Following the decision of Ornua to increase the estimated processing costs for the PPI calculation by 1.9 cpl for February, the chairperson of ICMSA’s Dairy Committee, Noel Murphy, said there is huge anger amongst dairy farmers in relation to the change and he called on Ornua to provide the complete data behind such an increase.
Mr Murphy said that farmers find it extraordinary that processing costs can increase by so much (25%) at a time when energy costs, a very significant element of cost, have seen significant reductions for over six months.
“The reality of the pressures facing farmers seems to be lost on Ornua. Do they even know or care that many are still producing milk below the cost of production? The 22% reduction in January milk supply should be a ‘wakeup call’ for Ornua and processors that all is not well on the farm.
“To introduce such a change at a time when farmers are under enormous pressure due to weather, costs, low milk prices and the ongoing negative impact of changes to the nitrates regulations shows a frankly alarming disconnect between Ornua and the dairy farmers producing the milk that is the basis for everything else.
“ICMSA is now specifically requesting that Ornua publish the full data, the method of collecting the data, and confirm whether the data was independently reviewed and verified. It’s the very least they can do after this announcement,” said Mr Murphy.
Mr Murphy said that 1.9 cents per litre for a farmer supplying 400,000 litres is equivalent to €7,600 per annum which is a huge amount. He said that farmer-suppliers to Ornua deserve a much better explanation than just a perfunctory email informing the press of the change.
“We are going to insist that farmers get the detailed data behind this decision and independent confirmation that it is correct. It is no longer acceptable to just throw out a figure with no explanation which potentially will cost dairy farmers millions in 2024. Frankly ICMSA does not believe that the processing cost being used is reflective of the actual cost of processing today,” concluded Mr Murphy.
