Ornua has increased the assumed processing costs used to calculate the PPI index to reflect recent energy price rises.
The change means the 7.0 c/l it has used since July 2020 will now be increased and linked to an energy index.
This month it moves the processing costs from 7 c/l to 8.7 c/l.
The change narrows what has been a widening gap between the farmgate price and Ornua’s PPI.
From March to December 2021 there has been a difference of between 1.2c/l and 5.1c/l between the Ornua PPI and what farmers received.
Across the big supply months, the gap was 3 c/l.
Ornua said the rising energy costs could account for 0.85c/l of the gap last year so that still leaves 2.15c/l of a difference between the PPI and farmgate price.
The February PPI is up to 152.3 from 147.2 or 43.4 c/l ex VAT which is the same as it was in January now that the processing cost is increased.