Farmers are asking me all weekend where is the €60 per cow gone that hasn’t been paid out in milk price.
I’ve no answers for them. There board representatives should know.
The owners of the business should be told where the money is invested.
Many farmers have no bother if they knew where the money was invested.
Some get frustrated that effectively everyone else is paid before the farmer gets paid.
Most will accept investment in a business is needed and hence all returns can’t be paid out in milk price. However, if they are not informed then they get suspicious and cross.
Most farmers will agree base milk price is good at the moment
Most farmers will agree base milk price is good at the moment, but as with all businesses, costs have gone up.
Processing costs have gone up too. The processors lifted the imputed cost of processing last year that is used to calculate the Ornua Purchasing Price Index (PPI).
When farmers see a difference of nearly 3c/litre, they want answers. The price gap has grown steadily all year.
Not all co-ops trade everything through Ornua, so this is a possible reason why there might be a difference.
Some of these products might not be making the same return as the butter and cheese they sell to Ornua.
Maybe co-ops are investing elsewhere in the business. Maybe they are subsidising a loss making part of the business. Maybe they are covering exceptional costs that make long-term sense for the business.
All these are possible reasons for the difference in what farmers get paid and what Ornua say they got from the market, but please let the shareholders and owners know.