The latest Ornua Purchase Price Index (PPI), for the month of July, shows a further drop in milk price.
Ornua confirmed today (Thursday, August 10) that the PPI figure for the month of July is 121.3, down from 124 for the previous month.
When accounting for estimated co-op processing costs of 7.5c/L (including an energy cost element that varies month-to-month depending on energy costs) for the Ornua product portfolio, and excluding any allowance for processor margins, the latest index figure implies an indicative return of 35.9c/L, including VAT.
This is 0.8c lower than the price for June, which stood at 36.7c/L.
Ornua also confirmed that its value payment payable to member co-ops in July is €7.7 million, which equated to 4.7% of gross purchases in the month (4.3% in the year to date).
Ornua said that that the PPI announced today “reflects weak market returns and weaker demand through the month of July”.
Kerry offers forward milk price scheme
In related news, Kerry Group has confirmed that it is offering its suppliers a forward price scheme at 33.5c/L, inclusive of VAT, at 3.3% protein and 3.6% butterfat.
This forward price scheme is for the period March to October 2024, and includes a feed and fuel price adjustor.
A statement from Kerry Group said that the feed and fuel price adjustor “helps limit participants’ exposure to inflation input prices during the period of the scheme”.
“This added feature provides farmers with protection against unforeseen increases in compound feed and energy prices and ensures greater stability in their financial planning,” the statement added.
The scheme opened for applications yesterday (Wednesday, August 9) at 2:00p.m, and will close today (Thursday, August 10) at 2:00p.m.
The price offered in the scheme is 3.5c below the most recent monthly milk price offered by Kerry Group, which was 37c/L for June supplies, announced in mid July.