Ornua has confirmed today (Wednesday, April 9) a decrease in its March Purchase Price Index (PPI) at 159.6, down from the previous month at 161.9.

After deducting the estimated processing costs of 9.5c/L (the same figure used for February), the PPI figure implies an indicative return of 47.4 cpl, 5.1% VAT inclusive (decreased from the previous month of 48.3 cpl) for milk of 3.6% fat and 3.3% protein which is net of Ornua costs to market.

The results reflect a "softening in market returns" for some product categories over the month of March, according to Ornua.

Ornua’s estimated member processing costs are based on the average of processing the Ornua ‘basket of products’ which is “not representative” of any individual member co-op processor.

The estimated processing cost excludes allowances for the member co-op processor margin.

The cost is determined from using Ornua’s initial estimate of member co-op processing costs from 2020 as a base, and then updating that figure quarterly in arrears based on indexes of variable elements, most notably energy costs.

The estimated processing costs will fall or rise quarterly as those external indexes change.

Ornua has also said today that its ‘value payment’ payable to its member co-ops in the month is €5.4 million, which equated to 4.2% of gross purchases in the month.

Ornua said that the PPI relates to product settlements/payments for the month and, for reasons of seasonality, is not directly aligned with milk production and payment.

In other dairy markets news, the average Global Dairy Trade (GDT) price index has increased by 1.1% after the latest auction.

Skim milk powder (SMP) recorded the highest price increase – rising 5.9% to €2,659/mt. Anhydrous milk fat increased by 2.3% to €6,199/mt and cheddar increased by 1.7% to €4,640/mt.

There were disappointing results for butter milk powder down 5.6% to €2,595/mt, mozzarella down 4% to €4,176/mt, lactose down 2.6% to €1,047/mt, butter down 1.2% to €7,029/mt, and whole milk powder down 0.1% to €3,756/mt.