The Ornua Purchase Price Index (PPI) and indicative price return have increased for December, the dairy business has confirmed.
The monthly PPI for last month is 159.3, an increase on the November index of 156.7.
After deducting the estimated processing cost of Ornua member co-ops, the PPI implies an indicative return of 47.6c/L including VAT, for milk at 3.6% fat and 3.3% protein.
This is an increase on the 46.7c/L indicative return for the previous month.
Ornua said the indicative return reflects strong market returns for the month of December.
The member processing cost was reckoned at 9.1c/L for the last quarter of the year.
The member processing cost is based on Ornua’s estimates of the average cost of processing the Ornua ‘basket of products’, which is not representative of any individual member co-op processor.
The processing cost also excludes any allowance for member co-op margin.
The processing cost increases or decreases quarterly in line with movements in indexes of variable costs (mainly energy).
Ornua said that the PPI relates to product settlements or payments for the month and, for reasons of seasonality, is not directly aligned with milk production and payment.
In addition to the PPI for December, Ornua has also announced that the ‘Ornua value payment’ payable to member co-ops for December is €2.2 million, which equates to 2.2% of gross purchases in the month.
Ornua to close UK cheese site
In other Ornua news, Oruna Ingredients Europe (OIE) has announced a proposal to close its cheese manufacturing and formatting operation in Ledbury, Herefordshire, UK.
The proposal to close the facility comes after a “comprehensive” strategic review of OIE’s manufacturing footprint, according to the company.
OIE Ledbury produces formatted natural and processed cheeses for the food manufacturing, foodservice, and global QSR (quick service restaurants) sectors.
In a statement, the dairy business said: “Ledbury’s processing capacity is under-utilised, and the facility requires significant capital investment to maintain production moving forward.
“It is anticipated that if the proposal goes ahead, production will cease in Ledbury no later than the end of June 2025.”
The majority of production will be transferred to OIE’s sites in Nantwich, Cheshire and Avila, Spain.