The Ornua Purchase Price Index (PPI) has increased for the month of August, while the resulting indicative milk price return has remained unchanged.

The Ornua Monthly Purchase Price Index (PPI) for August is 130.4, up from the previous month at 130.2.

After deducting estimated processing costs, Ornua's PPI implies an indicative return of 36.2c/L, inclusive of 4.5% VAT, for milk at 3.6% fat and 3.3% protein.

This price is unchanged from the indicative return for July.

Ornua said the index increase and unchanged milk price "reflects stable market returns for the month of August".

Processor estimated costs for August were reckoned at 10c/L.

The estimated processer costs are based on Ornua’s estimate of the average cost of processing the Ornua 'basket of products', which Ornua said is not representative of any individual member co-op processor.

The estimated processor costs exclude any allowance for member co-op processor margin.

The estimate processor costs are tied to external indices which are updated quarterly; therefore the cost will rise or fall each quarter depending on movement in these external indices (mainly energy).

Ornua said that PPI relates to product settlements and payments for the month and, for reasons of seasonality, are not directly aligned with milk productions and payments.

Ornua also confirmed that the the Ornua Value Payment payable to member co-ops in the month is €7.2 million, which equated to 6% of gross purchases in the month.

Joint dairy programme

In other dairy processing news, Kinisla and Teagasc have launched a renewed joint dairy programme for a three-year period.

Kinisla said the ‘Innovating for Success’ programme reaffirms a long-standing partnership with Teagasc on the technical performance, profitability and sustainability of its milk suppliers.

The programme was officially launched at Teagasc Moorepark last week.

The original joint dairy programme commenced some 30 years ago, and Kinisla - formerly known as Kerry Dairy Ireland - said the renewed programme will continue to provide its milk suppliers with on-farm learning, and access to research and technical advice.