The Ornua Purchase Price Index (PPI) increased for the month of November to 99.4 points, the fifth consecutive increase in the PPI this year.
The November PPI is the equivalent of 29.2c/L, VAT inclusive and is based on Ornua’s product purchase mix and assumed costs of 6.5p/l.
The increase in the PPI, the monthly indicator of market returns on dairy products sold by Ornua, reflects higher returns in the month across most dairy products, according to Ornua.
In October the PPI stood at 95.9 points, while in September the PPI was 92.2.
This latest increase in the price index comes as co-ops are due to set the milk price for November milk and follows on from a fourth consecutive increase prices at the Global Dairy Trade auction this week.
Dairy product prices rose 3.5% at Tuesday’s Global Dairy Trade auction following increases of 4.5% and 11.4% at the previous two auctions.
All product prices were up except for butter milk powder (-2.6%). Lactose prices increased the most with a 10.6% jump in prices.
Whole milk powder (WMP) increased by 4.9% while skimmed milk powder prices (SMP) rose 1.4%.
Meanwhile, there could be good news on horizon for world dairy prices, with global oil prices surging by 15% in the wake of last week’s decision by the Organisation of the Petroleum Exporting Countries( OPEC) countries to cut output by 1.2m barrels per day.
Yesterday, December 7, saw crude oil prices sitting at US$52 per barrel. This is the first time in almost two years that oil markets have nudged ahead of $50.
LacPatrick CEO, Gabriel D’Arcy said that this is significant as $50 is the price at which the world’s oil producing nations will start to actively purchase dairy products.