The Ornua monthly Purchase Price Index (PPI) for the month of August stands at 144.7, having increased from the previous month at 140.8.
The latest PPI implies an indicative return of 42.5c/L, inclusive of VAT, for milk at 3.6% fat and 3.3% protein which is net of Ornua’s costs to market.
This represents an increase of 1.4c/L from the previous month of 41.1c/L. Ornua said this result reflects increased market returns throughout the month of August.
In addition, the Ornua Value Payment payable to member co-operatives in the month of August is €7 million, which equated to 3.9% of gross purchases in the month.
Ornua PPI
Ornua’s estimate of member co-operatives’ processing costs was 9.0c/L last month. This figure has remained the same from the previous month.
It should be noted that these estimated processing costs:
- Are based on Ornua’s estimate of the average cost of processing the Ornua basket of products, which is not representative of any individual member co-operative processor;
- Exclude any allowance for member co-operative processor margin;
- Are based on an updated methodology (from March 1, 2024) which:
- Uses Ornua’s initial estimate of member co-operatives’ processing costs from 2020 as a base, and;
- Indexes the variable elements to external indices which will be updated quarterly in arrears;
- Will rise and fall quarterly in line with the movements in the variable costs (most notably energy) as per the external indices.
Ornua notes 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.