Ornua has today (Wednesday, August 31) announced an increase in its Purchase Price Index (PPI) for the month of August, however the equivalent milk price is down marginally.

The most recent PPI index is 184.6, which is up from the July index value of 184.4, and 179.4 in June, according to Ornua.

The August PPI reflects a price of 56.9c/L, inclusive of VAT, based on Ornua’s product purchase mix and assumed member processing costs of 9.3c/L, however excluding member margins.

The energy cost element of the processing cost is variable and changes each month depending on energy costs, as outlined in a statement by Ornua.

Ornua said the PPI increase is a result of marginally stronger returns across the product range, while the lower milk price is a result of the increased processing costs.

In addition, the Ornua Value Payment payable to members in the month is €7.79 million, which equated to 3.7% of gross purchases in the month (3.6% year-to-date).

Dairy analysis

Meanwhile, milk collections in Europe and New Zealand are down compared to last year, according to dairy analysis from multi-national financial services firm, StoneX.

Cumulative milk collections for June in the 27 EU member states and the UK are almost 1% behind the same month last year at 82.03 million tonnes.

European production in June stood at 13.83 million tonnes, down 0.7% year-on-year. Weighted average fat and protein were both unchanged on June 2021, at 3.95% and 3.35% respectively.

UK milk collections for last month were almost 1% down in a year at 1.28 million tonnes, according to StoneX’s dairy analysis.

“New Zealand milk collections fell sharply behind July 2021, reported at 288 kilotons (kt), down 5.6% year-on-year and 0.1% behind the three-year average,” Dr. Peter Meehan, StoneX senior EU dairy analyst, said.