The Ornua Purchase Price Index (PPI) for the month of March has seen a slight increase to 132.3 points, up from 131.5 points last month.
This index figure implies an indicative return of 37.6c/L, including VAT, for milk at 3.5% fat and 3.3% protein, which the business said is net of its costs to market.
This price is an increase of 0.3c/L on last month’s indicative return.
Ornua said the increase “reflects improved market returns through the month of March.
The price-per-litre accounts for member cooperatives processing costs of 9.4c/L, which is unchanged from last month.
The estimated 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 particular member co-op. The figure also excludes any allowance for processor margins.
The processing cost is calculated using a new methodology announced last month.
This methodology uses 2020 estimated co-op processing costs as a base, and indexes the “variable element” to external indices which will be updated quarterly in arrears.
The processing cost will rise or fall quarterly in line with the movements in the variable costs (most notably energy), as per the external indices.
In addition, the Ornua value payment payable to member co-ops for March is €3.6 million, which equated to 3.3% of gross purchases in the month.
Ornua also said that the PPI related to product settlements or payments for the month, and for reasons of seasonality is not directly aligned with milk production and payment.
Processors are currently preparing to issue their prices for March supplies, as the peak milk supply period approaches.
The Irish Creamery Milk Suppliers’ Association (ICMSA) has called on every co-op to pay 42c/L for March “as a minimum”.
Noel Murphy, the association’s dairy committee chairperson, said recently that co-ops and milk purchasers “owe their suppliers a badly needed boost”.
Murphy claimed that it is “absolutely possible” to raise the milk price paid for March supplies by “at least” 2c/L.