The Ornua Purchase Price Index (PPI) for February is unchanged from January at 105.4 percentage points.
This is the equivalent of 31.4c/L, VAT inclusive, based on Ornua’s product purchase mix and assumed costs of 6.5p/L.
Ornua has said that the February PPI reflects lower skimmed milk powder (SMP) and butter returns in the month, offset by higher cheese and whey power prices.
The PPI is a monthly indicator of market returns on dairy products purchased by Ornua (typically butter, cheese, whole milk powder and protein products), relative to comparable returns generated in a base year (2010).
Yesterday, prices at the Global Dairy Trade auction dropped 6.3%. The drop came after a decrease in prices at the last auction of 3.2%.
The main driver of the fall in prices was skimmed milk powder (SMP) with prices dropping 15.5% at the latest auction, while whole milk powder (WMP) prices also suffered with a decrease of 12.4%.
Cheddar, lactose and rennet casein all registered falls at yesterday’s Global Dairy Trade event.
The only products that saw price increases were butter (1.2%) and butter milk powder (8.4%).
Analysts at ASB Bank in New Zealand had hinted that WMP prices could fall by 10%, with rain and higher New Zealand milk production putting a dampener on prices.