The Ornua PPI (Purchase Price Index) is up slightly for the month of October, at a figure of 125.6, up from 121.8 for the month of September.
This converts to 38c/L (VAT inclusive), based on Ornua’s product purchase mix and assumed member processing costs of 7c/L and excluding member margin.
In a brief statement to Agriland today (Wednesday, November 3), about the PPI, a spokesperson for the Irish dairy exporter said:
“The increase is as a result of stronger returns across the product range.”
In addition, the Ornua Value Payment payable to members in the month is €7.95 million, which equated to 8.1% of gross purchases in the month (year to date 6.6%).
Recently, the Irish Farmers’ Association (IFA) Dairy Committee chairman, Stephen Arthur, insisted that milk processors must pay a milk price that reflects the PPI and the Ornua Value Payment.
The IFA has said that in July 2020, Ornua changed the way in which it reported the PPI. The PPI, it stated, is a measure of Ornua’s market performance on commodity products.
Therefore, the farm association said that it should only include base commodities.
Ornua acquisitions
Last month, Ornua announced that it had completed the acquisition of US cheese ingredients business Whitehall Specialties (WSI), for an undisclosed sum.
The business has been purchased from Mason Wells, a private equity firm based in Milwaukee, in the state of Wisconsin.
Ornua says that the acquisition complements its US Ingredients division – Ornua Ingredients North America (OINA) – and is “central to [our] long-term growth strategy in the US cheese ingredients market”.
This deal increases OINA’s current position in the US cheese ingredients market, expanding its production across six facilities in the states of Wisconsin, Minnesota and Pennsylvania.
The acquisition “will be an important enabler of Ornua’s long-term growth strategy, unlocking significant growth capacity and flexibility to support its existing and new customers’ ambitious growth plans”, the Irish business said.