It has been confirmed today (Thursday, August 9) that Ornua’s Purchase Price Index (PPI) for July of this year has dropped to 107.3.
This equates to a milk price of 32.1c/L including VAT, based on Ornua’s product purchase mix and assumed costs of 6.5c/L, the Irish dairy exporter explained.
The drop in the July 2018 index reflects weaker returns in the month for commodity butter and skimmed milk powder (SMP), it added.
In the sixth month of the year, Ornua’s PPI recorded a jump of almost four percentage points compared to the May equivalent – which stood at 105.4.
The increase recorded for the June PPI represented the second consecutive monthly rise, after the May index jumped by five percentage points.
Ornua’s Purchase Price Index for July is 107.3, adjusted from 109.0 in June. For more information on the PPI and how it’s calculated; https://t.co/NKR4oF3Qij pic.twitter.com/4V14hPYfoW
— Ornua (@ornua) August 9, 2018
Processors are expected to begin announcing their July milk prices in the coming days.
‘Maximum possible milk price’
Earlier this week, the chairperson of the Irish Creamery Milk Suppliers’ Association’s (ICMSA’s) Dairy Committee, Gerald Quain, stated that Ornua’s June PPI should be the minimum milk price set for July supplies.
The payment of the maximum possible milk price for July is absolutely essential, given the pressures on dairy farmers and the expected substantial reduction in farm incomes in 2018, he added.
A lot of dairy farmers are currently faced with “massive feed and fertiliser bills” as a result of the adverse weather conditions experienced over the past year, Quain noted.
“With most co-ops behind Ornua’s June PPI – which was 32.8c/L – dairy farmers need the July milk price to be at a minimum of this level,” the ICMSA representative said.