Ornua’s PPI jumps in the sixth month of this year

Ornua’s Purchase Price Index (PPI) for the sixth month of this year recorded a jump of almost four percentage points compared to the May equivalent.

It was confirmed today (Wednesday, July 11) that the PPI for June stood at 109.0 – this equates to 32.8c/L including VAT based on Ornua’s product purchase mix and assumed costs of 6.5c/L, the Irish dairy exporter explained.

The latest index is adjusted from 105.4 in May, 2018.

Today’s news represents the second consecutive monthly increase announced by Ornua; an increase of five percentage points was noted when the PPI for May was revealed.

According to a statement from Ornua, the June 2018 index reflects “stronger returns in the month for butter and powders”.

It is expected that a number of dairy processors will announce their respective milk prices for June in the coming days.

‘Destructive fresh milk price discounting’

Meanwhile, the discounting of fresh milk by Iceland and Aldi in recent weeks has been deemed “socially irresponsible” by the Fresh Milk Producers group has warned.

It added that the retailers’ actions are putting a complete supply chain of fresh, perishable food in danger of being decimated in the Republic of Ireland.

The group’s chairman Jim Mulhall – a liquid milk supplier to Glanbia from Kilkenny – said: “Aldi is currently selling fresh milk at €1.30 for 2L. Iceland is also offering a deal of 4L of milk for €2.60.

At this price point per litre, the supply chain cannot support a sustainable price to pay the primary producer.

“While retailers may claim to bear the burden of below-cost selling, history has shown us the opposite will ultimately happen – with price cuts ending up on the door of the farmer.”