Ornua has today (Wednesday, June 3) confirmed an increase in its May Purchase Price Index (PPI) at 129.8, up from the previous month at 127.0.
The PPI is a monthly indicator of market returns on dairy products purchased by Ornua – including butter, cheese, whole milk powder and protein products – relative to comparable returns generated in a base year.
Ornua’s estimate of member co-ops processing costs was 9.5c/L in month – the same figure of 9.5 cpl in the previous month.
Ornua stated that it should be noted that these estimated processing costs:
- Are based on Ornua’s estimate of the average cost of processing the Ornua basket of products, which is not representative of any individual member co-op processor;
- Exclude any allowance for member co-op processor margin;
- Are based on an updated methodology (from May 1, 2024) which uses Ornua’s initial estimate of member co-op processing costs from 2020 as a base and indexes the variable elements to external indices which will be updated quarterly in arrears;
- Will rise and fall quarterly in line with the movements in the variable costs (most notably energy) as per the external indices.
After deducting estimated processing costs, Ornua’s PPI implies an indicative return of 36.6c/L, 4.5% VAT inclusive (up from the previous month of 35.5c/L).
This is for milk with constituents of 3.6% fat and 3.3% protein which is net of Ornua costs to market.
The results reflect increased market returns for the month of May, Ornua said.
In addition to the above, the ‘Ornua Value Payment’ payable to member co-ops in the month is €8.5 million, which equated to 7.1% of gross purchases in the month.