Ornua has today (Wednesday, May 6) confirmed an increase in its April Purchase Price Index (PPI) at 127.0, up from the previous month at 121.9.

When Ornua's estimated member co-op processing costs of 9.5c/L are taken into account, the PPI implies an indicative return of 35.5c/L, inclusive of VAT at 4.5%, for milk of 3.6% fat and 3.3% protein, which is net of Ornua costs to market.

This indicative return is up 1.3c/L from the previous month's figure of 34.2c/L.

Ornua said "the result reflects a pick-up in market returns for the month of April".

Ornua

Ornua’s estimate of member co-ops processing costs has increased by 0.5c/L compared to March (9c/L).

This figure is 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.

The processing costs also exclude any allowance for member co-op processor margin.

The processing costs are based on a methodology 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.

The processing costs will rise and fall quarterly in line with the movements in the variable costs (most notably energy) as per the external indices.

The 'Ornua Value Payment' payable to member co-ops for April is €11.7 million, which equated to 11.5% of gross purchases in the month (7.3% year-to-date).

Dairy markets

The latest PPI follows the announcement that the Global Dairy Trade (GDT) index has moved up after the latest trading event yesterday, following two consecutive decreases.

The index moved up by 1.5%, the first increase since a slight 0.1% increase on March 17.

These two results were separated by decreases in the index of 3.4% and 2.7% (on April 7 and April 21 respectively).

The index, which is updated every two weeks, now stands at a figure of 1,214, up from 1,196 two weeks ago.

This increase reflects an average price of €3,527/t, with 13,743t of product sold.