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Ireland 11.01.2024

Final Ornua PPI for 2023 records decrease

Source: The DairyNews
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In the final month of 2023, Ornua's Annual Purchase Price Index (PPI) has registered a decrease, standing at 125.5 compared to the previous month's 125.8, according to the latest data released today.
Final Ornua PPI for 2023 records decrease
After factoring in estimated member co-op processing costs of 7.6c/L (excluding any allowance for processor margins), Ornua's product portfolio suggests an indicative return of 37.1c/L, VAT inclusive. This marks a decline from November's indicative price of 37.2c/L based on the index.

The variable energy cost element, dependent on monthly changes in energy costs, contributes to the processing cost.

Ornua has also confirmed a value payment of €2.5 million to its member co-ops in December, equivalent to 6.7% of gross purchases during the month. Ornua attributes this result to a seasonally quieter market demand throughout December.

In parallel developments, Lakeland Dairies has announced a 1.15c/L increase in its milk price for December supplies. The processor's board has decided on a base price of 37.15c/L (at 3.6% butterfat and 3.3% protein) for December milk in the Republic of Ireland, reflecting a 1.15c/L increase. Qualifying farmers will also receive a 5c/L out-of-season payment.

In Northern Ireland, the base price for December milk supply will be 30.25p/L, reflecting a 1p/L increase plus the customary out-of-season payment of 3p/L.

Looking ahead to 2024, Lakeland Dairies acknowledges more favorable global dairy markets but emphasizes the delicate balance due to demand uncertainty, despite positive indicators in key production regions. The processor commits to vigilant market monitoring in the coming months.
Becky Smith
Becky Smith
Analyst (Livestock) AHDB
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Keith Woodford
Keith Woodford
principal consultant at Agri food Systems Ltd.
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