Ornua Purchase Price Index Sees Modest Rise in March
Source: The DairyNews
Ornua's Purchase Price Index (PPI) for March has experienced a slight uptick, reaching 132.3 points compared to 131.5 points in the previous month.
This increase translates to an indicative return of 37.6c/L, inclusive of VAT, for milk with 3.5% fat and 3.3% protein, after deducting the company's marketing costs. The current price represents a modest rise of 0.3c/L from the previous month's indicative return.
According to Ornua, the uptick in price reflects improved market returns observed throughout March. The price per liter incorporates member cooperatives' processing costs of 9.4c/L, which remains unchanged from the previous month.
The processing cost estimation is based on Ornua's calculations of the average processing costs for its "basket of products," not specific to any particular member co-op. This figure excludes allowances for processor margins and is calculated using a new methodology introduced last month. The methodology adjusts quarterly based on external indices, particularly variable costs like energy.
Additionally, Ornua has allocated a value payment of €3.6 million to member co-ops for March, equivalent to 3.3% of gross purchases during the month.
It's worth noting that the PPI's relevance to product settlements or payments for the month may not directly align with milk production and payment due to seasonality factors. As processors gear up to determine their prices for March supplies amid the impending peak milk supply period, the Irish Creamery Milk Suppliers' Association (ICMSA) has urged all co-ops to set a minimum price of 42c/L for March.
Noel Murphy, Chairperson of the ICMSA's dairy committee, emphasized the importance of providing a much-needed boost to suppliers. He asserted that raising the milk price for March supplies by at least 2c/L is entirely feasible and essential for supporting dairy farmers during challenging times.
According to Ornua, the uptick in price reflects improved market returns observed throughout March. The price per liter incorporates member cooperatives' processing costs of 9.4c/L, which remains unchanged from the previous month.
The processing cost estimation is based on Ornua's calculations of the average processing costs for its "basket of products," not specific to any particular member co-op. This figure excludes allowances for processor margins and is calculated using a new methodology introduced last month. The methodology adjusts quarterly based on external indices, particularly variable costs like energy.
Additionally, Ornua has allocated a value payment of €3.6 million to member co-ops for March, equivalent to 3.3% of gross purchases during the month.
It's worth noting that the PPI's relevance to product settlements or payments for the month may not directly align with milk production and payment due to seasonality factors. As processors gear up to determine their prices for March supplies amid the impending peak milk supply period, the Irish Creamery Milk Suppliers' Association (ICMSA) has urged all co-ops to set a minimum price of 42c/L for March.
Noel Murphy, Chairperson of the ICMSA's dairy committee, emphasized the importance of providing a much-needed boost to suppliers. He asserted that raising the milk price for March supplies by at least 2c/L is entirely feasible and essential for supporting dairy farmers during challenging times.
