Ornua raised its August purchase price index slightly

Ornua’s Monthly Purchase Price Index increased marginally in August, reaching 130.4 compared with 130.2 the previous month. The index relates to product settlements and payments for the month and is not directly aligned with milk production and payments because of seasonal factors.

After estimated processing costs were deducted, the index indicated a return of 36.2c per litre. The figure includes 4.5% VAT and applies to milk containing 3.6% fat and 3.3% protein. It was unchanged from Ornua’s indicative return for July.

Ornua put estimated processing costs for August at 10c per litre. The calculation is based on its estimate of the average cost of processing the company’s “basket of products”, rather than the costs of any individual member co-operative processor.

The estimate does not include an allowance for the margin of a member co-operative processor. It is linked to external indices, which are revised every quarter; the estimated cost can therefore change from one quarter to the next as those indices move, mainly in response to energy prices.

Ornua said the small increase in the index, alongside the unchanged indicative milk return, “reflects stable market returns for the month of August”. The company also confirmed that the Ornua Value Payment due to member co-operatives in August was €7.2m, equal to 6% of gross purchases during the month.

Separately, Kinisla and Teagasc have renewed their joint dairy programme for a three-year term. Kinisla said the “Innovating for Success” initiative continues its partnership with Teagasc on the technical performance, profitability and sustainability of its milk suppliers.

The programme was formally launched at Teagasc Moorepark last week. The original joint programme began about 30 years ago. Kinisla, previously known as Kerry Dairy Ireland, said the renewed arrangement would continue to give its milk suppliers on-farm learning and access to research and technical advice.