Dairy markets: Ornua PPI sees another drop for April
The PPI figure stands at 156.9 for last month, down from 159.6 for March.
After deducting the estimated processing costs for Ornua's member processing costs, the latest PPI implies an indicative return of 46.3c/L, inclusive of 5.1% VAT, for milk at 3.6% fat and 3.3% protein.
This price is net of Ornua's costs to market. The figure is down on the indicative price for March of 47.4c/L.
The estimated processing costs for member dairy co-ops for the second quarter of the year is 9.6c/L, up from 9.5c/L for the first quarter. The updated processing cost was used for determining the indicative return for April.
The 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.
The processing costs excludes any allowance for member co-op processor margin.
In determining the cost, Ornua used its initial estimate of member co-op processing costs from 2020 as a base and links the variable elements of the costs 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) in the external indices.
Ornua said that the decreased PPI and indicative price 'reflect weaker market returns for the month of April'.
In addition to the PPI announcement, Ornua also confirmed that the 'Ornua value payment' to member co-ops in the month of April is €11.8 million, which equated to 6% of gross purchases in the month.
Dairy markets
In other dairy market news, the average Global Dairy Trade (GDT) price index increased by 4.6% following the latest auction yesterday (Tuesday, May 6).
There were a total of 175 bidders in the event which saw 16,714 metric ton (mt) of product sold.
The average selling price was €3,988/mt in the auction, which lasted for more than three hours, during which there were 101 winning bidders and 26 bidding rounds.
The GDT Price Index now stands at 1,344 today – compared to the previous index figure on April 15 which was 1,285.
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