Ornua increases its PPI Index due to higher butter prices
Ornua’s Purchase Price Index has risen to 105.9 from 104.1 for April 2019.
The figure is equivalent to farm gate prices of 31.6 cent per litre based on Ornua’s product purchase mix and assumed costs of 6.5 cent per litre.
The adjustment for April reflects higher butter prices and generally stable to improved returns for the powder variants.
This comes as global dairy prices rose for the 11th time in a row at a fortnightly auction held early on Wednesday, as waning New Zealand production provided support.
The GDT Price Index climbed 0.4pc, with an average selling price of $3,490 per tonne. The index rose 0.5pc at the previous sale, according to GDT Events.
However, most processors are currently quoting around 30.5-31.5c/l; apart from the West Cork co-ops that are paying over 34c/l. Last month Glanbia cut its milk price by 1c/l, with Lakelands dropping by 0.5c/l.
Gerald Quain of ICMSA said there was no reason for talk of “doom and gloom” in dairy markets.
Mr Quain pointed out that the GDT has seen 11 consecutive gains and is at its highest level since June 2017.
He added that Dutch spot market returns for butter and skim milk powder equated to an average price of 32.5c/l.
“The facts are that the global supply position is favourable, given that the EU and US are showing minimal growth year-on-year,” he said.