The Ornua monthly Purchase Price Index (PPI) for the month of November stands at 156.7, having increased from the previous month at 151.7.
After deducting estimated processing costs, Ornua’s PPI implies an indicative return of 46.7c/L, inclusive of 4.8% VAT for milk of 3.6% fat and 3.3% protein which is net of Ornua costs to market.
This marks an increase of 1.8c/L from 44.9c/L in October. Ornua stated that the results reflect “strong market returns” for the month of November.
In addition, the ‘Ornua Value Payment’ payable to member co-ops in the month is €3.2 million, which equated to 3.6% of gross purchases in the month.
Ornua PPI
Ornua’s estimate of member co-ops processing costs remained unchanged for the month of November at 9.1c/L.
In relation to the estimated processing costs Ornua stated that these are based on a number of factors including:
- 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;
- Exclusion of any allowance for member co-op processor margin;
- Are based on an updated methodology (from March 1, 2024) which: Uses Ornua’s initial estimate of member co-op processing costs from 2020 as a base; and Indexes the variable elements to external indices which will be updated quarterly in arrears;
- Will rise and fall quarterly in line with the movements in the variable costs as per the external indices.
Ornua notes that the PPI relates to product settlements/payments for the month and for reasons of seasonality is not directly aligned with milk production and payment.