The Ornua Purchase Price Index (PPI) for the month of May has seen a bump compared to April, with the indicative price increasing by 1.1c/L.
The PPI figure for the month is 135.6, up from the previous month of 132.6.
The latest PPI implies an indicative return of 39.6c/L, inclusive of VAT, for milk at 3.6% fat and 3.3% protein. This figure is net of Ornua’s costs to market, and is an increase on the 38.5c/L indicative price for April.
The indicative price reflects improved market returns through the month of May, Ornua said.
The price accounts of an estimated member co-operative processing cost of 8.6c/L for the month of May, which is adjusted quarterly in line with external indices of variable costs (mainly energy), as per Ornua’s new estimated processing cost methodology announced earlier this year.
“The PPI relates to product settlements/payments for the month and for reasons of seasonality is not directly aligned with milk production and payment,” Ornua said.
Also, the Ornua Value Payment payable to member co-ops in the month is €10.9 million, which equated to 6.1% of gross purchases in the month.
With dairy processors gearing up to announce their milk prices to farmers for May supplies, the Irish Creamery Milk Suppliers Association (ICMSA) has called for a “strong signal” on milk price.
The ICMSA has said that dairy markets have moved on “considerably” during May.
“Not only do dairy farmers need an increase in milk price, the market justifies it and dairy farmers need a strong signal from their milk processor that they understand the pressures on them at present by the delivery of a strong milk price increase for May,” ICMSA Dairy Committee chairperson Noel Murphy said.
“From high input costs to reduced milk supplies due to weather, costs, and nitrates pressures, milk processors need only look at the input bills being built up by farmers to realise the pressure on their suppliers.
“The ICMSA believes that milk price of 45c/L is not only justified but required to restore a level of confidence in the sector, and another clear message from dairy farmers is that they are fed up with the gimmick payments… Pay us on base price and cut out the gimmickry,” Murphy added.