The Ornua Monthly Purchase Price Index (PPI) for October is 151.7, slightly up from the previous month at 151.4.

Ornua today (Wednesday, November 6) outlined that its estimate of member co-ops' processing costs was 9.1 c/L in month - compared to 9.0 c/L in the previous month.

According to the co-op the latest PPI - after deducting estimated processing costs - implies an "indicative return" of 44.9c/L, which is flat from the previous month's corresponding return at 44.9c/L.

The return is inclusive of 4.8% VAT, for milk at 3.6% fat and 3.3% protein which is net of Ornua’s costs to market.

The co-op said that "the results reflect stable market returns throughout the month of October".

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;
An updated methodology which uses Ornua’s initial estimate of member co-op processing costs from 2020 as a base;
Will rise and fall quarterly in line with the movements in the variable costs as per the external indices.

The co-op has also confirmed today that the Ornua Value Payment payable to member co-ops in the month is €4.4 million - which equated to 3.6% of gross purchases in the month. 

The latest Ornua PPI comes in the same week as the average Global Dairy Trade (GDT) price index rose by 4.8% following the latest auction.

There were a total of 173 bidders in the event yesterday (Tuesday, November 5) and 36,595 MT of product was sold after 23 bidding rounds.

The average selling price was €3,668 per metric ton in the auction, which lasted for three hours, during which there were 112 winning bidders.

The GDT Price Index now stands at 1,216 – compared to the previous index figure on October, 15 of 1,160.