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Dairy trade: Further drop for Ornua PPI in May

Dairy trade: Further drop for Ornua PPI in May

Agriland04-06-2025
The Ornua Monthly Purchase Price Index (PPI) for the month of May 2025 has seen a further decrease, following the same trend as the previous month.
The PPI for May is 153.2, down from April's figure of 156.9.
Ornua's estimate of member co-ops processing costs was 9.6c/L in the month (9.6c/L in the previous month).
Ornua has stated that these 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;
Exclude any allowance for member co-op processor margin.
Ornua calculation
There are also 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.
Ornua said that the estimated processing costs will also rise and fall quarterly in line with the movements in the variable costs (most notably energy) as per the external indices.
After deducting estimated processing costs, Ornua's PPI implies an indicative return of 45.0c/L 5.1% VAT inclusive (decreased from the previous month of 46.3C/L) for milk of 3.6% fat and 3.3% protein which is net of Ornua costs to market.
The results reflect weaker market returns for the month of May.
In addition to the above, the 'Ornua Value Payment' payable to member co-ops in the month is €8.3m million, which equated to 3.7% of gross purchases in the month.
The PPI relates to product settlements/payments for the month and for reasons of seasonality is not directly aligned with milk production and payment, according to Ornua.
Dairy trade
Meanwhile, yesterday (Tuesday, June 3) the Global Dairy Trade (GDT) index saw a second successive decrease in the index figure following the latest trading event.
The index decreased by 1.6%, for an average price of €3,794 per metric tonne (mt). The index figure is now at 1,311.
Of the 12 most recent GDT auction events back to December 17 (including Tuesday's event), the index has decreased six times, increased five times, and gone unchanged on one occasion.
166 bidders participated in yesterday's event, with 117 bidders emerging from 15 bidding rounds. The event lasted for two hours and 14 minutes, in which 16,307mt of product was sold.
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