The PPI value now stands at 106.8, a level not seen since the autumn of 2014. This means the commodities exported by Ornua are returning a farmgate milk price of 30.3c/l (excluding VAT).

The index grew steadily during the second half of 2016 after hitting a low of 81 one year ago. It then remained steady for the first five months of 2017.

This follows Tuesday’s Global Dairy Trade (GDT) auction, at which dairy prices consolidated the rise observed during the previous five sales.

IFA dairy chair Sean O’Leary said that the current PPI level justified a May milk price increase of 2c/l. “Milk prices increased around 7.5c/l between July 2016 and February 2017, but have stagnated ever since. While co-ops may be tempted to further rebuild their balance sheets, milk prices must now be further increased,” he said. “As co-ops have increased sales significantly in recent months, and as dairy prices are recovering too, in the case of butterfat especially, historical levels, there is real scope for further milk price increases.”

Co-ops are expected to start setting May milk prices next week.

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