The PPI now stands at 84.2, down 1.3 points on February. This is equivalent to a farmgate price of 23.7c/litre including VAT (22.5c/l excluding VAT).

The index has fallen for the past 12 consecutive months, showing a drop of 17% in the value of the commodities exported by Ornua (typically butter, cheese, whole milk powder and protein products).

The PPI remains significantly below any level recorded since the 2010 base year.

Co-ops are due to begin setting milk prices for March this week.

Meanwhile, in a comment on its website, ICOS has said that although the Ornua PPI is down for March, it is demonstrating that "the Irish product mix and investment in added value" is helping to maintain milk prices of 10-15% above those levels.

"The concern, though, will be that butter slips to intervention price levels, and we could be back in the price environment of 2009," the organisation added.

Concern over SMP intervention threshold levels

ICOS also expressed concern that although European member states have now reached the 109,000t threshold for SMP intervention, the Commission has not yet technically provided for the doubling of the threshold.

Speaking after the recent Council of EU agriculture ministers, which took place on Monday 11 April, Martijn van Dam, Minister for Agriculture of the Netherlands and chair of the Council, said the Council still needs to adopt the modification to the fixing regulation that decides the intervention ceiling. "We will try to do this as soon as possible," he said.

According to ICOS, the next intervention tender closes on Tuesday 19 April, with the increased threshold not being ratified until two days later.

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