The Ornua purchase price index (PPI) for the month of May is 178.5 (55.2c/l, VAT inclusive based on Ornua’s product purchase mix and assumed member processing costs of 8.8c/l and excluding member margin) and is up from 177.6 in the previous month.

Ornua says the increase is a result of continued stronger returns across the product range.

In addition, the Ornua value payment payable to members in the month is €8.16m, which equated to 3.8% of gross purchases in the month.

Prices recovering

Globally, it looks like milk powder prices are recovering from the early spring dip.

Prices are currently moving at historically high levels, with the trend being upwards.

While there are still concerns and challenges, the market seems to be ignoring any such concerns at the moment.

Low stocks and lower supplies are driving the market. As a business, if you need more product, the price is higher.

Quotes for skimmed milk powder moved briefly below the level of €4,000/t, but this has moved on.

Prices for cheese have risen since mid-May. Again, we understand this is mainly a result of the low stocks.

Cheese makes money at peak supplies. Often, there is less skimmed milk when cheese is a good price.

Whole milk powder sales to China have fallen sharply, but Africa, demand seems to be improving somewhat at the moment, which may help to explain the turnaround in the market.