This week, Ornua released the purchase price index (PPI) for the month of December and despite the recent falls in dairy commodity prices, the index actually went up to 173.4, up from 171.8 the previous month.

With estimated member co-op processing costs of 10.1c/l for the Ornua product portfolio, this implies an indicative return of 52c/l, VAT inclusive (which is a flat result month on month).

The energy cost element of the processing cost is variable and changes each month, depending on energy costs. In addition, the Ornua value payment payable to members in the month is €2.9m, which equated to 3.7% of gross purchases in the month (3.7% year to date).

In a statement, a spokesperson for Ornua said seasonally low purchase volumes in December mean lower market prices have not yet been reflected in the PPI. On the basis of current spot pricing, and as Ornua trading volumes increase seasonally, declines in the PPI are expected over the coming months.

Milk supply continues to track below previous year supply in New Zealand (NZ). As NZ milk supply comes down off its seasonal peak in October, the latest November results published show milk supply still below the previous year, but the gap is tightening.

The opposite is the case in the US for the last six months of 2022, with milk supply running between 1.5% and 2% ahead.

The EU27 milk supply is also trending up for the latest November supplies published compared with the previous year. Remember, the last GDT auction was 2.8% down.