The purchase price index (PPI) stands at 111.3 for January, the same level observed in December. Based on processing costs of 6.5c/l, this is equivalent to a 31.9c/l milk price, excluding VAT, from the mix of products handled by Ornua.

The PPI peaked in October but has lost more than 4% of its value since then as the butter bubble deflated and skimmed milk powder prices remained low.

The stabilisation observed in January follows falls in the two previous months.

European Commissioner Phil Hogan has repeatedly warned of oversupply risks in several EU countries, including Ireland, calling on processors to "heed market signals" and get farmers to restrain production.

Co-ops are due to set milk prices for January in the coming days.

Read more

Dairy trends: steady rather than rising markets