Ornua's purchase price index (PPI) stands at 107.5 for December. This is equivalent to a farmgate price of 30.55c/l excluding VAT, assuming 6.5c/l processing costs.

The index increased by 2.4% last month, reverting most of the losses suffered in the two previous months.

"The December 2018 Index reflects improved spot and powder returns, off-setting lower butter and cheese prices," an Ornua spokesperson said.

Co-ops are preparing to set December milk prices from this week. IFA dairy chair Tom Phelan urged all co-op board members to end what has been a very difficult year for dairy farmers by holding the December price.

Current dairy market trends do justify cautious optimism at least

“Between the last week in December and the first week in January, Dutch spot raw milk prices have increased from just 29c/kg to 33.5c/kg, according to EU Milk Market Observatory reports. "Dutch spot SMP prices have lifted to near €1,800/t. In the first trade of the year, the new European EEX raw [liquid] milk futures saw a milk price equivalent of 35.05c/kg achieved for milk delivered in January [for product to be traded in March 2019],” Phelan said.

He added that production forecasts in the main European dairy producing countries remain down.

“There are real international geopolitical concerns in the year ahead, but current dairy market trends do justify cautious optimism at least," he said.