The Ornua Purchase Price Index (PPI) has continued on a downward trend after the latest index announcement by the dairy business.

Ornua confirmed today (Wednesday, October 11) that the index figure for September is 117.4, down from 119.2 for the previous month.

After accounting for estimated member co-op processing costs of 7.4c/L (excluding any allowance for processor margins) for the Ornua product portfolio, the latest index figure implies an indicative return of 34.4c/L, inclusive of VAT.

This price is down from the 35.2c/L indicative price based on last month’s index.

The energy cost element of the estimated member co-op processing cost is variable and changes each month based on energy costs.

Ornua also confirmed that its value payment payable to its member co-ops in the month of September was €8.6 million, which equated to 5.2% of gross purchases in the month (4.6% year-to-date).

According to Ornua, the latest PPI figure and indicative price “reflects weak market returns and quiet demand through the month of September”.

Further afield though, the New Zealand-based global co-op Fonterra has increased its farmgate milk price forecast on the back of improved demand for milk and weaker supplies.

The co-op announced a new midpoint of NZ$7.25/kgMS, which is up 50c from the previous forecast.

Fonterra chief executive Miles Hurrell said that the improved outlook reflects both supply and demand dynamics.

“Here in New Zealand we’re forecasting collections to be slightly below last season, while aggregate milk growth in key export countries is expected to be below average for FY24 (full year 2024),” he said.

The Fonterra chief executive warned that it is still “early days” when it comes to the amount of its 2024 sales book that the co-op has contracted, saying: “We still face significant exposure to volatility in commodity prices.”