Ornua returns slide to 31c/L in February
The Ornua PPI index fell again in February to 105.0 (31.3 cpl, VAT inclusive, based on Ornua’s product purchase mix and assumed costs of 6.5ppl) from 111.3 in January.
The company says it reflects lower returns for butter, SMP and spot product.
It comes as Global Dairy Trade prices slipped for the second time in a row at a fortnightly auction held earlier this week as an influx of supply from New Zealand curbed buying.
The Global Dairy Trade Price index fell 0.6pc, with an average selling price of $3,593 per tonne, said auction platform GDT Events.
The index had edged down 0.5pc at the previous sale, snapping three consecutive auctions of gains.
Whole milk powder (WMP), the most widely traded item, fell 0.8pc after New Zealand dairy giant Fonterra increased the amount of powder on offer, though that was still a better result than the 2.5pc drop expected by derivatives markets.
"Fonterra had increased its WMP offer volumes ahead of this event as milk flows start to improve, so buyers are unlikely to feel as much urgency to secure product," said Amy Castleton, dairy analyst at AgriHQ.
New Zealand, the world's largest dairy exporter, had suffered from curbed supply caused by unusually dry weather late last year, which had pushed up prices. Wetter weather in recent weeks led to a more favorable outlook for supply, which meant further price gains were likely to be muted.