The Ornua (formerly Irish Dairy Board) purchasing price index (PPI) has remained stable.

The board of Ornua met on Tuesday and set the PPI at 91.5 for August, down just 0.3 from the July PPI. The July PPI fell by 3.4 to 91.8.

For farmers, August’s PPI points to returns of 26.96c/l. The PPI is a monthly indicator of market returns on dairy products sold by Ornua and the previous lowest level occurred in July 2011.

There are further signs of an overall improvement on the global dairy market. The previous two Global Dairy Trade auctions in New Zealand have been positive.

Milk output in Europe’s three big producers, the UK, France and Germany, continues to slow, driven by low prices and dry weather. French milk production is back 2% on the same week last year and 0.3% in Germany. Global production is up 1.2% overall.

There is also evidence of a slowdown in America, although indications suggest that the early season in New Zealand has begun strongly.

The boards of the co-ops will meet over the coming weeks to set a milk price for August and IFA Dairy Committee chair Sean O’Leary said the slight fall in the August PPI should allow co-ops to hold the price paid to farmers.

“This would help co-ops hold their August milk price, and would play a strong part in the current series of farmer-to-farmer discussion meetings, with co-op boards being run this week by the IFA National Dairy Committee as part of its autumn milk price campaign,” O’Leary said.

Lakeland Dairies is the first co-op to set a monthly milk price and its board is due to meet on Friday.