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The PPI stands at 105.4 for February, unchanged from January. This is the first time the monthly index did not rise since starting its recovery from the rock-bottom value of 81 last summer.
While skimmed milk powder and butter returns fell in the past month, this was offset by higher cheese and whey powders.
The dairy commodities used to calculate the index are equivalent to a farmgate milk price of 29.7c/l once processing costs and VAT are excluded.
The PPI for February
The pause in the PPI’s six-month rally follows a sharp drop in the price of milk powders at Tuesday’s Global Dairy Trade (GDT) auction.
As co-ops prepare to set February prices, IFA dairy chair Sean O’Leary remarked that EU commodity prices – as reported by the European Milk Market Observatory for December, January and February – have been stable to slightly easier but remain equivalent to a farmgate milk price of 31.5c/l excluding VAT.
“This compares with average January milk prices of around 29.6c/l excluding VAT, and shows there is still scope for some price increases before peak,” he said, adding that 31.2c/l excluding VAT would be a “very realistic” price.
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