Dairygold inched closer to the billion-euro sales mark after a 'milestone year' for milk
But the Cork-based cooperative has warned about a volatile ‘butter bubble’.
AGRICULTURE GIANT DAIRYGOLD inched closer to the billion-euro sales mark last year.
The Cork-headquartered company – one the largest farmer-owned food and dairy ingredients processors in Ireland – booked sales of more than €965 million last year, an increase of just over €200 million on 2016′s tally.
The cooperative reported an operating profit of €32.4 million, almost double what it made during the previous 12-month period.
Dairygold chair John O’Gorman described 2017 as a “milestone year” for the company, attributing its financial performance to a “record volume of milk supplies”.
According to the annual results released by the cooperative, milk volumes increased by 8.3% last year to 1.3 billion litres.
The company said returns in the global dairy market were “significantly stronger” last year, which was reflected in its average milk price of 37.6 cent per litre, up 10.6 cent per litre on 2016′s figure. It said milk price increases were mainly driven by butter.
However, Dairygold noted that towards the end of last year, returns were “significantly less than the milk price paid to producers”. It said this volatile situation has continued into early 2018.
“The main factor was the rapid deflation of the butter bubble which went from a high point of €7,000 per tonne in August to less than €4,000 per tonne by year-end,” it said.
Dairygold CEO Jim Woulfe and chair John O'Gorman
Retail expansion
With a major chunk of its produce sold in the UK, Dairygold said the “continued uncertainty” surrounding the UK’s departure from the EU remains “a key concern”.
“Dairygold is clearly focused on developing alternative routes to market and on product diversifications as part of its risk mitigation and value-added strategies,” it said.
As part of its effort to build a stronger presence in Asia, it opened an office in Shanghai last year.
The company’s agri unit didn’t fare that well in 2017. Although revenue was up, Dairygold said 2017 was “another very challenging year for cereal and grain growers”.
Its retail division, on the other hand, delivered a “solid performance”.
Trading under the name Co-op Superstores, Dairygold operates 39 stores in counties Cork, Limerick, Tipperary and Clare. It sells a number of products including farming materials, workwear, electrical equipment and household supplies.
Last year, Dairygold announced that it would pump €11.5 million into the unit to open more stores between now and 2020.
