DAIRYGOLD CO-OP has posted an operating profit of €2.3 million for 2008 but losses on associates and other charges meant it retained a net loss of €3.2 million in a year that it described as “one of the most challenging on record”.
Global dairy markets suffered a “relentless” downturn in prices and costs such as energy, fertiliser and animal feed all rose sharply in 2008. The co-op also incurred a loss of €1.9 million on its share in Reox Holdings, the consumer foods, property and DIY retail holding company that was spun off from Dairygold in 2006.
Net debt increased by almost €30 million to €68 million during the year, which the co-op said reflected the investments made in the business. In addition, milk and grain bonuses declared for 2007 were paid out in 2008.
Turnover increased to €688 million, up €63 million on 2007’s performance. The retained net loss of €3.2 million compares to a retained net profit of €10.1 million in 2007.
Dairygold chairman Vincent Buckley said the co-op had supported dairy farmers over and above the market returns for milk by €20 million or 2.5 cent per litre during the year, which he said had protected its suppliers from the full severity of the collapse in global dairy prices.
However, Mr Buckley added that despite efficiency-improving investments in its operations, it was no longer possible to continue support at these levels.
“By the beginning of 2009, with dairy market returns plunging yet further against a background of a severe global economic downturn, it had become clear that despite our aspirations for a strong milk price, it would no longer be possible to continue to support milk price to 2008 levels,” he said.
In February, Dairygold cut the milk price they pay to suppliers by 2 cent per litre, with a further 2 cent per litre cut in March, meaning suppliers faced a price of 20 cent per litre - the lowest since 1983.
The Cork-based food company the Carbery Group has reported pretax losses of €800,000 for 2008 after a “challenging” year. Turnover fell 8 per cent to €204 million. Chief executive Dan McSweeney said demand for dairy products continued to be depressed.
