For the year to March 31 2015, Dale Farm posted turnover of £320M, compared with £293M the previous year. However, the group’s pre-tax profit fell to £3.55M due to depressed market returns especially from milk powder and cheese exports made worse by adverse exchange rates, said the company’s chairman John Dunlop.
Part of the United Dairy Farmers Group farmer co-operative, Dale Farm exports its powders and cheese to 45 countries. The company has operations in Ballymena, County Antrim, and Cookstown, County Tyrone the main cheese production centre.
In addition, it has manufacturing operations in England and Scotland, where it makes butter, cheese, yogurt, ice cream, dairy-based drinks and cream.
Profit decline
In a review of the year accompanying the financial results, directors attributed the profit decline to a reduction in returns for bulk dairy products.
“The growth in global milk supply in the last quarter of 2013/14 continued during 2014/15, leading to an oversupply situation and a sharp reduction in dairy market returns and farmgate milk prices,” it said.
“Matters were made worse by a weakening in demand with reduced Chinese dairy imports and by the Russian import ban on EU food products introduced in August 2014.
Eroded export returns
“Product realisations were further impacted by the strengthening in the value of sterling versus the euro and the US dollar, which eroded returns from exports and has made imported dairy products cheaper.”
However, Dale Farm said that despite the “difficult markets” it was able to process a record volume of its members’ milk and continued to generate strong growth in consumer product sales, mainly in cheese. “This more than offset the drop in sales in other sectors caused by the significant fall in dairy market returns,” it said.
The acquisitions of Ash Manor Cheese in Britain and the Fivemiletown speciality cheese businesses in Northern Ireland, coupled with investment in additional cheese packing capability, supported growth in consumer cheese sales, which more than doubled in the year, the company reported.