The Dairygold Co-Operative Society has reported record turnover and operating profits for 2022 despite what it called a backdrop of considerable volatility and inflationary pressures.
Dairygold posted a record turnover of €1.65 billion for the year to the end of December, an increase of 40.9% or €477.8m on 2021.
The co-operative also reported EBITDA of €68.5m and operating profits of €40.2m, increases of €10.9m and €9.8m respectively.
Dairygold said it paid leading milk and grain prices during the year, with an excellent performance delivered across all of the its businesses.
In its results statement today, Dairygold said that 2022 was an "extraordinary" year for dairy prices.
"Several factors on the supply side, including weaker output in the major global milk producing regions, post pandemic supply bottlenecks and the war in Ukraine, combined with stable demand, significantly strengthened dairy market returns," it noted.
Dairygold paid an historically high milk price of 62.4 cent per litre, based on the average constituents received including bonuses, plus VAT, an increase of 52% on 2021's milk price.
But it noted that dairy market prices have weakened in recent months with slower economic growth and the impact of high product prices reducing demand.
"This has inevitably impacted milk price in 2023, but as always, Dairygold's main priority is to continue to maximise returns for its members," the co-operative said.
The Dairy Ireland Business was a significant contributor to the society's strong operational and financial performance during 2022.
1.48 billion litres of milk were collected and processed from Dairygold Milk Suppliers over the 12 month period. Turnover increased by €301.6m to €1.03 billion, mainly due to the record increases in dairy market prices during the year.
Dairygold's Health and Nutrition Business continued to build a strong distribution network in China for its Aerabo premium brand of fortified Irish whole milk powder.
It is also continuing to explore acquisition and investment opportunities with the focus on finding the most appropriate opportunities from a margin and risk management perspective.
Meanwhile, its UK and Europe Business performed well last year, exceeding expectations, delivering a strong financial performance.
The focus for both businesses during the year was to broaden their commercial footprint through market diversification, product development initiatives and strong customer relationships.
Dairygold's Agri Business delivered a very strong performance across all activities in 2022, but was also impacted by the increasing cost of inputs and the challenge of securing products to meet customers demands.
The society said there is still huge uncertainty around feed and fertiliser prices, and volatility remains in the market, which will continue to be a challenge for the business in 2023.
"Dairygold recognises the impact that this volatility is having at farm level and will continue to offer value to its members, through strategic and efficient buying practices," it added.
Dairygold chief executive Conor Galvin said the society's strong performance was driven by maximising the unprecedented high market returns, achieving enhanced operational efficiencies, while managing volatility and significant inflationary pressures.
"This enabled the society to pay very strong and extremely competitive prices to members for their produce," Mr Galvin said.
He said the dairy industry and the volatile conditions within which it operates, continues to go through a period of significant uncertainty, with huge challenges to be faced, including sustainability, geopolitical tensions and ongoing market volatility.
"The last number of years have been very positive for the Society, and while we have a clear roadmap for the future, we need to be cognisant of how these challenges will influence the future, to continue that success over the coming years," he said.
"Making the appropriate and necessary decisions, to future proof farm enterprises and the society, will be critical to deliver the short-term goals and long-term strategic ambitions of the society and our members," he added.
