PROFITS at Dale Farm's parent co-operative United Dairy Farmers halved last year to £3.55 million.
The group said it was due to the depressed market returns, especially from milk powder exports, made worse by adverse exchange rates with the pound gathering strength against the euro as the year progressed.
United Group turnover was down slightly by 5 per cent to £421m over the year to the end of March.
It said this reflectied the impact of lower farmer milk prices and of lower feed prices and demand for feed in United Feeds against the previous record year.
Farm gate milk prices were volatile throughout the year, starting at a high of 32.4 pence per litre and finishing at 21.4 pence.
United Dairy Farmers said the collapse in dairy markets was driven by global overproduction in milk, weaker demand from China and a Russian ban on imports of EU dairy produce.
Dale Farm delivered a 10 per cent increase in turnover to £320m driven by a 27 per cent growth in consumer sales.
Sales of packed cheese were up 53 per cent while packed butter sales volumes increased 30 per cent.
During the year, Dale Farm purchased Welsh company Ash Manor Cheese and the Fivemiletown Speciality cheese business.
Dale Farm's group chief executive David Dobbin said: “The volatility in dairy markets and milk prices reinforces the rationale behind our strategy to grow in added value consumer products and thus deliver a more competitive and stable milk price to our farmers.
“Dale Farm delivered another year of strong growth however profits were hit by depressed market returns and adverse movements in exchange rates, with the pound gaining significantly in strength versus the Euro. The outlook for the current year remains difficult with dairy markets continuing to decline as the result of the ongoing global oversupply situation exacerbated by the ending EU dairy quotas in April 2015 which has led to increased output.”
At the end of March, United reached agreement with the NILGOSC pension scheme to withdraw from the scheme and cap its liabilities eliminating any future risk exposure.
This resulted in a one off exceptional net book charge of £1.9m.
