Operating profits for Aurivo Co-Op, the dairy co-operative behind Connacht Gold butter and Donegal Creameries brand, saw a significant drop in 2023 due to a major decline in milk prices and fertiliser sales. The co-op’s full-year results, released on Wednesday, showed a nearly 30% decrease in the average price paid to its members per litre of milk from 61.4 cents in 2022 to 41.1 cents in 2023.
Global milk commodity prices have taken a hit, reaching record lows after a peak last year, largely attributed to a reduced appetite for dairy products from markets in China, Southeast Asia, and Japan. Despite these challenges, Aurivo made efforts to uphold the milk price for its dairy farmers in 2023, leading to a 71.6% drop in operating profits from €17.8 million in 2022 to €5.1 million in 2023.
The co-op’s agribusiness unit also witnessed dampened demand for its fertiliser products, primarily due to weather-related delays in the spreading season last year and a decrease in fertiliser commodity prices. This contributed to a 13.9% decline in agribusiness unit revenues to €16.7 million in 2023. Furthermore, the co-op’s overall turnover fell by 16.4% to €638.6 million during the same period.
Reflecting on the challenging year, Aurivo’s chairman, Raymond Barlow, and chief executive, Donal Tierney, reiterated the co-op’s commitment to building a sustainable future for the business, ensuring support for the farmers, and prioritising effective investments. They expect 2024 to bring better opportunities for Aurivo and the sector at large, while remaining focused on delivering ongoing value to their members, customers, and the communities they serve.
In the meantime, Aurivo reports that Connacht Gold’s profits have risen by 14% over the year, experiencing nearly a quarter rise since 2021. Additionally, the cooperative finalised the purchase of Arrabawn’s liquid milk and butter van sales venture, incorporating it into their consumer foods division. This department maintained a steady revenue stream at €137.5 million, showing practically no change from the preceding year.