Profit after tax at Carbery in 2023 was €11.3m, down from €17.5m the previous year.

Turnover dropped 11% to €616.m, while operating profit was €6.9m lower at €19.6m.

The amount of milk processed was down 2% to 584m litres.

The processor said that performance at its dairy business was affected by the volatility in dairy markets throughout the year.

Carbery blamed a combination of subdued consumer demand driven by cost-of-living concerns, high dairy supply from 2022, geopolitical tensions and continued supply chain disruptions for the volatility.

Mismatch

The mismatch between the cost of inputs when making cheddar in the first half of the year versus the price received when it was sold also proved a headwind.

However, Carbery said it had some degree of protection from this, as its facilities allows production of both mozzarella and cheddar, allowing it to produce products which provide the best market returns.

Carbery produced a combined 62,000t of cheese last year, the majority of which was cheddar.

The taste division had what Carbery described as a “very strong performance” in 2023, with all regions delivering earnings growth.

The beverage and nutrition categories in Europe performed well, while the US market saw “significant” year-on-year growth despite some challenges.

Nutritionals

Performance at the nutritional ingredients business was described as “good” across all target segments in the annual report.

Carbery produces a portfolio of products under its Optipep brand for both the infant formula and clinical nutrition markets.

The company said that despite falling birth rates in China, that country remains a key infant formula market, where its ingredients are used in preparations designed for dietary management of babies with conditions such as colic and constipation.

On sustainability, Carbery dropped its scope one and two carbon emissions by 5.3% and its scope three (on-farm) emissions by 3.5%.

The introduction of the FutureProof scheme for suppliers saw a strong update, with 90% of farmers taking actions. Carbery paid a 1c/l bonus to all suppliers who agreed to adopt four measures under the scheme.

Carbery Group CEO Jason Hawkins said: “The strength of our diversified business model and our balance sheet allowed us to pay the second-highest milk price in our history to shareholders.”

He added: “Carbery is very proud that despite a challenging year, we managed to maintain our position as leaders in milk price.”

During the year Carbery paid €18.6m in support payments to shareholder suppliers from its stability fund. The remaining balance of that fund at the end of the year was €1.3m.

Chair of Carbery Group Cormac O’Keeffe said: “In my last year as chairman, I am very proud of how we prioritised paying a leading milk price.”

See full interview with Jason Hawkins in this week’s Irish Farmers Journal.