Centenary Thurles, the Thurles-based co-op with 1,265 farmer members, has returned to profit after reporting pre-tax profits of more than €1.2m for its 2017 financial year. The co-op had made a loss of €412,000 the previous year, after supporting both milk and grain prices to the tune of €1.25m.
Centenary paid no supports to members on grain or milk supplied last year, with co-op chair Jim Russell describing 2017 as an excellent year for farming in general. The co-op said it paid an average milk price of 37.34c/l last year, which was up 9.5c on the 2016 average. Centenary said grain prices paid to farmer suppliers were up €7/t last year. With bonus payments included, the price for barley increased to €145/t, while wheat prices stood at €153/t.
The co-op said it bought 19,000t of grain from its farmers in 2017, up by 1,000t on the previous year despite a reduction in acres planted. The average grain volume supplied by farmers increased by 10t to 162t.
Overall, Centenary reported operating profits of just under €1.5m for the year, as profit margins recovered to a steady 1.5%. The co-op saw turnover grow by a very strong 25% last year to reach €95.1m. This gain was primarily driven by the improvement in dairy markets, with the co-op’s milk sales rising over 44% in 2017 to reach €59m.
Increased supply
Centenary collected close to 152m litres from its 342 farmer suppliers last year. This is up almost 7%, or 9.5m litres on the previous year. Centenary sells almost all of its milk on to Glanbia for processing. Less than 3m litres are retained by the co-op for processing into liquid milk, which is sold under the Thurles Fresh Milk brand. Centenary said the liquid milk market in Ireland remained difficult last year as average retail prices fell by more than 1c/l, while farmgate prices paid to winter milk supplies increased by 6c/l.
However, the co-op did note that there is a sense that the liquid milk market was stabilising and the race to the bottom to protect market share has been arrested.
Sales at Centenary’s agribusiness division increased 5% to €34.5m, due to a 6% increase in fertiliser sales and a 13% increase in animal feed sales. The co-op said dairy ration sales increased 13% in the year, while sales of beef feed proved resilient last year, rising by 18% in volume terms.
Turnover from Bramblemore, Centenary’s fully integrated pig business, increased 11% last year to over €1.6m due to improved pig prices. The co-op carries no long-term debt and has over €7.1m cash in the bank. The net asset value is €47m.
Centenary has investments in a portfolio of shares that were valued at €24.6m at year end 2017. The majority of this portfolio is held in shares in Glanbia, Aryzta and IPL Plastics, formerly known as One51.
During 2017, Glanbia spun out around €2.6m worth of shares as part of its Glanbia Ireland deal. The co-op said these spun-out shares were passed directly to its farmer members.
Outlook
Speaking to the Irish Farmers Journal, Centenary chief executive Joe Kerrigan said the mood among farmers had improved after a very difficult spring.
“At the start of the year there was a lot of worry on milk price but the outlook has become more positive recently. That’s given a bit more confidence to farmers,” said Kerrigan. The Centenary boss said milk supplies from farmers in 2018 is currently about 1.5% ahead of last year, despite a very difficult March and April.
The Centenary boss said he had been worried about tillage farmers, with the area planted in winter crops in the area significantly down. The bad spring had delayed planting of spring crops but the recent good weather should have helped farmers catch up on planting work and given crops a good start.