It is my honour as Chairman to report to you on a very successful year for the Society. After a solid trading performance which was aided by favourable weather and strong milk prices, profits were up in all departments. Overall turnover has increased by 6.1%, with operating profit (before trade bonuses) up 12.8%.
In addition to trade bonuses in line with previous years, the Board was pleased to announce the introduction of a market support provision designed to assist suppliers and customers during periods of adverse market conditions. This brings the total trade bonus and market support package to €4.5 million, representing a 26% increase on the 2024 Drinagh total.
The dairy markets, after a strong start to 2025, weakened dramatically in the second half of the year. An over supply of milk in the major milk producing regions of the world had a negative effect on dairy markets. However, the fundamentals for dairy remain solid in the medium term. Recognising the challenges facing milk suppliers this spring, the Board announced a dairy support package to assist farmers by offering rebates on dairy feed, fertilizer and milk replacer.
Conflict in the Middle East has underscored the increasing volatility of the global environment, with fuel and energy costs rising sharply and supply chains becoming significantly disrupted. In addition, the conflict has also had a negative impact on the fertilizer market, where prices have climbed due to higher production and transport costs. The introduction of the Carbon Border Adjustment Mechanism (CBAM) has further added to market uncertainty and intensified price pressures.
2025 Financial Performance:
Creamery turnover was up 8.1% driven by volume and price. Mill turnover was marginally lower with volumes almost the same as the previous year. Fertilizer turnover was up 16.8% with volumes up 6.5%; all other turnover in the stores was up 6.3%. The pharmacy division reports a 6.3% increase in turnover.
Carbery has reported strong results. The Nutrition Division continues to grow in all segments while the Taste Division performance was strong with continued expansion. Group turnover was up 8.2% on 2024 while operating profit was lower by 3.8%. Carbery was able to increase the stability fund by €3M bringing the balance available to support milk price as necessary to €11.6M. In November, large numbers of milk suppliers took the opportunity to hear firsthand of Carbery’s performance and plans through its roadshow events.
Our investment portfolio contributed to 2025 group profit with equity markets again delivering positive returns. Drinlis has seen growth in its short term and long-term workspace rentals reflected in encouraging results for 2025 and an increase in the value of the property. Shinagh Estates reported a 12.3% increase in turnover and a 32.7% increase in operating profit on 2024.
Creamery:
Milk supply increased by 2.3% (4.7 million litres) to just over 215.4 million litres, driven largely by a favourable spring and stronger output in the first half of the year. Notably, 2025 marks the first year since 2021 in which annual milk supply exceeded that of the previous year.
The FutureProof Sustainability Bonus payment increased from 1.0 cent per litre to 1.25 cents per litre, following the introduction of a liming measure. As a result, total payments to Drinagh suppliers under the programme reached €2.11 million or 0.98 cents on average per litre.
The Nitrates Derogation, which is critical to the commercial sustainability of our grass-based production system, was renewed for a further three years in December. A key determinant for the sector will be water quality in the years ahead. Encouragingly, there has been strong engagement among Drinagh suppliers in the Farming for
Water EIP, with over 40% participating in the scheme, which provides funding in areas requiring water quality improvements.
The Carbery survey identified farm succession as a key priority for the coming years. In response, a number of events were held throughout the year to support this focus, including the Gurteen Open Day, a farm structures workshop in Dunmanway, and a succession and collaborative farming information day at Drinagh Central. This area will require continued attention to ensure that members remain well informed about the opportunities available.
The Society extends its congratulations to Donal O’Donoghue, Maulathrane, Leap, who was the Drinagh winner at the Carbery Milk Quality and Sustainability Awards. Congratulations are also extended to Michael and Anne Duggan, Ballyboy, Dunmanway, who were finalists in the NDC and Kerrygold Quality Milk Awards during the year.
The Board approved a year-end bonus of 1.0 cent per litre on 2025 milk supplies. The average price paid for 2025 milk supplies was 56.04 cent per litre, after levies and charges and including VAT (53.50 cents per litre in 2024).
Stores:
The Stores division had a very strong trading year. Major redevelopment projects were carried out in the Skibbereen Hardware, Bantry Farm Centre and Dunmanway Hardware stores. Aughadown store was also upgraded. These investments position our stores well for the future. A rebate of €15 per tonne on fertilizer was approved at year end.
Mill:
Mill throughput was just under 99,000 tonnes for the year under review. Prices remained relatively stable throughout the year. The Board approved capital expenditure to construct a new storage shed and workshop for the mill. This project will be completed in mid-2026. Feed rebates similar to last year were approved at year end.
Pharmacies:
Our pharmacy business had a very satisfactory year with turnover increasing in all locations. A major expansion and refurbishment took place in our Skibbereen pharmacy. I wish to acknowledge the part played by our staff which facilitated the continuation of trade and service to our customers while the renovation was completed. The increased shop floor area in conjunction with robotic dispensary system leaves us well placed to meet the future needs of our customers.
Finally, I want to thank all those who contributed to the success of the Society in 2025. A special word of thanks to my fellow Board members for their support throughout the year. Thanks to the staff and management whose dedication helps the Society to continue to grow and prosper.
Thanks also to our loyal customers, milk suppliers and shareholders for their continued patronage and loyalty. After a very successful 2025, the early months of 2026 have brought uncertainty and difficulties. However the Co- Op is well placed to meet these challenges, and we look forward to the future with confidence.
John Hurley
Chairman.
Attachments: