Annual profits at Dale Farm, Northern Ireland’s largest milk processor, which has a large plant in Ballymena, have fallen by about 50% to £3.5m.
Its parent group, United Dairy Farmers co-operative, said the reduction was due to depressed market returns, especially from milk powder exports.
This was “made worse by adverse exchange rates with the pound gathering strength versus the euro as the year progressed”, it said.
The firm said also that farmgate milk prices had been volatile.
“Prices roller-coasted, starting the year at a high of 32.4 pence per litre and finishing at 21.4 pence,” it said.
“This reflected a collapse in dairy markets driven by global overproduction in milk, weaker demand from China and a Russian ban on imports of EU dairy produce.”
Dale Farm group chief executive David Dobbin said despite this fall in operating profits, the company had “delivered another year of strong growth”.
“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,” he said.
The company said there was a 10% increase in turnover to £320m, driven by a 27% growth in consumer sales with packed cheese sales volumes up 53% and packed butter sales volumes up 30%.
Its brands include Dromona, Spelga and Rowan Glen.