Aurivo set for weaker overall 2018 performance than ‘strong’ 2017

2018 won’t be as good a financial year as 2017 for Aurivo, though it should still be a good year, the north-west dairy giant’s CEO Aaron Forde has confirmed.

Forde was reflecting on what has been a year of volatility for the co-op – and Ireland as a whole – during an interview with presenter Claire Mc Cormack on tonight’s episode of FarmLand.

“2017 was a good year for Aurivo; 2018 would certainly be remembered as a year of volatility – volatility in weather and volatility in commodity prices.

“That’s been true for Aurivo; 2018 won’t be as strong a year as 2017 but we will continue our track record of a strong performance.

“That strong performance as a co-operative is measured in two ways; paying a good relative milk price to our milk suppliers – and for eight out of the past 10 years we have paid the strongest milk price in the northern half of the country to our milk suppliers in Aurivo.

“But also having a strong, sustainable co-operative there with a strong balance sheet. So, 2018 won’t be as good as 2017 but it will be a good year for Aurivo.”

2017 saw Aurivo increase its turnover by 9% to €426.4 million, according to the co-operative’s financial report for the year.

Aurivo processed 420 million litres of milk – a record year and an increase of 8% on 2016.

Marts also continued to make a “valuable contribution” to the business, with sales rising last year to €81.6 million from €78.5 million in 2016.

The reported group operating profit – before exceptional items – amounted to €3.9 million, an increase of 10% on the out-turn for 2016 (2016: €3.57 million).

Asked on where he sees milk prices going over the next 12-24 months, Forde was cautious but hopeful, noting that there have been multiple elements at play over the past year.

I think this year has been one of volatility; mainly driven by weather events – but not exclusively.

“Also by geo-political events – the China US trade dynamics that have been going on have been having somewhat of an impact.

“Oil prices have risen strongly – that hasn’t translated into milk prices as yet. One would have to remain hopeful that it will.

“We’re in a difficult phase now; most of the milk price in Ireland for the last 18 months, two years, has been made up driven by butter – the high price of butter. That historic high, that looks now to be plateauing and coming into a more normalised situation.

One would hope as we transition into 2019 that some of the dynamics that are there will tilt back in the supplier’s and the farmer’s favour and that we’ll see more stability in milk pricing for 2019.

The past week also marked the official launch of Homeland.ie, the agri-business branch of Aurivo unveiling a new website, described by Forde as its “35th store”.

Explaining the development, the CEO said: “Homeland is the brand for our agri-business unit; it has a feed mill producing 150-odd thousand tonnes of feed – Ballaghaderreen in Roscommon – and 34 physical retail stores up and down the west and north-west of Ireland.

“Homeland.ie is our thirty-fifth store effectively, with a good, strong team that has been 18 months building towards yesterday (Monday) when it launched.

We’re very excited about it. I never cease to be amazed by the people – profile, age of people – who are shopping online.

“Though, from our point of view as an agri-business and supplier into farming, we have absolutely got to be online and have the best agri-retail site in Ireland.

“We believe we’re there and hopefully it’ll do very, very well for us,” Forde said.