Aurivo Co-operative Society reported that it made an operating profit of €17m last year, a significant improvement on the €5m operating profit in 2023. Revenue was up 13.5% to €725m and net debt dropped from €26.5m to €11.5m. Aurivo created a milk stability fund of €3m to help manage future milk-price volatility.
In a year which saw milk volumes drop across the island, the co-op managed to increase the amount it processed by 1.5% to 516m litres. Aurivo said it had 24 new dairy entrants during the year. Chief Executive of the Co-op, Donal Tierney, told the Irish Farmers Journal that the new entrants coming into Aurivo more than covered the supply lost from those retiring from dairying. He said that the average herd among suppliers stands at approximately 90 cows.
Aurivo has four operational divisions – dairy ingredients, consumer foods, agribusiness and livestock marts. Turnover was higher at each of them in 2024 except agribusiness, where revenue slipped by 1%, mostly driven by lower fertiliser prices during the year.
Revenue at the dairy ingredients division jumped 22.5% as global dairy markets recovered. The co-op said that it developed new products and increased its global footprint, with Southeast Asia now accounting for 10% of sales, up from zero in 2022.
The consumer foods division saw a 15.1% increase in revenue, with the integration of the liquid milk business purchased from Arrabawn successfully completed during the year. While returns on butter sales were challenged due to the all-time high bulk butter prices, the impact was negated by retail price increases. Aurivo said the For Goodness Shakes sports nutrition business, which mostly focuses on the UK market, “recorded a strong performance” in 2024.
Revenue at the livestock mart division, up 13.8% in the year, was boosted by pricing as well as throughput. By the year-end, that stood at 79,000 cattle and 83,000 sheep, up 5% and 27% respectively.
Tierney said the operating profit of €17.1m in 2024 was 236% higher than 2023, adding that 2023 “was an awful year for us. We suffered more than most because our commodity mix on fat-filled powders was particularly hard hit.”
On the co-op’s current commodity mix, he said that over 25% of Aurivo’s volume is liquid milk.
“We’re the second biggest, next to Tirlán, in liquid milk in the market,” he said, adding that Aurivo would have a far higher proportion of its milk in liquid than any other processor. Tierney was confident about the health of that business, saying that the co-op had started paying “very decent winter premiums” in recent years.
The balance of the co-ops products are fat for butter – sold directly both to Ornua and churned by Aurivo for Ornua and other markets. On the protein side, the processor makes fat-filled powder. Tierney said that most of that product used to be sold to sub-Saharan Africa, but the co-op has diversified its markets in recent years and is now in Southeast Asia and Central America.
“Africa is still important for us, but we no longer have all our eggs in one basket.”
Looking at other divisions, Tierney said that Aurivo has a large argibusiness: “We have 34 retail stores and we have a large feed mill doing 178,000t of feed.”
Other divisions
On the retail side, Tierney said that the co-op is not looking at rationalisation: “We just opened a purpose-built agri, hardware and DIY store in Longford. All of the stores are branded Homeland and all of them have a core agribusiness.”
On agri supplies, Tierney said that there was some tightness in fertiliser supplies in late March and early April this year, where everyone wanted fertiliser at the same time. He said the problems were mainly around logistics, including the delayed arrival of ships, but that those problems had passed and there were no issues with getting fertiliser now.
Tierney also cited the increased volumes of cattle and sheep through the co-op’s marts during the year: “The marts business has always been a very low-margin business, but it has always been profitable in my time with Aurivo.
“The big difficulty with the marts is the credit risk. During the peak season, which in our region is October and November, the business would have credit outstanding running to €8m or €9m. We would get that debt down to practically zero every year, without fail.”
On the outlook for the mart business, in the context of falling herd numbers in both cattle and sheep in the country, Tierney was unequivocal: “There’s been a lot of chat about consolidation in the dairy sector – it’s consolidation in the mart sector that’s really, really needed. There’s far too many marts in the country.”
He did admit that he’s been saying for the last 10 years that “there’s going to be massive consolidation on the marts, but there hasn’t been any”.
Speaking of consolidation, and looking at the landscape for milk processing on the island Tierney said: “Aurivo has played a part in dairy consolidation in the past, back in 2012 Aurivo acquired the Dairy processing business from Donegal Creameries PLC and in late 2023 Aurivo acquired the branded liquid milk and van sales business from Arrabawn. I do see consolidation happening in the industry, but if you’d asked me five years ago, I would have given you the same answer and I probably would have said it would happen within five years back then. That hasn’t happened.
“Looking ahead, I don’t think there will as many co-ops in the country in a decade as there are now. But I’m not sure as to when that [consolidation] will be triggered. There needs to be a business case to do it. If two co-ops are coming together, is it going to add a cent a litre for the farmer? If it does, then there is a strong case, but if it doesn’t then there is no need to do it.
“Scale isn’t everything,” he concluded.
Comment
While Aurivo’s results for 2024 are a reflection of the recovery in dairy markets during the year, the co-op’s annual report does show a processor which has managed to take advantage of the situation by paying down debt, adding to its milk stability fund and also paying a strong milk price for the year.
The co-op’s dairy operations account for just over 60% of revenue last year, with the balance made up from €160m from agribusiness and €117.3m from marts. These two divisions are well known to farmers and are even complementary, with farmers able to use Aurivo brands for much of their business dealings. It does also mean that while the co-op has diversified away from its core milk processing business, it still is very much a farmers’ co-op.
The big question for the co-op is what comes next. With debt levels so low, there is opportunity to borrow to invest in further diversification – like other co-op CEOs, Tierney has no ambitions for fresh investments in processing capacity. Or, with the co-op in such sound financial shape, it might be the time to look at increased co-operation or even a merger with another operation in the country.
For any co-op board in Ireland right now, those conversations should be happening. But, as we have seen in the past, co-op mergers usually only happen when an operation is on the brink of failure. Those crisis-driven amalgamations were about survival, rather than about adding value for farmers.
Everyone seems to agree that there are too many processors in the country. It seems that despite this, the willingness to actually do something to change that remains absent.
In short
Profit recovers from 2023 slump at Aurivo.Co-op marginally increased milk supply in 2024.Mart business had record throughput.Co-op cut debt, added to milk stability fund.
Aurivo Co-operative Society reported that it made an operating profit of €17m last year, a significant improvement on the €5m operating profit in 2023. Revenue was up 13.5% to €725m and net debt dropped from €26.5m to €11.5m. Aurivo created a milk stability fund of €3m to help manage future milk-price volatility.
In a year which saw milk volumes drop across the island, the co-op managed to increase the amount it processed by 1.5% to 516m litres. Aurivo said it had 24 new dairy entrants during the year. Chief Executive of the Co-op, Donal Tierney, told the Irish Farmers Journal that the new entrants coming into Aurivo more than covered the supply lost from those retiring from dairying. He said that the average herd among suppliers stands at approximately 90 cows.
Aurivo has four operational divisions – dairy ingredients, consumer foods, agribusiness and livestock marts. Turnover was higher at each of them in 2024 except agribusiness, where revenue slipped by 1%, mostly driven by lower fertiliser prices during the year.
Revenue at the dairy ingredients division jumped 22.5% as global dairy markets recovered. The co-op said that it developed new products and increased its global footprint, with Southeast Asia now accounting for 10% of sales, up from zero in 2022.
The consumer foods division saw a 15.1% increase in revenue, with the integration of the liquid milk business purchased from Arrabawn successfully completed during the year. While returns on butter sales were challenged due to the all-time high bulk butter prices, the impact was negated by retail price increases. Aurivo said the For Goodness Shakes sports nutrition business, which mostly focuses on the UK market, “recorded a strong performance” in 2024.
Revenue at the livestock mart division, up 13.8% in the year, was boosted by pricing as well as throughput. By the year-end, that stood at 79,000 cattle and 83,000 sheep, up 5% and 27% respectively.
Tierney said the operating profit of €17.1m in 2024 was 236% higher than 2023, adding that 2023 “was an awful year for us. We suffered more than most because our commodity mix on fat-filled powders was particularly hard hit.”
On the co-op’s current commodity mix, he said that over 25% of Aurivo’s volume is liquid milk.
“We’re the second biggest, next to Tirlán, in liquid milk in the market,” he said, adding that Aurivo would have a far higher proportion of its milk in liquid than any other processor. Tierney was confident about the health of that business, saying that the co-op had started paying “very decent winter premiums” in recent years.
The balance of the co-ops products are fat for butter – sold directly both to Ornua and churned by Aurivo for Ornua and other markets. On the protein side, the processor makes fat-filled powder. Tierney said that most of that product used to be sold to sub-Saharan Africa, but the co-op has diversified its markets in recent years and is now in Southeast Asia and Central America.
“Africa is still important for us, but we no longer have all our eggs in one basket.”
Looking at other divisions, Tierney said that Aurivo has a large argibusiness: “We have 34 retail stores and we have a large feed mill doing 178,000t of feed.”
Other divisions
On the retail side, Tierney said that the co-op is not looking at rationalisation: “We just opened a purpose-built agri, hardware and DIY store in Longford. All of the stores are branded Homeland and all of them have a core agribusiness.”
On agri supplies, Tierney said that there was some tightness in fertiliser supplies in late March and early April this year, where everyone wanted fertiliser at the same time. He said the problems were mainly around logistics, including the delayed arrival of ships, but that those problems had passed and there were no issues with getting fertiliser now.
Tierney also cited the increased volumes of cattle and sheep through the co-op’s marts during the year: “The marts business has always been a very low-margin business, but it has always been profitable in my time with Aurivo.
“The big difficulty with the marts is the credit risk. During the peak season, which in our region is October and November, the business would have credit outstanding running to €8m or €9m. We would get that debt down to practically zero every year, without fail.”
On the outlook for the mart business, in the context of falling herd numbers in both cattle and sheep in the country, Tierney was unequivocal: “There’s been a lot of chat about consolidation in the dairy sector – it’s consolidation in the mart sector that’s really, really needed. There’s far too many marts in the country.”
He did admit that he’s been saying for the last 10 years that “there’s going to be massive consolidation on the marts, but there hasn’t been any”.
Speaking of consolidation, and looking at the landscape for milk processing on the island Tierney said: “Aurivo has played a part in dairy consolidation in the past, back in 2012 Aurivo acquired the Dairy processing business from Donegal Creameries PLC and in late 2023 Aurivo acquired the branded liquid milk and van sales business from Arrabawn. I do see consolidation happening in the industry, but if you’d asked me five years ago, I would have given you the same answer and I probably would have said it would happen within five years back then. That hasn’t happened.
“Looking ahead, I don’t think there will as many co-ops in the country in a decade as there are now. But I’m not sure as to when that [consolidation] will be triggered. There needs to be a business case to do it. If two co-ops are coming together, is it going to add a cent a litre for the farmer? If it does, then there is a strong case, but if it doesn’t then there is no need to do it.
“Scale isn’t everything,” he concluded.
Comment
While Aurivo’s results for 2024 are a reflection of the recovery in dairy markets during the year, the co-op’s annual report does show a processor which has managed to take advantage of the situation by paying down debt, adding to its milk stability fund and also paying a strong milk price for the year.
The co-op’s dairy operations account for just over 60% of revenue last year, with the balance made up from €160m from agribusiness and €117.3m from marts. These two divisions are well known to farmers and are even complementary, with farmers able to use Aurivo brands for much of their business dealings. It does also mean that while the co-op has diversified away from its core milk processing business, it still is very much a farmers’ co-op.
The big question for the co-op is what comes next. With debt levels so low, there is opportunity to borrow to invest in further diversification – like other co-op CEOs, Tierney has no ambitions for fresh investments in processing capacity. Or, with the co-op in such sound financial shape, it might be the time to look at increased co-operation or even a merger with another operation in the country.
For any co-op board in Ireland right now, those conversations should be happening. But, as we have seen in the past, co-op mergers usually only happen when an operation is on the brink of failure. Those crisis-driven amalgamations were about survival, rather than about adding value for farmers.
Everyone seems to agree that there are too many processors in the country. It seems that despite this, the willingness to actually do something to change that remains absent.
In short
Profit recovers from 2023 slump at Aurivo.Co-op marginally increased milk supply in 2024.Mart business had record throughput.Co-op cut debt, added to milk stability fund. 
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