Performance nutrition, the big driver of growth at Glanbia in recent times, saw revenues grow only 7.6% in the first six months of the year. Meanwhile, the ingredients business powered ahead with revenues up 12.2%. But it wasn’t just lagging growth – margins also fell in the performance nutrition business from 16.1% to 15.4%.

Siobhan Talbot, Glanbia chief executive, told the Irish Farmers Journal this fall in margins was not unexpected given the recovery in dairy markets. The performance nutrition business has been concentrating on branded growth while reducing the volumes under contract manufacturing in recent years. Talbot was confident the second half of the year would be stronger and volume growth would be in the mid-single digit range for the full year.

She believes dairy markets are well balanced currently, but that dairy fats (butter) at the current prices are challenging in the longer term. She said that the big unanswered question is if dairy fats will turn in 2017. Because of the fat shortage she said that there is little incentive for producers to direct milk into other products such as cheese. She believes EU and world butter prices will align over time, but doesn’t believe prices will stay at this level.