Ornua reported an operating profit of €136.6m for 2025, a 4.7% increase on the previous year, on revenue of €3.45bn.

The Ornua value payment to member co-ops was €74.3m, made up of cash bonuses and additional premiums paid for products purchased during the year.

Total purchases of dairy products from member co-ops reached €1.86bn, which Ornua said reflected the robust product prices paid to members during a mixed year for processors.

Conor Galvin, Ornua CEO, said that access to Kerrygold and value-add ingredients is worth 2c per litre to member co-ops.

Overall, Ornua said its performance during the year was “resilient” despite “very turbulent market conditions”.

The Kerrygold brand remains Ornua’s key asset and reached the milestone of $1bn in retail sales in the US for the first time in 2025.

This achievement is particularly notable in the face of challenging trade environment which existed during the year, especially relating to US President Donald Trump’s tariff policies.

Kerrygold remains the number one butter brand in Ireland and Germany; and the number two butter brand in the US.

Kerrygold introduced 16 new products and product extensions during the year including new butter blends, Kerrygold cheese sticks, cream cheeses and new flavoured butter.

The value-add ingredients business, which sells dairy products to leading manufacturers and quick-serve restaurant operators, saw continued “robust demand” supported by Ornua’s technical expertise. The co-op noted that there was significant commodity market volatility and notable headwinds for the global food manufacturing and food service sectors during the year.

Dairy supply and demand

Ornua noted that global milk supply was much stronger than anticipated in 2025. While flows increased by about +1.0% in the first half of the year, they increased by almost +4.0% in the second half, with annual collections expanding by +2.5%.

That expansion was across all major milk-producing regions including Europe, New Zealand and the US. The increase in the EU-27 was driven by higher yield-per-cow as favourable weather and higher margins led to greater milk production levels.

This, Ornua said, resulted in a notable increase in the production of butter, cheese and skim milk powder.

On the demand side, the retail sales environment in Europe was stable as the rate of growth slowed.

The foodservice sector saw sluggish demand as lower-income consumers were reportedly eating out less often.

Against this backdrop, with higher supply of dairy commodities meeting flat demand, there were weaker commodity prices later in the year.

This had a direct effect on farmgate milk prices, particularly in the fourth quarter of the year.

The conflict in the Middle East has created some urgency for buyers to secure product

The start of this year saw a stabilisation of European dairy commodity prices after a sustained period of weakness.

Demand from international markets has also picked up as buyers see value at current prices.

In addition, the conflict in the Middle East has created some urgency for buyers to secure product.

However, that current boost to demand could affect future purchasing.

Combined with continued robust global milk supply and geopolitical instability, this could limit demand (and consequently price) growth potential in the second half of 2026.

Operating model

During the year the co-op introduced a new operating model which it calls “one global Ornua” which aims to simplify workflows across the business and strengthen collaboration across markets and divisions. The new model sees the creation of a global commercial division which brings together the consumer foods and value-added ingredients and which will be led by Cesar França who previously held the role of managing director of global foods.

The co-op will also have a dairy ingredients division, a global operations division and a group functions division.

“There has been an increase in the cost of production from the primary producer forward, which requires the entire system to be more efficient than ever,” Galvin told the Irish Farmers Journal.

“One of the pieces we were looking at when we began our strategic review 18 months ago was how to become more efficient and develop a model that is more scalable where we can drive margin through to business to give back to members.

At the core of this entire structural change is our desire to keep growing

“What our new operating model allows us to do is to scale our expertise in commercial, in operations and in group functions. This will allow us to get the benefits of our size and allow us to invest back in innovation.

“At the core of this entire structural change is our desire to keep growing, but to keep growing by being more creative, by being more inventive and by being more in tune with what the consumer wants.”

Ornua 2030

The co-op has introduced a new five-year strategy to 2030 which outlines Ornua’s ambitions for growth.

The co-op aims to grow earnings to over €200m in five years to enable it to generate stronger member and farmer returns and reinvest for the future. This includes a target to grow the Ornua value payment to members to €99m.

Other financial targets include a 5% earnings margin and net debt of €110m through strong balance sheet management.

There is also a target to grow brand value from €1.8bn to €3bn over the next five years.

Ornua has identified three pillars to achieve these goals. The first is “world-class commercial execution” and to be the partner of choice for member co-ops, the second is “operational excellence” through driving efficiencies and simplifying Ornua’s global manufacturing footprint, and the third is “strategic enablers” through people, technology and finance.

It is clear that for Ornua, 2025 was a challenging year. Even while other dairy processors had strong commodity prices for the first six months, the Kerrygold maker had to deal with the uncertainty and market dislocations caused by Trump’s tariff policy.

The financial outrun for the year is a testament to how strong the Kerrygold brand is in the key US market, with retail spend on the product remaining robust despite all the uncertainty.

Looking ahead, there appears to be little sign of an end to the volatility in dairy markets. If supply growth remains strong and demand growth weak, then competition for markets where margin can be found will only increase. The Kerrygold and the Irish grass-fed brands are one place where those margins can be found.

Ornua has built that market up over decades to allow Kerrygold to become the premium consumer product it is. This premium is reflected in the extra returns which Ornua earns on those Kerrygold products. The challenge over the next few years will be to protect that brand and, critically, that margin, from all challengers – both foreign and domestic.