“The major dairy importers and traders across every continent have taken advantage of lower prices to increase their stock of dairy products over the past year and this will take some time to wash through the system. Overall we anticipate that there will be a gradual improvement in market conditions once global stocks begin to clear,” Hanley said in a Christmas message to Lakeland suppliers.

He listed the abolition of the EU quota system and increased production by European farmers, the Russian ban on EU dairy products and a global oversupply from dairy producing countries as factors for the current milk price volatility.

Yet he added that investment, acquisitions and cost-cutting at Lakeland made it a sustainable company in this environment.

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Hanley singled out the recent announcement of Lakeland’s joint venture agreement with Fane Valley.

“Lakeland Dairies will be the second largest dairy processing co-operative on the island of Ireland in 2016, with a milk pool of over 1.1 Billion litres. That will further enhance efficiencies across our entire processing footprint. Indicatively, that level of milk throughput will yield 160,000 tonnes of powders a year and over 30,000 tonnes of butter, in addition to our dairy foodservice output”, he said – all with “no share-ups, levies or funding demands placed on our milk producers”.

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Dairy trends: exchange rates, oil prices and balancing supply globally