German dairy co-op DMK saw its profits rise 9% last year to €79m, as profit margins widened slightly from 1.3% in 2018 to a still very narrow 1.4% in 2019. The co-op’s sales for the year increased by 4% to just under €5.8bn, while net profits fell by 20% to €24.5m, largely as a result of restructuring costs.

DMK said it invested €145m last year in capital projects, including the construction of a new infant formula plant to manufacture its own brand of baby formula, along with a new milk drying facility.

DMK is the largest dairy co-op in Germany, processing about 7bn litres of milk every year, supplied by its 6,000 dairy farmer members.

As a result of this loss in milk supply, DMK were forced to close a number of milk processing facilities

However, the co-op lost a massive 1bn litres in milk supply last year, as a large cohort of dairy farmers walked away from the co-op to rival dairy processors.

As a result of this loss in milk supply, DMK were forced to close a number of milk processing facilities and outsource milk processing to other companies. Ingo Muller, CEO of DMK, said both measures cost the co-op money, but allowed it to stabilise the business following the loss of such a large volume of milk.

On top of this, the milk price paid to farmers also suffered. Muller said the co-op’s milk price for 2019 (32.3c/l at 4.2% fat and 3.4% protein, according to LTO) was not where he wanted it to be, as it was below the average milk price paid by other dairy companies, against which DMK benchmarks itself.