Irish Dairy Industry Faces Challenges Amid Rising Costs and Falling Milk Prices

The Irish dairy industry is currently dealing with substantial challenges due to rising energy costs and falling milk prices, as highlighted by Lakeland Dairies' chief executive Colin Kelly. He noted the 'significant pain' being felt across rural Ireland and urged the government to take further action to protect farm incomes and prevent disruptive protests.

In 2025, Lakeland Dairies achieved a 10% increase in group revenues, reaching €1.9 billion. This growth was attributed to higher milk production volumes, with the group processing a record 2.14 billion litres. Despite this, the year was marked by significant 'volatility', as detailed in the company's annual report.

Milk prices declined sharply in the latter half of 2025 and continued to drop in early 2026 due to a global milk surplus. However, Ornua, part-owned by Lakeland, reported recent signs of stabilization. Kelly mentioned that global milk flows were 4% to 6% higher than the previous year, an unprecedented situation for the industry.

Despite these challenges, Lakeland reported operating profits after exceptional items of €34.4 million, slightly up from €33.5 million in 2024. Distribution costs remained stable at €237.4 million. The company benefited from economies of scale, which helped manage costs effectively.

Additionally, Lakeland implemented an efficiency program, resulting in redundancy costs of €5.4 million and a headcount reduction of 110 employees, primarily in the last quarter of 2025. The company also reported exceptional income of €6.5 million from the sale of its ice cream business and a factory closure.