However, such tie-ups have done little to protect Glanbia from either severe falls in commodity prices or a sharp downturn in the Irish economy. First, the company has had little choice but to accept lower prices for the butter, cheese, whey and other milk-derived products that it sells through world wholesale markets. Second, it has suffered from domestic recession — partly from lower consumer spending on branded foods and tougher competition from sterling-based rivals, but more from the knock-on effects of lower milk prices on farm incomes. This has hampered its agribusiness division, which sells fertilisers and animal feeds. The upshot is that Glanbia’s Irish dairy division, its biggest in terms of sales, will have made its first loss in 2009 — of about €18 million on current estimates.

The reassurance is that Glanbia will return to growth in 2010. Dairy markets have begun to pick up in recent months: farm-gate milk prices have risen about 20 per cent from their 2009 lows. The company has also stepped up its cost-cutting efforts at home, so much that yesterday it announced a further €15 million provision for the restructuring of its Irish operations. It is still early days, but the elimination of last year’s losses should enable group earnings to grow by between 6 and 8 per cent this year.

But Glanbia’s evolving shape belies its roots as a commodity food producer — still evident in the farmers’ co-operative that retains 55 per cent of its shares. It has forged a series of overseas joint ventures in which profits are moving in the right direction: Nutricima, a dairy powder tie-up with PZ Cussons in Nigeria, which provides scope to enter other emerging markets, and Southwest Cheese in New Mexico, one of America’s biggest whey processors.

The conference, to be held at Rochestown Park Hotel on Tuesday 12 January will deliver technical messages to commercial dairy farmers for the year ahead.

Four farming families will make presentations on the day, followed by a technical research/advisory paper to solve some of the questions posed by farmers.

In the first section, Laois brothers Paul and David Hyland together with North Tipperary farmer John Cahalan seek direction on how far they can push stocking rate.

In the second morning session, Tom Barron, Waterford, will outline key messages he has learnt from a recent trip to New Zealand for setting up farm infrastructure.

Finally young Waterford Farmer of the Year, William Keane will show how he is planning for the future with his father and developing their business to succeed long-term.

Conference fee is E60 with discounts for online booking, discussion groups and students. Visit www.irishgrassland.com or call 1890 843 442.

The impact of the downturn in global dairy markets in the first half of the year, lower US cheese prices and a poor economic backdrop with weak consumer demand resulted in a difficult year in 2009. Strong cost management together with an excellent operational performance could not fully offset an unprecedented trading environment. The Group expects to report adjusted earnings per share of 30 to 31 cents for 2009, in line with revised adjusted earnings per share guidance for the full year which was announced on 30 April 2009.

US Cheese & Global Nutritionals is expected to deliver a good result that is ahead of 2008. A good performance in Global Nutritionals driven by solid organic growth, new product introductions and the full year effect of the acquisition of Optimum Nutrition in August 2008 more than offset the effect of lower US cheese prices.

As previously announced the result from Dairy Ireland will be considerably lower than 2008. For most of the year the decline in global dairy markets created a very difficult environment for the Irish Dairy Ingredients business. Prices and returns for dairy processors and suppliers were below the cost of production, which gave rise to a major first time loss in Irish Dairy Ingredients for the full year. A reduction in farm incomes affected farm purchasing power leading to a performance in Agribusiness that will be lower than 2008. Consumer Products is expected to report a reasonable result for 2009 underpinned by a significant internal cost reduction programme. In the latter part of 2009, in response to a very competitive Irish food retail market, Consumer Products reduced prices to customers on a range of product lines.

Joint Ventures & Associates are now expected to deliver an improvement in performance in 2009. While performance was somewhat impacted by global dairy markets a robust performance by Southwest Cheese and an improved performance from Nutricima (Nigeria) more than offset a decline in Glanbia Cheese.

As part of ongoing improvements focused on achieving sustainable cost competitiveness Glanbia is implementing a further significant cost reduction programme in 2010 in Dairy Ireland. A net provision of approximately €15 million, mainly relating to redundancies, will be provided for in 2009.

A strategic review of the Group’s pension arrangements was completed in 2009. The revisions to the overall Group pension arrangements, which are currently being finalised, give rise to a net reduction in pension liabilities which will result in a 2009 exceptional credit of approximately €50 million. In 2009, a review of the internal corporate structures of the Group was also completed. This gave rise to an exceptional non-cash charge in 2009 of approximately €18 million on the repayment of sterling intergroup loans. This loss, which was previously recognised in the Group’s currency reserve, is now transferred to the Group’s income statement and therefore will not impact the overall Group’s balance sheet.

In total, Glanbia is expecting a post tax net exceptional credit of approximately €17 million for the year.

 Declan O'Brien