United Dairy Farmers (UDF) is a co-operative organisation buying, processing and selling milk mainly from just under 1,800 registered suppliers across Northern Ireland.

In the extended business, UDF is the parent company and owner of several subsidiaries including Dale Farm Dairies, Rowan Glen located in Scotland and Dale Farm Lakeland in Cumbria.

The annual report to the end of March 2011 confirms that the business results have significantly improved. Two unrelated features are particularly noticeable this year. First, the value of turnover, through the sale of milk and milk products, has risen appreciably. Second, the balance sheet value of the shareholders' funds also increased appreciably.

The greater part of the explanation for the increase of £12m in the balance sheet value of shareholders' funds is an improvement in the actuarial value of pension funds. A notional deficit of over £10m a year earlier has converted to a small deficit of £0.8m.

As a co-operative organisation, UDF trades with small margins between the prices paid to milk suppliers and the revenue earned through selling that milk for processing.

Operating profits, at £4.7m, were just over 1% of turnover. In the last year, where milk supplies attracted a 19% increase in auction prices, this was supplemented by an increase of 8% in the volume of milk produced.

The average price paid to farm milk suppliers, at 25.75 ppl continued the improvement of recent years from an average of 20.9 ppl, in 2008-9.

Employment in the group rose slightly, by 3%, to average 817 during the year.

During the year 2010-11, UDF purchased the retail milk business of Fane Valley and this addition is credited with improving the results for Dale Farm.

Also during the year, UDF subsidiaries continued with a series of product improvements and expanded production of cheddar cheese and expanded the use of whey products.

Although the members of UDF did not receive any dividend in 2010-11, they did receive an allocation of bonus shares. UDF financed its capital expenditure plans from internal resources, including retained post-tax profits and a modest increase in bank borrowing.