In a trading statement to the City, Dairy Crest said that trading conditions had remained competitive with oil related costs continuing to increase.
It added that group profits for the six months to end September 30 would be significantly lower than in the first half of the year, although performance in the second half would benefit from a firmer market for cheese, recent business wins and acquisitions.
In its foods division, Dairy Crest said that its key brands maintained market share and its cheese brand Cathedral City had delivered a strong performance.
In its dairies division, fresh milk volumes to major retailers were down in the first half, but volumes in the second half would increase once a contract agreed with Morrisons starts in October.
Meanwhile, in its trading update, Robert Wiseman Dairies said that although it had increased its milk prices in March this year, inflation in oil related costs had eroded the affect of the increase.
Despite this, Robert Wiseman said that it anticipates the full-year to be “a record one” in terms of volume and turnover.
However, it added that because it had lost its milk supply contract with Morrisons, it would cut down on production volumes at its dairies in Glasgow and Aberdeen, which would lead to redundancies.