Dairy Farmers of Britain has vehemently denied speculation it is in trouble.

Last month, the £562m farmer-owned co-operative blamed the credit crunch for the cancellation of a scheduled half-yearly payment of interest on members’ accounts, believed to be worth £1.75m, which sparked rumours of cashflow problems.

In response, chief executive Andrew Cooksey this week described the “feverish rumour-mongering” as “wildly inaccurate and potentially very damaging ”.

Speculation had been stoked by two high-profile departures in the past week.

Commercial director David Potts left the company to become MD of newly formed yoghurt business Nom Dairy UK, while nonexecutive director Philip Moody left to become an advisor to DFB in his role as MD of Smith & Williamson Corporate Finance.

However, Cooksey insisted DFB staff were working to keep the company’s development on track . “We simply cannot be distracted by ill-informed speculation,” he said. “We will continue to keep all members fully informed whenever there is actually something to report.”

DFB was hampered by having less modern facilities than many of its rivals, making it harder for the company to compete effectively,a source close to the company said. In spite of that, the farmer-owned business model gave DFB protection to ride out the storm, the source said.

In its most recently published results, for the 12 months to 31 March, DFB reported a pre-tax loss of £7.5m, up from £2.7m in 2007. Turnover was up 1% due to higher milk prices.