Murray Goulburn yesterday raised its farmgate price from less than 33 cents per litre to 34.5c/litre, boosting the complex milk solids-based price offered to its 2400 supplier-farmers to an immediate $4.48 a kilogram.
The new MG milk price was welcomed by the co-operative’s farmers, though it still lags well behind key competitors, with Fonterra paying $4.75/kg, Warrnambool Cheese and Butter $4.80/kg and Bega $5/kg.
MG’s interim chief executive David Mallinson claimed the 3.4 per cent increase was solely related to better-than-expected sales income since July, as global milk prices recovered ahead of forecast after a supply glut.
He denied it was a desperate measure to stop some of Victoria’s biggest farmers switching supply to processors such as Bega Cheese, Warrnambool Cheese and Butter and the new Midfield group.
Murray Goulburn has lost 300 million litres of milk, or 8 per cent of its dairy processing business, since its shock reduction of milk prices in April, and another savage cut in July.
“We are starting to see market conditions turn; it is still a volatile (global price) environment but we think market conditions warrant a price step-up,” Mr Mallinson said.
Victorian farmer Tim Humphris, who milks 330 dairy cows at Tongala, said yesterday the latest price jump might just be enough to stop him switching from Murray Goulburn to local processor Tatura Milk.
“It’s small but it’s an excellent start; it will make a difference,” said Mr Humphris, who was on the brink of signing a deal with Bega-owned Tatura Milk for his 2.2 million litres of annual milk production. “This will go some way towards rebuilding the trust that has been eroded and lost.”
Murray Goulburn said it hoped to offer further “step-up” payments to its farmers during the next 10 months, taking its average milk price for 2016-17 to $4.88/kg.
Source: TheAustralian
Link: http://www.theaustralian.com.au/business/companies/murray-goulburn-gives-farmers-a-little-back-on-milk-price/news-story/95e3d7d0f40afdd0f1ae44a13ed59971
