The company announced a small price increase for suppliers and has also extended the terms of repayment of a milk support package introduced after the price cut.
The company has suspended the repayment of the support program and told suppliers they can pay it off over three more years.
The company has set aside $50million towards paying a step-up in the milk price of about 25¢/kg, which will take the season’s forecast milk price to about $4.95/kg.
Murray Goulburn chairman Philip Tracy said the annual milk support program recoupment had essentially been halved, and no supplier would repay more than the support they originally received.
A dairy farmer from Blighty currently milking 200 cattle was disappointed with the review of the support package, and despite the step-up, said farmers were still operating at a loss.
‘‘I’m still unhappy about the MSSP and really I don’t think they know what the payment should be for each farmer individually,’’ he said.
‘‘I believed in MG as a company and co-operative and I wanted them to show some positivity going forward.’’
He said the review had come too late and the milk price cut had already put a lot of financial pressure on farmers.
‘‘Cash flow is paramount and people are distressed. And I am one of them.’’
Murray Goulburn cited the wet weather as the reason for the downturn in production and the subsequent review of the support package, however the Blighty farmer doubted this was the case and said it was more likely that farmers had cut their production because of a poor milk price.
‘‘I’ve sold half my herd. The financial restraints are terrible.
‘‘I’m sure if the milk price was reasonable, farmers would still produce.’’
However, Mead dairy farmer Dianne Bowles was very pleased with the step-up, saying it showed a bit of positivity going forward.
‘‘My understanding is that this step-up has been enabled because of exceptional circumstances due to decrease in milk volume,’’ Ms Bowles said.
‘‘We possibly need to thank those that have left.’’
Ms Bowles said she had stuck by Murray Goulburn through the challenging times but believed the announcement sent a strong message that the co-operative was here to stay and was ‘‘keen to be a player’’.
While other people would be commenting the review and step-up were too little, too late, Ms Bowles said the MSSP was set up with good intentions from the start.
‘‘The repercussions have hurt and it’s a long way back for Murray Goulburn, but I hope they can turn it around.’’
Ms Bowles has decreased her production but said this decision was not a response to April’s price cut.
Fonterra’s milk price increase just hours after Murray Goulburn was an interesting development, Ms Bowles said.
‘‘It’s been hard slog working with animals walking through mud. It does have a negative effect on production.’’