Murray Goulburn cuts 60 jobs

Murray Goulburn is set to cut more than 60 jobs as reduced dairy supply continues to hit its operations.

Murray Goulburn is set to cut more than 60 jobs

Murray Goulburn is set to cut more than 60 jobs as reduced dairy supply continues to hit its operations.

The co-operative will offer voluntary redundancies for an expected 60 driver roles, and additional support roles.

“These actions are regrettable but necessary to ensure a strong Murray Goulburn that can deliver sustainable and competitive returns for our suppliers,” a spokesperson said last night.

Earlier this year, the Transport Workers Union said it did not expect job losses.

More than nine rival dairy companies are understood to have lodged full or joint preliminary bids for the embattled farmer co-operative with its corporate advisers Deutsche Bank, with today’s cut-off date likely to lead to the selection of a shortlist of four of five early offers.

The bids — some of which will see unusual pairings of competitors as they haggle about how to divide Murray Goulburn’s prize assets, contracts and factories — are understood to combine an estimate of the value of the physical business and its 10 processing plants with a share offer to non-voting investors with units in MG’s hybrid listed trust MGC.

Bidders include French-Italian Parmalat, Cheese, New Zealand giant Fonterra, China’s Burra and Canada’s Saputo.

Murray Goulburn has lost almost half of its former 3.2 billion litres of milk supply in the past 18 months since it crashed its milk price retrospectively by 15 per cent and tried to claw back previous payments from its loyal suppliers.

Many of its farmers have walked away and sold their milk to better paying rivals such as Bega, Fonterra and Warrnambool Cheese & Butter, as well as newcomer Midfield Dairy.

Meanwhile, Australian dairy farmers are set to emerge this financial year from two trading years in the deep red, with Dairy Australia forecasting higher gross farm income and better milk prices ahead.

The situation is so far helped by lower costs flowing from an abundance of grass, with farmers in the major dairy export states of Victoria and Tasmania set to see slim profits flow of between 30 cents and $1 for every kilogram of milk solids produced, as milk prices approach $5.90/kg.

Dairy Australia chief economist John Droppert described the industry as entering a “recovery phase” after a tough and volatile 18 months since the shock industry crisis of April 2016.

Milk production is again creeping up as farmers feel slightly less nervous, with the sombre national milk pool set to increase from 9 billion litres last year to 9.2 billion litres in 2017-18.

Despite record low milk prices, 89 per cent of dairy farmers managed to record a return on assets last year, as favourable seasonal conditions and pasture growth reduced feed and irrigation costs, helping to offset low incomes.

The Dairy Australia Outlook report also found 89 per cent of are dairy farmers are optimistic for the 2017-18 season with the majority predicting an improvement in farm business returns.

Mr Droppert said while global dairy commodity process remained relatively stable, butter prices are at near record levels.