Murray Goulburn suppliers in shock over milk price cut

MURRAY Goulburn suppliers are shocked by the news their milk price will be cut for the rest of the season.

Not impressed: Paul Mundy, who farms with his wife Lenore, at Cobram East, labels the situation a “fundamental stuff-up of fairly substantial proportions”.

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MURRAY Goulburn suppliers are shocked by the news their milk price will be cut for the rest of the season.

Many are still calculating what it means for their operation, but people want to know answers.

Cobram East supplier Paul Mundy called for further resignations.

“The chairman and deputy chairman must resign,” he said.

“They can’t get off scott-free.

“It is a fundamental stuff-up of fairly substantial proportions.”

Gunbower supplier MG supplier Stu Modra said he wasn’t surprised with the news this morning.

Mr Modra said more MG board members should “consider falling on their swords” following this “debacle”.

MG today told the Australian Securities Exchange the milk price for the remainder of the year would be $5.47 a kilogram of milk solids, down from $5.60kg/MS.

United Dairyfarmers of Victoria president Adam Jenkins labelled the news “a major blow to the confidence of the Australian dairy industry”.

“This is very, very disappointing to come so far in a season and have an announcement like this,” he said.

“With the dry season, coupled with the high water prices in the north and lack of water in the south.”

Mr Jenkins also questioned MG’s plan to “prop-up” the milk price and said it could mean it would take longer for farmers to recover as they have to pay but the support.

MG’s proposal would mean farmers could receive support to keep their milk price at $5.47kg/MS and this would be paid back from FY17-FY19.

Mr Jenkins said he would encouraged farmers to talk to their accountants, banks and even a lawyer before considering this option.

When asked if other processors would consider dropping the farmgate price, Mr Jenkins said MG was considered the benchmark.

“I can’t see how they would not consider something,” he said.

Mr Jenkins was furious at a tweet by Murray Goulburn today which he said, in his opinion, pointed to insufficient accountability and governance.

The MG tweet he referred to said “the board realises that greater focus is required to support the execution of MG’s transformation and will be implementing business changes”.

The Board realises that greater focus is required to support the execution of MG's transformation and will be implementing business changes.

— Devondale MG (@DevondaleMG) April 26, 2016