MURRAY Goulburn has slashed its opening farm gate milk price for the 2016-17 season to $4.31 a kilogram of milk solids.
This morning the co-operative announced it would pay $4.31/kg to suppliers from the Southern Milk Region which takes into account a $0.14c/kg re-payment of the milk supply support package (MSSP).
The MSSP is a cash support package designed to limit the impact on Murray Goulburn’s dairy farmer suppliers in Victoria, Tasmania and South Australia following the reduction in the opening FY16 farm milk price. Murray Goulburn will recoup the funds distributed over the next three financial years from milk payments.
The co-operative forecast the farm gate milk price would rise to $4.80/kg during the 2016-17 season.
Murray Goulburn interim chief executive David Mallinson said commodity prices remained the largest external influence on its financial performance.
“Global conditions have not improved, and the latest data suggests excess global inventories, including the impact of European intervention, may have surpassed the equivalent of six billion litres of milk," he said.
“Key commodity prices have remained below US$3000 per tonne for almost two years, much longer than historical price downturns.”
