MG lifts open­ing price

The Cobram Courier - - NEWS - By Jenna Bishop

Af­ter con­cerns Mur­ray Goul­burn’s con­ser­va­tive open­ing milk price would leave some sup­pli­ers strug­gling with debt ac­cu­mu­lated in last year’s ter­ri­ble sea­son, the com­pany has raised its open­ing price.

Last week, Mur­ray Goul­burn an­nounced its open­ing price would in­crease by 50¢ to $5.20/kg milk solids, which in­cludes the re­ward pro­gram and other in­cen­tives.

The com­pany also an­nounced an in­crease in the higher end of the full-year fore­cast, tak­ing the range from $5.20 to $5.50/kg MS.

Pre­vi­ously, farm­ers had ex­pressed their dis­ap­point­ment in a low open­ing price, es­pe­cially with all the other ma­jor pro­ces­sors open­ing at least 50¢ higher, in­clud­ing Fon­terra at $5.30/kg MS.

In a state­ment is­sued last Wed­nes­day, Mur­ray Goul­burn said the June 6 open­ing price of $4.70/kg MS was is­sued ear­lier than pre­vi­ous years to as­sist sup­pli­ers with plan­ning.

‘‘Since then, MG has had the op­por­tu­nity to re­view the 2017-18 bud­get as­sump­tions, which in­clude dairy com­mod­ity prices, ex­change rates and achiev­ing cost out ini­tia­tives, as well as achiev­ing milk in­take of ap­prox­i­mately 2.5 bil­lion litres,’’ the state­ment said.

‘‘The up­dated FMP has also taken into ac­count im­proved com­mod­ity prices re­flect­ing an­tic­i­pated mar­ket returns, to­gether with ad­di­tional con­tracted sales.

‘‘MG recog­nises that in the cur­rent com­pet­i­tive en­vi­ron­ment it needs to main­tain milk sup­ply and pro­vide im­proved cash flow for sup­pli­ers.

‘‘The de­ci­sion to re­vise the open­ing price to $5.20/kg MS is in­tended to as­sist in main­tain­ing com­pet­i­tive­ness and sup­port the sup­plier base.’’

The price re­vi­sion was wel­comed by the United Dairy­farm­ers of Vic­to­ria, who said it was a ‘‘sen­si­ble’’ de­ci­sion af­ter lis­ten­ing to sup­pli­ers.

‘‘They’ve taken a pos­i­tive step for­ward, but many farm­ers across Vic­to­ria are still re­cov­er­ing from last sea­son’s milk price cuts,’’ UDV pres­i­dent Adam Jenk­ins said.

The UDV has urged pro­ces­sors to pass any up­ward move­ments in the milk mar­ket onto farm­ers, with many farm busi­nesses ex­pected to re­main chal­lenged into the new sea­son.

It is also en­cour­ag­ing farm­ers to do their own num­bers on their farms with their own sys­tems.

Mr Jenk­ins ac­knowl­edged the early price an­nounce­ment as ev­i­dence Mur­ray Goul­burn and other pro­ces­sors had lis­tened to the farm­ing com­mu­nity and broader dairy in­dus­try.

‘‘It’s good to see Mur­ray Goul­burn come out early with a re­vised price be­cause it gives farm­ers time to plan their bud­gets for next year, when in the past these de­ci­sions would hap­pen af­ter the sea­son has started,’’ he said.

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