By ANEEKA SIMONIS
MILK prices set by major processor Murray Goulburn have been slashed far more than already struggling farmers had expected.
The shock below-production price announcement has been described as “worse than the worst case scenario” for suppliers.
The troubled milk giant announced it will pay suppliers $4.31 a kilogram for milk solids during the coming season, causing significant losses to farmers which estimate per kilogram value to be between $5 and $5.50.
Victorian Farmers Federation Cardinia branch president Ian Anderson predicted most farmers will “be running at six figure losses” over the course of the season following the Tuesday 28 June pricing announcement.
“If (farmers) can get by, they are doing well. No one will be developing their business, everyone is just in survival mode.
“The opening price is worse than the worst case scenario.”
Dairy farmers have already been forced to lay off workers and mental health care packages have been announced in the wake of the April news which meant farmers would be forced to retrospectively pay back millions to the processor due to a global supply shortfall.
United Dairyfarmers of Victoria President Adam Jenkins said: “Dairy farmers are still carrying the weight of MG’s poor management decisions that’s led to the debt they’re being forced to repay on the back of this low opening milk price.”
However, he suggested the $4.31 per kilogram cost was likely a conservative figure as the global markets take a hit with Britain’s recent decision to leave the European Union (EU).
“This is a conservative price, and it’s most likely that MG is erring on the side of caution, but it opens up the possibility of stepping up to a more reasonable price later in the season,” he said.
Murray Goulburn forecasts the price will rise to $4.80 per kilogram by the end of next season.
