Thursday, July 7, 2022

Murray Goulburn announces record opening milk price

Murray Goulburn Co-operative Co Limited (MG) today announced an effective initial price of $5.60 perkilogram milk solids, a 24 percent increase on the previous year’s opening price.  

MG Managing Director Gary Helou said that the combination of a 24 percent increase in the price
available to suppliers at the start of the financial year, changes to the milk payment system and the offer
of a pre-paid step-up would deliver an increase in cash of approximately $200 million to MG suppliers in
the first half of next season compared to 2012/13.

The forecast end-of-season milk price for 2013/14 is a range of $5.80 to $6.00 per kilogram milk solids
(approximately 45 cents per litre).

“MG’s opening price reflects the positive impacts of the $100 million operational savings, higher world
dairy ingredients prices and a softening Australian dollar.” Mr Helou said.

“Demand for dairy food remains strong in key markets in Asia and the Middle East with growth in traded
global dairy market expected to exceed five percent per annum. On the other hand, global supply of dairy
products was hampered by negative seasonal conditions in key exporting regions, including New
Zealand, Australia and Europe. Growth in global traded milk supply this year is expected to be less than
one percent, or half the previously forecast two percent. This shift in the balance between supply and
demand has resulted in the recent surge of international dairy prices.”

“Although prices are expected to stay strong during the next six months, factors like growth in supply,
foreign exchange and continued strong demand will shape prices during the second half of the year.”
Mr Helou explained that the MG Board had approved a special pre-payment of 2013/14 milk proceeds of
$0.09 per kilogram of butterfat and $0.19 per kilogram protein to be paid on 15 July 2013 – injecting $31
million into MG suppliers’ cash flows.

“This early injection of cash at the beginning of the new season will be a major boost to our supplier
shareholders who are enduring tough seasonal conditions and higher input costs.”

Mr Helou also confirmed that previously announced changes to MG’s milk payment system would bring
forward more cash to most suppliers.

“We have moved approximately $35 million from off-peak to peak months and made a range of other
changes to improve the balance in our payment system.

“In addition to our pricing initiatives we continue to provide additional services that can assist suppliers in
the short and longer term. This includes provision of MG Finance, our Next Generation young farmer
initiatives and our workforce support resource. MG Trading is also continuing to secure fodder to help MG
suppliers through the winter period where feed remains tight.

“We have outlined a very clear strategy designed to improve farmgate prices and we believe the Cooperative
is the vehicle for Australia’s dairy farmers to determine their own futures.”


More articles on this topic