In a week where Bega and other companies announced an opening price in the mid $5 per kilogram of milk solids, Murray Goulburn Co-operative announced an opening farm gate milk price of just $4.70/kg MS.
Murray Goulburn’s chief executive officer Ari Mervis said that in setting the opening price the company had taken a prudent view on key assumptions for commodity prices.
‘‘Although global commodity prices have shown some recovery since this time last year, whole milk powder and particularly skim milk powder prices remain under 10-year averages,’’ he said.
‘‘This has been somewhat offset by irmer butter and cheddar prices. We have also had regard to Global Dairy Trade auction results over the past two months and current futures pricing, both of which suggest some ongoing price volatility in global markets.’’
In correspondence to suppliers, Ari Mervis noted that while the opening and forecast prices were an improvement on last year, the company’s performance remained below his expectations.
‘‘Today (Tuesday), MG announces the commencement of a comprehensive strategic review which will look at all aspects of MG’s strategy and corporate structure, including the profit sharing mechanism and capital structure,’’ he said.
‘‘I see this review as a fundamental next step to strengthen MG for the future.
‘‘While the previous decisions resulting from the manufacturing footprint review, including the announcement of three site closures, were necessary, I do not consider them alone to be sufficient to move the business forward.’’
The co-operative has also announced a full range forecast of between $5.20/kg MS and $5.40/kg MS.
■For an interview between Country News and Mr Mervis, see: www.countrynews.com.au