Murray Goulburn has announced its milk flow has reduced but has reassured suppliers that it will not affect the opening average milk price for the Southern Milk Region.
At this stage, Murray Goulburn’s total 2017-18 milk intake is expected to be about 2.3billion litres.
The company reported 1.6billion litres of milk had been received in the first half of 2016-17.
According to Murray Goulburn, the impact of the reduction in milk intake has been offset by various cost and business improvements compared to budget, and while it has maintained the forecast range of $5.20 to $5.50/kgMS the company has warned if recent strengthening of the Australian dollar continues across the full financial year, this could create some uncertainty in relation to the achievability of $5.50/kgMS.
In response to the closure of three processing sites, the company has recently taken steps to optimise its manufacturing footprint in response to milk intake.
‘‘As a result, we have today taken the precaution of notifying all Victorian milk processing companies that at this stage MG does not intend to process any future surplus seasonal milk,’’ a letter to suppliers stated.
Murray Goulburn will provide a further business update at the time of the release of the 2016-17 full year results announcement on August 22, or earlier as required.
In other news, the company has announced that it has entered into agreements to sell the Kiewa Country brand and certain associated assets to a local business as well as appointing Deutsche Bank AG as a financial adviser to Murray Goulburn on the previously announced comprehensive strategic review.