Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Murray Goulburn announces 2017 farmgate milk price

Tuesday 28 June 2016 12:34 PM

Murray Goulburn announces 2017 farmgate milk price, sees only 'modest' recovery

By Tina Morrison

June 28 (BusinessDesk) - Murray Goulburn Cooperative, Australia's dominant milk processor, announced its forecast farmgate milk price for the coming year, saying it expects only a modest recovery in prices in the second half of the year.

The company forecast a farmgate milk price of A$4.80 per kilogram of milk solids for the season ending June 30, 2017, compared with an expected payment of between A$4.75 to A$5.00 in the current year. It announced a 2017 net opening farmgate milk price of A$4.31/kgMS after repayment of a 14 Australian cents/kgMS milk supply support package.

Dairy companies are cutting payments to their farmer suppliers as they grapple with weak dairy prices which have remained lower for longer than expected as global supply continues to exceed demand. Murray Goulburn said today that global conditions haven't yet improved.

"In the face of these difficult market conditions, the forecast FY17 FMP reflects MG's view that commodity prices will continue to trade around current levels for the remainder of the 2016 calendar year with only a modest recovery in price of around 6 percent across MG's major commodities during the second half of FY17," interim chief executive David Mallinson said in a statement. "This prolonged environment of lower prices means MG expects to achieve lower average selling prices for commodities throughout FY17 when compared with FY16.

"We acknowledge FY17 will be a challenging year for our suppliers," he said.

To help cope with the lower prices, Murray Goulburn is looking to make its business more efficient by reducing costs and working capital levels, he said.

Australia's Bega Cheese last week released an opening farmgate milk price for the 2016/17 season of A$5/kgMS, saying analysts aren't expecting an improvement in dairy commodity returns until the first half of next year. Fonterra Cooperative Group, which is obliged to at least match Murray Goulburn’s price under its Bonlac supply agreement, is yet to release its forecast for the new season in Australia.

Units in the MG Trust last traded at A$1.135 and have shed 54 percent this year.

(BusinessDesk)

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

$7.5 Billion Surplus: Government Accounts "Show Strong Economy"

“The surplus and low levels of debt show the economy is in good shape. This allows the Government to spend more on infrastructure and make record investments in health and education,” Grant Robertson says. More>>

ALSO:

New OIO Application Trumps Judicial Review: OceanaGold Cleared To Buy Land For Waihi Tailings Expansion

In a surprise turnaround, the government has given OceanaGold a greenlight to buy land to expand its Waihi mine after the application was previously turned down by Land Information Minister Eugenie Sage. More>>

ALSO:

Christchurch Rebuild: Fletcher Sued For $7.5m Over Justice Precinct

Fletcher Building is being sued for $7.5 million by utilities contractor Electrix, one of the subcontractors on the Christchurch Justice and Emergency Services Precinct. More>>

Three New Drugs: PHARMAC Signs Bundle Deal For More Cancer Medicines

420 New Zealanders with lung cancer, breast cancer, multiple sclerosis and respiratory disease will benefit each year from a bundle deal PHARMAC has finalised with a medicine supplier. More>>

ALSO:

"Levels Playing Field": Government Responds To Electricity Price Review

The changes announced today include: • Supporting new and independent retailers by requiring the big power companies to sell into the wholesale market at affordable rates. • Extending discount rates to all customers • A pilot scheme to help customers who have not switched power providers before to shop around for better deals... More>>

ALSO: