Tasmanian dairy farmers disappointed with Murray Goulburn milk price

Mr Lawrence said his initial reaction to the price was disappointment because he had expected more.

“It’s not as much as we’d like. A $5.00 price would have been slightly better. It was always going to be a frugal season,” Mr Lawrence said.

“Fonterra had indicated they would open a lot higher than that. There’s definitely a gap between the two major processors,” Mr Lawrence said.

“That makes it tougher through spring. It’s gently, gently again for the next season to control costs and maximise productivity,” he said.

Mr Lawrence is contracted to supply Murray Goulburn for 12 months, but said he would gain extra income from stock sales.

The company forecasts a price range of between $5.20 and $5.40 per kilogram of milk solids for the full season, based on dairy commodity prices, exchange rates, cost out initiatives and a milk intake of 2.5 billion litres.

Tasmanian Farmers and Graziers Association Dairy Council chairman Andrew Lester said Murray Goulburn’s farmgate milk price forecast was not unexpected.

“It is in line with what Murray Goulburn can sustainably offer,” Mr Lester said.

“We hope there’s opportunity for them to step it up later in the year,” he said.

Murray Goulburn’s price of $4.70 is less than rival Fonterra’s forecast of between $5.30 and $5.70 per kilogram of milk solids for the 2017/18 season.

The price has been based on commodity prices, Murray Goulburn chief executive Ari Mervis said.

“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,” Mr Mervis said.

He also announced a review for Murray Goulburn, looking at strategy, corporate and capital structure and profit sharing.

Financial benefits from the three facility closures at Edith Creek and in Victoria are not expected to be realised for another two years, Mr Mervis said.

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