Dairy processor Murray Goulburn will increase the amount it pays suppliers for milk, though the amount will still be less than it costs those farmers to produce it.
The co-operative said in a statement that it will pay farmers $4.46kg/ms after application of the MSSP repayment, or an extra 15 cents per kg.
As the ABC notes, this is less than other processors, such as Fonterra (which is paying $4.75kg/ms), Bega ($5kg/ms) and Warrnambool Cheese and Butter ($4.80kg/ms).
In addition, MG has increased its forecast FY17 farmgate milk price to $4.88 kg/ms.
“Market conditions remain volatile however we have been able to capture enough of the current uplift to pass on both a step-up and modest increase in full year forecast to suppliers today,” said MG’s Interim Chief Executive Officer David Mallinson.
“Whilst international dairy markets have improved recently, they remain below historical average levels. Recent signs of recovery have come as global milk supply slows year-on-year. However, commodity prices and the strength of the Australian dollar remain a source of risk to current full year forecast.”
In April, MG retrospectively cut its farmgate price. Shocked farmers, who were not expecting the cut now owe the company money and many don’t expect to survive.