Murray Goulburn’s forecast farmgate milk price of $4.80 per kgms for 2016/2017 will enforce dairy farmers to try to survive while receiving less for their milk than the cost of producing it.
David Basham, acting president of advocacy body Australian Dairy Farmers told the SMH farmers are likely to have to endure this situation for the next 12 months.
Announcing the forecast yesterday, MG Interim Chief Executive Officer, David Mallinson blamed commodity prices for the forecast.
Mallinson said that, according to the latest data, excess global inventories may now be more than the equivalent of 6 billion litres of milk.
“We acknowledge FY17 will be a challenging year for our suppliers. We have set a robust forecast, and while there are a number of areas which may provide upside to our FY17 forecast, we do not believe it is prudent to include these in our forecast at this stage. Should more positive conditions emerge, MG will be vigilant in ensuring any upside passes to our suppliers and investors,” he said in a statement.
One dairy farmer facing the low price, Damian Murphy from South Gipsland told the SMH producers will need assistance if they are to survive.
“The dairy industry will need supportive banks to assist us through this time,” Murphy said.
“We are hoping that if we needed more money, [the banks] will support us with that, or if we needed to change the terms of our loans, they will be supportive of that.
“It is just a matter of hanging out for as long as we can, for as best as we can, looking for that turnaround.”