Australia’s largest dairy processor Murray Goulburn’s milk supply is down to 2.3 billion litres for this season.
This is a drop of 200 million litres from its forecast at the start of the season and 34 per cent down on the 3.5 billion litres it processed in 2015-16.
The milk volume was a “current” calculation, according to a co-operative spokesman.
Last week, The Weekly Times revealed a mass exit of milk from Murray Goulburn to processors such as Parmalat, Fonterra and Bega Cheese over the weekend of July 15-16, when monthly milk cheques arrived.
More milk is expected to leave at the same time next month as contracts conclude.
Murray Goulburn said the milk intake forecast of 2.3 billion litres was “prior to any significant upside or downside from seasonal impact”, but stressed the reduction would not affect the opening average available southern milk region farmgate milk price of $5.20 a kilogram of milk solids.
The milk reduction had been offset by cost cutting and business improvements, Murray Goulburn said.
But Murray Goulburn warned that if the recent strengthening of the Australia dollar continued across the full financial year it “could create some uncertainly in relation to the achievability of $5.50/kg/MS” — the closing price it indicated.
In a market update on Monday Murray Goulburn said it had “entered into agreements to sell the Kiewa Country brand and certain associated assets to a local business that is expected to recommence local manufacture in the future”.
The co-operative said the terms of the deal were confidential.
Meanwhile, reports this week that Lion Dairy and Drinks was for sale have been refuted by the company.
A Lion Dairy and Drinks spokeswoman said it did not comment on speculation, following reports Philippines-based San Miguel Corp was interested in the business.
Source: The Weekly Times