Dairy giant Murray Goulburn has cut both its profit expectations and expected closing farmgate milk price for this financial year because of wet weather and a subsequent drop in milk intake.
The company said in a statement that its forecast of $42 million for 2016/17 would be revised down and its expected closing farmgate milk price would fall from $4.88 per kilogram of milk solids to $4.70.
In addition, MG said it would suspend the milk supply support package, a loan scheme set up to assist dairy farmers struggling to repay the debts associated with its retrospective farmgate milk price cuts earlier this year.
“Until recently, there was confidence that spring rainfall was positioning the industry for an excellent season,” said Interim Chief Executive Officer, David Mallinson.
“However unexpected continual rainfall since mid-September following the step-up announcement on 13 September 2016 has created a major challenge for our suppliers and industry.
“Production across South Eastern Australia was down 10.7 percent in August, and this trend has continued to date. In particular, the North of Victoria has moved from drought like conditions in FY16 to severe wet conditions, with production from that region down 16.9 percent August year to date.”