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UPDATED
DAIRY farmers met with Murray Goulburn in Rochester on Tuesday night to discuss the problems the co-operative is facing.
The meeting was reportedly well-attended, with standing room only.
Tongala dairy farmer and Murray Goulburn supplier Neil Pankhurst said the meeting was productive and conducted respectfully.
“It was well-attended and suppliers were keen to get a better understanding of why Murray Goulburn are in the position they currently are,” Mr Pankhurst said.
Last week the company cut the price it pays to suppliers, from $5.60 per kilogram milk solids to between $4.75 and $5 per kilogram milk solids, and drastically reduced its forecast profit.
“They certainly gave an explanation of why they’re in the situation they are,” Mr Pankhurst said.
“I think there is still a bit of concern among suppliers about why it wasn’t identified sooner, the actual position the company is in.”
Mr Pankhurst said the co-operative offered three main factors that explained its current situation: poor international commodity prices, the change in exchange rate from when it set milk prices, and the reliance on one value-added product, sachet milk powder, which it had not been able to deliver in the quantities demanded.
He said Murray Goulburn expected to have overpaid $150 million to $200 million to its suppliers by the end of the financial year.
About 18 to 21 cents per kilogram milk solids would be withheld from suppliers over the next three years to cover this shortfall, he said.
Mr Pankhurst said this would have a flow-on effect in the local communities and economies in which dairy farmers lived and worked, particularly in northern Victoria, which was home to 45 to 50 per cent of Murray Goulburn’s suppliers.
Campaspe Shire mayor Leigh Wilson urged dairy consumers to buy Australian products and support the local industry in a trying time.
“The consumer has it within their power to help,” Cr Wilson said.
Mr Pankhurst said that despite the productive nature of the meeting, he and other farmers remained frustrated with the situation.
But Mr Pankhurst said he remained positive about the future of the industry in northern Victoria.