The chief executive of troubled milk processor Murray Goulburn has refused to guarantee the long-term future of its Rochester plant after the company on Friday announced a $31.9 million loss for the first half of 2017. 

When responding to questions by Fairfax Media, Ari Mervis said he was not in a position to give predictions, or forecasts, about the future of MG’s Rochester and Gippsland plants.

Mr Mervis said he was also unable to comment on claims, by farmers at the Traralgon Australian Competition and Consumer Commission hearing, they were fearful stepdowns (in the milk price) could occur again.

“I am not in a position to make any guarantees, I can’t really comment, specifically, on the detail, at this early stage,” he said.

His comments follow the company’s half-yearly financial report, released on Friday, which indicated a 20 per cent drop in milk intake for the first half of 2017, with the company also recording a net loss to shareholders of $31.9 million. 

Recent reports suggested the company had lost around half of its suppliers over the past six months, throwing the future of its four factories – in Rochester, Leongatha, Koroit, and Maffra – into doubt.

The company employs more than 150 people at its Rochester factory. 

Mr Mervis said the first half of 2017 had been “particularly challenging” for the milk processor. 

“Record rainfalls and high levels of competitor activity have reduced our milk intake, impacting revenue and our ability to fully recover fixed costs and overheads,” he said.

“In addition, although the recent increases in the global prices of dairy commodities are welcome, they have not recovered in time to impact on MG’s first half sales volume.

“I would like to thank our valued suppliers, who continue to be the foundation of our business.”

In November Fairfax Media reported the company may have overstated its earnings for the 2015-16 financial year. 

A forensic accountant said at the time Murray Goulburn had wrongly inflated its year to March earnings by $150 million.

As a result, according to a Morris Forensic report, the stated pretax profit of $57.5 million should in fact have been a loss of $92.5 million, which would have punched a significant hole in the group's balance sheet.