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Suspension of Milk Supply Support Payment

VICTORIAN dairy farmers have mixed feelings, with Murray Goulburn announcing that the Milk Supply Support Package (MSSP) will be suspended for the remainder of the 2016/17 season.

Recovery of the MSSP, a three-year loan program introduced after the retrospective price cuts, will be suspended from 1 October 2016 until 30 June 2017. The co-operative has also cut its forecast seasonal farmgate milk price.

United Dairyfarmers of Victoria President, Adam Jenkins, said the industry accepts the need to move forward but also needs to question the impact of these changes.

“The revised figure of $4.70kgMS from $4.88kgMS, needs to be clarified, when the rest of the industry is showing signs of recovery and other global market returns are moving in the opposite direction.

“The fact that Fonterra New Zealand has raised its 2016/17 forecast farmgate milk price by 50 cents to $5.25 per kg of milk solids, needs to be understood in relation to the Murray Goulburn product mix,” said Mr Jenkins.

Murray Goulburn has also introduced other initiatives to ease financial pressure, such as an advance pre-payment option and a growth incentive payment.

“The FMP pre-payment may help farmers with pre-payment but we have to question whether these decisions are in the interests of suppliers.

“We will be looking for the detail on this at the AGM next week. All suppliers, including new and contracted suppliers and those who have pre-paid their MSSP must be treated equitably.

“UDV is willing to work with industry and having competitive processors is paramount to the success of the Australian dairy industry,” added Mr Jenkins.

Murray Goulburn also announced that their forecast full year NPAT of $42 million will be lower, due to the decrease in milk intake, impacted by wet seasonal conditions.

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