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Suppliers will pay Murray Goulburn $183 million in clawbacks, the company’s annual financial statements reveal.
This is more than $10 million higher than previously expected.
UDV president Adam Jenkins said suppliers who stayed with MG would pay up to six per cent more than previously estimated.
“The results are the results… Industry have acknowledged they have to cut costs and make things better,” he said. “The UDV is working with Murray Goulburn... to prevent this from happening again.”
MG chairman Philip Tracy said farmers were paid $5.53 per kilo of milk solid across the 2015/16 financial year when they should have received $4.80.
“The value of the milk supply support package is the difference between (those figures),” he said.
Mr Tracy said tough seasonal conditions had made for tight times but the processor was “looking forward to a really good spring”.
“No one’s excited about a low milk price,” he said. “It’s clearly very tough market conditions for all of us to navigate.”
He said the support package was the “best way to carry farmers through”.
MG released its 2016 financial reports to the Australian Securities Exchange on Wednesday morning with a $40 million after tax profit in the year it slashed returns to farmers and paid a final dividend of $3.91 a share.
Mr Tracy said MG would reduce costs moving forward “to minimise the impact of the milk supply support package through cost saving and efficiency in the business”.
“Over the course of the next two-to-three years that will flow through to the support package.”
But MG suppliers voiced their concerns about the rise in the clawbacks with many “stuck” farming below profit.
Woolsthorpe supplier Brian McLaren said MG had the choice of not paying dividends to pay suppliers but had chosen to show profit so shareholders wouldn’t feel “ripped off”.
“I’ll show you ripped off,” he said. “I can put up with the world price, I have for years, it’s the clawbacks that hurt.”
Cooriemungle farmer Steven Spokes said he hadn’t received a milk cheque in four months and had been forced to sell many of his herd.
“I’m about at the end of my tether, I’ve had enough of this bull****,” he said. “Why should we have to pay for incompetence.”
Bega Cheese on Wednesday also reported a $28.8 million after-tax profit, up 132 per cent to. It and Warrnambool Cheese and Butter, which recorded an 88 per cent loss in May, maintained their milk prices.