Murray Goulburn’s (MG) new chief executive officer Ari Mervis is urging its south-west milk suppliers to continue supplying the company.
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His call comes after the company suffered a 20.6 per cent drop in its milk supply in the six months to December, caused in part by farmers shifting to other processors when MG cut its farmgate milk price.
Mr Mervis said MG was a suppliers’ co-operative and the destiny of the company would be determined by those who stayed with it.
Mr Mervis, who started with MG this month, was speaking after the company released half year results that showed a $31.9 million loss, a sharp reversal from the $9.3 million profit a year ago.
He said about half of the 400 million litres of milk supply that MG had lost in the past six months had gone to rival processors offering better prices.
But he warned the attractive prices offered by rivals might not be sustainable because overall milk production in Victoria had also dropped.
Mr Mervis also said MG was not likely to make a decision about whether it would build an infant formula and nutritionals plant at Koroit until after it had completed a review of all its assets. But he said MG remained committed to a strategy to build its presence in dairy nutritionals.
He gave no indication MG would go beyond its forecast closing price of $4.95 a kilogram milk solids this season but said there were “favorable tailwinds” taking the dairy industry into the next season.
