SYDNEY, Oct 27 (Reuters) - Australia's largest milk processor Murray Goulburn said on Thursday it would take a one-off sum of A$81.8 million ($62.54 million) from the profit pool of its publicly traded MG Unit Trust (MGC) to allow it to help its struggling dairy farmer members.
Murray Goulburn said in a statement it would use A$50 million to pay farmers $0.02 more for their milk supplies and A$31.8 million to supplement its revised scheme of providing loans to struggling dairy farmers.
Murray Goulburn in April slashed prices paid to farmers for their milk after conceding that its strategy of exporting high-valued products such a nutritional dairy products to countries like China was not working.
But with the announcement coming so late into the season, farmers said they had no choice but to maintain production levels, despite incurring mounting losses.
"The announcement today preserves MG's ability to make these investments in the future, whilst maintaining prudent debt levels. We thank our suppliers and investors for their patience as we have worked through this review, and we now look forward to working together to rebuild our great co-operative," said Philip Tracy, chairman of Murray Goulburn.
Prices for dairy ingredients like milk and butter have fallen sharply for more than two years, hit by a global oversupply, squeezing the finances of farmers and producers and pushing many towards consolidation in search of economies of scale. ($1 = 1.3079 Australian dollars)
Add to My Watchlist
What is My Watchlist?