Try looking longer term... ...and also if MGC retains its co-op status it is then still the industry de facto FGMP market price maker and all others follow and by nature of being a co-op it can use the FGMP price step-up approach that has occurred for many decades amongst co-operatives. Yes the step-up approach has its downsides for dairy farmers as it impact their cashflow but in the absence of anything better it is all we currently have. It also allows MGC to fine tune the FGMP if the other pure investor based companies seek to outbid MGC on the FGMP and deny it a milk supply. This by the way is one of the advantages of splitting MGC into a pure co-op and an ASX listed trading house.
Got any better ideas?
MGC Price at posting:
93.0¢ Sentiment: None Disclosure: Not Held
...and also if MGC retains its co-op status it is then still the industry de facto FGMP market price maker and all others follow and by nature of being a co-op it can use the FGMP price step-up approach that has occurred for many decades amongst co-operatives. Yes the step-up approach has its downsides for dairy farmers as it impact their cashflow but in the absence of anything better it is all we currently have. It also allows MGC to fine tune the FGMP if the other pure investor based companies seek to outbid MGC on the FGMP and deny it a milk supply. This by the way is one of the advantages of splitting MGC into a pure co-op and an ASX listed trading house.
