Two Australian dairy groups, Warrnambool Cheese and Butter Factory (WCB) and Murray Goulburn, have slashed the milk prices they pay to farmers for the 2009/10 season.

WCB, which last month warned its annual losses could be worse than it originally thought, said it would pay an average of A$0.28 (US$0.23) per litre – the equivalent of US$3.78 per kilogram of milk solids.

The group admitted the price was a “significant decrease” from last year’s opening price but said it had taken into account the current state of international commodity prices.

The move comes three months after WCB was forced to reverse plans to lower the price it paid suppliers for raw milk, which had seen some farmers leave the business and put the group’s milk supply in jeopardy.

Reports in Australia also claimed today (2 July) that dairy co-operative Murray Goulburn has unveiled its lowest milk price to farmers for over a decade.

Murray Goulburn is set to pay its farmers around A$0.26 for a litre of milk, ABC News said.