Embattled Australian dairy processor Murray Goulburn has lowered its expectations for its full-year profits after cutting its forecast milk intake for the period.
The company, which issued a series of profit warnings during its last financial year, said it now anticipates fiscal 2016/17 “net profit after tax of AUD42m (US$26.3m) will now be lower given revised expectations for milk intake”.
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The Devondale maker continued: “A number of initiatives have been put in place to protect returns, however given unexpectedly wet climatic conditions in recent weeks, MG will not be providing specific profit guidance for FY17 at this stage.”
Murray Goulburn said milk intake for the year will be “substantially lower”. The company said net milk losses stand at 350m litres, representing around 10% of last year’s total milk intake. The firm blamed lower on-farm production levels, which it attributed to wet weather.
Interim CEO David Mallinson explained: “Until recently, there was confidence that spring rainfall was positioning the industry for an excellent season. However, unexpected continual rainfall since mid-September following the step-up announcement on 13 September 2016 has created a major challenge for our suppliers and industry. Production across South Eastern Australia was down 10.7 percent in August, and this trend has continued to date.”
The cooperative, which is part-listed in the Australian stock exchange, also lowered its farmgate milk price to AUD4.70 per kilogram of milk solids, down from AUD4.88. Murray Goulburn has come under fire in Australia for paying its farmers prices for milk that they argue are unsustainable and fail to cover production costs.
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