Murray Goulburn (MG) has blamed its decision to cut its forecast farmer milk prices and company profit for the 2016/17 financial year on the weather.
Very wet climatic conditions in south east Australia are behind the move, with the dairy giant revising its expected milk intake down by 20 per cent on 2015/16.
MG's $42 million profit forecast for the 2016/17 financial year will also be lower, on the back of its lower milk intake, and the company is now forecasting a 2016/17 milk price of $4.70kgms, down from $4.88kgms.
Interim CEO David Mallinson said: "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 September 13, 2016, has created a major challenge for our suppliers and industry.
"Production across south eastern Australia was down 10.7 per cent in August, and this trend has continued to date. In particular, the North of Victoria has moved from drought like conditions in FY16 to severe wet conditions, with production from that region down 16.9 percent August year to date.”
MG has also announced plans suspend its loan program, the milk supply support package (MSSP) it introduced just a few months ago following its retrospective milk price cuts.
