Murray Goulburn expects to lose 200 million litres of milk this season as a result of suppliers switching to other processors.
The company announced a revised 2017-18 milk intake forecast today of 2.3 billion litres, down 8 per cent on the milk intake of 2.5 billion litres in its opening milk price announcement on June 6.
In 2015/16, the company's milk intake was 3.5 billion litres, which was 2.5 per cent down on the record 3.6 billion litres collected in 2014/15.
The latest milk intake estimate represents a 34 per cent drop in two years.
The company said the 2.3 billion litres was before any “significant upside or downside from seasonal impact”.
But it said the reduced intake had not impacted on its opening price of $5.20 a kilogram milk solids.
It said cost and business improvements had enabled it to offset the reduced milk impact.
MG also said it maintained its forecast final price range of $5.20-$5.50/kg MS but said if the Australian dollar continued to strengthen, there could be some uncertainty about the $5.50.
The company also announced it had found a buyer for the Kiewa Country brand and associated assets.
A “local business" is expected to start local manufacture in the future, it said.
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