Will farmers get a sweetner in MG deal?

01 Nov, 2017 04:00 AM
Comments
0
 

With the fate of embattled Murray Goulburn set to become clearer on Friday it will be interesting to see what, if any, sweeteners are on offer for those at the coalface of the milk industry.

A successful tilt by Canada's Saputo, or another party, will be closely scrutinised by farmers who have borne the brunt of a litany of poor decisions by management and lower milk prices at the nation's biggest dairy processor.

Despite increasing the price paid on milk delivered to $5.20 per kilogram of milk solids in June, Murray Goulburn's price still sits below that of rivals Fonterra and Bega Cheese. The differential has contributed to the departure of farmers from Murray Goulburn.

That makes wooing farmers back and retaining those on the books crucial to the company's future.

It's understood Bega's Murray Goulburn bid included a fighting fund or milk pool of as much as $300 million, which would have been used to lure back farmers and up the price paid to those who had been loyal throughout the company's travails.

That comes after Murray Goulburn outlined that it expects to collect 2 billion litres of milk in 2018, which represents a fall of 43 per cent in just two years.

Bega was dropped from the bidding contest on Thursday and appears to have been outmuscled on its headline bid price.

Even so, complexities around the Murray Goulburn unit trust structure and the overlay of the Foreign Investment Review Board, meant the prices being put forward by some bidders were not the overriding consideration.

One of the Chinese suitors was said to have lobbed an offer of more than $1.5 billion and didn't make the cut.

The situation will reach a crescendo on Friday at Murray Goulburn's annual general meeting.

AFR

POST A COMMENT


Screen name *
Email address *
Remember me?
Comment *
 
DATA driven quality performance indicators are helping Hans and Kerrin van Wees and Jakob Malmo to achieve high production from a pasture-based dairy system in Gippsland, Victoria. 
03 Apr 18 DATA driven quality performance indicators are helping Hans and Kerrin van Wees and Jakob Malmo to achieve high...
Seed is the most important input into any crop or pasture that is sown.03 Apr 18 Seed is the most important input into any crop or pasture that is sown.
light grey arrow
Why does Adam insist on doing the biding of the processors? That is their line and he has
light grey arrow
The dairy industry is unnatural, unhealthy and extremely cruel.
light grey arrow
The solution is simple - the wheel base width at the rear axle needs to be extended 25cm on
Advertiser content for McLanahan
WITH a passion for innovation and their usual focus on products that are robust and reliable, global supplier McLanahan Corporation, has released a complete system for managing pasture based livestock effluent.02 May 18 Advertiser content for McLanahan WITH a passion for innovation and their usual focus on products that are robust...
Like a lot of dairyfarmers, Steven and Leanne Wieland's Boonah, Qld, business has grown in the past decade.13 Feb 18 Like a lot of dairyfarmers, Steven and Leanne Wieland's Boonah, Qld, business has grown in the past decade.
Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition opportunities.25 Sep 16 Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition...
Monopoly market may confront cropping sector under mega-merger proposal.22 Sep 16 Monopoly market may confront cropping sector under mega-merger proposal.