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 *
 
Best management practice of ryegrass and managing the residual height throughout dry periods is critical to enhance persistence of pasture. 
26 Dec 18 Best management practice of ryegrass and managing the residual height throughout dry periods is critical to enhance...
A new definition of 'genetically modified' currently awaiting parliamentary approval could see a swathe of new grasses on the market within three years.
13 Nov 18 A new definition of "genetically modified" currently awaiting parliamentary approval could see a swathe of new...
light grey arrow
The processors have not got used to the idea that the supermarkets have 'disrupted' their
light grey arrow
This why if you own and control the selling platform in a free and supposedly open market, You
light grey arrow
What I find confusion and strange is that the NEW AUSTRALIAN DAIRY PLAN has not got any form or
Spending $2.7million to build a new dairy is part of a rolling upgrade and improvement plan for VAN Dairy Group, located at Cape Grim, Tasmania.29 Dec 18 Spending $2.7million to build a new dairy is part of a rolling upgrade and improvement plan for VAN Dairy Group,...
Australian Dairyfarmer's Jeanette Severs checked out the range of new and interesting products and services on show at the South Gippsland Dairy Expo in September, while Peter Roach caught up with suppliers at the Elmore Field Days in October.02 Dec 18 Australian Dairyfarmer's Jeanette Severs checked out the range of new and interesting products and services on show...
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.