MP optimistic about Leongatha dairy factory
MURRAY Goulburn’s Leongatha factory looks to be less affected by a review of the co-operative’s operations than other factories.
That is the view of Gippsland South MLA Danny O’Brien, who met with MG’s leadership team of chairman John Spark and CEO Ari Mervis in Leongatha last Wednesday.
“There are no decisions yet on the factories but I’m optimistic about the future of Leongatha, and encourage Victorians and local dairy farmers to continue to support the co-op when they can,” Mr O’Brien said.
The new leadership team was at the Leongatha Football Clubrooms last Wednesday evening to meet 130 MG suppliers and hear their concerns.
The main issues raised by suppliers at the Leongatha meeting were the outlook for milk pricing, the Milk Supply Support Package, current reviews of MG’s milk payment system and board structure. Suppliers were keen to meet Mr Mervis after the meeting.
A MG spokesperson said plans for the Leongatha factory would be announced as part of updates on the outcomes of a review underway, as appropriate.
During last Wednesday’s meeting, MG suppliers heard the review would help give farmers the highest possible price for milk.
“In addition to a business-wide cost reduction program announced last year, significant advances have been made on a business review of our assets and distribution network, which if progressed may deliver further efficiencies and value into the milk pool in the future,” the spokesperson said.
“The review is focused on aligning our organisational capacity and capabilities with future milk intake.”
Asked what MG was predicting for the rest of the season, both locally and internationally, the spokesperson said, “A number of factors give MG cautious confidence for the outlook beyond this financial year.
“Improved seasonal conditions, current commodity pricing and the realisation of planned cost reduction initiatives indicate improved milk prices for suppliers,” the spokesperson said.
“The significant supply/demand imbalance which caused the two year depression in dairy commodity prices is still present and there is potential for ongoing volatility in commodity prices.
“Full cream milk powder prices have recovered to be closer to long run averages. However, other dairy commodity futures are currently trading flat, which implies prices are likely to remain around this level.”
The spokesperson said MG was focusing on “rebuilding the trust and confidence of our suppliers and doing everything we can to provide the highest possible farmgate milk price for them”.
South Gippsland Shire Council also met with the new MG leadership team in Leongatha last Wednesday.
Mayor Cr Ray Argento said council and MG leaders discussed MG’s economic value to the shire.
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