Murray Goulburn established a milk supply support package (MSSP) for farmers following a shock retrospective cut to milk prices in April, with the funds loaned to farmers to meet short-term demands to be deducted from their future milk payments for up to three years from 2017.
Interim CEO David Mallinson says the cooperative has to regain the confidence of its farmers and suppliers.
“The clear way to get this back on track is to manage the impact of the MSSP,” he said.
“We know it’s an issue for our suppliers, and we’re very focused on both mitigating it now and in future as well.”
The first part of that process was to cut costs, and Murray Goulburn aims to save $50 million to $60 million a year by 2018 through staff cuts and operational improvements.
The cost initiatives are expected to make an extra $10 million to $15 million available for distribution to farmers in 2017.
Mallinson said the 200 jobs to go are mainly at Murray Goulburn’s head office in Melbourne.