Murray Goulburn Co-op announced it is forecasting an FY17 FMP of $4.80 per kgms with a net opening FMP of $4.31 per kgms after application of the MSSP repayment
MG Interim Chief Executive Officer, David Mallinson, said: “Commodity prices remain the largest external influence on MG’s financial performance. Global conditions have not improved, and the latest data suggests excess global inventories, including the impact of European intervention, may have surpassed the equivalent of 6 billion litres of milk4. Key commodity prices have remained below US$3,000 per tonne for almost two years, much longer than historical price downturns.
“In the face of these difficult market conditions, the forecast FY17 FMP reflects MG’s view that commodity prices will continue to trade around current levels for the remainder of the 2016 calendar year with only a modest recovery in price of around six percent across MG’s major commodities during the second half of FY17.
- This prolonged environment of lower prices means MG expects to achieve lower average selling prices for commodities throughout FY17 when compared with FY16, which will impact the Distributable Milk Pool by approximately $95 million5.”
“We acknowledge FY17 will be a challenging year for our suppliers. We have set a robust forecast, and while there are a number of areas which may provide upside to our FY17 forecast, we do not believe it is prudent to include these in our forecast at this stage. Should more positive conditions emerge, MG will be vigilant in ensuring any upside passes to our suppliers and investors,” Mr Mallinson said.
