Another MG resignation

MURRAY Goulburn has lost its third board member in as many weeks, and there are reports it is under investigation by the Australian Securities and Investments Commission.

The co-operative confirmed that the corporate regulator had made enquiries about its half yearly results, posted in February.

It has allegedly asked for documents and emails relating to when the company was listed on the Australian Stock Exchange, as well as the profit downgrade announced earlier this year.

Law firm Slater and Gordon is reportedly reviewing options for a class action for investors.

The news comes as dairy farmers continue to struggle with rapidly falling prices from other companies.

The United Dairyfarmers of Victoria is calling on the major milk processors to end the pricing uncertainty they’ve created for dairy farmers.

UDV president Adam Jenkins said Murray Goulburn’s price claw-back was unfair to producers.

“The UDV wants MG and Fonterra to review and ultimately remove these claw-back clauses from their supply contracts, so we never see a repeat of what’s happened this season. Why should dairy farmers pay for the poor management decisions of these dairy processors?” he said.

He said the UDV was listening to its members and working with other groups to gain legal advice on MG and Fonterra’s legal obligations to suppliers under existing contracts.

“We’re also calling on the processors to make announcements on the opening season price as soon as possible, so that farmers have the certainty they need to plan for the season ahead,” he said.

The UDV wants the current milk pricing structures offered by dairy processors to be reviewed.

“We need a pricing system that builds resilience, not one that makes farmers more vulnerable,” Mr Jenkins said. 

“We want to restore confidence in the dairy industry and work towards a sustainable, profitable future.”

In the meantime the UDV is focusing on the immediate task of helping farmers through the next few weeks and preparing for the season ahead.

“Our priority is helping farmers and communities deal with this sudden milk price drop,” Mr Jenkins said. 

“What matters is what we can do now. We’re working on getting more state government and industry resources into helping dairy farmers reassess their finances in the wake of these price cuts.”

The UDV is reviewing MG and Fonterra’s obligations to suppliers under existing contracts, with the aim of removing claw-back provisions, as well as working with the state government’s industry taskforce to identify services that can be brought into play to help farmers. This includes rural financial counsellors, expanding the Taking Stock program and employing farm consultants to give one-on-one advice.

They will also be calling on processors to announce the opening prices for the 2016-17 season so farmers can adjust or refinance their businesses.