Dairy processor Murray Goulburn is determined to find a better solution for suppliers.
Murray Goulburn will review its controversial Milk Supply Support Package following a statement issued to suppliers recently.
Chair Philip Tracy said the package was put in place to try to soften the adverse short-term impact on supplier cash flows.
The MSSP allowed Murray Goulburn to pay suppliers an average available Southern Region farm gate milk price for FY16 of $5.53 kg/milk solids rather than the final $4.80 kg/milk solids.
“Since its introduction it has become very clear that the MSSP is not considered by suppliers to have addressed their most significant concerns and is potentially proving counterproductive from the perspective of their continued loyalty,” Mr Tracy said.
“This was not its intent and the board is very mindful of continuing to do what it can to help address supplier concerns.
“The board and management are therefore actively reviewing all options with a view to providing a better solution to support suppliers in the long-term interests of suppliers and MG.”
UDV president Adam Jenkins said the current system was unworkable and those staying with the co-op had been saddled with the debt of those who had left.
“It was too inequitable, if someone leaves the co-op then they don’t take the debt with them,” Mr Jenkins said.
Mr Tracy said it was a complex issue, but was receiving the board’s focused attention.
MG expects to announce changes by the end of October.