Murray Goulburn Cooperatives' domestic collection slumped by more than a fifth through the latter half of last year, outpacing the decline Kiwi rival Fonterra Cooperative Group faced, as record rainfall and a tougher fight for suppliers sapped its intake.
Melbourne-based Murray Goulburn, Australia's dominant milk processor, collected 1.61 billion litres of milk in the six months ended December 31 from 2.03 billion litres a year earlier, as Victorian production sank 9.9 per cent due to record rainfall in September last year and an "aggressive competitive environment has resulted in substantial milk loss as all players seek to replace intake due to seasonal conditions", it said when reporting its first half result.
The dairy cooperative said the seasonal reductions were broadly in line with the industry decline, although retirements had been higher than normal.
Earlier this month Fonterra said its Australian production shrank 7 per cent to 75.7 million kilograms of milk solids in the six months ended January 31, saying milk supply was hit by "unfavourable pasture conditions".
"Record rainfalls and high levels of competitor activity have reduced our milk intake, impacting revenue and our ability to fully recover fixed costs and overheads," managing director Ari Mervis said in a statement. "In addition, although the recent increases in global prices of dairy commodities are welcome, they have not recovered in time to impact on MG's first half sales volume."