MURRAY Goulburn has forecast a price of $6.05 per kilogram of milk solids for full year 2015-16.
The forecast was contained in a letter sent to suppliers today with a prospectus for share offers.
MG also reconfirmed its 2014-15 farm milk price of $6/kg MS.
It said the forecast $6.05 for 2015-16 remained subject to changes in external factors such as global dairy commodity prices and prevailing foreign exchange rates.
It also said it was reliant on MG’s proposed capital structure change being accepted at the extraordinary general meeting next week and then implemented.
It is also based on the Australian dollar sitting at an average of US$0.76 for the duration of the 2015-16 financial year and certain assumptions regarding commodity spot prices.
Achieving this forecast will also result in the third consecutive year that MG suppliers receive total farmgate returns in excess of $6/kg MS.
“It will also be the first time in MG’s history that this result has been achieved and would be made against a backdrop of volatile and low global dairy commodity markets,” the letter said.
“This is further validation of MG’s strategy of shifting its product mix to premium dairy foods in key growth categories, supplemented by a continued focus on reducing cost in the business and driving efficiencies.”
MG said it would release final details of it southern milk pool and NSW-Sydney opening prices at the usual time in late June.
The prospectus issued was an invitation for suppliers to acquire fully paid ordinary shares in MG and was not open to the general public.
Existing suppliers who do not hold sufficient MG shares to meet their share standard have the opportunity to buy MG shares for between $1.00 and $1.24 per share, subject to various conditions, up to their share standard.
Existing suppliers also have the opportunity to buy shares in excess of their individual share standard up to the 0.5 percent ownership limit set out in MG’s constitution.
If existing suppliers participate in this offer they will have the opportunity to acquire these shares at the same price at which units are issued to external investors under the Initial Public Offer (IPO).
The offers are also subject to the consideration of the proposed capital structure at next week's EGM.
