The Federal Government is this morning expected to announce an assistance package for dairy farmers affected by recent milk price cuts.
Dairy farmers were left hundreds of thousands of dollars in debt after Australia’s largest dairy processor Murray Goulburn and New Zealand processor Fonterra unexpectedly slashed prices within a week of each other.
Murray Goulburn said the price drop was due to unfavourable changes in the exchange rate, lower than expected adult milk powder sales in China, and a downward revision on the value of the milk supplies it currently holds.
It cut its $5.60 per kilogram price for milk solids, and now expects to pay between $4.75-$5.00 per kilogram — a drop of around 10 per cent.
Fonterra Oceania managing director Judith Swales said in a statement the price cut was the result of a “supply and demand imbalance” and a strengthened Australian dollar.
Its retrospective cut will see prices fall from $5.60 per kilogram of milk solids to $5.00.
Since those announcements, the Coalition has been under pressure to provide additional support to affected farmers.
For some dairy farmers, the price cut meant the loss of two years’ profit in one day.
The funding is likely to include concessional loans but farmers have been critical of that approach in the past, with concerns over delays in rolling out such funding and the management of such a scheme.
Deputy Prime Minister Barnaby Joyce is expected to make an announcement about the funding in Tamworth, in his electorate of New England today.
This post originally appeared on ABC News.
© 2016 Australian Broadcasting Corporation. All rights reserved. Read the ABC Disclaimer here.