Murray Goulburn has announced a lower opening farmgate milk price for the 2018 financial year, although it expects prices to range higher over the full season.
The troubled dairy processor has also launched a strategic review to look at all aspects of its strategy and corporate structure, including the profit sharing mechanism and capital structure.
Murray Gouldburn on Tuesday set its opening farmgate milk price for next season at $4.70 per kilogram of milk solids, lower than the $4.95 a kg that it had set for fiscal 2017.
However, it expects the full-year farmgate milk price in 2017/18 to improve to between $5.20 and $5.40 per kilogram.
This would be subject to the dairy co-operative achieving cost-cutting targets and a milk intake of around 2.5 billion litres, as well as on dairy commodity prices and exchange rates.
"Although global commodity prices have shown some recovery since this time last year, whole milk powder and particularly skim milk powder prices remain under 10-year averages. This has been somewhat offset by firmer butter and cheddar prices," chief executive Ari Mervis said.
He added that global dairy trade auction results over the past two months and current futures pricing suggest ongoing price volatility in global markets.
Murray Goulburn, which posted a first-half loss of $31.87 million, announced in May it would axe up to 360 jobs, close three older processing facilities, take a $410 million hit from writedowns and suspend dividend payments in an effort to improve its financial performance.
It also dumped the unpopular support package for dairy farmers in a bid to shore up its milk supply and lure back farmers who abandoned it after last year's shock cut to the farmgate milk price.
On Tuesday, Mr Mervis also announced the comprehensive strategic review.
"I see this review as a fundamental next step to strengthen MG for the future. While the previous decisions resulting from the manufacturing footprint review, including the announcement of three site closures were necessary, I do not consider them alone to be sufficient to move the business forward," he said in a statement.
The expected financial benefits of the overhaul are not expected to be fully realised until FY19, he said, adding that its further update on the strategic review will be provided at the time of MG's full-year results in August.
Shares in Murray Goulburn's listed unit trust dropped 14.5 per cent to 73.5 cents.
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