Murray Goulburn dairy farmers saddled with debt are relieved, but their milk processors are nervously waiting for confirmation about their jobs.
The co-op will forgive $148 million of debts owed by farmers under its Milk Supply Support Package, but may slash up to 360 jobs when it closes three processing facilities by the end of next year.
The facilities in Tasmania's Edith Creek and Victoria's Rochester and Kiewa employ about a quarter of MG's milk powder and cheese workers, union representative Gary Maas says.
"Job cuts today may improve Murray Goulburn's share price, but will leave workers and farmers facing great uncertainty," the National Union of Workers Victorian secretary says in a statement.
"We would expect that workers from these sites will be provided opportunities to relocate into positions elsewhere in Murray Goulburn."
But MG's announcements were seen in a different light by farmers begrudgingly preparing to begin repaying debts from July.
MG introduced the MSSP debt pool after it retrospectively slashed farmgate prices last April and tried to claw back overpayments.
"We thought the debts were inequitable because each time someone left that company, that debt pool was spread across the people who remained," United Dairyfarmers of Victoria President Adam Jenkins told AAP.
"They suspended it after about two or three months and ... we think it's excellent they've (scrapped it)."
Mr Jenkins said factory closures would pose challenges for the local communities, but farmers needed to return their business and the co-op to profitability.
Murray Goulburn has been struggling to maintain its milk supply after very wet weather in August and September cut the amount of milk produced by its suppliers.
The dairy company booked a first-half loss of $31.87 million in February, compared to a profit of $10 million a year earlier.
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