Murray Goulburn to cut milk price by 12 percent next year

Australia's Murray Goulburn is cutting the price of wholesale milk by 12 percent effective February 1, 2009.

Murray Goulburn chairman Ian McAuley said some export prices have fallen 60 percent in the last month.

McAuley said it has been a very difficult period as this is the first fall in the farmer's milk price in three decades.

He added a major price decline occurred in the last three weeks and it is uncertain how long the price's downward trend will last.

Dairy farmer Graeme Anderson said many family businesses could lose AU$200,000 (US$137,610) in income next year.

Anderson said the price cut will make a huge difference because they had a worn out milk vat and were looking at possible upgrades.

Anderson also said the cuts will hit the broader economies of dairy communities across southeastern state of Australia, Victoria.