MELBOURNE, Sept. 8 (Xinhua) -- Disgruntled Australian dairy farmers are abandoning milk giant Murray Goulburn in droves after being asked to accept heavily reduced prices.
Farmers in Victoria and Tasmania have left Murray Goulburn since the company announced in April it would cut its milk price by 15 percent.
Those who have left account for 350 million liters, or 9 percent, of the company's annual milk supply.
Murray Goulburn's losses were exacerbated in August as its rival dairy processors paying more for milk made room to accommodate producers who abandoned Murray Goulburn.
In the last week of August alone three major suppliers to Murray Goulburn in the Rochester region of northern Victoria switched the 16 million liters of milk produced on their farms to Bega Cheese's Tatura plant, despite having to refund forward incentive payments to Murray Goulburn.
Brendan Martin, the manager of one of the farm's that recently switched to Tatura, said that he found it surprisingly easy to move away from Murray Goulburn.
"We left pretty easily; they had nothing to hold us and Tat Milk was offering us (6 U.S. cents) a liter more than MG; that's (38,000 U.S. dollars) a month more income for the same work and the same costs," Martin told News Limited on Thursday.
"I think MG was surprised (when we left); they were banking on no one else having the capacity to take such a lot of milk from us bigger suppliers."
Murray Goulburn has moved to stem the flow of farmers leaving the company, issuing a warning to all major dairy producers that active attempts to convince farmers to switch producers could be considered "aiding and abetting the breaking of a contract."
Barry Irvin, chairman of Bega Cheese, confirmed that executives at Tatura Milk were contacted by Murray Goulburn threatening legal action over the farmers switching.
"A couple of specific cases around Rochester were mentioned, but there are many more; my view is bring it (legal action) on," Irvin told News Limited.
"Some of these guys are coming to us in tears, asking us to take them on; this is not us twisting their arms."
Murray Goulburn on Wednesday announced a new brand of milk, with 30 U.S. cents from every 1.90 U.S. dollar bottle sold going into a fund that supports farmers hurt by falling milk prices.
