But after eight years of working in banking, Mr Mumford swapped his indoors job and returned to the family farm in the foothills of Victoria's Strzelecki Ranges.

Now 46, his family have been Murray Goulburn suppliers for more than 50 years continuously. His lengthy career as a dairy farmer, detailed knowledge of finance and numbers, and his long association with Murray Goulburn means he is uniquely placed to assess the dramatic news from the dairy processor that rocked the Australian dairy industry on Wednesday.

And in a nutshell, he's disappointed by what he's heard. The payments he was expecting for milk from his 420 cows have been cut, and the value of his supplier shares in the co-operative has slumped as the market responded to news of Murray Goulburn's woes.

Lower revenue because of a reduced milk price means he will have to cut into his farm budget again, for the third time this financial year. He might have to sell some cows, and warned of a flood of stock that could hit the "chopper market" as farmers respond to the news.

"It's taking all the profit out of the system, off your individual farm," he said.

"It's disappointing on a farm level that the milk price has dropped, because we put a lot of faith in Murray Goulburn with the systems they have.

"This was just quite a difficult blow. Particularly because the Yarram district had an extremely tough spring. And we've got huge amounts of fodder coming into the district just to feed cows.

"So couple that with milk price and very little rain, there's a lot of angst within the district, moving forward. And now Murray Goulburn has decreased the milk price.

"So tough decisions are going to have to be made on a farm level, for myself and everybody else to navigate through to next season - and that's perhaps the disappointing thing. We've got to tighten our budgets once again and get the pencil back out to the budget."

Mr Mumford asked whether Murray Goulburn could have advised suppliers earlier that milk prices paid to farmers would be lowered. "I think the big question is: should we have been advised earlier about the true expectations of milk price? And I would say - absolutely."

Meanwhile, Adam Jenkins, president of the United Dairyfarmers of Victoria, said the Murray Goulburn situation would reverberate throughout the dairy industry and affect country communities. Some dairy farmers might choose to exit the industry, he warned.

"This has major spillover effects, in confidence and growth. Right at a time when our key customers across the world are saying 'can Australia grow, and even value add with us'," he said.

"It is a very very poor turn of events. Coupled with, obviously, the dry conditions and the time of year that we're heading into. People are setting up their production systems going into the new year."

Mr Jenkins said preliminary estimates produced by dairy farmers and consultants in the wake of Murray Goulburn's announcement suggested that an average farm could be "between $100,000 and $120,000 worse off' over the next 38 months because of the milk price cut.