MURRAY Goulburn has flagged further milk price step-ups this season.

In his final address to suppliers at last week's annual meeting, outgoing chairman Ian MacAulay said dairy markets had "shown a solid recovery" in recent months.

"We have already delivered three farmgate price increases this season and we expect further price increases as the season progresses," Mr MacAulay said.

"Murray Goulburn does understand farm budgets remain extremely tight and we will continue to pass on any increased returns that the market delivers."

While he would not be drawn on the value of future step-ups, Mr MacAulay said the remainder of the season was "looking positive" for farmers.

"With the outlook for the milk price-feed price ratio, I believe farmers can make good returns for milk produced in the remainder of this season," he said.

Managing director Stephen O'Rourke said the past financial year had been "extremely challenging" for Murray Goulburn.

The co-operative recorded a before-tax loss of $25.4 million, but managed a small after-tax profit of $1 million.

Mr O'Rourke said Murray Goulburn made a decision late last year to plan for a loss "to buffer our farmers from the full impact of the dairy collapse".

He described the decision to slash this year's opening milk price as "not a difficult decision, but a horrible one".

Swan Hill dairy farmer Grant Davies was selected as the co-operative's new chairman.

Mr Davies was appointed to the Murray Goulburn board in 2004 and has served as deputy chairman since 2007. He milks 520 cows at Swan Hill with his wife, Barbara, and son, Brett.

Mr MacAulay served 18 years on the board, including 11 as chairman.

Maffra farmer John Vardy was re-elected to the board and has been made deputy chairman.

Two new directors - Bill Bodman from Won Wron and Philip Tracy from Yanakie - were also appointed.

They replaced retiring board members Bill Brown, who had served since 1994, and Bill Verboon.

Peter Hawkins was appointed a special director, adding to his roles on the boards of both Westpac and Mirvac Group.