The embattled company announced on Tuesday that it had slumped to a $371 million headline loss in the last financial year and flagged the prospect of asset sales or even a takeover from an ongoing strategic review.

It also admitted that the intake estimate it gave less than a month ago of 2.3 billion litres would more likely now be about 2 billion litres as farmer defections and climatic conditions affected supply.

Murray Goulburn chief executive Ari Mervis said the drop in intake was "disappointing".

"The message we have given to our supplier businesses is the restoration of Murray Goulburn will take time and patience and from their side they didn't have the time or patience," he said.

At the time of the July intake estimate the company was forecasting a final milk price of between $5.20 and $5.50 a kilogram of milk solids.

Now the company's guidance is that it will simply pay at least $5.20 and flagged it may need to borrow up to $100 million to guarantee that payment should other factors including global commodity prices moved against it.

It is the second year in a row that the company has had to look to borrowing to meet its proposed payments to farmers.

A report from Grant Samuel assessing the need for the $100 million in borrowings, released alongside the results, warns that an inability to meet the promised price would unleash a vicious cycle where it would lose more milk supply reducing Murray Goulburn's profitability and then its ability to pay pay a competitive price.

"The outcome... would be a material risk of further significant loss of milk supply," the report says.

Mr Mervis conceded that continuing to borrow to underwrite the milk price was not sustainable as a strategy over the longer term.

"What we are trying to do, as best we can, is protect our milk and retain our milk," he said.

Mr Mervis said Murray Goulburn would not breach any banking convenants if it borrowed that full amount and stressed that it might not be necessary.

"What we have is access up to $100 million, that doesn't mean we need it," he said.

The accounts released on Tuesday show gearing jumped from 29 per cent to 37.7 per cent even as the company slashed its total debt.

In an announcement to the ASX on Tuesday morning, the nation's biggest milk processor said its sales dropped 10.3 per cent to $2.49 billion. Sales from its flagship Devondale brand fell 14 per cent, or $502 million, to $1.02 billion.

The headline result was heavily impacted by one-off costs of $405 million associated with the axing of the company's controversial milk supply support package.

The company announced an underlying net profit of $34.7 million but will pay no dividend.

"MG has experienced a difficult year as a result of the significant reduction in milk intake and adverse seasonal conditions," Mr Mervis said.

"The [last] financial year has tested the strength and resolve of Murray Goulburn and its suppliers.

"A new management team is now in place and a comprehensive strategic review covering all aspects of MG's strategy and corporate structure, including the profit sharing mechanism and capital structure is accelerating," Mr Mervis said.

That review has already yielded a "number of confidential, unsolicited, indicative proposals from third parties".

"These proposals have ranged from concepts around certain non-core assets to larger proposals including whole of company transactions," the company said.

Mr Mervis said the next few months would be "pivotal" for the future of the business.

Deutsche Bank is advising Murray Goulburn on the potential merits of the proposals.

The company is also battling a court case launched by the Australian Competition and Consumer Commission alleging it misled farmers about the likely milk price it would pay in the year after its sharemarket float.

Shares in its listed offshoot traded above $2.50 in early 2016. The share price lifted 3.2 per cent to 64.5 cents on Tuesday.