The number of dairy producers has fallen by half since the industry was deregulated six years ago.

Farmer groups say the average farm gate price is 29¢ a litre, more than 10 per cent lower than overall prices in 2000, before the quota system was removed.

Mike Norton, of WAFarmers, said producers were trying to remain positive about the future of the industry, but it was difficult at current farm gate prices.

This year, the State’s 240 dairy farmers, who farm mostly along the South-West strip between Pinjarra and Cowaramup, are battling spiralling feed costs and water shortages due to the drought.

Milk supply shortages could emerge this summer. Some farmers have already begun cutting back on expensive feeding regimes which normally allow their cows to maintain out-of-season milk production over summer.

Source: The West Australian