Milk prices are expected to reach 34.7 cents per litre according to the Australian Bureau of Agricultural and Resource Economics (ABARE), a result of world demand and limited growth in production.

The United Dairyfarmers of Victoria (UDV) welcomed the price rise but insisted farmers receive an increase in farm gate price.

UDV president Doug Chant said the group had been pushing for improved prices for farmers especially with the tough drought conditions.

``I think our industry desperately needs an improvement in farm gate prices. Any rise to consumers must be passed on to the farmers,'' he said.

He said it was an early prediction but a very important one for the industry.

``Everyone else is being looked after but it is about time the farmers are too,'' he said.

WestVic Dairy Inc executive officer Mike Weise said he would be pleased with any increase in the milk price.

``If the increase does come it will be welcomed. There are a lot of extra associated costs with the drought and there are a lot of farmers hurting out there,'' he said.

Source: The Standard