Rumours are also growing of potential price increases of as much as 20 per cent in Victoria for the next financial year, and 25pc in New Zealand, in response to climbing global milk prices and dwindling local production.

Export values for milk powder have jumped almost $US1800 a tonne in the past six months to indicator prices of about US$4200/t and butter has made similar solid gains.

A chorus of farmer warnings in recent months has insisted that milking cows has become unsustainable, particularly in drought.

Dairy Farmers Milk Co-operative chairman, Ian Zandstra, Nowra, said the domestic supply chain must start delivering some viability to the farm base.

Victorian processor, Murray Goulburn, has conceded its price should be lifted a lot to help struggling farmers.

Source: North Queensland Register