Mary Valley dairy farmers John and Margaret Cochrane have bought Kenilworth Country Foods.
Mary Valley dairy farmers John and Margaret Cochrane have bought Kenilworth Country Foods. Contributed

Is this the dairy industry's first good news for 20 years?

THE national industry body established to help dairy farmers adapt to the near-death transformation of their industry, has reported "positive signs" amidst continuing tough conditions.

But for some farmers, the prospect of light at the end of the tunnel still looks like an oncoming train.

Dairy Australia sees the bright side in a statement this week in its June Situation and Outlook Report, which identifies increasing overseas demand and continuing "robust" levels of Australian consumption.

The group's senior industry analyst John Droppert said Australian dairy farmers were reaching the end of "an exceptionally challenging season," but said positive signs were emerging.

"Positive domestic market trends, stronger global markets and a weaker Australian dollar have supported higher farmgate pricing this season and look set to deliver further increases over the next 12 months," he said.

The catch, as well known Gympie Region dairy farmer and Kenilworth cheese processor John Cochrane said yesterday, is that the price rise is largely on the back of lower production.

And that is because so many farmers are no longer in dairying.

"But it is the first good news in at least 10 years," Mr Cochrane said.

But the good news was a product of industry problems which had been worsening since the industry began moving towards de-regulation in 1999.

Mr Droppert agreed.

"Dairy Australia's forecast of a seven to nine per cent decrease in national milk production remains unchanged.

"This is the sixth consecutive year of declining sentiment nationally and a majority of farmers now feel negative about the future of the industry in all dairying regions (except Tasmania)," he said.

A survey of 800 farmers across all dairy regions showed only 34 per cent feel positive about the industry's future. But a smaller sample quick survey in April had shown sentiment had improved since then.