A mixed picture is being painted for Victoria's dairy industry for the 2018/19 season.

The Victorian Farm Monitor Project has found average profits across the state for the season were $85,000.

It was a year that saw farmers in Gippsland and the state's north battling on going drought and rising input costs.

The south west saw average net farm income increase by $27,000, thanks to favourable seasonal conditions.

Agriculture Victoria's Farm Business Economist Claire Waterman told Macquarie's Rural Reporter Eddie Summerfield, it's been a tough year.

"We've seen profits decrease in general terms, but it has been a mixed result for the three dairying regions," Ms Waterman said.

The widespread dry conditions saw an overall increase in variable costs by 20 percent.

"The price of inputs around water, grain, and hay, and silage, and that has the biggest impact on profit," Ms Waterman said.

"We had an improvement in milk price, around six percent on all the farms, but that didn't offset the large increase in those inputs."

Despite tough conditions more than 85 percent of the 75 farmers surveyed predicted farm profits will increase during the current season.

That sentiment has seen farmers willing to keep their herd sizes stable.

"The average herd size was just under 360 cows per farm, in previous years we've seen farmers culling in response to dry, or challenging conditions," Ms Waterman said.

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A mixed picture is being painted for Victoria's dairy industry for the 2018/19 season.
The Victorian Farm Monitor Project has found average profits across the state for the season were $85,000.
It was a year that saw farmers in Gippsland and the state's north battling on going drought and rising input costs.
The south west saw average net farm income increase by $27,000, thanks to favourable seasonal conditions.
Agriculture Victoria's Farm Business Economist Claire Waterman told Macquarie's Rural Reporter Eddie Summerfield, it's been a tough year.
"We've seen profits decrease in general terms, but it has been a mixed result for the three dairying regions," Ms Waterman said.
The widespread dry conditions saw an overall increase in variable costs by 20 percent.
"The price of inputs around water, grain, and hay, and silage, and that has the biggest impact on profit," Ms Waterman said.
"We had an improvement in milk price, around six percent on all the farms, but that didn't offset the large increase in those inputs."
Despite tough conditions more than 85 percent of the 75 farmers surveyed predicted farm profits will increase during the current season.
That sentiment has seen farmers willing to keep their herd sizes stable.
"The average herd size was just under 360 cows per farm, in previous years we've seen farmers culling in response to dry, or challenging conditions," Ms Waterman said.
Subscribe to the National Rural News podcast: http://bit.ly/RuralNewsPodcast

The Rural News

The Rural News is market leader, dealing exclusively with stories of interest to the farming sector and has the support of Australia’s largest media business and international correspondents.

The Rural News is market leader, dealing exclusively with stories of interest to the farming sector and has the support of Australia&rsquo;s largest media business and international correspondents.