Released earlier this month, the Victorian Food and Fibre Export Performance Report 2019-20 found dairy exports were valued at $2.1 billion last financial year, an increase of three per cent on 2018-19.

Milk and cream products were the highest value dairy category, contributing to 48 per cent of Victoria’s dairy exports.

Cheese and whey products were the second highest value category at $869 million, making up 41 per cent of dairy exports, the report found.

China continued to be the highest value export market for Victorian dairy products, making up 27 per cent of dairy export total value.

Japan was the second largest consumer of Victorian dairy products, with a value of $419 million (20 per cent of total dairy exports), decreasing 10 per cent from 2018-19.

“Improved seasonal conditions, particularly in the second half of 2019-20, lifted dairy farm profits and production as compared to the previous year,” the report said.

“Greater pasture availability in regions south of the Great Dividing Range and lower feed prices enabled farmers to source relatively cheap feed

“Farmers in the north of the state budgeted for high water prices and many chose to purchase fodder instead of irrigating.

“The lower costs along with a 17 per cent improvement in milk price, increased average farm profits three-fold to $346,000 before interest and tax ($1.68/kg of milk solids).”

While nearly all surveyed farms experienced positive profits, with consistent performance reported across the regions, many farms are still not fully recovered from the recent years of drought and challenging conditions, the report found.

The improved conditions and confidence have supported higher milk production.

According to Dairy Australia, Victorian milk production improved by six per cent in 2019-20 compared to the previous year, accounting for 63 per cent of Australia’s dairy production by volume.