Mr Smith's blunt assessment of the year that was came despite higher milk prices.

``I reckon the higher milk price that's coming through for 2013-14 is the best thing about this season,'' he said.

``That will be about 25 per cent up on the previous year - the season itself has been pretty ordinary, but is showing signs of improvement now.''

The 2012-13 season (from July 1, 2012, to June 30, 2013) was down about 4 per cent in production on 2011-12, but is expected to improve during summer and autumn to finish about 2 per cent up on last year.

``The benefits of the higher price are only just starting to flow through now and it's probably going to take the rest of the season to consolidate that position,'' Mr Smith said.

``We had a pretty difficult late winter and spring this year - a lot of farmers lost production.

``But the 2013-14 season has improved as the weather's improved, and we've had a bit more rain, so even though it's dried out well, we're still getting the rain we need - it was just too wet in early spring.

``But the expected 2 per cent production increase on last year really only puts us back to where we were the year before, and will probably end up producing about 780 million litres - we had hoped to be over 800 million by now.''

Mr Smith said 2013 saw about half a dozen new dairy farms enter the industry, with others being looked at as future possibilities.

``So we'd expect to see more farms enter the industry over the coming years, but I guess confidence has been a bit down with some people holding off,'' he said.

``The new farms that started this year were pretty well spread out around the state, and I guess they had been planned well in advance of this season, so were going to start regardless of prevailing conditions.

``But I would think, if we can get a couple of years of fairly good prices, we'll get more people thinking about dairy - the demand is certainly there.

``We are getting interest and although it has been a bit slow, we'd expect to see the same number of new farms next year - hopefully it will pick up from there.''

Mr Smith said there had been some interest in the area north of Campbell Town, and he was hopeful some of that interest would translate into new farms.

``There seems to be interest in the South Esk Irrigation Scheme - irrigation is not the only factor to be considered when thinking about a dairy, but it is certainly one of the important factors,'' he said.

Mr Smith said the outlook for next year was that the milk price would probably drop a little.

``But things are still fairly positive from what we can see - we hope the price won't drop too much, but at this point, it's a bit early to project too much on that,'' he said.

``The outlook, medium term, is that demand still remains positive, it's a matter of landowners in Tasmania deciding whether or not they want to get into dairying.''

Mr Smith said DairyTas, in 2011-12, set a five-year target of 40 per cent more milk production than that year's 780 million litres.

``But we're effectively a year behind that timeline because of the current situation, and that 40 per cent increase is likely to push out to five to 10 years rather than the planned four to five years,'' he said.

``The project started a little later than anticipated  - it really didn't get going until 2012-13, with planning about a year in the pipeline, so in the past couple of years we really haven't gone very far.

``As far as the growth is concerned, a lot will depend on how many new farms come on line.

``Dairy has some great opportunities for Tasmania, and we are looking for more people to take advantage of those opportunities and to invest and work in the industry.''