TASMANIAN milk production continued to break records in 2014-15, DairyTas chief executive officer Mark Smith said.
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Mr Smith said that for the year to November, production was 13.8 per cent up on last year and on track to easily break the record of 804.5 million litres set in 2013-14.
"By year end we expect to achieve 860 million to 880 million litres," he said.
"Our target is 1150 million litres by the year 2017 and we're on track to achieve that.
"As the drier summer conditions start to take effect, this production growth will drop off somewhat, but the availability of widespread irrigation will assist many of our dairy farmers.
"Most of the growth came from existing farms with more cows, improved per-cow productivity and better seasonal conditions.
"There have been some new dairy conversions starting this year and we know plans are in place for more over the coming few years.
"The milk price, while under pressure at around $6 a kilogram milk solids average, is holding at that level.
"Milk processors are still predicting that they will hold to this average price despite the ongoing pressures on international commodity prices.
"The outlook is for some downward pressure on milk price in 2015-16 — the extent of this will be dependant on the speed of the upturn in commodity prices during 2015.
"The fixed-price option many farmers have taken advantage of is proving beneficial.
"Recent financial information released by ABARES shows that for 2013-14 Tasmania was the region with the most profitable dairy farms.
"The average Tasmanian farm profit was $123,670 compared to the national average of $48,000.
"There was a negative profit average in Tasmania the year before."
Mr Smith said that despite volatility, Tasmania continued to grow its production and its dairy farmers continually out-performed those in other regions.
"Tasmania's favourable climatic conditions and low-cost farm operations means that business risk is better able to be managed," he said.
Mr Smith said that dairy had been one of the best-performing commodities this year as as long as the milk price held at a "reasonable level" dairy farmers would be comfortable with their debt levels.
