Victoria's struggling dairy farmers have been given a boost with an $11.4 million funding package to help cope with falling farmgate milk prices.

The money, which is made up of $6.2 million from the state government and $5.2 million from the dairy industry, is aimed at easing the pressure on thousands of dairy farmers, their families and communities.

Many farmers are expected to operate at a loss this financial year after major milk processors Murray Goulburn and Fonterra slashed farmgate milk prices earlier this year.

Farmers are waiting anxiously now for an announcement about what the "opening price" for milk payments will be for next financial year.

"The Victorian dairy industry is facing an unprecedented set of circumstances," Agriculture Minister Jaala Pulford said on Tuesday, announcing the funding.

"Our dairy farmers are doing it tough. This is something that we've not seen in Victoria in the last 40 years. These are really challenging times," she said.

Amid concerns over the economic fallout from the milk payment cuts, Ms Pulford said the government would get modelling on what the price cuts would mean for the state economy.

"We do know that when you count all of the farmgate activity, all the on-farm activity, all of the work in production, all of the work in transport and you put the whole package together, it's an $8 billion annual contribution to the Victorian economy.

"Dairy is the heart and soul of Victorian agriculture, and so this is not an insignificant challenge we're dealing with. We're talking about a big income hit for thousands and thousands of people," she said.

Victorian Premier Daniel Andrews said: "The Labor government stands behind our rural communities, and we won't let any farmer or community member go it alone."

The funding package includes $4.5 million for community support, money for farm business support to enable farmers to make sound business decisions and $1.5 million for more mental health services and assistance.

An estimated 80 per cent of Victoria's more than 4000 dairy farms have been hit by the price shock, because they supply the two major processors.

United Dairyfarmers of Victoria president Adam Jenkins welcomed the $11.4 million fund.

"When things get tough we've got to all stick together and get through this," he said.

"People need to take stock of where their business is and be quite clinical about that. And then they can move forward."

Mr Jenkins said community support for the dairy industry had been "absolutely fabulous".

Nationals leader Peter Walsh urged the government "to roll out the programs without delay".

"We strongly encourage the Andrews government to now work on direct relief measures, like rates rebates and waiver of charges like fixed water costs, which farmers have been raising with us."