“The open-air environment of grazing enterprises is not expected to allow the buildup of gases,” the statement said.

“Animals including livestock generally tolerate well smoke (and ash fallout) from fires, however some animals, particularly pets and horses, may exhibit minor respiratory problems or eye irritation.”

Veterinary advice should be sought if animal owners are concerned that their animals are being affected by smoke or ash.

When it came to food safety, Dr Milne said there were no known issues associated with the exposure of livestock to smoke during bush, grass and peat fires.

UPDATE 4.20pm: Emergency Services Commissioner Craig Lapsley said the peat fires were generating a large amount of smoke.

"We are looking at what we will do," he said.

"We may put in bores or sprinklers.

"If we don't drench it and soak it, it will keep burning under the ground.”

He warned residents to be "very mindful" of the type of smoke.

"It will have carbon monoxide," he said.

"In large amounts it is very dangerous and will have negative health impacts. It's incomplete combustion and it generates more smoke and more carbon oxide."

Mr Laspley also warned south-west residents that this weekend was forecast to be windy.

"This weekend could be dangerous. At the moment it is very dry," he said.

"We are moving back into a windy weekend. We're not out of it yet. It might not be as hot, but it will be windy." 

UPDATE 3.30pm: Agriculture Victoria is advising farmers who have livestock in the area affected by smoke from the peat fire near Cobden to consider reducing the animals' exposure to the peat smoke.

Agriculture Victoria relief manager Bob O'Shannessy said people seeking information about the impact of smoke from peat fires could get a fact sheet from agriculture.vic.gov.au/firerecovery

Mr O'Shannessy said farmers should also reduce their exposure to the peat smoke.

The Terang relief centre will remain open overnight.

UPDATE 11.30am: The peat fire at Cobrico continues to emit smoke, challenging both emergency services and the local community.

Incident controller Mark Gunning said overnight residents in a localised area near the fire were relocated, due to poor air quality being detected.

About 40 residents of Cobrico were told to leave the town on Thursday night, as authorities were concerned smoke from nearby peat fires would cause health issues.

One person was taken to hospital while more residents are expected to be relocated in the coming days, incident controller Mark Gunning said in a statement on Friday.

Peat fires - made up of partially-decayed vegetation - can produce stinking and irritating gases, particularly troublesome to people with heart or lung conditions.

"If anyone is concerned that their health is being impacted by the fires, they can call into the Terang Civic Hall to be assessed," Mr Gunning said.

“The relief centre at the Terang Civic Hall was set up by Corangamite Shire, where around 40 people stayed overnight. Health checks were conducted and one person was taken to hospital for further monitoring,” he said.

It is expected that more people will be relocated today, with the air quality remaining poor around the peat fire.

Shifting winds over the coming days may change the direction of the smoke and the area of the community which will be impacted. 

There are two other smaller peat fires in the broader fire area at Garvoc and Lake Elingamite.

A community meeting will be held at 1pm today at the Timboon Civic Centre, 57 Bailey Street. In Cobden, a meeting will also be held at 4pm in the Civic Hall, 53-55 Victoria Street.

EARLIER: A RELIEF centre has been set up at Terang due to air quality issues caused by peat fires in the Cobrico area, between Cobden and Camperdown.

Up to 50 properties are being impacted.

A police spokesman said there were air quality issues relating to peat fires in the Cobrico area.

“As a result a relief centre has been set up in Terang at the Terang Hall which is being staffed by a multi-agency response team,” he said.

A Colac incident control centre spokeswoman said during the week there were a number of active peat fires in four lake beds which were producing a lot of smoke.

Such fires are notoriously difficult to extinguish.