United Dairyfarmers Victoria president Paul Mumford has no illusions about the hardships farmers have battled in recent years.
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"We have been through so much turmoil in the past five to 10 years," Mr Mumford said.
This has resulted in dozens of dairy farmers exiting the industry or changing their operation to beef or lamb.
But he says there is light at the end of the tunnel and has encouraged dairy farmers to stay in the industry.
"The rubbish is clearing," Mr Mumford said.
"The industry is consolidating and we are actually now starting to tick off major issues to help farmers.
"I know farmers have done it extremely tough but I am optimistic that we can change some of our primary mechanisms to our businesses to show that we are a profitable industry going forward."
Mr Mumford said the introduction of a mandatory code of conduct was a major win for dairy farmers.
He said the next priorities were to address the cost of hay and grain, the cost of electricity and the cost of employing people to help out on dairy farms.
Mr Mumford said there was a lot of confidence in the industry and he believed in five years it would again be prosperous. "I would love to promise that it can be fixed within 12 months, but let's be realistic," he said.
"We need a few good seasons to help farmers."
Mr Mumford said there was still huge demand for dairy products both domestically and internationally.
However, he said retailers needed to stop shortchanging farmers. "At the moment I lay a whole lot of blame directly at the retailers for using our product as a price loss leader," Mr Mumford said.
"If they are good corporate citizens of Australia they should start showing the dairy industry some respect.
Mr Mumford said it had also become more difficult for people to enter the dairy industry, with banks tightening lending criteria.
He said this was a good thing, with banks ensuring people could make the repayments and a bad thing because it prevents some people from realising their dream of buying their own dairy farm.
"It's a double edged sword," Mr Mumford said.
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