Recent developments in milk prices and major input costs reported in Dairy Australia's February update of the Dairy 2010: Situation & Outiook Report gave local industry ground for cautious optimism. However, the difficult cash flow conditions faced bymost dairy farmers during 2009 are limiting their ability to respond positively to improving market signals and recovering margins. A more sustained turnaround in the operating environment in southern regions - particularly in prices paid at the farmgate - is required to boost confidence and encourage milk production to expand.
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