On Friday Woolworths wrote to farmers via milk processors advising the 10-cent per litre levy on own-brand milk – which it introduced in 2018 – would be removed at the end of June.

Mr Thompson said while dairy farmers were no longer fighting the dual battle of dollar-a-litre milk and tough drought conditions, there was still a long way to go in rebuilding the industry.

“The irrational dollar-a-litre pricing model nearly killed the dairy industry, we cannot let that happen ever again,” Mr Thompson said.

“It’s starting to look like the big supermarkets and their customers understand the value of supporting our local dairy industry, but there is a degree of disappointment among dairy farmers that the drought levy was not rolled into the base price.

“Fair, market-based pricing that recognises the true cost of production is what dairy farmers need for a sustainable future.”

NSW Farmers recently announced it would ramp up dairy advocacy efforts with the creation of a new role, and Mr Thompson said they would continue to fight for fairness in competition policy.

“NSW Farmers strongly advocated for the Dairy Code of Conduct that came into effect on January 1, 2020, and further strengthening of the code will ensure farmers continue to be treated fairly and equitably, while ensuring longevity and growth of a critical industry,” Mr Thompson said.