Dairy farmers got some rare good new today when New Zealand based dairy co-op Fonterra forecast milk prices would rise to $NZ4.25 for the 2016/17 season, an increase of 35 cents per kilo for milk solids at the farm gate.

The move does not affect Fonterra suppliers in Australia who are still waiting to hear the company’s estimates for the Australian market.

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However, given New Zealand is a key milk importer, it may reflect increased optimism in international dairy markets that would flow on to Australia.

Farmers supplying Australia’s biggest dairy exporter, Murray Goulburn to release its estimates for 2016/7 which it must do before June 1.

Murray Goulburn threw the industry into disarray last month when it announced a price cut for the current year of as much as 15 per cent.

Many farmers said they faced ruin as their last two years profits would be lost due to the retrospective move.

At the time the company said the price drop is due to unfavourable changes in the exchange rate, lower than expected adult milk powder sales in China, and a downward revision on the value of the milk supplies it currently holds.

The cut saw the immediate departure of managing director Gary Helou.

The Federal Government unveiled a $578 million financial assistance package over 10 years for struggling dairy farmers on Wednesday morning.

Farmers will be offered $55 million in low-interest concessional loans up to June 30.

Another $500 million will be set aside for loans over the next two years.

National Federated Farmers boss Tony Mahar welcomed the news, telling ABC news that the government should be congratulated for responding to their current “exceptional circumstance”.

“This will undoubtedly help with cashflow across their businesses,” Mr Mahar said.

With ABC