Australian dairy prices are on the rise due to stronger demand from international markets.

In Victoria, a dairy processor, Warrnambool Cheese and Butter has increased its prices to A$0.31 (US$0.28) a litre. Last year, many dairy farmers were affected as the global financial downturn caused the price paid for milk to fall below the production cost.

Chris Phillips, Dairy Australia's trade and strategy general manager, said prices have risen despite the high Australian dollar. He added that the international spot markets have rebounded quite strongly due to the underlying demand for dairy.

Furthermore, dairy prices around the world have remained firm while there has been a bit of a supply response from the US, Europe and other countries.