World markets mean milk prices are at record lows even though 60 per cent of production is consumed within the country, while news of milk being imported from China is another blow.

Nic and Erica Dibden of Tilba are luckier than most as their jersey cows produced a higher fat and protein milk that Bega Cheese pays 50 cents litre for, with the average price in recent weeks being around 36 to 38 cents a litre.

But the extreme dry conditions have added to costs and forced farmers to cut herds sending older milking cows to the sale yards.

Mr Dibden said farmers in Victoria were being paid as little as 26 cents a litre well below the cost of producing a litre of milk.

"Normally you were paid in the good times which would get you through the bad times," he said.

"That would be alright, but that just isn't happening."

Tilba is usually one of the wettest localities in the district but Bobundara Creek is dry and the farm's dams are critically low, a real concern considering the Dibden's herd of 660 Jersey cows consumes as much as 20,000 litres a day in summer.

The water table has disappeared well below the surface and it was as dry as it had ever been.

The lack of pasture means they order in $10,000 worth of feed every week, ranging from grain to canola meal and molasses syrup, a by product of biofuel production.

Work has already dried up on the farm with Nic down to one farm worker meaning he has less time off from his long days that start at 3am and end after 6pm with three hours of milking at the start and end of the day.

An additional and unwanted distraction for Tilba dairy farming families has been the Eurobodalla Shire Council's Local Environment Plan and its call for an Aboriginal heritage area that extends all the way down to the ocean with unknown consequences.

Consquences that have already allegedly sunk the sale of one property east of Central Tilba.