UPDATE: THE exchange rate will have more of an impact on the farm-gate milk price at the start of next season than originally thought.
And experts are predicting "more downside than upside'' for opening prices.
Dairy Australia strategy and knowledge manager Joanne Bills said a volatile and a high Australian dollar during the next few months could affect opening price announcements.
Last year there were forecasts that the dollar would soften towards the end of 2012.
Australian dairy farmers have been sheltered this season from the unfavorable exchange rate by processors hedging product sales and currency exposures, but Ms Bills said softening the blow of exchange rates into the 2012-13 season will depend on how much they can effectively hedge for next season.
"It is not so much this season,'' she said.
"It's what coming down the pipeline for the 2012-13 season, if you can't get cover lower for the exchange rate than this is very potential exposure to this impact.''
According to Dairy Australia Situation and Outlook February update, released yesterday, a "purely exchange rate'' impact on farm-gate milk prices could be $0.30 a kilogram of milk solids if the Australian dollar rises from $US1.05 to $US1.10.
But one positive, highlighted by the report, has been the resilience of dairy commodity prices this season despite growing global milk supply and economic uncertainty.
The report suggested a final average southern farm-gate milk price range of $5.20-$5.30 a kilogram of milk solids this season.
Dairy Australia has forecast milk production growth between 3-4 per cent this season reaching up to 9.5 billion litres.
On the domestic-front, it has been 12 months since the supermarket milk price war on house-brand milk began and Dairy Australia reported total sales of drinking milk from February to December last year increased 4.9 per cent.
It said this also indicated an increase of 1 per cent in the "supermarket channel share''.
However, supermarket retail sales value fell 1.5 per cent during the same period _ the average price of milk went from $1.64/litre to $1.54/litre.
"Volumes are up, but unit prices are under a fair bit of pressure,'' Ms Bills said.
"That's what's putting pressure on domestic profit margins.
"The increase in milk consumption is there, but its just not earning as much for anybody as it used too.''