Just a few years ago amidst a cruel drought many were predicting the end of irrigated dairy farming in the Murray-Darling Basin.

Farmers left the industry in droves, cows were sold, land left abandoned and close to half the regions milk production was lost.

But almost as quickly as the hard times hit, things are turning around and many are describing the comeback as the stuff of legend.

Murray Dairy is the industry group that provides direction and research for farmers in a large part of northern Victoria and southern New South Wales.

Chairman, Malcolm Holm is a dairy farmer at Blighty between Finley and Deniliquin in southern New South Wales.

"We hit 3.2 Billion litres (of milk produced) across Murray Dairy and fell down to 1.86 billion litres (during the drought) and now we are back at 2.25 billion litres."

"With the seasonal conditions around us, we anticipate growth to keep happening."

The industry has been helped by the farmers that survived the drought expanding and new entrants coming to northern Victoria to dairy.

One of those is Andrew Wilson who four years ago at the height of the drought decided to do the unthinkable and start a dairy farm in northern Victoria.

"I sort of got in when everyone was getting out, which is what they say you should do but no one ever does."

"The farm I have taken over was a beef farm, it was originally a dairy that went to beef (during the drought), so I have turned it back into a dairy."

"Three neighbours have now also done the same."

Since starting Andrew has developed a strong, profitable dairy business that milks 200 cows.

He has been so successful that he can afford to build a new house which he says will keep him focussed on dairying, "for another two or three years."

The revitalisation of dairy in the Murray Dairy region doesn't necessarily mean factories that were closed or downsized will automatically reopen.

"To some extent that will be sometime off," believes John Droppert from Dairy Australia, "we did have the infrastructure to process 11 billion litres of milk in this country and we are still only up to 9.5 (billion litres)."

"You are probably likely to see new investment rather than reopening of old plants because we are getting down the track a bit and it is old technology."

"I guess the sort of products they were producing aren't necessarily the ones that will be demanded in this day in age."

As other areas of the country deal with their own problems of drought, expensive land and competition from other agricultural industries, the Murray Dairy region is picking up the slack.

After coming through their own problems, Malcolm Holm believes a new breed of dairy farmer has emerged in the area that can compete on a global scale.

"I think essentially, anybody that's gone through the drought in the last decade, I reckon we can just about put them anywhere in the world and they could make a go of it."

"We have been able to cope with a whole range of situations."