Tough conditions are expected to continue for Dairy Farmers over the the next year amid rising costs and stagnating industry support.

Rabobank has released it's annual Dairy outlook, and says producers will have limited margin for error in the season ahead.

The looming possibility of El Nino weather conditions by the end of winter could add to struggles for the industry.

Rural reporter Chris McCarthy spoke with Rabobank senior dairy analyst Michael Harvey about his forecast. 

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