The dairy farming industry will be "devastated" from the bushfires unless supermarkets raise milk prices and government assistance becomes available, a prominent farmer is warning.

Key points: Dairy supplies could be at risk as a result of deadly bushfires destroying livestock and charring land

Dairy supplies could be at risk as a result of deadly bushfires destroying livestock and charring land One farmer said raising milk prices to as much as $1.75 could help save the dairy industry

One farmer said raising milk prices to as much as $1.75 could help save the dairy industry Worsening drought conditions and production costs are pushing dairy farmers out of business

Bushfires have killed as many as half a million animals this season, including livestock across the NSW South Coast and Gippsland in Victoria.

Thousands of cattle, sheep and horses have perished in the blazes, while some farmers have been forced to euthanise hundreds more.

South coast dairy farmer Robert Miller said fresh milk supplies could be significantly compromised as bushfires rage through crucial dairy land.

"Every dairy farmer in NSW is suffering now. We've got a shortage of milk and it's only going to get worse," he said.

"The whole of our rural economy is going to be greatly affected."

But the dairy industry is already struggling from the crippling effects of drought and persistently low milk prices.

Fires have destroyed more than 160 hectares of his pasture — half of his farmland — near Milton.

He was able to save half of his heifers near Cobargo, but around 200 perished on New Year's Day.

"It's emotional and stressful enough just dealing with the fires at home but having to euthanise animals … it's our livelihood," he said.

Mr Miller said closed roads have meant limited access to the fodder required to feed the animals who survived the bushfires.

"I'm out of feed. We're waiting on trucks to bring feed in but with the fires, it's too dangerous to bring hay in. All the paddocks and pasture has been burnt."

The charred remains of the land once thriving with dairy cows was compared to a "lunar landscape". ( Supplied: Robert Miller )

While many farmers are still yet to assess the extent of damage, Mr Miller said urgent Federal Government assistance is needed for coastal areas considered too lush to be in drought.

"We've got no cash reserves. We've been in drought for so long. We can't meet the $10,000-$15,000 a day bill to feed animals," he said.

Mr Miller said although he could access concessional loans, they fell short of the "$2 million interest-free" drought funding that would bolster the recovery effort in the aftermath of such a disaster.

"We're after the proper loans to assist us. The Prime Minister needs to make these changes immediately," he said.

"We're not desert anymore, we're a lunar landscape here."

A spokesperson for Minister for Agriculture Bridget Mackenzie said there are emergency payments available in fire-affected areas, including the Bega Valley in NSW.

"Some assistance drought measures are available to farmers in hardship regardless of the cause", the spokesperson said.

The cost of purchasing feed and rebuilding farms could force some farmers from the industry. ( Supplied: Robert Miller )

Mr Miller said retailers should also lift the price of dairy products on Monday to help support the industry.

"It needs to go up. I was saying $1.50 a litre but maybe it needs to go to $1.75," he said.

Supermarkets likes Coles and Woolworths said recent fires have not impacted fresh milk supplies.

But Max Roberts, President of Bega Cheese, said that could change as many farmers were unable to collect milk due to power outages.

"When the fires went through we lost power to a number of dairy farms and cattle weren't milked for up to 60 hours," he said.

"There's certainly going to be a loss of production there."

Robert Miller said he fears he wont be able to feed the cattle he saved from the fires. ( Supplied: Robert Miller )

The industry has already suffered a tragic blow with the deaths of prominent dairy farmers Patrick and Robert Salway in Cobargo while protecting their home from a bushfire on the NSW South Coast.

Nowra-based farmer and recently appointed NSW Dairy Advocate Ian Zandstra said significant production costs and worsening drought conditions could force many farmers out of the industry.

"Some farmers have been devastated and they will have a hell of a challenge ahead of them with the cost of purchasing feed and rebuilding their farms," he said.

"It's a high cost industry and it needs to be willingly targeted with federal support."

"It's not an industry you can enter and exit so easily at will."