A Queensland dairy farmer has been forced to walk off his farm the same day Woolworths announced an end to the sale of $1-a-litre milk in its stores nationwide.

Robbie Radel, a fourth-generation dairy farmer from the North Burnett, three-and-a-half hours north of Brisbane, said he expanded his business in 2005 to include the Biggenden farm, but the bank forced him to sell the property.

The dairy at Robbie Radel's Biggenden farm. ( ABC Wide Bay: Eliza Goetze )

"The banks forced us to sell," Mr Radel said.

"I basically said: 'We don't want to do [that], what are you going to do?'

"They said: 'If you don't do it of your own accord we will do it.'"

Better late than never, but too late for some

Mr Radel's last day on the 97-hectare farm coincided with the supermarket giant's announcement that it would stop selling $1 milk nationwide.

Dairy farmers and industry bodies have been lobbying supermarkets to end cut-price milk since 2011.

The supermarket has committed to selling own-brand milk for a $1.10 per litre.

He said the advent of $1 milk forced farm gate prices down even further.

Robbie Radel's property was the last remaining dairy farm in Biggenden. ( ABC Wide Bay: Eliza Goetze )

"When Coles brought in their milk on Australia Day 2011 it really was the signal that the end was nigh," he said.

"We've been fighting for sustainable farm gate prices for a very long time between the processors and the major supermarkets.

"The squeeze is always on for us to produce a higher-quality product and supply it even cheaper than we have, and it simply hasn't been sustainable.

"We've now finally got Woolworths, which I guess is better late than never.

"It's a small victory and it's certainly not the end of the fight."

'Bittersweet' victory for struggling farmers

Mr Radel, who owned the last dairy farm in Biggenden, said the change in policy makes him a little more optimistic about the future of the Wide Bay dairy industry.

"It was like the whole situation it was absolutely bittersweet to get that little bit of good news on the day we were packing the last of our belongings and moving back to the family farm," he said.

"That milk that is supplied to Woolies only makes up about eight per cent of dairy farmers in the whole of Australia.

"It's not going to be a silver bullet.

"I do believe that it will make it as far as the processors … whether that then gets passed along — I don't know that I'm that confident.

"The best hope is that the others are shamed into doing the same thing … on the proviso that that extra 10 cents does actually make it as far as the farm gate."

Sentiment shared by region's farmers, politicians

The Federal Member for Wide Bay, Llew O'Brien has labelled the decision a significant move for the dairy industry but Coles and Aldi need to follow suit.

Federal Member for Wide Bay Llew O'Brien says the Woolworths announcement is the beginning of fairness in the dairy industry. ( ABC News: Matt Roberts )

"It's a small price rise for the consumer but it will be a significant increase for the dairy farmer," he said.

"In terms of the milk market this has broken the deadlock between Coles and Woolworths in the $1-a-litre milk price war.

"The dairy industry is in crisis — it's unsustainable as it is.

"This is the beginning of fairness in the milk market.

"We've got a mandatory code of conduct coming soon … it'll give better flexibility to farmers to change from processors who aren't giving them a good deal."

South Burnett dairy farmer Damien Tessman said $1 milk had been soul-destroying but Woolworth's decision will not remedy the challenges the industry is facing.

Cattle on Robbie Radel's dairy farm at Biggenden. ( ABC Wide Bay: Eliza Goetze )

"This is where the rubber hits the road for the industry and Coles in particular — they started this," Mr Tessman said.

"The reality is we need the price to be higher.

"[But] it is something that I think will give a lot of heart to a lot of farmers to be able to invest back in their business."