VICTORIAN food and fibre exports jumped to a mammoth $9 billion in 2011-12, with dairy the leader of the pack at a value of $1.9b.
State Agriculture Minister Peter Walsh said export results from Victoria had continued a record-breaking streak, improving by 11 per cent for the year.
The State is now the top agricultural export earner in the country, accounting for 29pc of Australian food and fibre exports.
"These results mean an extra $1b has flowed into the Victorian economy," Mr Walsh said.
Apart from dairy, grain exports displayed an extraordinary 61pc rise to hit the $1.8b mark.
"Victoria experienced one of the best seasons on record last year, with good rainfall and sub-soil moisture from the previous summer rain," Mr Walsh said.
"While rain did affect some crops, cereals, oilseeds, processed grains and pulses, all recorded significant increases in the value of their exports."
He said the performance of the dairy industry was outstanding.
"This result shows the remarkable strength and resilience of Victoria's dairy sector, which is an international success story despite the high Australian dollar," he said.
The solid results were heavily dependent on China, with the State sending $1.86b in food and fibreexports to Chinese buyers – an in-crease of 15pc or $290m for the year.
Mr Walsh also suggested Victorian agricultural industries should view exports as an alternative market to supermarkets like Coles or Woolworths, adding it offered a third force in the marketing strategy.
For south-west Victorian-based dairy processor Warrnambool Cheese & Butter (WCB), the export market has always played a huge role in marketing.
The company was last week recognised for its export efforts at a State level, taking out the Victorian Exporter of the Year award.
WCB chairman Frank Davis said it was an enormous achievement, especially as the award was judged across all industries, not just agriculture.
The company sells product into 43 countries, with export sales accounting for $290m in 2011 out of total sales revenue of $504m.
"That number has gone up 17pc over the past two years," Mr Davis said.
But while things were looking up in the dairy export sector, there were plenty of challenges ahead, he said.
Mr Davis said a cost-effective transport network was needed to move product from farm to factory to port efficiently, while the lack of free trade agreements was hindering growth.
Rakesh Aggarwal, managing director of Longwarry Food Park in Gippsland, agreed.
"The dairy industry is suffering because our government hasn't been able to establish a free trade agreement with Korea and China," he said.
"But China has a free trade agreement with New Zealand and that's basically shut us out of the market."
He said the Australian Government needed to be more proactive on the issue, especially if it wanted to sustain the growth of the export sector.
Furthermore, Mr Aggarwal said a solution needed to be found regarding the rising cost of electricity.
"Our power costs have gone up 25pc in one hit – and we get no compensation," he said.
United Dairy Farmers of Victoria (UDV) president Kerry Callow said it was nice to be recognised for how well the State's dairy industry was performing.
But the results also pointed out that government – at local, State and Federal levels – could be doing more to ensure export growth continued.
She said road and rail investments were needed.
"Certainly, trade agreements are important too," she said.
"The amount of product NZ gets into China is phenomenal compared to what we are able to do.
"That's an area where the government could help the industry out."