Director Julie Marie Bickford said there aren't enough consumers in Maine to expand processing here.
"If we're going to do something for a larger group of farms it's going to have to be, 'can we make sure milk produced in Maine can have a home,'" Bickford said.
Currently, the state said consumer trends are shifting toward cheese and yogurt and away from fluid milk.
A third of the state's Dairy Farms have shut down in four years, many citing high costs and low returns.
Farmers said state lawmakers must better understand the challenges facing the dairy industry, and its important place in the food system and Maine's economy.
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