Former farmer Neil Parish, a Conservative MP in Devon, fears the fragile sector will continue to struggle until cheese, yoghurt and other processed dairy products are lining the shelves of supermarkets overseas.
He called on the Government to do more to promote British dairy products to BRIC countries – Brazil, Russia, India and China – which have burgeoning middle-classes with increasingly sophisticated appetites.
Protests as farmers were losing money on each litre of milk they produced heaped pressure on processors Dairy Crest, Arla Food and Robert Wiseman Dairies to reverse plans to cut their milk price.
But Mr Parish, MP for Tiverton and Honiton, said prices would always rise and fall on the market, and said exports hold a brighter future.
He said: "Dairy products from France, Denmark and the Netherlands can be found in supermarkets from Ankara to Beijing whilst British produce, some of the finest in the world and produced to the highest animal welfare standards, is nowhere to be seen."
Britain under-performs in food and drink exporting. The UK currently sells more to Belgium than it does to all four BRIC countries – and Mexico – combined.
The Government's Farming, Food and Drink Exports Action Plan includes appointing a food and drink ambassador and championing British food at overseas events. Central to the strategy is removing bans on British meat imports.
In May, the Government secured a £50 million trade deal with China which will see the world's most populous country open its borders to British pork. Mr Parish is hoping for something similar for the dairy industry.
The majority of milk produced in Britain is for the liquid milk market whilst only 49% goes into processed products including butter, far less than European counterparts.
"Farmers are never going to get a good price whilst we flood the UK market with liquid milk," Mr Parish wrote in an article for the Conservative Home website.
"If we are to increase demand domestically and increase our exports we must look beyond liquid milk and increase processed products like powdered milk and cheeses. We must take advantage of emerging markets like the Middle East and China that are increasing their consumption of dairy products."
The UK imports more dairy products than it exports, and of the 13,544 million litres of raw milk produced in this country in 2011, only 403 million was exported.
Mr Parish added: "It is not until we see the bigger picture in the dairy industry that our dairy farmers will flourish. The Government has been successful in securing a multi-million pound deal with China to export breeding pigs. It is this sort of support that the Government must give to the dairy industry."
Mr Parish's comments come ahead of his Westminster Hall debate in the House of Commons on September 13, where the Government will be pressed on removing red-tape, taking advantage of expanding overseas markets and ensuring that the long-awaited supermarket watchdog has enough power to be effective.
Last month, 2,500 dairy farmers from across the country descended on London to protest the series of cuts, which kick-started blockades across the country.
A Department for Environment, Food and Rural Affairs spokesman said: "Time after time ministers have been saying that milk processors should stop squabbling over milk bottling contracts and focus on the wider, more lucrative emerging markets which are crying out for dairy products like butter and cheese.
"The Government is running an exports programme to encourage and support more food and drink companies to venture overseas and break down trade barriers abroad. But ultimately only the industry can step up and take advantage of the opportunities itself."
