Heading into their eighth year of drought, the Darcys are determined to do it smart, despite the financial stress of doing it tough with no water for irrigated pasture and a hefty monthly fodder bill.

Tom Darcy is a second generation dairy farmer, who came home to run the family farm some 30 years ago after graduating from Hawkesbury agricultural college, with a degree in dairy technology. His 24-year-old son Andrew, is following in his footsteps, with a degree in farm business management from the University of Melbourne.

Both believe there is a future in dairy farming for those who can innovate and adapt, using tough times to develop drought-savvy farming methods.

Tom Darcy points out that failure isn't an option given that 93 farms in the Bega Valley are responsible for a local industry Bega Cheese that's worth more than $800million a year, exports cheese to India and is one of Australia's best-known brands.

''Water remains our biggest challenge, because you need water to keep your herd going. If you haven't got feed for your dairy cows, they'll fall away in condition, and it takes a long time for a herd to pick up again.''

Drought has forced the Darcys to buy in 80 per cent of fodder, trucking wheat, canola and lucerne hays from South Australia, the Riverina and western Victoria. They also buy mineral supplements, grains and protein-rich products syrup and mill-run pellets that are waste by-products from flour mills.

As well as the monthly freight costs, they employ a nutritionist to advise on the best mix to produce high butter fat content, and recently spent $78,000 on a machine to mix an optimum blend.

Other climate change innovations include installing an effluent recycling system for pasture irrigation, extensive plantings of shade trees to minimise summer heat stress for their cows, feed troughs to prevent fodder waste from trampling, and improved ventilation for the milking shed.