DairyNZ says it backs the Government in its efforts to eradicate the cattle disease Mycoplasma bovis from New Zealand.
More than 150,000 cattle will be culled in a world-first bid to eradicate the disease.
The cull, of around 126,000 in addition to the 26,000 already underway, will take place over one to two years.
"The decision wasn't made lightly and reflects our hope that the disease can be eradicated," said DairyNZ chair Jim van der Poel.
"Our farmers have been waiting for almost 11months on a way forward and part of the challenge has been a lack of certainty about the long-term solution for New Zealand.
"Today we have that certainty," van der Poel said.
"Over 99 per cent of our dairy herds in New Zealand have no signs of this disease, and we want to keep it that way," he said.
"DairyNZ has been actively – and passionately – working on behalf of our farmers to find a solution," van der Poel said.
"We know that moving towards eradication will be a devastating decision for some, and will mean that thousands of animals will have to be culled," he said.
The Government said it has reached an agreement with farming sector leaders to attempt to eradicate the cattle disease, with an estimated cost of eradication of $886 million to be spent over the next 10 years.
"Today's decision to eradicate is driven by the Government's desire to protect the national herd from the disease and to protect the base of economy - the farming sector," Prime Minister Jacinda Ardern said.
"This is a tough call - no one ever wants to see mass culls. But the alternative is the spread of the disease across our national herd," she said.
The Government will meet 68 per cent of the cost and Dairy NZ and Beef and Lamb New Zealand will meet 32 per cent.
Federated Farmers president Katie Milne said there was no doubt the decision announced today to continue to attempt to eradicate the disease was going to cause "pain and anguish" for more farmers.
"But industry has always, from the beginning of this, been committed to working with the government to eradicate, if the science said it was feasible," Milne said.
"Federated Farmers believes getting rid of this insidious disease is preferable to living with it, for years on end, probably without any compensation available for farmers in future when it does hit and can't be controlled."
About 4.2 million cattle are slaughtered annually in New Zealand, this includes 1 million dairy cattle, 1.4 million beef cattle and 1.8 million calves.
The Government said it was confident meat processors could handle the increased cull.
About half of the 23,00 cattle to be culled as a result of the outbreak, which is not harmful to humans, have been slaughtered already.
As at May 24, the number of infected farms was 37, in Waikato, Hawke's Bay, Manawatū, Canterbury, Otago and Southland.
Steven Carden, chief executive of the country's biggest farmer, state-owned Landcorp, supported the plan to try to eradicate cattle disease.
The decision would clearly be "extremely expensive" and Landcorp would like to see regular quarterly assessments by the Ministry for Primary Industries of its success or otherwise, he said.
If the programme was proving futile, MPI had to be ready to quickly change to a management approach.
Landcorp had an infected property near Pahiatua. The company has 60,000 dairy cows and 80,000 beef cattle on its 125 New Zealand-wide farms.
It had yet to do extensive cost modelling of what the eradication decision could mean, Carden said.
Beef + Lamb New Zealand said it supported the decision to attempt phased eradication of M. bovis.
"This has been a difficult decision to reach, and we acknowledge that it won't please all farmers," said B+LNZ Chairman Andrew Morrison.
"As a Southland farmer near to one of the epicentres, I am well aware of the impact of this response on farmers, their families and our communities.
However, with only a limited window in which to attempt to eradicate M. bovis, the decision to continue eradication efforts had been made with the best long-term interests of the wider pastoral sector in mind, Morrison said.
"This is a stressful time for farmers," he said.
"Farms that are infected, or are under movement restrictions, are under huge pressure and the uncertainty and anxiety spreads much wider than those directly affected, right across our rural communities. Today's decision provides certainty for the sector on the next steps."
Ashburton dairy farmer John Jefferson, who farms 560 cows in the Mycoplasma bovis hot zone where many of the 37 infected properties are located, is "a little surprised" and thinks the decision-makers could be in for some disappointment.
Farmers in the South Island suspected the decision was being driven by North Island farmers, Jefferson said. Infected properties in the North Island are so far much rarer than in South Island.
"I think maybe they're [the decision-makers] optimistic. It is a biosecurity breach so they have the powers. Everyone down here has been reasonably keen to manage it instead of eradication drive."
Jefferson said the farming situations of the South and North Islands were quite different.
"Gypsy day" or June 1, the first day of the new dairy season, in the South Island meant thousands of cows being moved to grazing for the winter.
In the North Island the day was associated with hundreds of sharemilkers and cows shifting farms as well as young stock leaving the home farm for grazier properties.
MPI restricted movement controls on Canterbury farms had been very tough on feed budgets as farmers were forced to keep animals at home, Jefferson said.
He questioned whether healthy cattle showing up as carrying the bacteria organism were simply developing immunity to the disease, which some in the sector believe has been in New Zealand for several years but undiagnosed before last July's outbreak at Waimate.
Federated Farmers dairy chairman and Waikato farmer Chris Lewis was slightly stunned by the decision announcement when approached for comment, despite knowing what it would be as a consulted industry leader.
"Nothing prepares you for seeing the hard details and seeing the scale of it."
Lewis, who has handled hundreds of calls from worried dairy farmers in recent months said the decision meant a "big challenge ahead for us all".
"It's not going to be easy and I acknowledge a few farmers won't be very happy at all. But a few will be."
Asked if he thought the decision was overly-optimistic, Lewis said MPI and primary industry sectors had spent "months and months and months" seeking technical advice.
"They wouldn't go this way unless they had confidence they could do this.
"There will be checks and balances. The first check will be this calving [season] when bulk milk tests are done. Will they confirm whether MPI has got it contained?"