Three years ago Yorkshire's dairy farmers couldn't believe that the price they were receiving for their milk could get any worse. In some cases it had plummeted to 13ppl (pence per litre) – half the figure of nearly a decade before.

Many had suffered enough from years of low prices and deserted the way of life they never felt they would leave. Those who remained held on to the hope that, as numbers of dairy farmers steadily decreased, eventually they would be rewarded with a better price. A case, they hoped, of waiting for demand to outstrip supply.

Three years on and today's milk price has returned to around 26-27ppl, a mark at which, a few years ago, dairy farmers said they would then be in a position to reinvest. That's exactly what has happened on two East Riding dairy farms.

Sam Middleton of Wawne, just outside of Hull, and the Waring family, of Cherry Burton, have both recently updated their operations. But it's not that they are getting carried away with the milk price. Sam Middleton puts it succinctly. "Basically we cannot make money on milk alone. We need to sell stock as well."

Sam's grandfather, Guy, ran the Grangecroft dairy herd for many years. That meant Sam was around the cows as he was growing up, but it was only when he visited the States that he realised the potential to increase the amount of milk each cow produces, and he saw the value of breeding in order to sell quality cows to other farmers.

"I have always been interested in cows, but it was during my year out from my HND course at Harper Adams College that my enthusiasm grew. I worked on a dairy farm in Wisconsin with the Indianhead Holsteins, probably one of the best herds in the world at the time."

Unlike the impression that most UK farmers have of American farms, the herd was not large – only 80. However, it was massive in stature and enough to open Sam's eyes.

"The Indianhead Holsteins were averaging 12,000 litres," he says. That's per year – a figure way in excess of an average UK farm. "When I came home I decided to take on the dairy herd which was then averaging 7,000 litres. I soon decided that they were not the cows I really wanted to work with."

Through his own experiences and through meeting his wife, Lucy, the daughter of renowned ex-dairy farmer Gerald Carter, Sam implemented a breeding policy that has increased his average production from 7000 to 10,000 litres.

"I started with a cull-out of cows that I didn't think would make it, and concentrated on those I thought would."

Sam then used Canadian and American genetics to breed better cows, as well as benefiting from some of Gerald's herd when he sold up his stock in 2004.

"I'm looking for big-frame cows that have the capacity to digest the forage to make the milk, but not hat-racks that are narrow-chested and won't last. I'm not pushing the amount they yield. If cows are healthy they will give the milk."

Sam hasn't increased the herd at Wawne, he still milks around 120, but he does do things a little differently. He recently invested in a brand new dairy building and two robotic milkers known as Lely Astronauts.

"This area isn't a massive one for dairy farming and it is difficult to get people good enough to do the job you want. By putting in robotic milkers we have made the job manageable for myself and my father (Roger)."

Robotic milking means simply that the cows walk to the robot and it does the rest.

"The cows are now milking 24 hours a day and on average each cow is milking three times a day."

Sam and Lucy, who is a vet in Sutton-on-Hull, have added another herd prefix to the farm with their Paradise Holsteins, and they have started showing them. Sam sees this as a lead-up to earning a reputation for quality stock.

"Showing is an enjoyment thing but it is also a marketing tool to get us recognised out there. Other dairy farmers will then see we have the right stock. At present we're building up the numbers in the herd so that we have surplus stock to sell.

"This time last year freshly calved heifers were selling for between £1,000-£1,500, now you can't get anything for less than £2,000-£2,500."

Just a few miles the other side of Beverley is Cherry Burton, where Peter, Judith and James Waring have a herd of 150 cows. They are already renowned show people in their own right, regularly scooping prizes at the Great Yorkshire and Driffield, as they did once again this year.

Peter has long understood the value of successful breeding and only last month took two heifers to the show and sale at Lancaster. He took champion and reserve, and also won best pair.

Their latest addition to Field House Farm is a brand new young stock building. Peter and his brother Paul were in partnership, along with their father John, but that partnership is no longer.

Both Peter and Paul are still farming but it made sense to alter their ways of working as both have a son involved in the business too. It is perhaps a measure of how the dairy farming world has changed in the past three years that they have stayed in milking and have invested further.

Despite the recent upturn in fortunes, Peter still feels aggrieved about the price he is receiving. "We sell to Arla, but we're not on a supermarket contract. We still get a penny less than everybody else. It must be something to do with us being this side of the country where there aren't that many dairy farmers."

It wouldn't be the same if dairy farmers weren't having a quibble or two over prices, and you can understand their reticence in commenting that everything is right with the dairy world just yet. After all, their milk price may be back to what it was a decade or so ago but farm prices for feed, fertiliser and fuel have all gone through the roof this year.

More milk from fewer cows, using fewer people and selling stock to other dairy farmers. These are two of the routes to dairy farming success.