The Australian Dairy Products Federation (ADPF) welcomed the opportunity to contribute to the Select Committee’s inquiry into Australia’s productivity performance.

Below provides the executive summary, see our submission in full for more.

For dairy manufacturing, productivity directly shapes whether businesses invest or scale back, whether regional facilities grow or close, and ultimately whether Australia retains a strong, sovereign food manufacturing base.

Dairy processors operate in a high-skill, capital-intensive environment, transforming perishable raw milk into safe, nutritious products for Australian households and export markets every day of the year.

In that context, even modest shifts in cost, scale or efficiency have a material impact on productivity, competitiveness and investment.

Right now, the operating environment is working against the sector.

Rising input costs across energy, labour, insurance and compliance, combined with declining milk supply, workforce shortages and increasingly complex regulation, are constraining productivity growth and dampening investment.

At the same time, global competition is intensifying, placing further pressure on margins, capacity, utilisation and market share. One in four dairy products consumed in Australia is now imported.

These challenges are further compounded by the ongoing conflict in the Middle East and the associated fuel market disruptions, adding additional cost pressures and uncertainty.

The task ahead must be practical and immediate.

Aligned with the National Food Security Strategy now in development it will determine whether Australia remains a manufacturing nation or becomes increasingly reliant on imports.

Secure and sovereign food production is a core priority for the Australian dairy industry. Dairy processors are already investing in efficiency, sustainability and innovation, however, lifting productivity will require a coordinated effort to lower the cost of doing business, unlock investment, rebuild scale and remove unnecessary friction across the system.

For ADPF, that means focusing on the policy priorities we have consistently put to government:

• cementing dairy’s place in national health and nutrition
• economically sustainable growth in the Australian milk pool and lifting the value of dairy
• championing Australian dairy
• lowering the cost of production
• future-proofing the dairy processing workforce
• driving innovation and sustainability in dairy processing, and
• strengthening trade partnerships and market access.

With the right competitive policy settings, the sector is well placed to respond.

More: Read ADPF’s submission.