ADPF’s 26/27 Pre-Budget Submission

Australia’s dairy processors sit at the heart of the nation’s food system. Every day, they transform raw milk into high-quality, nutritious foods that support Australian households, underpin public health and sustain regional economies.

This is a highly skilled, capital-intensive manufacturing sector with operations in every state and deep roots in regional Australia. It supports dairy farmers, transport operators, factory workers, exporters and retailers, while delivering trusted, locally produced dairy foods enjoyed by consumers at home and abroad.

Despite strong foundations, this vital sector is increasingly challenged by its operating environment, and ability to remain globally competitive.
Milk production has declined from 11 billion litres two decades ago to 8.315 billion litres in FY2025. At the same time, processors face escalating electricity, gas, insurance, ingredient and compliance costs.

One in four dairy products consumed in Australia is now imported.

Supermarket concentration is intensifying and trusted Australian brands are increasingly displaced by private-label and overseas products. Without action, these pressures threaten food security, regional employment, and Australia’s sovereign dairy manufacturing capability.

Dairy also delivers exceptional value beyond the farm gate and factory floor – supporting national health across all ages.

On average, three serves of dairy each day delivers 10 essential nutrients, including calcium and high-quality protein. If recommended dairy consumption levels were achieved, about $2 billion3 in annual healthcare costs could be avoided, with further savings of $66 million in aged care.

The next five years will be decisive for Australia’s dairy manufacturing sector. Without coordinated action, Australia risks losing processing capability, investment and skilled jobs to overseas competitors.

ADPF’s 2026/27 Pre-Budget Submission sets out practical, targeted solutions to restore competitiveness, rebuild confidence and secure long-term investment for Australian dairy processors, supporting farmers, consumers, retailers and government.

When the dairy industry is strong, Australia is strong.

Read ADPF’s submission for more.