Dairy matters to the Murray–Darling Basin (MDB) and to Australia.

The basin underpins a significant share of Australia’s milk production and processing capacity, supporting regional jobs, national food security, and export competitiveness.

But the sector is under pressure.

Declining milk supply, rising input costs, regulatory complexity and global competition are constraining productivity and investment across dairy processing.

Further water recovery under current Basin Plan settings – particularly buybacks – will compound these pressures, accelerating structural decline across the dairy supply chain. Independent, industry-commissioned analysis shows that additional water recovery will:

• reduce milk production
• increase water prices and input costs
• lower processing plant utilisation
• increase the risk of plant closures and regional job losses

This is a structural risk to a critical food manufacturing sector.

The Australian Dairy Industry Council (ADIC), Australian Dairy Products Federation (ADPF) and Australian Dairy Farmers (ADF) welcomed the opportunity to contribute to the 2026 Review of the MDB Plan.

We recommended a shift from volume-based water recovery to outcome-based, evidence-driven and place-based water management. One that delivers environmental outcomes while sustaining productive industries and regional communities.

Read our submission.