Australian Dairy Products Federation Executive Chair John Williams

Australia’s dairy processors are used to operating under pressure. It comes with the job.

Milk doesn’t wait. Dairy factories run around the clock. Export markets shift overnight.

Global instability is hitting home, with escalating tensions in the Middle East driving up fuel, freight and packaging costs across the dairy supply chain.

Processors are also managing tight milk supply, rising labour, insurance and compliance costs.

When essential inputs such as packaging, sanitation products and logistics are disrupted, the consequences are immediate.

Without packaging, product can’t reach shelves. Without sanitation inputs, production cannot be safely sustained.

This is what food security looks like in practice: maintaining the sovereign capability to produce, process and supply essential food.

Dairy remains a staple in almost every Australian household – a reliable source of nutrition that people depend on every day.

Protecting the sector means protecting a critical part of Australia’s food system.

Government and industry need a coordinated plan to strengthen the full dairy supply chain.

Global shocks matter, but some of the biggest threats for Australian dairy are at home, where policy settings are working against food security agendas.

Export fees are set to rise sharply under the government’s shift to full cost recovery, with per-consignment charges increasing by more than 160 per cent over the next few years – a direct hit to global competitiveness.

At the same time, the Australia–EU Free Trade Agreement will open the door to more subsidised dairy imports while delivering limited benefit in return.

Water policy is another critical pressure point. The Murray–Darling Basin Plan review has significant implications for dairy, where water underpins milk production, regional jobs and local economies.

Together, these pressures are eroding confidence and making it harder for processors to invest, grow and remain competitive.

Dairy farmers are rightly focused on securing sustainable returns at the farm gate.

Dairy processors understand that because we rely on a strong, viable farming sector.

But both ends of the supply chain are under strain, and there is limited room to absorb more costs.

Despite all of this, Australian dairy processors keep delivering.

They transform raw milk into food every day of the year, supporting more than 70,000 jobs and generating $18.5 billion in economic activity.

They are investing in energy efficiency, automation and emissions reduction.

Dairy delivers affordable high-quality protein, calcium and essential nutrients in a form Australians trust every single day of the year.

Beyond retail, dairy underpins food service and export markets.

Government attention on food security is welcome, but more action is needed.

Policies must recognise dairy as an essential industry by reducing regulatory and cost pressures, securing milk supply, supporting investment and delivering trade outcomes that create real value.

Dairy must also be embedded in national nutrition policy, alongside targeted co-investment, building on initiatives like the National Reconstruction Fund, to improve productivity, adopt new technologies and strengthen manufacturing capability.

Australia also needs clearer national leadership on food security and supply chain coordination, including a dedicated Food Minister.

If we get this right, Australian dairy will keep doing what it has always done – turning a perishable product into something reliable for millions of Australians every day.