If we want Australian made dairy food, we need to make it competitive

Drive through almost any dairy town in regional Australia and you’ll find a factory that’s been part of its economic backbone for generations.

Supporting local business, jobs and families that keep regional communities strong.

Twenty-five of those dairy factories have announced closures in the past four years.

Meanwhile cheese on supermarket shelves – sitting alongside cheese made from that dairy town’s milk – is increasingly coming from overseas.

Australia produces some of the best milk in the world.

So why are dairy products we can make here being shipped thousands of kilometres to reach our shelves?

Because Australia is a more expensive place to make them.

Our dairy manufacturing industry generates $20.6 billion in economic output each year and supports more than 96,000 Australian jobs, most in regional Australia.

Dairy Australia’s latest data shows the Australian milk pool grew 1.5 per cent to 8.65 billion litres last year – a positive result after years of pressure.

But that growth cannot be mistaken for a structural turnaround.

Dairy farmers and manufacturers are still carrying rising costs, workforce shortages and investment pressures.

It does show something important: Australian dairy can grow when the conditions are right.

A growing milk pool is encouraging. Growing imports of dairy products, we can manufacture here are not.

Imports aren’t a shopping trend; they’re a warning light on the dashboard that’s been flashing for a while.

They tell us something important about the competitiveness of manufacturing in Australia.

We want to make dairy in Australia, from local milk, but that only happens if Australia is a competitive place to do it.

We need to talk about food security

We welcome the Australian Government’s development of a National Food Security Strategy.

But there’s a version of ‘food security’ that only shows up when something goes wrong – a supermarket shelf is empty and suddenly everyone remembers to care.

That’s not food security; it’s crisis management.

Food security is the ongoing work of keeping dairy farms farming, factories running, skilled workers employed and capital willing to invest for the next 20 years.

Australia has an abundance of high-quality food today, but we can’t assume abundance is permanent.

Once a factory closes rebuilding capacity takes years and hundreds of millions of dollars, if it happens at all.

So, here’s the uncomfortable truth: there is no sovereign food security while the economics of making food here keep getting worse.

Resilience requires investment – and investment only happens when the numbers stack up.

Back Australian dairy manufacturing

Australian dairy manufacturers aren’t asking to be protected from competition, they’re asking for a fair shot.

They’re ready to invest: in more productive factories, in automation, new technology, great people and higher-value products.

But investment follows the economics and the costs – raw milk, ingredients, energy, labour, freight, insurance, packaging, regulation and compliance keep rising.

Our competitors aren’t standing still – many have greater scale, lower costs and in markets like the US, government programs that protect farmers’ income and reduce risk.

Australian dairy exports to the US now face a 12.5 per cent tariff, while US dairy has open access to our market.

The result is US cheese landing in Australia at prices we cannot compete with.

We know government can’t set the global price of milk, but it has significant influence over what it costs to make that same block of cheese here – and that’s the lever ADPF wants pulled.

We’re calling for a Dairy Growth and Manufacturing Capacity Package: targeted tax incentives and co-investment in automation, technology and more efficient dairy manufacturing; affordable energy and support for the energy transition; lower regulatory and export costs; a skilled workforce; and stronger export support.

Farmers need a sustainable return for their milk. Families expect dairy to stay affordable. Retailers compete hard on price.

Dairy manufacturers must make that equation work every single day, with a highly perishable product.

It’s not an easy equation, but it’s solvable if government treats manufacturing competitiveness with urgency.

We want to compete from Australia

For Australian made dairy to remain on Australian shelves, Australia needs to remain a competitive place to manufacture it.

We have the farmers. We have the skills. We have the factories and markets.

What’s missing is policy that matches the rhetoric, because talk of food security and sovereign capability is running ahead of action on the ground.

Food security isn’t secured after a factory closes. It starts with making Australia a competitive place to invest, produce and manufacture – with government creating the conditions for investment, retailers backing Australian made dairy and consumers choosing it.