Urgent action needed to safeguard dairy supply amid fuel disruption risks

Australia’s dairy industry has written to the Prime Minister calling for immediate government action to protect fuel supply, as escalating fuel security risks pose a serious threat to national food production and supply chains.

The industry operates as a continuous, 365-day system producing a highly perishable staple food and essential ingredient. From milking cows on farms, to transporting milk, feed and inputs, through to processing and manufacturing, every step of the dairy supply chain depends on reliable access to diesel.

Emerging fuel disruptions are now placing that system under increasing strain.

Without consistent fuel access, the consequences are immediate and far-reaching. Animal welfare and on-farm safety are put at risk. Milk collection and processing operations face disruption. Manufacturing continuity becomes uncertain. Ultimately, this threatens the availability of fresh dairy products on supermarket shelves in Australia and in key export markets.

Despite existing fuel security frameworks, the dairy industry is not explicitly recognised as a priority user. This gap is critical. It means dairy farmers and processors are being forced to compete for fuel in increasingly constrained markets, heightening the risk of lost milk, stranded livestock, environmental impacts and supply chain breakdowns.

In response, the Australian Dairy Industry Council (ADIC), representing both farmers and processors, is seeking coordinated Commonwealth and State Government support to ensure the sector is protected within emergency fuel arrangements.

Specifically, we are calling for:

• Pre-designation of dairy as a priority fuel user, covering farms, milk transport, feed supply and processing and manufacturing facilities, including the ability to move product to market
• Alignment across jurisdictions, with dairy embedded in all state and territory fuel emergency response plans
• Guaranteed access to contracted fuel supply, ensuring dairy businesses are treated as protected bulk customers in any allocation system
• Prepared use of emergency direction powers, enabling fuel to be directed to dairy-critical users where market mechanisms fail
• Formal recognition of dairy as essential to food security and animal welfare, reflecting its role as a daily, perishable staple and a critical component of Australia’s food manufacturing and retail supply chains.

These measures are practical and proportionate. They align with the broader objective of maintaining essential services, minimising economic disruption, and ensuring equitable fuel distribution during times of crisis.

Importantly, they would help ensure the continuity of food production and processing, support farmer and workforce wellbeing, and safeguard access to nutritious dairy products for Australian consumers.

Ensuring uninterrupted production, processing and supply is not only critical for the industry, but also essential for Australia’s food security.