Dairy is also one of Australia’s leading rural  industries in terms of adding value through further downstream processing.  Much of this processing occurs close to farming areas, thereby generating significant economic activity and employment in country regions. ABARE estimates a regional economic multiplier in the order of 2.5 from the dairy industry. 

Dairying is a well-established industry across the temperate and some subtropical areas of Australia. While the bulk of milk production occurs in Victoria (more than 65% in 2006/07), all states have viable dairy industries that supply fresh milk to nearby cities and towns. A wide range of high-quality manufactured products, from fresh products such as yogurts and a wide variety of cheese types to bulk and specialised milk powders are produced in most Australian states. Nevertheless, the manufacturing of longer shelf life products, such as cheese and powders, is becoming concentrated in the south-east corner of the country.