Australian Dairy Industry In Focus

The 2020/21 season will be remembered by many as one of the best in recent memory. After several challenging years, favourable weather delivered a turnaround in operating conditions on farm. Above average rain and warm temperatures during spring and summer resulted in a close to record large winter crop harvest and plentiful pasture growth. This significantly improved feed availability and lowered input costs for most farmers across the country. 

Combined with a historically strong farmgate milk price, a vast majority of farmers reported making an operating profit during 2020/21. Favourable conditions for most of the year encouraged many farmers to retain stock and begin to focus on rebuilding the herd. As a result, Australia’s national milk pool increased for the first time in three years, ending the season up 0.7%, at 8,858 million litres.

In 2020/21 there were 4,618 registered dairy farms operating in Australia. The dairy industry is a significant source of employment across regional areas and is one of Australia’s leading rural industries in terms of adding value through further downstream processing. It is estimated approximately 37,400 people were directly employed on dairy farms and by dairy processing companies in 2020/21.

Associated transport, distribution, farm services and research and development activities represent further employment connected to the industry. Much of this occurs close to farming areas, thereby generating significant economic activity and employment in regional Australia.

 Australia accounts for less than 2% of the world’s estimated milk production but remains a significant exporter of dairy products. The country currently ranks fourth in terms of world dairy trade – with a 4% share, behind New Zealand, the European Union and United Kingdom (as a bloc) and the United States. 

In 2020/21, 32% of milk produced in Australia was exported, worth a total of A$3.3 billion.
More than 88% of Australian exports were destined for Asia in 2020/21, with Greater China remaining one of Australia's fastest growing export markets by volume. Measured by dollar value, the top five export markets were Greater China, Japan, Malaysia, Indonesia and Singapore. Japan remains a vital trade partner for Australian exporters, as a mature, high-value market with long-established business relationships.