Dairy Australia - Dairy information for Australian Dairy Farmers and the industry

Primary content

Our Production Summary provides you with recent information on trends and activity within the dairy manufacturing sector.

Production summary

The Australian dairy manufacturing sector is diverse  and includes national and multinational companies, both privately owned and publicly listed. Farmer-owned cooperatives no longer dominate the industry.  
The decline in total milk production over the past two decades reduced the need for Australian dairy companies to invest in processing capacity, at least in the short to medium term. At the same time, the age of existing plants and the need to rationalise production has seen some processors close plants to reduce costs. Others have chosen to upgrade or increase capacity at remaining sites.

Over the past 12 months the milk processing sector has undergone substantial change, with a number of long-term investment decisions being made or otherwise changed. 

The Australian Consumer and Competition Commission (ACCC) released its long-awaited dairy inquiry report in April 2018. The report concluded that there are significant imbalances in bargaining power at each level of the dairy supply chain. The ACCC recommended the implementation of a mandatory code of conduct. In May 2018, the sale of the operating assets and liabilities of Murray Goulburn to Saputo Dairy Australia was completed, following approval from the ACCC and the Foreign Investment Review Board. Saputo Dairy Australia agreed to divest the Koroit plant in southwest Victoria to ensure farmgate competition in the region. Bega Cheese purchased the Koroit plant in a bid to increase its presence in southwest Victoria. Fonterra’s rebuilt Stanhope cheese factory, in Northern Victoria, came fully online in the first half of the 2017/18 season.  Australian Consolidated Milk started to build a milk processing plant at Girgarre, in Northern Victoria, capable of processing up to 200 million litres of milk per year. Large multinational companies have operated in the Australian dairy industry for many years and currently include Fonterra (New Zealand), Kirin of Japan (Lion Dairy and Drinks), Lactalis of France (Parmalat) and Saputo of Canada (Warrnambool Cheese and Butter Factory and Murray Goulburn).

Around 49% of manufactured product (in milk equivalent terms) was exported and the remaining 51% sold on the Australian market in the 2017/18 season. This contrasts with drinking milk, where most was consumed in the domestic market.

Cheese is consistently the major product stream, accounting for more than a third of Australia’s milk production in 2017/18. Recent increases in cheese production capacity suggest that this will become the case even more so in the future. Drinking milk and skim milk powder/butter production were the two next largest users of milk, accounting for 27% and 23% of Australian milk. 


Dairy biosecurity

Dairy biosecurity is vital for protecting your farm. Dairy farmers and their advisors now have access to a new online biosecurity tool to build their skills and adapt their management approach to biosecurity risks.

Hay and grain reports

The hay and grain report is commissioned by Dairy Australia to provide an independent and timely assessment of hay and grain markets in each dairying region. The report is updated 40 weeks per year.

More Initiatives