The dairy industry is one of Australia’s major rural industries. Based on a farmgate production value of $4.4 billion in 2018/19, it ranks fourth behind the red meat, wheat and wool industries.
It is estimated that approximately 46,000 people are directly employed on dairy farms and by dairy companies within Australia. Associated transport, distribution,
farm services and research and development activities represent further employment associated with the industry. Additionally, dairy processing often occurs close to farming areas, generating significant economic activity and employment in regional areas.
Australian consumer support for dairy remains strong with one of the highest per-capita consumptions in the developed world. During 2018/19 Australians consumed on average 321 litres of milk. This is more than the 269 litres per capita consumed in the United States and the average of 305 litres of milk consumed per capita in the European Union.
Demand for Australian dairy products is not just confined to the domestic market. Australia is also a significant exporter of dairy products to the rest of the world. It is the fourth largest exporter in terms of world dairy trade with a 6% market share (behind New Zealand, the European
Union and the United States). In 2018/19, Australia exported 35% of milk produced, worth $3.2 billion. Overall, exports to Asia account for close to 85% of total Australian exports, dominated by the markets of Greater China, Japan and South-east Asia.
In recent times, the dairy sector has successfully advocated for important industry initiatives, including the end of $1/litre milk and Free Trade Agreements with Indonesia, Hong Kong and Peru, leveraging the industry’s ability to take a united and well-constructed position to government.
While the Australian dairy industry has strong foundations, there are challenges the industry is committed to working through. Dairy Australia’s strategic plan will need to address the global changes associated with the COVID-19 pandemic as well as dairy-specific challenges set out in the dairy plan.
Industry impacts from COVID-19
The COVID-19 pandemic looks set to usher in a new era for the global economy from which the dairy industry will not be immune.