The state of Victoria remains at the heart of Australian dairy production, accounting for 63 per cent of the national milk supply, despite the sector having been characterised by structural consolidation and rationalisation over the past two decades. The number of active dairy farms has fallen by more than half, from 5,346 in the 2006/07 season to fewer than 2,400, whilst the state’s total production has remained stable at around 5.3 billion litres, compared with 6.4 billion litres twenty years earlier.
The fundamental shift in Victoria’s dairy farms lies in increased capital investment, larger farms and significant productivity gains per cow and per hectare. The average size of commercial dairy herds rose by around 40 per cent – from around 345 cows two decades ago to nearly 485 cows per farm. At the same time, the average farm size increased from 271 hectares to over 350 hectares.

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