Farmers have expressed concern about the continuing increase in imported butter and cheese, outlined in the latest Australian Dairy Industry In Focus 2023 report
The report found Australian dairy industry has slipped from fourth to fifth place on the list of world dairy exporters.
But Dairy Australia analysis also pointed out at the same time, Australia imported more dairy products.
"Imports increased significantly between 2021-22 and 2022-23, especially for butter and cheese," DA industry analyst Isobel Dando said.
The total volume of dairy imported in 2022-23 was 343,556 tonnes, up 17pc from the 292,787 tonnes the previous year.
In value, imports were worth $2.7 billion, up 30pc from $2.1 billion the previous year.
Australian Dairy Farmers president Rick Gladigau, Mount Torrens, SA, said costs had made it harder to compete with New Zealand on milk price.
"We are a market for others, we know that," Mr Gladigau said.
"This isn't the first time it's happened - the world price is always going to go up and down
"At the moment, the way it is we have got a good farmgate milk price while our competitors are paying less or are highly subsidised to produce dairy products," Mr Gladigau.
"It is a concern.
"The thing we want consumers to be aware of is that they need to keep supporting Australian dairy because times will change.
"If we lose Australian products off the shelves now, later on it might not be there when things turn back."
He said it was an issue of food security, which was evident during the height of the COVID-19 pandemic when importers stopped bringing dairy into Australia.
"We won't have it at all, you'll be drinking powdered milk," he said.
"It won't be like this forever, so consumers need to buy quality Australian products they can be comfortable in purchasing."
But he said processors needed to be aware they needed to pay a fair price for milk.
"It might be a good price, it might be short term pain (for processors), but for the long term it is of benefit to the whole of industry," he said
"If we keep losing farmers, we will have less milk, and there will be more imported product."
United Dairyfarmers Victoria president Bernie Free said imports were always of concern.
"We are a higher cost manufacturer of products, in general, and we need to make sure we are getting the best return for the product we are producing," Mr Free said.
"We need to mitigate that as much as possible to make sure we continue to have a strong dairy sector in Australia."
He said imports were driven partly driven by the low price being paid for milk, in New Zealand.
"That shows the value of the Mandatory Code of Conduct - we want a fair milk price but it's a balancing act," he said.
"We need to make sure we can increase our milk production to the demand Australia needs."
Rising costs were still an issue, he said.
"Agricultural inflation is higher than normal inflation, we just have to hope some of these costs do come down," Mr Free said.
"Everything is increasing in price, from when we are trying to upgrade infrastructure, through to the standard stuff, like power, chemicals and all our consumables.
"It's making dairying harder and harder to make a living out of."
The latest DA Production Inputs Monitor showed dry conditions continued in October, but monitored water storages across Victoria remained close to 100 per cent capacity.
The monitor showed across northern Victoria, temporary water prices rose again in October, climbing another 17pc from last month.
"Over the same period, the volume of water traded fell 34pc, which is likely a reflection of softening demand after the drier conditions throughout August and September," the monitor said.
"Conversely, both temporary water prices and traded volumes decreased from last month in the Murray Irrigation system, falling 17pc and 57pc respectively.
"Despite this, current prices and traded volumes in both systems are substantially above last year, signifying a much drier spring this season compared to last."
The average cost of a tonne of feed wheat, delivered in the Goulburn/Murray Valley region was $385, down $3 from September.
The average cost of cereal hay, delivered to the region, was $298/t, down $15 on the previous month.
The monitor found global indicative diammonium phosphate (DAP) and urea prices rose 2pc and 10pc respectively, over September, while the price of muriate of potash (MOP) decreased slightly.
"While there has been minimal price movement in recent months, indicative values remain significantly below last year.
"Reports suggest this is unlikely to change in the short-term, as production across both Europe and China remains on track."
Domestic stores in China were likely to fill quickly, and there were expectations that exports would return over the longer-term as a result.
"Nevertheless, fertiliser prices hinge on global energy markets that are facing significant threats from global conflicts," the monitor found.
Cull cow sales were 53pc below the same time last year.
Prices had fallen 59pc over the same yearly period, tracking 4pc below the five-year average.
