SOUTH Australia's dairy lobby group has been denied group B membership of Dairy Australia.

South Australian Dairyfarmers Association's bid to become a member which contributes to the strategic planning of the industry research and development body was defeated at the Dairy Australia annual general meeting today.

During the meeting the 45.10 per cent of the proxy votes were in favour of the resolution allowing SADA to become a group B member, but following a poll at the end of the meeting the resolution was defeated.

After the meeting, SADA president David Basham said he was disappointed.

"Not for SADA but for South Australian dairy farmers,'' he said.

"They are paying $3 million in levy (payments) and they don't have the same right as other levy payers.''

Mr Basham said the SADA board was meeting next week and it would discuss other options for contributing to Dairy Australia.

"We have to consider how we can engage with Dairy Australia, we have to make sure levy payers are looked after.

"(This) maybe not through a formal process . . .  we will have to sit down with Dairy Australia board and management.''

SADA applied for group B membership of Dairy Australia in September.

The current Dairy Australia group B members are national lobby group Australian Dairy Farmers and Australian Dairy Products Federation.

Earlier in the year SADA was removed as a member of ADF.

During the Dairy Australia meeting today, new ADF president Noel Campbell said he was committed to bringing SADA back in the national body.

United Dairyfarmers' of Victoria president Kerry Callow spoke against the resolution and said it could set a precedent for other state bodies to become group B members of Dairy Australia and this would be expensive.

Providing the closing remarks on the discussion about this resolution Dairy Australia chairman Max Roberts said SADA and ADF should "it down and sort it out and get back together''.

Other resolutions including, to re-elect director Kelvin Jackson and elect John McKillop were passed.