SHORT-TERM issues have distracted the dairy industry from the "main game" of supplying premium export products.
And there is plenty to gain from supplying the global dairy market given there will be an estimated 10-billion litre supply gap by 2021.
Consultancy firm Freshlogic's director Steve Spencer presented some findings from the Dairy Australia and Gardiner Foundation's Horizon 2020 project at the Australian Dairy Conference in Queensland last week.
The presentation was designed to encourage farmer feedback and ideas about how to spread the message to other industry stakeholders.
The report found the expanding global dairy market presents an opportunity for the Australian dairy industry, however the key will be focusing on premium products to ensure a viable return because Australia does not have the lowest cost supply chain any more.
Mr Spencer said positives for the industry when competing in the area of premium products rather than bulk commodities included a quality and safety record, sustainability credentials and proximity.
He said the industry didn't connect well with consumers and its market presence and cost competitiveness were unsatisfactory.
Mr Spencer said the nominal trend of farmgate milk prices had been an annual increase of 3.5 per cent, but it had been volatile.
He said sustainability, achieving more value while doing less, were aspects the industry had to focus on which would provide a licence to sell and operate.
Mr Spencer said combining the focus on planet concerns such as environmental impacts with people concerns such as animal welfare, health and nutrition - as well as profit was the best outcome.
He said the Australian dairy industry was seen as less integrated in customer-value chains and it did not work closely with the Federal Government to improve market access.
Mr Spencer said product quality and safety were positives.
The research concluded the most likely scenario for the industry would include fragmented growth with production rising to 12 billion litres and strong corporate leadership.
The report also revealed the industry had lost the ability to successfully manage and grow dairy farm wealth over time, and it did not celebrate success.