West Vic dairy farmers have been through drought, rising costs and the flow-on effects of overseas conflict in the past few years - yet the region still produces a fifth of the country’s entire milk supply and generates billions of dollars for the local economy.
For some of the farmers behind that output, the level of reward hasn’t always matched the level of risk.
Much of what happens to their milk, including what they’re paid for it, is decided by four big businesses who buy, bottle and brand it.
So who owns western Victoria’s milk?
The big kahunas: Australia’s dairy industry has long been overseen by a handful of major processors: Saputo, Fonterra, Lactalis, Bega and Bulla. As of April this year, Lactalis bought out Fonterra’s Australian business in a $3.2 billion deal.
Local plants, including Saputo near Warrnambool, Lactalis in Cobden and Bulla in Colac employ more than 1,000 people collectively.
Talking dollars: In 2025, Lactalis generated more than $2.55 billion in revenue. Saputo’s revenue exceeded $3 billion, while Bega achieved more than $3.5 billion.
Bulla’s exact revenue is not publicly available, but reporting at the time of former CEO Allan Hood’s departure in February put the company’s annual revenue at roughly $500 million.
Contributions: Some of those earnings make their way back to farming communities. As global conflict escalated earlier in the year, Saputo, Lactalis and Bega introduced farmer support payments to provide extra compensation to their suppliers to cushion the blows of increased costs.
Bega’s scheme has ended, while Victorian farmers supplying Lactalis will receive payments until the end of this month. Saputo’s payments will remain in place for the entire 2026-27 season.
Processors also offer grants and donations to local communities, such as Lactalis’ Dairy For Good program and Saputo’s Legacy and Building Strong Communities programs. Processors like Bulla, Lactalis and Saputo also have partnerships with national food charities like Foodbank and Second Bite.
Local experience: Crossley dairy farmers Karrinjeet Singh-Mahil and Brian Schuler are first to say the south west is the best part of the country for farming, having been in the game since 1997. They’re also firm believers of the notion that processors like Saputo or Fonterra would not exist without farmers.
Schuler and Singh-Mahil supplied milk for Nestle in the farm’s early days, before Nestle was bought out by Fonterra.
They stayed with Fonterra until the 2016 clawback scandal, where the processor reduced its farmgate milk prices mid-season, forcing 350 farmers into retrospective debt. Fonterra was sued in 2017 and settled out of court in 2022 for $25 million.
From there, the pair supplied Murray Goulburn – before that company was then bought out by Saputo.
In recent years, they have supplied for a smaller processor, Australian Dairy Farmers Corporation.
Change in relationship: Singh-Mahil said the relationship between farmers and processors was damaged through 2016 and a lot of trust was lost.
“I think we were all very trusting that everyone was doing the right thing and looking after each other, because without us, they don’t have an industry, but then all that stuff happened,” Singh-Mahil said.
“I think that fundamentally changed how we saw our supply relationship.”
In more recent years, she said it’s not uncommon for farmers to change processors to get a better price for their milk each season.
“It's not something that people readily do, although nowadays they do it a great deal more readily than they used to.”
Are things better? Singh-Mahil said the industry had made improvements in its treatment of farmers through the introduction of guidelines like the ACCC’s Dairy Code of Conduct in 2020, but when faced with higher costs, unpredictable weather and staffing challenges, it was hard to say whether circumstances were overall better or worse.
Future of dairy: Both Singh-Mahil and Schuler believe young people in the region aren’t being presented with agriculture as a potential career path unless they’ve grown up with a background in it.
“Schools are so focused on VCE … if you think about how many schools actually teach agriculture, it’s very few, not enough at all,” Singh-Mahil said. “We're not getting the kids coming out of school seeing agriculture as a real option for them … the industry's regressing, and we need more people.”
Schuler added some of the students who take interest in agriculture who don’t originate from a farming background turn out to be “some of the best farmers”.
“They're not tied to [thinking], ‘my dad always did it this way, or my mum always did it this way’, they choose, they work out reasons why something is a good thing to do,” Singh-Mahil agreed.
Room for improvement: When farmers are already under pressure, as Singh-Mahil and Schuler have been over the years, processors prioritising farmers ahead of global prices could help ease the strain.
“If they actually thought about farmers as being a key part of their business rather than an expense, because what it comes down to is if you keep doing this to farmers, this industry is going to keep shrinking, and we are the start of their business,” Singh-Mahil said.
“Their business is people making high quality dairy products, and Australia makes amongst the highest quality in the world.”