The biggest impact for the dairy and food sectors comes from CSIRO’s decision to leave precision fermentation, microbial technologies and strain engineering for food ingredients and products. These capabilities have been central to the development of next-generation dairy proteins, including animal-free casein and lactoferrin, and have supported companies working on cow-free milk and alternative dairy ingredients.

CSIRO also plans to exit food manufacturing and ingredient innovation programs and discontinue the Australian Food Innovation Network (AFIN). The network had linked food manufacturers, dairy processors, universities, investors and government agencies, helping companies commercialise new products and access research expertise. Its closure removes one of Australia’s most important platforms for food innovation and industry collaboration.

The restructuring is being driven by long-term financial pressure. CSIRO says government funding has increased by only 1.3% annually over the past 15 years, well below inflation, while maintenance costs for its research facilities continue to rise. Even after receiving an additional A$100 million in federal funding, the agency still faces a maintenance backlog of around A$280 million.