Joyce said Treasurer Scott Morrison will request the ACCC undertake an inquiry, starting in November, under Part VIIA of the Competition and Consumer Act 2010, providing the Commission with powers to obtain information from companies.
Joyce said dairy farmers in Australia deserve fair farmgate returns, as well as transparency in milk price arrangements and supply contracts.
He encouraged all parts of the dairy industry to contribute information confidentially, adding that commercial interests would be protected.
The inquiry will look at sharing risk along the supply chain, supply agreements and contracts, competition, bargaining and trading practices in the industry and the effect of world and retail prices on profitability.
The ACCC will release an issues paper and engage with stakeholders through public and private hearings, and written submissions to deliver a final report to government in the second half of 2017.
Joyce said the coalition government wants to work with dairy farmers and processors to strengthen the dairy industry, including an election commitment of up to A$2m ($1.5m) to establish a commodity milk price index.
“The coalition government is delivering assistance to dairy farmers with a A$579m ($436m) support package to help them manage through the current low price environment,” Joyce said.