Paper presented at the Australian Agricultural and Resource Economics Society (AARES) 2013 Conference. This study uses data from the ABARES irrigation farm survey and the Australian Water Availability Project to evaluate movements in technical efficiency and technical change in the irrigated dairy industry in the southern Murray-Darling Basin between 2006-07 and 2010-11. Stochastic translog production frontiers are estimated using the maximum likelihood method developed by Battese and Coelli (1992). Average efficiency and returns to scale were estimated to be 77 per cent and 1.17 per cent, respectively. Across the period, technical change and technical efficiency change for the sample dairy farms were estimated to be 1.8 per cent and -0.8 per cent a year, respectively. These results suggest that there may be scope for further structural adjustment in the irrigated dairy industry and that there has been a growing gap between the farms on the production frontier and those below it.