The New Zealand dairy industry is a highly organised, globally marketed food production system. In order to remain internationally competitive, the industry has had to adjust to flexible price regimes and the need to achieve greater production efficiencies. At the same time, the dairy industry is based on an agricultural system grounded in ecological and social specifics that can be in conflict with business aspirations. This paper outlines some of the environmental implications of modernising New Zealand’s dairy industry, focusing on the Waikato Region, which has traditionally been a major player in the country’s dairy industry. The authors question whether the dairy industry’s growth projections, which are linked to realising greater production efficiencies, are sustainable in the long run.