During the past decade, Australian and New Zealand dairy farmers have been increasingly exposed to volatility in milk prices, declining terms of trade, climate variability, changing regulation, and increasing consumer demand to demonstrate their 'social licence to farm'. In response to the varying challenges, it is not surprising that we see significant diversity in dairy-farm systems in Australia and New Zealand. Despite much research effort to address these challenges at both the component and farm-system level, the evidence of adoption and dairy farming-system change over the past 5 years has been inconclusive. The present review explores how farmers and systems research have been affected and are responding, and whether systems research is developing research in the appropriate direction, proactively researching dairy-farming systems that are resilient, profitable and sustainable into the future, notwithstanding the increased volatility that dairy farms are experiencing. While much farm systems research in Australia and New Zealand has addressed the challenges associated with improving productivity and profitability, and the known challenges such as climate variability and improving environmental outcomes, there is need to fore-sight future risk, challenges and opportunities for dairy systems. It is also important that the system researchers explore alternative approaches such as working collaboratively with the known system experts, the dairy farmer, in a participatory environment to increase rate of knowledge transfer and adoption of positive research outcome.