The food and beverage industry is among Indonesia’s most rapidly expanding industries. One of the food and beverage industries is the milk and dairy industry, which has seen an increase in domestic consumption. Indonesia’s milk production has many issues, such as suffering on-farm management, inadequate equipment, selling dairy cows for beef, and low milk quality. However, the food loss in the dairy supply chain is less critically mentioned in the government agenda. Furthermore, in dairy farms, technology adoption must be implemented, and the knowledge must be transferred as a partnership between firms and farms. Implementing technology benefits to strengthen human resources, research, and development. The study aims to identify the path of the relationship between food loss contributors, processing, and food loss amounts as a foundation for initiating digital technology. The method used was quantitative, with 322 farmers from Malang Regency, Indonesia, as the highest milk producer. The analysis was evaluated using the structural equation modeling partial least squares (SEM-PLS). The result showed a significant relationship between food loss contributors (collaboration and knowledge), processing, and the food loss amounts in the dairy supply chain. Processing does not mediate the relationship between weather and the food loss amounts. The findings can be used to initiate digital technology adoption to prevent food loss based on collaboration and knowledge to support the processing stage. The stakeholders can begin a digital sharing platform to link the information from firms to farms.