About 95 per cent of kids aged two to five exceeded the daily maximum recommended intake of saturated fat, according to a survey by the Women's and Children's Health Research Institute in Adelaide.
Milk and dairy products accounted for half of toddlers' saturated fat intake but breakfast cereals, rice, pasta, bread, biscuits, cakes and processed meat contributed to a lesser extent.
More than 30 per cent of children surveyed were overweight or obese.
However, study author Dr Shao Zhou emphasised dairy products were still an important source of calcium for growing children.
She said despite the high levels of saturated fats, the overall results indicated children were consuming the recommended intake of energy from food.
A lack of physical activity could therefore explain the levels of overweight or obese children, she said.
Another explanation could be that food diaries parents kept for the children surveyed over three days may not have been a true reflection of their normal energy intake.
The study led by Dr Shao, a PhD student, surveyed 300 children aged one to five in Adelaide, with a range of socio-economic backgrounds to ensure it was representative of the national population.
The results showed children were getting enough energy, protein and carbohydrates.
The diets also contained adequate levels of iron, zinc and calcium, but not enough fibre and omega-3 fatty acids.
Dr Shao said the results were concerning because children's diet patterns could continue later in life and lead to heart problems and chronic disease.
"The high saturated fat and low intake of fibre is a pattern that is associated with adverse long term health effects in adults," Dr Shao said.
"These observations suggest that there is a need for increased attention on establishing healthy eating patterns in early childhood, as dietary patterns established early in life often carry through to adulthood," Dr Shao said in the article, published in the Medical Journal of Australia today.
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