Downturn at the Dairy (Part 4)
by Margaret Henderson
Traditionally, most of the milk produced in the Richmond
River District was separated and the cream made into butter.
Some whole milk was sold locally while a small amount was
made into cheese.
As early as 1897 Richmond River butter was sent to the
British market. There is at least one report of this butter
being sold as top quality at the highest price then offering,
104 shillings per hundred-weight, (approx. $0.25 per kilo).
Agents were contracted to sell the butter overseas and the
market was very unstable for most farmers until the central
factories, especially the cooperatives, were established.
Britain soon became Australia's major market. In 1896 592,962
lbs. (approx. 300,000 kilos) of butter were exported by
New South Wales to the United Kingdom. By 1905 it was over
17 million lbs. (approx. 8.5 million kilos).
It was sometimes difficult to maintain top quality products.
Hygiene was ignored by some farmers and some separating
stations. Australia was, however, competing on the world
market against countries like Denmark which had had a very
high standard for many years. Something had to be done.
In 1901 the New South Wales Government introduced industry
regulations. All dairies had to be registered. Standards
were set and had to be maintained as inspectors were employed
to make regular visits to farms and factories. In 1908 the
Pure Foods Act was introduced. This added to the restrictions,
but also aimed at a better product and, theoretically, a
With the outbreak of the World War in 1914 Australia became
established as the chief supplier of dairy products to Britain.
All surplus butter and cheese was exported and prices were
good. However, with the end of the war in 1918 prices became
more unstable and then fell dramatically. It was felt that
more controls were required to stabilize the industry in
In 1924 the Australian Dairy Produce Board was established.
Part of its role was to supervise the industry throughout
Australia. To stabilize prices a levy was placed on all
home consumption so that export sales could be subsidised.
Over the years various other Boards were established but
all had the primary aim of stabilizing export prices and
therefore stabilizing the industry itself.
The Milk Zone War
At the same time, in New South Wales, another element was
working in the market place. This was in the sale of whole
milk to the domestic market. Because of its distance from
large population centres the Richmond River District had
concentrated mainly on the manufacture and sale of milk
by-products. The dairying areas nearer to Sydney, however,
had the benefit of being able to supply the increasingly
lucrative metropolitan whole-milk market.
This would not have mattered apart from the fact that the
milk supplier received considerably more per litre than
the cream supplier. In 1929, for example, the amount paid
to the milk supplier was more than double that paid to the
cream supplier. Naturally the Richmond River District suppliers
wished to be part of the richer market. However, this was
not possible because of government restrictions.
In 1929 the Metropolitan Milk Board had been established
to collect milk for distribution throughout the Sydney area.
A price war resulted as suppliers tried to enter the market.
In 1931 its name was changed to the Milk Board and a Milk
Zone was set up. This restricted the area from which the
milk could be supplied. North Coast farmers or factories
allowed to send milk to the Milk Board. This virtually
split the dairying industry in two by legislation. For many
years the farmers on the North Coast lobbied state governments
in an effort to enter the Milk Zone. It was obvious that
farmer action was required. This was not new to the farmers
of the Richmond: they had formed cooperatives to process
and distribute their products; they had formed agricultural
societies to promote communication and education of farmers
and to distribute information. Lismore was at the centre
of both these movements. In addition the value of paspalum
as a pasture grass had been found in the Lismore district.
Without this there may not have been a dairying industry.
One major force in this new battle was the Primary Producers
Union (PPU) which had been established on 15 December 1915
at a meeting of Norco shareholders. The PPU had become a
state-wide organization with a District Council based in
Lismore and its own publication, The Primary Producer, distributed
from Lismore. It was to remain an active force for many
years. There were some splinter groups, the major one being
the Australian Primary Producers Union (APPU).
Much political turmoil revolved around the quota problem.
Lobbying, principally by Norco and the PPU, did not see
any relaxation of the system until the late 1940s. This
was partly for the convenience of the Board rather than
to help the northern farmers, however. The Milk Zone was
starved of milk in the winter months as production declined.
Production was more stable on the North Coast throughout
the year. In 1949 Lismore's Norco factory supplied the shortfall.
Between 1951 and 1955 this increased as population, and
therefore demand, within the Milk zone grew and by the end
of the 1950s Norco was supplying approximately 40,000 gallons
Part 1: The Pioneers;
Land Boom; First Dairy; Early Problems
Part 2: Dairying
Part 3: Overcoming
Part 5: Defeat in
Victory for the North; The End of an Era
Corndale Butter Factory, opened 8/1/1913, taken over by