Downturn at the Dairy (Part 4)

by Margaret Henderson

Marketing

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 better income.

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 Australia.

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 were not

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 weekly.

Part 1: The Pioneers; Land Boom; First Dairy; Early Problems
Part 2: Dairying Takes Off
Part 3: Overcoming Problems
Part 5: Defeat in Victory for the North; The End of an Era

Corndale Butter Factory, opened 8/1/1913, taken over by Norco 1921