the production and processing of milk products

Milk cows and the making of butter certainly entered the Williams, as well as the Paterson and Allyn River Valleys along with the first European settlers. However, while some attempt at making butter for sale elsewhere was made, the majority of ‘dairying’ before the 1890s was a matter of family production or local and fairly immediate consumption. This changed with the arrival of the cream separator, which initiated the development of a dairy industry along the river flats of the Williams, Paterson and Allyn Rivers. This industry grew rapidly throughout the first half of the 20th century, reaching its peak in perhaps the late 1950s or early 1960s, before going into an, at first slow and then increasingly rapid decline, until by the 1980s only a handful of dairies remained scattered around the valleys.

Early in the 19th century on the Tocal Estate on the Paterson River, cheese and butter were produced, with 15 lb of cheese a day and 150 lbs of butter per week sent to Sydney at one point, though none was shipped in the summer.[1] But it was not until the end of the 19th century that a number of technological changes created a dairying ‘industry’. Beginning in 1880 with the invention of the cream separator, refrigeration in the 1880s helped increase demand as overseas markets could now be reached, while the Babcock Tester of 1890 meant the amount of cream in milk could be tested on a cow by cow basis, allowing farmers to cull and improve their herds.[2]

Up until the 1880s, butter had been made by by placing milk in shallow dishes, setting these out overnight, then skimming the cream off the top. This was done at the farm and the butter then churned by hand. The butter produced was at best a side income to the main farm activity of growing crops such as tobacco or corn. The introduction of the centrifugal cream separator, marketed most successfully by Swedish engineer Carl Gustaf Patrik de Laval, dramatically sped up the butter-making process by eliminating the slow step of letting cream naturally rise to the top of milk. The major impact of this technology, in addition to increased production, was the establishment of ‘creameries’ to which farmers could take their cream, with the leftover skim milk used to feed to pigs and calves, while butter was produced on a larger scale.[3]

The growth in dairying was to be a great boon to the district, but change never comes easily and many opposed or neglected this opportunity at first. This was a circumstance pointed out in some detail by a correspondent of the Manning River Times who in 1905-6 toured the north coast and the Williams Valley and reported on what he considered was much wasteful land use. Farmers, such as Mr Harry Muddle on 76 acres at Bendolba, were used to maize growing. For years Mr Muddle hated the idea of dairying until a friend asked to run 12 dairy cows on his property and paid him in milk. The £5 a month this gained him soon converted Mr Muddle to the benefits of this new industry.[4]

The change to dairy farming gave a major boost to the many small farmers and tenants whose tobacco and corn crops had not provided them with any but the barest living. By 1899, there were 296 landholders who could be described as farmers, and of these 129 had dairy farms.[5] Dairy farms soon spread further up the rivers as better roads and motors cars cut travelling times and rail (1911) improved access to markets. For the larger landowners too, dairying provided the opportunity for increased rents from their tenants as well as profits from the creameries and butter factories that their capital allowed them to set up. The government also moved to support the new dairying industry and a ‘travelling Dairy Unit’ in the Hunter region demonstrated the new methods so as to encourage the establishment of creameries.[6]

Creameries were set up at Vacy, Gresford, Allynbrook and on the Williams River at various locations. One was the short-lived creamery at Vacy in 1892:

“This creamery, the first in our district, was publicly opened yesterday, Monday, the 18th instant, by Mr. Theo. Cooper. The dimensions of the building are 35 feet by 16 feet, and 13 feet high. The boiler room is 10 feet square, and the boiler of 6-horse power, and the engine is of 4-horse power. The two separators are capable of holding 180 gallons of milk. There is also a reservoir for heating milk. The receiving tanks allow for weighing 120 gallons of milk at a time. A windlass is arranged to draw the milk from the carts, and the water required is pumped up from the river, near which the creamery is situated.”[7]

In 1894, a creamery/butter and cheese factory was set up by Richard Boydell in the Allyn Valley, and in 1893 John Hooke set one up at Wirra Gulla not far from Dungog town.[8] Boydell’s attempt to set up a Dairy Co-op, however, was not successful, while that at Wirra Gulla burned down in 1895. About 1890, Robert Bosworth set up a creamy just north of the Bandon Grove bridge and another was established at Dingadee near Dungog.[9] With access to rivers, much cream was taken by ‘cream boats’ from Gresford to Bowthorne/Duckenfield, where a co-operative butter factory was established, as well as down the Williams River to Clarence Town, and the Paterson River to Morpeth, doing this in 1916 at 6d. per can.[10] Many of the smaller creameries quickly closed and larger establishments developed known as butter factories, such as those at Dungog, Gresford and Gostwyck. [For more on the history of the many creameries and butter factories see the Paterson River site.]

A significant feature of the dairy industry at this time, and for many years afterwards, was that it favoured co-operatives. Co-operatives were very popular as a means of raising capital and keeping control in the hands of producers. The dairying industry was suited to this as it was based on many small producers whose resources could afford to establish the relatively simple creameries and butter factories. The local creameries could handle the milk supplied to them by farmers within ‘horse and cart’ distance, but the production of butter and its supply to the larger centres required more capital and this was gained by the establishment of co-operatives such as the Dungog Co-operative Butter factory in 1905 and the Bowthorne Co-operative Butter Factory at Gresford in 1907.[11] In June 1908, the Raymond Terrace Dairy Company established a Paterson branch with a factory at Gostwyck.[12] This factory was bought by Peters Ice Cream Company in 1915 until it closed in 1926.[13] In 1913, a second Dungog milk processor opened, known as the Dungog Dairyman and Farmers Milk and Ice Company. Unlike the Dungog Co-operative Butter factory, this second processor did not make butter but instead supplied milk to the Sydney market only.[14]

Despite the increased scale these factories implied, the basic unit of the dairy industry remained a family farm with hand milking and labour costs keeping things small. For these farmers the great advantage was that dairying provided a weekly income compared to the more annual result (if any) of other crops and products.[15] As dairying became the main concern of farmers, crops such as tobacco, corn, vegetables and fruit declined. Another result was that the major communication between farms and their service centres became the milk pickup. Increasingly, motor vans carrying milk cans would deliver supplies, newspapers, and even school children as they went between dairy farms and creameries.[16]

By the beginning of the 20th century, even before the railway line came through, a general description of the Boydell estate at Camyr Allyn was of its four pursuits: grazing, dairying, agriculture and wine growing, with the dairying largely taking place on a share system.[17] Railways allowed milk to be transported from dairies along the line to factories in the city, and those within reach of the line running through Dungog to Paterson and on to the city markets were able to take advantage of this.[18] By 1917, the Dungog district was described as a major milk supplier, after the South Coast, due to its rail link.[19] In 1927 Dungog was awarded 3rd prize in the British Dairy Show, following Canada and Warwick in Queensland.[20]

The quality of milk products was always an issue, and as early as 1915 the Dairy Industry Act was designed to regulate this. In the Williams Valley, the Jersey Herd Society, with R W Alison and H L Fitzgerald among others as members, aimed at improving butter fat content.[21]However, the major factor influencing the dairy industry was the fluctuation in milk production between summer and winter, with winter milk production able to be kept up only with expensive feed.

In an attempt to overcome these fluctuations, NSW milk zones were introduced in 1932 within which farmers were paid high prices to maintain year round production and fodder conservation, herd improvement and pasture management were also encouraged. Any continuing winter shortfalls were met by purchases from outside the milk zone. In the 1930s, widespread price-cutting led to Sydney’s ‘Milk War’ which only ended when a reformed industry Milk Board took control of supplies into Sydney and Newcastle. The Board then appointed a handful of organisations to act as agents to sell milk to the public. The various dairy farmers of the Paterson, Allyn and Williams then had to fit within this increasingly regulated system.

It was at this time that the Dungog Dairyman and Farmers Milk and Ice Company closed leaving the Dungog Co-operative Butter Factory without competition within the Williams Valley. Also, after a long period of mergers and closures, the Hunter Valley Co-operative Dairy based at Hexham, which changed its name from ‘Raymond Terrace’ in 1944, controlled most milk production in the Hunter region, with the Sydney based Dairy Farmers Co-Op providing the main competition – competition strictly controlled by the Milk Board and its system of zones and quotas.[22] The Paterson Valley did not enter these milk zones until 1942, which resulted in encouraging more dairy farms on even more marginal land, with only some of the most remote farms remaining cream-only producers.[23]

In 1942, the dairy farmers of the district threatened to strike if they were not granted an increase in the price paid for milk. Among other things it was argued that: ‘Young men were getting sick of the farms and getting better money elsewhere.’[24] The response was continued government intervention that helped, presumably, to keep some of these young men on the farms. This was done with protection for butter and restrictions on imports of margarine and vegetable oils, as well as minimum prices that helped to prop up an uncompetitive export market in butter. The result was that 1945 to 1955 was a period of continued expansion, with Paterson and Allyn River dairies, for example, increasing from 200 to 248 dairy farms. Despite the continuing growth in dairy farms, or perhaps because of it, the Dungog Chronicle in 1950 declared dairying to be a form of ‘white slavery’ as price and wage increases were not matched by rising milk prices.[25]

Many of these dairy farmers would have been share farmers, under which the landowner provided all the capital, including the herd, and all subsequent costs and income was then split between the landowner and the dairy farmer. Sharing farming agreements varied, from hand-shakes to detailed written conditions determining such things as the number of horses that could be kept, etc. The proportion of share farmers to those who owned and worked their own properties is unclear. Where larger properties continued to exist, such as on the Williams River around Dungog – some of which ran two or three dairies – the proportion was high, while further up the Williams Valley and over on the Paterson and Allyn Rivers it appears to have been much less.[26]

In 1955, individual quotas (as opposed to factory quotas) began to be introduced based on a dairy’s winter production (the most expensive period).[27] The introduction of this kind of quota was strongly opposed within the area of the Dungog Co-operative and their introduction was delayed until as late as 1961.[28] The quota system resulted in a marked increase in productivity as some dropped out of dairying – often those who qualified for a quota insufficient to live on – and those that remained had more income for improvements. The quotas of those who left could be purchased, with the cost of two cans worth of milk quota (40 gallons) in the early 1960s as high as £5,000.[29]

Another impact of quotas and the effort to maintain a constant level of milk supply was that less separated milk was sold as cream. Previous to quotas, the morning milk was generally sent to the Butter Factory and night milk was separated for cream – with occasionally a special run if milk was short at the factory. With quotas, nearly all milk was sent to the factory and skim milk was no longer available as pig feed, with the consequence that keeping pigs as extra income on dairy farms further declined.[30]

The increased productivity of the 1950s meant that the Dungog Co-operative Butter Factory was very pleased with its results in 1959, declaring a record turnover and a profit of £26,901. The Butter Factory, the Chairman of which at this time was also the local MLA, made this profit from both the sale of its butter, manufacturing powered milk, and supplying milk to the Milk Board. It also ran an artificial insemination project and provided veterinary services; this last partly subsided by both the Milk Board and Dairy Farmers. The management of the Co-op at this time was also pleased that the price of butter in Britain was rising, but concerned that margarine quotas had increased and that per head consumption of butter in Australia had fallen to a mere 27.8 pounds.[31]

An aspect of the improved productivity within the three valleys was the switch from corn and sacaline feed to pasture feed. Since the beginning of dairying in the 1890s, dairy regions such as the Williams Valley had relied on crops such as corn and the newly introduced sacaline to provide feed for dairy cows. The change to pasture such as rye grass and clover, improved milk productivity, as well as reduced the amount of handling a dairy farm required, while increasing the need for pasture management.[32]

After pasture feed and quotas, the next major change for dairying within the three valleys was the introduction of bulk milk pickup, which needed a suitable road, ramps, room to turn, and vats – these last could be bought on easy payments from Dairy Farmers Co. All this meant higher capital costs that often outweighed the ease of tanker collection versus cans. One Eccleston farmer, for example, with a bridge unable to sustain a tanker, mounted his refrigerated vat on a trailer to take to the road for tanker collection. When a flood washed away the bridge he gave up dairying. For those operating several dairies on a share farmer basis, the capital requirements of bulk milk were especially high and at least one landowner reputedly closed down three dairies in one day on the introduction of bulk milk.[33] From 1962, Paterson and Allyn River milk went to the Hunter Valley Co-operative Dairy Company via a milk receiving depot built at Paterson.[34] Williams Valley milk went to Dairy Farmers, though the introduction of bulk milk pickup seems to have been late compared to the Paterson and Allyn Valleys.

The high capital cost of the change over to bulk pickup, coinciding with a severe drought in the mid-1960s, saw a decline in dairying farm numbers. In 1963, it was reported that 40% of dairy farms in the Williams and Paterson Valleys were between 150 and 350 acres, with some 15% between 200 and 250 acres. These sizes were considered large but this was attributed to the hilliness of the country, which meant that much of the land was suitable only for dry cows or for ancillary cattle. This same report stated that ‘the Paterson Valley is not as well off as the Williams Valley climatically’.[35] From 1963 to 1979, dairy cattle numbers fell by half in both the Paterson/Allyn and Williams Valleys. Major droughts in 1964-66, and again in 1979-80 contributed to this fall. Naturally the most remote and marginal farms began to withdraw first, with Paterson/Allyn dairies numbering 110 in 1970 and only 62 by 1980. This rate of 5% withdrawal per year was in line with NSW and national trends.

Any fall in overall milk production due to the reduction in the number of dairy farms was partly offset by the increase in productivity per dairy, from an average 72,000 litres in 1951 to 163,000 litres in 1971, as smaller producers withdrew and production increased in those remaining.[36] This increase in productivity was also due to a change in the late 1960s and early 1970s from the Jersey cows that had been common to Friesians. The much larger and more productive Friesians were largely obtained using artificial insemination (AI) methods that now became standard practice on most dairies.[37] In this same period the demand for milk and butter began to decline for health reasons, as well as being greatly impacted by the UK’s joining of the Common Market, and the 1970 lifting of the ban on margarine.[38]

The decline in dairy farm numbers meant that the Dungog Co-operative Butter Factory was over capacity by the 1970s. In that decade it also had a turnover in the consumer goods it supplied to the dairy farms of over $800,000 – an aspect of its operations it now began to consider a burden. In 1981, this co-operative allowed itself to be taken over by Dairy Farmers, which a short time later closed its Dungog operations.[39]

Drought, bulk milk collection, the introduction of quotas, and then their abolition as de-regulation affected the dairy industry, as well as high grain prices in the 1980s, forced many to leave the dairy industry. Despite these considerations, the reluctance of many farmers to leave a ‘way of life’ made this a long drawn out process. Factors that made many reluctant to give away dairying, despite its falling profitability, included family tradition, freedom of hours, and the attractions of working in the open. Additionally, there were many tax deductions, as well as savings with home grown vegetables, fruit and meat. Factors that pushed many to give up their dairies ranged from tighter hygiene from the 1960s and the condemnation of many sheds, to the aging of farmers, and the increasing reluctance of children or wives, on whose labour the farm depended, to continue. As well, growth of expectations for children’s education, and for leisure in general, encouraged alternatives to dairying.[40]

A major alternative to dairy farming that was readily available in the Dungog district was the switch to beef cattle. Many dairy farmers had experience with beef cattle as it was common to raise vealers on higher pastures above the riverflats, and all three valleys contained much high land suitable for beef cattle. Again, the rise in beef cattle within the Williams Valley was in line with averages in NSW and Australia, with a peak between 1966 to 1975.[41]

Another alternative for dairy farmers was to raise broiler chickens. This was increasingly common after 1977 due to increased productivity and the provision by Steggles of feed, credit and permission within their own system. This system was limited to 40 farms per processing plant and to below Gresford. Horse studs and even goats were other livestock choices that some made. A final alternative was simply to sell the land, and this many did to hobby farmers, leading to a fragmentation of agricultural land, and some promotion of weeds and fence declines.[42]

Despite the numbers that have left the dairy industry, the Williams Valley still has many dairy farms, with around 20 dairies in the Williams Valley alone. These dairies include a few with more than 200 cows that produce nearly as much milk as did the numerous smaller dairies of a generation ago, as well as a number that continue to operate on a smaller scale with perhaps only 50 cows. Change continues the occur, with some change even appearing to indicate a pulling back from the seemingly inevitable technological enhancement of the dairying process, as with the now common practice of many dairies foregoing AI and instead allowing a bull to service their commercial herds – a practice that is less costly and which some believe improves the chances of gaining heifers over bull calves.[43]

Heritage Survivals

  • Milking sheds

  • Butter factory sites – Dungog, Gostwyck

Footnotes    (↵ returns to text)

  1. Walsh, Voices from Tocal, p.47.
  2. Jeans, An Historical Geography of New South Wales, p.256.
  3. Scarr, The Oak and the Dairy Industry, pp.3-4.
  4. Gow, Kempsey to Dungog, p.83.
  5. Strachen, ‘Assumed but rarely documented’, para 6.
  6. Scarr, The Oak and the Dairy Industry, p.4.
  7.  Maitland Mercury, 22/12/1892, p.4.
  8.  Gresford 150 Years 1829-1979, Early Farming& Dungog Chronicle, 5/12/1893.
  9. Sullivan, Charles Boydell, pp.172-173 & Hazell, A Centenary of Memories, pp.13-14 [1895/1896].
  10. Scarr, The Oak and the Dairy Industry, p.5 and p.18 & Gow, Kempsey to Dungog, p.83-4.
  11. Scarr, The Oak and the Dairy Industry, p.4 & p.26, & Clements, Vacy … One Hundred & Eighty Years of History, p.77.
  12. Gent, Gostwyck Paterson 1823 to 2009, p.54.
  13. Clements, Vacy … One Hundred & Eighty Years of History, pp.81-83.
  14. Osmond, Dairy Farming in Dungog During the Milk Board Years, p.22.
  15. Jeans, An Historical Geography of New South Wales, p.251.
  16. Scarr, The Oak and the Dairy Industry, p.5 & p.18.
  17. Sullivan, Charles Boydell, pp.184-185 & Dungog Chronicle, 3/5/1910.
  18. Jeans, An Historical Geography of New South Wales, p.252.
  19.  Sydney Morning Herald, 31/5/1917, p.5.
  20.  Examiner, 20/10/1927, p.5.
  21.  Sydney Morning Herald, 12/4/1922, p.9.
  22. Scarr, The Oak and the Dairy Industry, pp.20-31.
  23. Skaines, The Dairy Industry of the Paterson Valley, pp.10-16.
  24.  Dungog Chronicle, 20/1/1942, p3.
  25.  Dungog Chronicle, 26/8/1950 & Skaines, The Dairy Industry of the Paterson Valley, p.42.
  26. Dugald Alison, interviewed 16/4/2012 & Grafton Shelton, interviewed 19/4/2012. [Both are Williams Valley dairy farmers.]
  27. Skaines, The Dairy Industry of the Paterson Valley, p.29.
  28. Osmond, Dairy Farming in Dungog During the Milk Board Years, p.35.
  29. Grafton Shelton, interviewed 19/4/2012.
  30. See 3.2 Agriculture.
  31.  Dungog Chronicle, 9/9/1959, p.1.
  32. Grafton Shelton, interviewed 19/4/2012.
  33. Skaines, The Dairy Industry of the Paterson Valley, p.54 & Dugald Alison, interviewed 16/4/2012.
  34. Clements, Vacy … One Hundred & Eighty Years of History, p.84.
  35. Study by Hunter Valley Research Foundation in Dungog Chronicle, 4/5/1963, p.1.
  36. Skaines, The Dairy Industry of the Paterson Valley, pp.17-25.
  37. Dugald Alison, interviewed 16/4/2012.
  38. Skaines, The Dairy Industry of the Paterson Valley, p.47.
  39. Osmond, Dairy Farming in Dungog During the Milk Board Years, p.48.
  40. Skaines, The Dairy Industry of the Paterson Valley, pp.45-56.
  41. Skaines, The Dairy Industry of the Paterson Valley, pp.58-63.
  42. Skaines, The Dairy Industry of the Paterson Valley, pp.62-67.
  43. Dugald Alison, interviewed 16/4/2012.