Dairying

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Whaling provided wealth to the Twofold Bay area. Mining and granite cutting did so around Moruya. Timber provided substantial income to the Clyde River area. Similarly, it was dairying that became (and remains) the most important industry around Bega, generating most of that area’s wealth.

This was not always the case. When the first European settlers arrived from the late 1820s/early 1830s they brought beef cattle and sheep with them and by 1835 the Governor of NSW, Sir Richard Bourke, was writing to the Secretary of State for the Colonies in London noting the South Coast area had been ‘depastured by Flocks and Herds, attended by Shepherds and Stockmen, the pastures already contributing largely to the wealth of the Colony.’ An influx of squatters in the second half of the 1830s brought more beef cattle and sheep to the area, with cattle then intended to be shipped from Twofold Bay to markets in Sydney and Van Diemen’s Land.

Over the next few years, the area’s farmers turned their attention, at various times, to the production of tallow and hides (the market prices for beef having collapsed) and the growing of wheat, corn, vegetables, potatoes and barley, before significant numbers realised dairy farming might be a more profitable pursuit.

The dairy industry in the area really started to emerge in the 1860s, and by the mid-1870s butter and cheese production in the area was well established.

Over time, the production of butter in the Bega Valley area was to decline and the production of cheese increased. Time delays and handling problems in transporting (often unrefrigerated) butter to Sydney, quality problems with the local product, and competition from the dairy industry in the Illawarra that was focused on the production of butter for the Sydney market were largely responsible for this local shift towards cheese production.

The Kameruka Estate, near Candelo, was one of the properties that was showing the way. Originally set up to farm beef cattle, by 1880 the Estate was concentrating on dairying and cheese-making. At that time six of its farmers each had herds of 100 cows and were supplying milk to the company’s ‘The Island’ or ‘Wolumla’ factories. (A third cheese factory, ‘Niagara’ was to be opened in 1904 and a butter factory (‘Home Farm’) was also opened on the Estate. By 1885 1,000 cows were being milked on the Kameruka Estate. In 1935 the Estate’s factories were receiving milk from 2,750 cows.)

By the 1890s farmers from the Bega Valley were shipping 1,500 tonnes of cheese, 500 tonnes of butter and 500 tonnes of bacon (plus significant amounts of tallow, lard, hides and leather, maize and maizena (corn flour), wattle bark, horses, cattle, pigs, calves and sheep) annually.

In 1882 John Farraher of Candelo brought the first Jersey cows to the Bega Valley. Their milk was found to produce 25% more cheese than did a comparable number of Australian Illawarra Shorthorns that, up until then, had been the most popular breed among the area’s dairy farmers.

In the 19th century most South Coast dairies had an associated cheese or butter factory. However, in November 1894, the NSW Creamery Butter Company opened the first large dairy factory in the Bega Valley. It was immediately successful, prompting the astute local farmers to establish large district co-operatives to ‘cut out the middleman’ (such as the NSW Creamery Butter Company, which was forced out of business by competition from co-operatives by the end of 1903!).

The first local co-operative butter factory in the Bega Valley was opened in Wolumla in 1887 and the first co-operative cheese factory was the A.B.C. Diary Factory at Tilba Tilba that opened in 1891. (The name A.B.C. was chosen to signify that it was the state’s first co-operative cheese company and not as locals sometimes suggest, somewhat romantically, that it was an abbreviation of ‘Australia’s Best Cheese.’ Much of the A.B.C. Dairy Factory’s success was due to it changing from production of American Cheddar cheese to a firmer, slower-maturing Canadian Cheddar.)

By 1900 the Bega Valley supplied almost half of the state’s total cheese production.

The Bega Co-Operative Creamery Co Ltd (which until 1953 only produced butter, and which is now Bega Cheese) was established in 1899 and its factory commenced operations in July 1900 with cream being supplied from 27 farms. Six months later the co-operative had 100 dairy suppliers and by mid-1902 this number had risen to 162. (Reflecting subsequent changes to the industry, Bega Cheese now receives milk from around 100 local dairies.)

The success of the Bega Co-operative led to the establishment of a Cobargo District Co-operative Creamery Butter Company in 1901 and a Bemboka Co-operative Society in 1905.

The early 20th century was marked by the introduction of milking machines (the first in 1909 installed by D.A. Gowing of Jellat Jellat) and pasteurisation (in 1915 at the Bega Co-Operative factory). Also in 1915 motor vehicles stated to replace wagonettes for transporting cream from dairies to the factory (at that time cream was separated from the milk on dairy farms prior to it being transported to the factory and the left over milk was used to feed to pigs and calves).
In 1915 Sir Robert Lucas Tooth, the then owner of Kameruka Estate, died. The Estate passed to his two young daughters and responsibility for running it passed at Trustees. They were thereafter unwilling to invest money in continually updating facilities on the Estate, so its pre-World War I glory days and its role as an industry leader gradually declined. In the 1950s the Niagara and Wolumla factories were closed and The Island factory closed in 1971. The Bega Co-operative Society then acquired the well-established Kameruka cheese brand and has continued to make product under that brand ever since.

Around 1920 there were 49 cheese factories and 8 butter factories in the area between Tilba and Wolumla. (Their locations are pinpointed on maps at the Bega Cheese Heritage Centre).

The 1930s and 1940s were decades of consolidation within the local industry with, for example, the number of cheese factories in the Bega Valley dropping to just 6 by 1942.

The late 1940s and early 1950s were dominated by discussions, debates and negotiations about whether the Bega Co-operative should produce dairy products other than butter – products such as cheese, milk, buttermilk, ice cream or ice cream ingredients, milk powder, malted milk, condensed milk. Because the Bega Co-op was the dominant player in the area, whatever decisions were made by the Co-op were likely to have a significantly influence on the future of other local dairy processors and any decision by the Co-op to process milk instead of cream would immediately mean that local farmers would no longer have surplus skim milk supplies available to feed to pigs or calves. So the Co-op’s decisions were not made easily.

In the end, the Bega Co-op decided to accept deliveries of whole milk from farmers (which immediately required the Co-op’s storage facilities to be increased some tenfold) and in September 1953 the Co-op started supplying milk to school children and residents in Bega. A month later it started supplying milk to the Cooma area.

Surplus milk that was available to the Bega Co-op from its shareholder farmers led to production of cheese at its Bega factory from November 1954.

But the Bega Co-op and its shareholder farmers had their eyes on the possibility of providing milk to the growing Canberra market, and were well-aware that a 10-year exclusive contract held by Dairy Farmers was about to expire. However, to be able to do so, it was first necessary to build a processing plant within Canberra – a not inconsiderable investment.

Various alternative options for supplying the Canberra market were assessed (including simply supplying bulk Bega milk to Dairy Farmers) at a time when other milk supply opportunities were also becoming available, the most notable of these being the supply of milk to the cheese factories on the Kameruka Estate. (As it turned out, 1¼ million litres of milk were shipped from the Bega Co-op to Kameruka Estate in the July to December 1962 period).

Bega Co-operative milk started being delivered in the Goulburn market in May 1960 and (following the opening of a Bega Co-operative owned plant in Canberra) to the Canberra market from August 1960. This was greeted with enthusiasm by consumers because the retail price of milk in these markets immediately dropped, and within days Bega Co-op controlled more than a quarter of the Canberra milk market. (An immediate local benefit that resulted from Bega Co-operative’s move into the Canberra market was that the road between Bega and Canberra was sealed soon thereafter!)
Supplying the Canberra market with milk has remained a significant part of the Bega Co-operative’s business. It is now processed and distributed there by Capitol Chilled Foods, a joint venture owned by Lion Dairy and Bega Cheese.

The early 1970s witnessed significant changes within the South Coast dairy industry.

The closure of the Kameruka factory in 1971 meant that the only remaining dairy factories on the Far South Coast were at Bega, Cobargo, Bemboka, Pambula, Central Tilba (the A.B.C. factory) and Tilba Tilba. (This is in dramatic contrast to the scene in 1910 when there were 54 dairy factories in the area!) In 1972 A.B.C. was acquired by Bega Cheese, the Tilba Tilba Co-operative factory closed in 1972, and in 1974 the Pambula Co-operative closed. (The Bemboka Co-operative closed in 1978 and the Cobargo Co-operative in 1980).

Production of butter at the Bega Co-operative ceased in 1972, but this was barely noticed at the time because Bega brand butter continued to be manufactured until 1980 at the Cobargo Co-operative factory.

Legislative changes in 1970, impacting dairy farmers, led to the closure of many older dairies in the area when farmers found themselves unable or unwilling to update their dairy facilities. A greater emphasis also seems to have emerged around this time on raising the quality of herds, which was primarily aimed at increasing the milk production per cow.

In 1971 the Dairy Industry Authority was established which significantly impacted South Coast dairy farmers through its introduction of a complex system of quotas that affected both farmers and processors, and a system of ‘equitable distribution’ of milk to the Sydney area. One unanticipated impact of the establishment of the Authority was that the retail price of milk in Bega and Merimbula jumped by 40%!!

A High Court decision in October 1975, which effectively reversed one of its previous decisions and declared invalid NSW laws that had prohibited interstate (principally Victorian) milk from being sold in NSW, really put the cat among the pigeons and ignited a passionate debate (locally, as well as nationally) about the distribution and marketing of milk and milk products. With considerable justification, local dairy farmers felt that dairying in the Bega Valley was being made artificially uneconomic because of NSW government policies – and, in elections in 1976, dairy farmer ‘conservatives become revolutionaries’ had no hesitation vigorously campaigning (successfully) against the local Liberal/Country Party candidate.

The eventual outcome was that Bega Co-operative was given rights to ship significant volumes of milk into the Sydney market. This, along with a very successful marketing campaign promoting Bega Cheese (which by October 1978 had captured over one third of the cheese market in NSW), resulted in a significantly increased demand for milk from local dairy farmers.

Since then there have been some major changes to the local dairy industry. Perhaps most evident has been a reduction in the number of dairies in the area, accompanied by a simultaneous growth in the sizes of remaining dairies: managing and milking a herd of 1,400 cows, as occasionally happens today, would have been absolutely inconceivable to a dairy farmer in times past when managing a herd of fewer than 100 cows would have been the norm. This transformation has been the result of modern thinking and modern farming methods that have included a better use of irrigation, more effective use of fertilisers, better usage of waste water from dairies, and the installation of ‘modern’ milking equipment which has included, most recently, the construction of the first ‘robotic dairy’ in the area (in which cows essentially milk themselves at times determined by the cows, rather than at times pre-determined by a dairy hand).

Bega Cheese Limited – which evolved from the original Bega Co-operative Society – has simultaneously become one of Australia’s most successful growth companies (for example, doubling the capacity of its Bega factory in 1983 and constructing a state-of-the-art cheese cutting, packaging and processing plant in Bega in 1998). By 2013 Bega Cheese regularly received milk from almost 450 suppliers and was processing about 7½% of Australia’s total milk production.

In 1979 Stephen Codrington concluded his book on the history of dairying in the Bega Valley, ‘Gold from Gold’, with the following words: “No author, no matter how competent, could possible ‘conclude’ a history of the Bega Valley dairy industry. How can a conclusion be written about an industry whose growth is accelerating in such a dynamic and exciting fashion as dairying in the Bega Valley?” He was, undoubtedly, correct.