In February 1985, Professor A. G. Lloyd contributed an article to the Sydney Morning Herald with the splendid headline, “What we need is a milk war”. I found it among the papers of the Nowra Dairy Co-operative. By then, the Australian dairy industry had been fighting itself for the best part of a century. Apparently, nobody thought it had quite finished the job.
Every farming family knows something about a long-running dispute. The cousin who borrowed the trailer in 1974 and never brought it back. The father whose succession plan left the farm to the son who gambled it away. The siblings who haven’t spoken for twenty years and can no longer remember what they were fighting about. The dairy industry had all of these characteristics, plus several thousand cows, a collection of governments and an astonishing capacity to hold a grudge.
Our story begins in 1908, when Sydney milk buyers cut the price paid to farmers from 10 pence a gallon to six, in the middle of a drought. Farmers went on strike. The young Dairy Farmers Co-operative offered seven and a half pence, helped Jamberoo clear its debts and financed a new factory. Everyone shook hands, or something approximating it. Peace lasted 23 years.
In 1931, with the Depression biting, a Sydney distributor offered Jamberoo a better price for its milk. Jamberoo had recently opened a new brick factory and owed ÂŁ17,000. Dairy Farmers considered this a betrayal. It expelled 100 members, many of them Jamberoo farmers, and cancelled their shares. Jamberoo remembered. In the dairy industry, a grudge had an exceptionally long shelf life.
The NSW Government created a Milk Board to restore order. Unfortunately, the Board could declare prices but couldn’t enforce them. Historian Jan Todd called it a “toothless tiger”. Farmers received less than half the declared price. The government tried again, gave the new Board some teeth, and regulated the fresh milk industry for the next half century. Everyone complained about regulation, but at least they had something in common.
Then came 1984. George Orwell had warned us about surveillance, propaganda and perpetual war. He had overlooked the NSW milk industry.
On 9 April, supermarket owner Jim Fleming put Victorian milk on the shelves of his Jewel stores in Sydney. It came in two-litre plastic bottles and cost nine cents less. The Victorian milk represented about one per cent of the NSW market. Bill Crothers of Midland Milk described it as “only a hatful of milk”. NSW reacted as though Victoria had crossed the Murray with tanks.
Milk vendors blocked Macquarie Street with their trucks. Premier Neville Wran came out to negotiate. More than 800 farmers launched Operation Padlock, picketing Jewel supermarkets and standing outside the Midland Milk factory in Shepparton. Ten days later, Fleming conceded defeat. “We are pretty good, but not that good,” he said.
By February 1985, Professor Lloyd was calling for another milk war, arguing that competition could expose inefficiencies and help Sydney consumers paying high milk prices. The farmers, processors, retailers and vendors had rather different ideas about who was inefficient and who should pay.
Federal Primary Industry Minister John Kerin tried to bring the states together under a national plan. In March 1986, he spent an entire day locked in a room with three farmer leaders. They emerged with the comfort clause, an arrangement allowing a state to withdraw from the national scheme if another state’s milk undercut its market. NSW used it twice within a year. I suppose we should be grateful they agreed on anything.
Back on the South Coast, two cousins who had grown up together in Jamberoo were taking a much less complicated approach. Russell Fredericks managed Nowra’s dairy factory. Geoff Boxsell managed Jamberoo. During a drive to Sydney in late 1982, they joked about putting “the cat among the pigeons” by proposing a merger. They eventually brought the two co-operatives together.
Dairy Farmers tried to persuade Nowra to join it instead. Nowra’s farmers rejected the offer. It had been more than fifty years since the Depression-era expulsions. Apparently that was too soon. Six years later, Shoalhaven, the co-operative formed by Jamberoo and Nowra, joined Dairy Farmers anyway.
Then came the Italians. In 1999, Parmalat offered Dairy Farmers members $4.02 a share for part of their holdings, under a proposal that would give the Italian company control. Farmers gathered at the Burrawang Hotel, passed motions of no confidence and eventually took the dispute to the Supreme Court.
Dairy Farmers responded with advertisements declaring, “Beautiful one day, foreign-owned the next.” Geoff Boxsell wrote a song to the tune of “I Am Australian”. He called it “We Ain’t Italian”.
The court found that material distributed by the board was misleading and deceptive, although the judge made no finding of dishonesty or bad faith. The directors were ordered to pay legal costs personally. In April 2000, around 3,000 farmers voted at a special meeting. The three directors facing removal retained their seats with overwhelming support. Managing director Alan Tooth offered a memorable observation. “Any jackass can knock down a barn but it takes a team of skilled carpenters to build one.”
While everyone was fighting, Victoria decided it no longer wanted the regulated system. As the country’s largest milk-producing state, its decision left the others with little room to move. On 1 July 2000, the regulated fresh milk markets disappeared.
Within a year, average NSW dairy farm income had fallen from $82,000 to an estimated $37,000. Around 200 NSW dairy farms closed in the first six months. There were winners, there were losers, and there were families whose futures changed forever.
I’ve been looking back over these events while also reflecting on something I discovered preparing for a World Peace Day presentation to school students in Cowra. In studying the history of war, I was confronted by how persistently organised violence has appeared across human generations.
Of course, a milk war is a very different proposition from an armed conflict. Nobody should confuse a blockade of supermarket milk deliveries with the devastation of military warfare. But the language interests me. For a century, the dairy industry talked about wars, battles, invasions, threats, surrender and enemies.
Farmers fought processors. Farmers fought retailers. Processors fought retailers. States fought states. Co-operatives fought other co-operatives. Farmers fought farmer. Farmers fought their own co-operatives.
Governments regulated everybody, then deregulated everybody. And all of them believed they had something important to defend. Often they did.
A farmer fighting for a price that covers the cost of production has a legitimate grievance. So does a consumer struggling to afford food. A milk vendor protecting a family business and a processor trying to keep a factory operating both have reasons to be concerned about their future. Their interests sometimes conflict. Finding an arrangement that allows them to live alongside one another is the challenge.
Looking back, the most interesting moments in the dairy industry’s history may be the occasions when people stopped fighting long enough to negotiate. Kerin and the farmer leaders in that locked room. Russell Fredericks and Geoff Boxsell talking during their drive to Sydney. Farmers, vendors and processors sitting around George Davey’s pricing committee, part of the negotiations associated with the group the industry nicknamed the “milk mafia”.
Those conversations didn’t solve every problem. Some produced compromises that quickly unravelled. Others helped organisations and communities survive. I wonder how much of our energy, in agriculture and beyond, goes into proving that the other side is wrong. And how much we invest in understanding what they are trying to protect.
We teach children about the great wars of history, the victories, the defeats, the treaties and the terrible human cost. Perhaps we could spend a little more time teaching them how to negotiate before a disagreement becomes a conflict, and how to recognise when compromise is possible without abandoning what is fair.
As for the dairy industry, through every strike, blockade, court case, merger, price war and family grudge, the cows remained magnificently indifferent. Morning and afternoon, they turned up to be milked. They had no interest in who won.
And perhaps, after more than a century of dairy industry warfare, the question is whether the rest of us can learn to live with an outcome in which nobody has to lose.
Dear reader FYI Dairy Farmers, with a capital D and F, refers to the Dairy Farmers Co-operative and the company that followed. Little bit of history – Dairy Farmers Milk Cooperative was formed on 15 January 1900. Sixty five stakeholders from the New South Wales Illawarra region, came together and agreed to run the organisation on true co-operative lines.
Dairy farmers, with a little d and f, are the people milking the cows. They were not always on the same side.
