A brand new future for dairy farmers
Deregulation, supermarket dollar milk and profit-hungry processors have led to the closure of hundreds of small, family-run dairy farms in recent years. But some dairy farmers have found a way to take back control and build a brand new future.
Since the eighties, the number of dairy farms in Australia has rapidly decreased, falling by about three quarters from 21,994 in 1979-80 to 5055 in 2019-20. This ongoing steady decline has been exacerbated in great part by the deregulation of the dairy industry in 2000. This means international prices are the major factor in determining the price received by farmers for their milk. It often falls below cost of production.
Following deregulation, the industry has continued to consolidate and corporatise. Large multinational processors now dominate a dairy landscape that once featured farmer-owned co-operatives. While co-ops secured a fair price for members, corporate processors only have eyes for a good return. And they’re keeping farmgate prices consistently low.
Compounding the problem, a tightly held retail market monopolised by major supermarket chains competing for customer loyalty has seen retail milk prices fall as low as $1 for a litre. Australian supermarket branded milk remains among the world’s cheapest. Our dairy farmers have become the least powerful players in the dairy supply chain.
While the overall number of dairy farms is falling, the average size of remaining farms has grown. This shift in industry is encouraging larger, more intensive farming systems that can command more power at the negotiating table. Our smaller dairy farmers have been left with very little bargaining power and are being squeezed out of the game. In 2019 alone, almost 500 small farms closed their gates and walked away from the industry.
But some family-run dairy farms are finding a way to take back control. They’re boosting the viability of their operations, guaranteeing a future for the generations to come. Farmers are doing this by cutting out the middleman and producing their own branded product.
The little dairy that roared
The Little Big Dairy Co in Central Western NSW is run by the Chesworth family. The Chesworths have a proud dairy farming history that dates back more than 100 years. They now produce their own branded single-source milk and dairy products. These are sold at retailers as far north as Brisbane, out west as far as Bourke and down to Albury.
Steve and Erika Chesworth created The Little Big Dairy Co in 2012, after years of struggling in an increasingly amalgamated and bureaucratic dairy farming environment that was making it difficult to turn a profit. But their daughter Emma wanted to continue working on the farm, so Steve and Erika decided to invest in an entirely new business model.
“We were always members of a co-operative,” Erika says. “But they just couldn’t compete with the multinational companies. And then we had supermarkets coming over the top of that – they took so much money out of the marketplace, and they devalued our product.
“It was a really difficult space to do business, particularly when you get drought, and then the whole community turns on you and accuses you of ruining the Murray Darling. From 2000 to 2010 was a terrible time; it was truly a fraught space to operate in.”
Who cares about dairy?
Another drought followed, which was preceded by some intense weather events. But milk processors continued to put the squeeze on farmers, and Erika says that at one point they were sending a third of their milk out the gate at just 10 cents a litre.
“We felt like we were the only people in the whole country that cared about our milk and our cows,” she says. “We felt the government didn’t care. The consumer didn’t care. And the people who were buying our milk didn’t give a rat’s because they were screwing us. But we love what we do too much, and we had a daughter who wanted to work on-farm. We were like, what can we do? So we gave it our best shot and we created Little Big Dairy.”
The Little Big Dairy Co is now an 800-cow, 10-million-litre operation. Half of this volume is processed on-farm as the family’s branded single-source product, which includes award-winning cream and an industry first: Fairtrade flavoured milk. Milk meter technology allows the dairy to be able to pinpoint exactly which cows have produced the milk for each bottle. Each cow also has its own name, which Steve and son Duncan both know off by heart. While it took a lot of hard work and risk, the ultimate success of Little Big Dairy has ensured that the Chesworths can continue dairy farming in the generations to come.
For many smaller family dairy farms, the concept of making the move to production of their own branded product can often seem too big or daunting a task to even consider tackling alone. But now a new digital platform has been developed to provide these farmers with the resources and support they need to transition their way up the value chain.
Southern Highlands dairy farmer Cressida Cains of the award-winning Pecora Dairy has created Dairy Cocoon – an online not-for-profit source of business tools and information for small dairy farmers who want to produce their own unique branded products such as milk, cheese, yoghurt or gelato. Launching only a few months ago, Dairy Cocoon has already helped four farmers to begin producing their own branded product, and at the time Cains spoke with Eativity, she was working with 18 more and fielding hundreds of enquiries.
“We have this situation where on one hand we’ve got small dairy farmers unable to make a profitable business and who are closing down,” she says. “And yet on the other hand, we’re importing huge amounts of cheese and dairy into this country, and that’s growing by 4000 tonnes every year. It’s quite an alarming situation.
“We need to stem the closures of small dairy farms. Small business is the backbone of Australia, and agriculture is what this country is based on. Dairy Cocoon offers a viable and workable solution for small dairy farmers who want to find an alternative pathway; who otherwise would have just sold up their farms and said, ‘This is too hard’.”
A golden opportunity
Cains has been working in the dairy industry for over a decade, and her work to help promote a secure future for Australian dairy farmers led to her winning the 2020 NSW-ACT AgriFutures Rural Women’s Award. Being so passionate about the industry and fearing for its future, Cains saw Dairy Cocoon as her calling, and something that was direly needed.
“We’ve got this golden opportunity in this country,” she says. “The agriculture that we have here is extraordinary. We have unique features that none of the rest of the world has. If you think about dairy animals in Europe, America and Canada, most of them have to be housed for a lot of the year because of the inclement weather. All our dairy animals are out on this wonderful pasture and incredibly clean ecosystem, which is just such a gift for Australia. It’s something that we need to foster and take care of, and really nurture.”
Some might question whether consumers would be willing to pay extra for a branded dairy product, but a quick look at the astounding success of the boutique craft beer industry would show you that there is a huge demand out there for unique, quality brands.
“I think it’s particularly poignant at this time, because consumers now want to know where their food comes from,” Cains says. “They want to know the provenance of their food. And with COVID, we’ve had time to look around and think, hang on, what are we manufacturing in Australia? And what is imported? It is absolutely the right time to be getting behind small, independent brands and to learn more about the dairy industry and who produces what.”
Quite a tale to tell
Erika also believes that big change is needed if the Australian dairy industry is to survive and thrive, and that part of this change must come from making the average consumer more aware of where their dairy products are really coming from.
“We’ve gone from an industry that used to produce, at one point, up to 12 billion litres a year, and a big portion of that that was exported. Now we’re down to just eight. And we import tonnes of crap. All the cheese on your Domino’s pizzas is imported from America.
“While processors are importing crap, they’re exporting the high-value stuff. We’re actually a net dairy importer. That’s really sad. And there’s no care. It’s just about profit.”
While every dairy farm is different, producers like the Chesworths also have a very strong focus on sustainability, regenerative farming and animal welfare.
“I think all dairy farmers care about animal welfare,” Erika says. “Because you’re milking them every day; you’re seeing them all the time. So there’s this real emotional connection.
“We also use regenerative farming practices for the land, for the animals and for people. Our dairy runs on solar power, and we were one of the very first to use cardboard boxes for delivery of milk to cafes. We just need to start telling those stories better.”
Cains agrees that effective storytelling will play an important role in the future of family dairy farming, as it helps to foster a stronger connection between city and country.
“We need to tell the stories of these small producers, of these people who are working so hard on their family farms,” she says. “They’ve got such an amazing story to tell.”