Local dairy farmers initially sent farm-made butter to Sydney by cart or coastal steamer, then by rail from 1867. Fresh milk was supplied from 1876 to the Fresh Food & Ice Company (FF&I) at Moss Vale and Bowral for consignment, in special rail trucks cooled with ice, to its facility at Darling Harbour in Sydney. Milk was also supplied from 1882 to FF&I’s butter factory at Mittagong, where an imported Danish cream separator was installed. Farmers at a distance from the railway, unable to supply fresh milk due to poor roads, continued to rail their butter to Sydney.

In 1880, Illawarra and Southern Highlands producers formed the South Coast & West Camden Co-operative, the first in Australia, to cut out manipulative city selling agents. It handled all farm produce, including bacon, eggs, butter and cheese, and would grow to be a major competitive threat to FF&I.

In 1887 the South Coast railway opened to Kiama and FF&I began receiving milk in Sydney from coastal farmers. The local district’s suppliers thus faced setbacks, with threats to discontinue the milk train and prices reduced from 8 to 6 pence per gallon. As well, FF&I expanded its butter processing facilities at Darling Harbour and installed similar separator equipment as at Mittagong, where production ceased.

To suppliers’ relief, FF&I continued to rail milk from Bowral, building a loading depot near the station, and the milk trains continued to run. The expected price was received until January 1889, when FF&I suddenly ceased taking their milk. Angry milk suppliers at Bowral were informed by FF&I manager, Mr Locke, that alterations in the running of the trains compelled it to discontinue taking their milk, as most of it was sour when it arrived in Sydney. The Illawarra line was better, with coastal milk brought into Sydney at an early hour, without ‘sours’. He said, however, the company still wished to deal with the Bowral suppliers if possible.

Although feeling unfairly treated, they agreed to continue the supply but were not satisfied with the price offered. When another Sydney company then promised better prices and conditions, FF&I matched the offer. It kept its Bowral depot in operation and Sydney continued to receive local milk.

Butter making on the farm underwent a revolution in 1884 with the opening at Kiama of the Pioneer Co-operative Dairy Produce Factory Co Ltd, Australia’s first co-operative factory. The success of the co-operative marketing arm had spurred farmers to apply co-operation to production and, with cream separators installed, to achieve better returns. Although the private sector fought back, the movement took off and many such factories soon existed, including at Berry, Kangaroo Valley and Barrengarry, and along the Southern Railway at Cobbity, Camden, Picton, Mittagong and Bowral.

Numerous factories also opened on the district’s eastern side: the ‘Beehive’ located between Wildes Meadow and Robertson (1887); at Robertson (1888); at Kangaloon and the ‘Emu’ at Wildes Meadow (1889); the ‘Waratah’ at East Kangaloon (1890); ‘Roberton Park’ at Glenquarry (1891); at Manchester Square near Moss Vale (1891); and at Pheasant Ground (1892). Farmers carted their whole milk in cans to these factories and, after separation, the skimmed milk was taken back to feed pigs, calves and fowls. At Bowral, the Wingecarribee butter factory opened on the Oxley family property in 1892, with cheese making from about 1902.

Dissatisfied with how the Sydney market dealt with them, in 1891 local farmers formed a marketing co-operative with their own selling floor in Sydney. Renamed the Berrima District Farm & Dairy Company in 1895, it acquired FF&I’s factory at Mittagong and took over the butter factory at Robertson, converting them into central butter factories to achieve greater efficiency than the small, scattered ones. These continued for a while as feeders then closed.

By the 1930s the local milk supply and dairy manufacturing industry had greatly expanded, adding to the district’s prosperity. A history will be provided in a later series, including the role of Dairy Farmers at Moss Vale, Robertson’s Cheese Factory and Bowral’s Milk Factory.