Filled to Overflowing?

It’s what we put on our cereal, in our coffee, the perfect partner to cookies – but milk is not something we normally give a lot of thought. I had been in Newfoundland for a number of weeks before I realized that there were actually choices to be made regarding my lactic purchases. With their similar packaging and identical pricing, I hadn’t realized there were two different brands on supermarket shelves. And that made me wonder: does Newfoundland really need two milk processors? It is, after all, a small market, at the end of the supply line. Does a population the size of a Toronto suburb really justify two processing plants and two distribution networks? The short answer is “well, it has them” but the long answer is much more interesting.

Central Dairies and Scotsburn Dairy Group are the two major players in the province’s fluid milk sector. They’ve roughly split the market (neither would reveal an exact market share), they both process their milk in Mount Pearl (sister city to the provincial capital, St. John’s), they both contract the same trucking company to collect raw milk from farmers, and their Newfoundland operations have similar numbers of employees (approximately 175 and 225 respectively).

Central Dairies, which had its start in Labrador before heading to Newfoundland, became a division of Nova Scotia-based Farmers Cooperative Dairy Limited in the 1980s. Scotsburn is also a Nova Scotian company. Though founded in 1900, it didn’t arrive in Newfoundland until 1984 when it merged with Eastern Dairyfoods. The story of maneuvering and consolidation that lead to the current equilibrium is fascinating, but Scotsburn and Central are only the tip of the industrial iceberg – there’s a lot more under the surface.

Milk starts with farms, and it wasn’t until this past quarter century that farming in Newfoundland and Labrador was a profitable business.  well into the 20th century, industrial grade products like powdered and canned milk were the norm in most communities. There was fresh milk, but it was a luxury only available in urban centers, or if your neighbor happened to have a cow. The industry grew slowly in the second half of the century (the provincial government-organized mass resettlement of isolated settlements had created communities large enough to support small processing facilities), but in 1983 Newfoundland was still importing more than half of the raw milk it was processing.

Though he looks like a robust and youthful 50-something, Hector Williams has been a farmer for more than 40 years. He runs H&E Williams farm in Goulds (a rural subsidiary of St. John’s), and he’s been at it since the Hippies were marching on Washington. “In ‘66 I decided to make agriculture my way of life,” says Williams. “The first couple of years we had to supplement the farm income with outside income – and we done some different jobs too. We had some hogs, and a lot of vegetables back then. In 1971, my brother and I took over the farm from our father, and since then we’ve been full-time farmers. We expanded the farm from 13 cows up to 130.”

These days, things are looking good enough that Williams’ son is thinking about expanding the property and building new facilities, which make it possible for them to produce industrial milk, as well as fluid.

It wasn’t always that way. Before 1983, there were 75 farms across the province and six processing companies. Inputs were expensive. Feeding cows is the single most expensive part of a dairy , and farmers were paying a premium for feed shipped from the mainland. “We didn’t have a really good land base here, so a lot of our forage had to come in – that was eating into our profits,” explains Williams.

While producing milk on the island was expensive, the alternative was equally inefficient. Importing milk from Nova Scotia was not only expensive, but relying on another province for a dietary staple didn’t feel right either.

Dairy Cows

“I guess it was the foresight of some of the farmers,” says Williams of the move that changed everything. “We saw that there was an opportunity here to develop food security with milk and develop a dairy industry. So in 1983 we formed the Milk Marketing Board and went into supply management. We could see there was a golden opportunity to expand, and some have done that.”