What would make anyone join the ultra-competitive, notoriously low-revenue space that is Australia's dairy industry?
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For Victorian micro-farmer Cathy Palmer it was an overwhelming urge to shake the whole thing up.
Palmer's How Now milk is produced without ''bobby calves'' or male calves, which are typically separated from their mothers and sent to slaughter within 30 days.
The RSPCA estimates 450,000 of these bobby calves are killed each year.
Instead of breeding male calves, Palmer and her partner Dr Les Sandles use artificial insemination technology to ensure their 30 cows only give birth to females. These female calves remain with their mothers and eventually become part of the milking herd.
Paying dividends
Palmer says it's the way dairy should be done and so far, their ethical approach is paying dividends. Their milk is winning awards and demand and revenue are rising.
"Every dairy knows the time is coming where the consumer is going to rip the Band Aid off and say, 'We all know what the truth is about dairy'," Palmer says.
"There's lots of concerns about bobby calves and what we can do to make it better to appease consumers. They're under a fire now."
Asked if How Now was the way of the future for the dairy industry, a Dairy Australia spokesperson said it was just one way of doing things differently.
"Australian dairy farming systems are diverse and adapted to local conditions, the farmers' operations and processor requirements for the products and markets they supply," she said.
"How Now's farming practice is just one approach to farming."
Starting out
Palmer gave up a career in music publishing to set up How Now in the small town of Wunghu, near Shepparton in northern Victoria. It was the result of two years of tossing the idea around with Sandles, a third-generation dairy farmer.
"So after we talked about it and did a million budgets we went and bought 18 cows and decided to just trial it in 2016," she explains.
"We did a little cold calling to kick sales off and went to several farmers markets and processed and sold 300 litres in our first week. It wasn't much, but it was a start.
"I had a firm belief that if people knew the truth about bobby calves they wouldn't chose that way and that they would pay more for their milk.
"We pay less for milk than we do for water in the supermarkets. I don't think anyone needs to consume two litres of milk a day.
"To me milk is something that should be treated as a premium."
The pair spent $100,000 on setting up their farm and found a processing plant where they could additionally produce cream and cheese.
Within just a couple of months of starting they won the Delicious Produce Award 2017 for the best tasting milk in Victoria.
Pitted against much bigger diaries, they impressively won the same gong again in 2018 and received a silver medal at the Australian Food Awards 2018.
How Now's turnover in 2016-17 and 2017-18 was $250,000 respectively. This year it's projected to hit $287,500 as word of How Now spreads. Today the business produces 3000 litres per week and the milk is sold in 24 IGAs and produce stores.
Pricing milk
Supermarket wars saw milk prices slashed to $1 per litre in 2011, however Woolworths and Coles recently moved to raise prices after lobbying from drought-weary farmers who blamed cheap milk for decreasing farm-gate prices.
Sold for between $6.50 and $7.50 for two litres, How Now is far from competitively priced. But Palmer has her eyes on the long game and says her ultimate goal is to teach other farmers how to produce milk ethically.
"For our business to succeed, we're not looking to upscale," she explains.
"We're never going to have 100 cows. For us, it's scaling up in a different way. We're looking to replicate.
"So as we get to 100 cows, which is about 30-35 cows in the dairy at a time, the plan is to replicate by finding somebody else who wants to do what we do and then supply us with milk."
Palmer is planning to launch an equity crowdfunding campaign with Pledge Me, selling 20 per cent of How Now in the hopes of raising $1 million.
Despite volatility in domestic prices and higher operating costs, Australia's milk and cream processing industry is expected to grow to $3.2 billion in 2018-19. According to IBISWorld, this is mainly from rising demand for Australian milk in export markets.
Growing consumer awareness of the fat content in milk had led to more people turning to soy and almond milk, plus a predicted decline in milk consumption.
It's opened the door to niche businesses entering the industry and pushed up industry employment numbers in the past five years.
