Kōrero: Agricultural processing industries

Whārangi 2. Dairy factories in the 20th and 21st centuries

Ngā whakaahua

Dairy products

In the 20th and 21st centuries New Zealand dairy factories have turned milk into four groups of products:

  • milk powders, including whole-milk, skim-milk and buttermilk powder
  • cream products, including butter, milk fat and ghee
  • cheese – mainly cheddar, but an increasing volume of specialist cheeses
  • protein products such as casein and caseinates.

More dairy factories and new products

At the beginning of the 20th century dairy factories produced only butter and cheese. Between 1901 and 1911 the number of dairy factories rose from 248 to 338, and the value of dairy exports tripled. While the number of butter factories fell from 1900 to 1920, cheese factories increased four-fold, with most growth in Taranaki. Joseph Nathan and Company started making canned dried milk in 1904 at Bunnythorpe, near Palmerston North, later adopting the brand name Glaxo. The company also pioneered casein production in Whanganui in 1911.

Home separators

From about 1900, when home separators became available, farmers separated out cream from skim milk on the farm. Taking only the cream meant farmers had to transport only about one-tenth the previous volume to the butter factory.

Cooperatives take over

Farmer cooperatives dominated dairy factory ownership in the 20th and 21st centuries. In 1900 farmer cooperatives owned about 30% of dairy factories; by 1917 they owned 80%.

The New Zealand Co-operative Dairy Company

Hardware store owner William Goodfellow set up the Waikato Co-operative Dairy Company in 1909, after he was left with equipment a customer had ordered but could not pay for. The following year he turned his company into a cooperative. His butter and cheese operations merged with the New Zealand Dairy Association in 1919 to form the New Zealand Co-operative Dairy Company – the first to have an on-site laboratory and a farm instruction service to help farmers. By 1920 it was the largest cooperative.

Radio Dairy

William Goodfellow, managing director of the New Zealand Co-operative Dairy Company from 1919 to 1932, saw communication as the key to cooperative members producing more and better milk. He set up a radio station to keep in touch with the company’s isolated farmer suppliers. This developed into the Radio Broadcasting Company of New Zealand, which operated a national broadcasting system under contract to the government from 1925 to 1931.

Fewer factories, more production

The number of dairy factories fell through the 20th century – from 564 in 1918 to just 43 in 1990. However, because of economies of scale and improved transport systems, output increased. For example, from 1960 to 1990, the number of employees rose from 4,586 to 6,334, and output per worker increased from 0.27 to 1.86 tonnes.

Milk tankers lead to bigger factories

Dairy factories began to pick up milk from farms, and from the early 1950s milk tankers were used. By 1961, 58 of the 138 dairy companies had started using tankers, and by 1966, 764 tankers were in regular operation. Drivers recorded how much milk they had picked up from each farm by reading an indicator tube on the tanker.

Tankers collected whole milk, not just cream. This resulted in multi-plant dairy factories, where all the components of the milk were used to make a variety of products, including milk powders, protein products such as caseinates and whey products.

The cost of collecting milk fell as tankers got bigger. Computerisation meant companies could work out the best routes for collecting milk – changing week by week as production varied. Refrigerated storage facilities on farms from the mid-1950s meant milk did not have to be collected every day.

Farmers control dairy industry

Through their cooperatives, farmers controlled dairy production, processing and marketing. The New Zealand Dairy Board, which was jointly owned by the cooperatives, operated as their marketing arm. By law, dairy products could only be exported through the board.

Cooperatives merge

In 1983 there were 30 cooperatives. After the dairy industry was deregulated in 2001 there were only three – Fonterra Co-operative Group (formed by the merger of the two biggest dairy companies and the abolition of the Dairy Board), Westland Milk Products and Tatua Co-operative Dairy Company. In 2007 Fonterra processed about 95% of New Zealand’s milk. Its Whareroa plant, near Hāwera in Taranaki, is the largest single dairy processing site in the world.

Champion’s cheese confiscated

In 1986 Mercer cheesemaker Albert Alferink had his cheese confiscated by the South Auckland medical officer of health – accompanied by police – because the Dutch immigrant was using unpasteurised milk in his cheese. The judge threw the case out, saying he bought the cheese every week. After this, Alferink got a pasteuriser and heat-treated the milk to the required standard. In 2009 he won Champion Cheesemaker at the Cuisine New Zealand Champions of Cheese Awards.

The Dairy Companies Association of New Zealand, formed in 2003, took over the dairy board’s role of representing the interests of dairy companies.

Independent and boutique cheesemakers

The early 2000s have seen the growth of small independent cheesemakers, including organic producers. In 2007 there were more than 30 boutique cheesemakers in New Zealand.

Me pēnei te tohu i te whārangi:

Jane Tolerton, 'Agricultural processing industries - Dairy factories in the 20th and 21st centuries', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/mi/agricultural-processing-industries/page-2 (accessed 20 July 2019)

Story by Jane Tolerton, published 11 Mar 2010