Dairy factories were built from the late 19th century to process milk. Dairy products – butter, cheese and milk powder – would become New Zealand’s most valuable exports from the 1930s.
Early dairy processing
Before dairy factories, butter was made on the farm. It was used by the family or exchanged in the local general store for other goods. Until refrigeration was introduced, butter could not easily be sent out of the local area. People tried tinning it or packing it in kegs, adding a lot of salt – but the result was often a greasy mess.
First dairy-processing operation
In 1871 John Mathieson and neighbouring farmers at Springfield formed the Otago Peninsula Co-operative Cheese Factory Company. After a move to Highcliff in 1875, they had the first factory-style dairy processing operation in New Zealand, supplying Dunedin and exporting to Australia.
Edendale dairy factory
The first purpose-built dairy factory was erected on the New Zealand and Australia Land Company’s Edendale estate near Invercargill. Many early New Zealand dairy factories were built on the same lines as this, a two-storey wooden building with insulated walls. It was based on a factory company general manager William Davidson had seen in Canada.
Edendale produced its first cheese in January 1882, and the following year won a £500 bonus offered by the government for the first export of 50 tons of cheese from a commercial operation in New Zealand.
The advent of refrigerated shipping meant New Zealand could develop a dairy export industry. William Davidson was the promoter of the first refrigerated ship’s voyage to London in 1882. The cargo was mainly sheep meat, but he also sent a small amount of Edendale butter – although the factory did not produce butter commercially until about 10 years later.
Dairy factories multiply
By the end of 1882 New Zealand’s second dairy factory had opened at Flemington, near Ashburton, and its third, at Te Awamutu. Nine factories started in 1883, seven in the North Island. The first factory that made only butter began at Kārere, near Palmerston North, in 1884, but most dairy factories were soon converted to make both butter and cheese. In 1886 there were 36 dairy factories; 10 years later there were 170.
Dairy factory entrepreneurs
Most early dairy factories were started by entrepreneurs.
- Chinese migrant and storeowner Chew Chong set up the Jubilee Dairy Factory at Eltham in 1887 and other factories in Taranaki.
- Farmer Henry Reynolds set up a factory at Pukekura, near Cambridge, in 1886, and others in Waikato. He built a cool store in London and sold direct to shops there, also exporting to Australia and Asia.
- Manager Wesley Spragg started the New Zealand Dairy Association by converting a cheese and bacon factory at Pukekohe into a butter factory.
- Joseph Nathan, who had an import/export business in Wellington, became a major owner of Manawatū dairy factories and an exporter of butter and cheese.
Anchored to the butter brand
Henry Reynolds chose Anchor as his butter’s brand name – because he saw a tattoo of one on a sailor’s arm, some sources say. When his Waikato factories were bought by Wesley Spragg’s New Zealand Dairy Association, the Anchor brand went too. It continued to be used through more mergers – to become one of Fonterra’s brands in the early 2000s.
Farmers deliver their milk
Farmers delivered their milk to factories. Cheese factories used whole milk, but butter factories only wanted the cream, so they separated the milk and sent the skim milk home with the farmer to be fed to the pigs. Farmers were paid for the volume of milk they took to the factory. However, from the early 1890s, after Babcock testers replaced early lactometers to measure the quality of the milk, farmers were paid by the butterfat content of their milk.
Creameries and skimming stations
Creameries made butter. They were set up in the 1890s along with skimming stations, which took the cream off the milk. Skimming stations were simple buildings with scales, measuring and storage tanks, and mechanical separators powered by steam engines or water turbines.
How butter and cheese are made
Butter is made from cream, which is revolved in churns. When blobs of partly-made butter appear, the buttermilk is drained. The remaining butter is washed and salt is added. It is then churned into a mass, cut into blocks and wrapped.
Cheese is made from whole milk. It is poured into a vat and a ‘starter’, with milk-souring bacteria, is added to ripen the milk, which gradually separates into curds and whey. The whey is drained off. The curds are cooked (if making a hard cheese), cut, dried out and pressed to squeeze out moisture, and usually left to mature.
Having local creameries and skimming stations meant farmers did not have to take their milk so far, and factories could extend their collection area. The Taieri and Peninsula Milk Supply Company had about 40 skimming stations spanning about 200 kilometres around Dunedin.
Farmer cooperatives develop
In the 1890s farmers formed cooperative dairy companies. This was partly because developing technology cost more than individual proprietors could invest, but also because farmers, who supplied the milk, wanted a share in the profits of production. Farmers gained shares in cooperative companies for a nominal capital contribution. The farmers guaranteed milk supply and received earnings in proportion to the amount they supplied.
In 1889 the government appointed the first dairy instructor to help factories become more efficient. From 1894 dairy factories had to be registered and were inspected.