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New Zealand Dairy Industry
OUR INDUSTRY
TODAY
New Zealand Dairy Industry A. J. GOLDFIHCH
Marketing Division, Dairy Board, Wellington, New Zealand grass growth. Temperatures do not rise nmch above 70 to 75 F in summer and the countryside remains free of snow and ice in the winter. The equable clinlate makes unnecessary the Northern Hemisphere practice of housing cat-
Introduction
As the world's largest international trader in dairy products, New Zealand and its dairy industry will repay study by anyone having an interest in dairying. Many of the delegates to the 1970 International Dairy Congress in Australia plan to return home by way of New Zealand 1,200 miles a~ross the Tasman Sea from Sydney. They can be sure of a warm welcome to New Zealand. E a r l y contact with the authorities will ensure they will see plenty to interest them, including some of the finest dairy farms and dairy factories anywhere. I t should be remembered that dairying in this South Pacific country is export-oriented. Over 90% of milk sales from farms is used for manufacturing, and of this volume 84% is for the manufacture of exports. The New Zealand dairy industry consists of approximately 100 cooperatively owned companies which jointly control a national administrative and marketing organization. This is the New Zealand Dairy Board. The Board is the world's largest exporter of dairy products. Its shipments of manufactured products during the year ended May 31, 1969, were in long tons: butter, 216,000; cheese, 85,000; milk powders, 150,000; casein, 68,000; other products 6,000. The second important point about New Zealand's dairy industry is that it depends for most of its income on earnings in export markets and is the only major dairy industry in the world that does. New Zealand, therefore, has a special interest in the maintenance of fair prices on international nmrkets, and abhors the subsidizing of dairy produce export sales by other countries. I n General Agreement on Tariffs and Trade and in other international forums, whenever the opportunity offers, New Zealand representatives speak out against the subsidizing of dairy produce exports which, in their view, leads to breakdowns in the normal structure of world commercial markets.
FIe. 1. The province of Taranaki is one of the principal dairying areas of New Zealand. The picture show a corner of a typical dairy farm. In the background is Mt. Egmont, which precipitates a bountiful rainfall throughout the dairying region. tie for p a r t of the year. Concentrated feedingstuffs are not necessary, either; the cattle are grass-fed throughout the year. New Zealand's geographical position and strict quarantine practices continue to keep the country free of serious animal diseases. Farming System
Climate
New Zealand has the ideal climate for dairying. Plenty of sunshine and well-distributed rainfall throughout the year encourage vigorous
To make the most of natural advantages, the typical New Zealand dairy farmer has developed patterns of livestock management different from those in the Northern Hemisphere. H e concentrates on dairying, keeping no other livestock
493
494
JOURNAL
OF DAIRY
VI~t 9, Tht' world's htrg('st d:th'y pvodtt('ls n z : l n u facturJng Ill;lilt. Ownl:(| by LIIC New Ze;t]and t~o[)perlltiw' [):lit')" (~Olllp[llly i1[ T e [{;Lp~l, Wnikato. This f:~ctory processes 4()(h00() g:t]lons of milk a (b}y in the flush of the seaso, and lllallufactures 4(},00() h,ns of milk powder a yct~r. A fleet of 52 mi]k tank trucks keeps it supplied.
than cattle, not engaging in arable farming operations. Most farms are one-family units and average 90 cows. Output per man in dairying in New Zealand is the highest in the world.
/~.anufacturing The dairy factories are the world's largest and are highly mechanized or automated. The emphasis is on large-scale operations, with the highest standards of hygiene. Most butter factories manufacturing for export have outputs in excess of 3,000 tons a year. Most of the milk powder exported is manufactured in plants with capacities of from 4,000 to 40,000 tons a year. The cheese factories and the casein plants are the world's largest. The dairy factories are owned by companies cooperatively controlled by the farmers. Administrative duties are performed by executives who form a loosely knit corps. The factories are operated by managers who nmst be registered by the Department of Agriculture. There is a free flow of technical information among managers. A factory instruction and inspection service operated by the Department helps to maintain quality and uniformity of products.
Quality Control On the farms and in the factories great emphasis is placed on quality and strict control procedures. The milking of cows is entirely mechanized. Differential payments to the farmer in favor JOURNAL OF DAIRY SCIENCE V O I . 53, NO. 4
SCIENCE
AUTOS[ATED (~ON Ti¢OI, S
F1(;. 3. Four main control t,(mters :~re in the Te R.Im milk powder p l . . t . . d permit a high ,lczree of a~¢tom~ttcd control over all nlanufacturi . g processes :tnd the supply of essential services. The picture shows oJ~c of these (,enters, featuring two panels of the main production control. An electrical control console panel embraces 90 scts of press-button controls which iudieatc motor load conditions throughout cvaporation, drying, powdcr transport, and clean-in-place operations. The picture also shows a production control panel coinplete with warning alarms and a graphic representation of the three processing plants, from holding wells to powder hoppers, indicating the state of all processing operations and allowing for variable control. of high-quality milk, coupled with stringent hygiene govermuent regulations enforced by inspectors, help to ensure production of the highest quality milk. In the factories, the aim is tile manufacture of the highest quality products. The system of payment is based on a quality grade awarded to the product, providing the factory management with a powerful inducement to manufacture to the highest standards.
Government Grading Dairy products manufactured f o r export are moved to port stores where Government quality grading offices are located. Grading is regarded as a vital part of the preparation of the products for sale. New Zealand was the first country in the world to establish government grading of export dairy produce; this was begun 1894. Grading is performed by the Department of Agriculture, a state agency completely independent of the dairy industry. The Government grading officers make entirely separate and detached judgment on the quality of the manufactured products. A certificate identifying the grade awarded to the produce is issued, and the grade is also stamped on each con-
OUR
INDUSTRY
tainer. The New Zealand Government grade certificate is accepted throughout the world as an accurate indication of quality. I t offers protection to the buyers, and forms the basis of each sale. Dairy Board
The New Zealand Dairy Board is a statutory body which acts as the administrative head of the industry and as its export marketing agency. All dairy companies are cooperatives. The shareholders in each company are the dairy farmers who supply it. F r o m among suppliers, they elect their dairy company's board of directors who are responsible for operation of the company, including determination of the products it will make. Of the Board's members, 11 are elected by the cooperative dairy companies and two are appointed by the Government. The Board acquires all export dairy products from the manufacturing companies, sells them overseas, and returns the proceeds, less marketing costs, to the companies. The Board sells its products throughout the world and is currently exporting to over 90 countries. The principal market for butter and cheese is the United Kingdom, but nearly 90% of the milk powders and casein is sold in other markets. Sales are made in the United Kingdom through the Board's own sales organization. I n other markets, the Board sells through local agents, or it sells direct, on a contract basis, to some large buyers. The greater part of the New Zealand dairy product export trade is supplying butter and cheese for repacking in the countries of consumption, and supplying milk powders and casein for processing. The Board is the world's largest supplier of milk powders and anhydrous milk fat for the manufacture of condensed milk and other food products. A considerable and increasing volume of trade is also carried on in consumer packs of butter, cheese, milk powders, and other products. To all buyers, the Board offers complete technical services, ranging from advice on technical problems connected with processing or
495
TODAY
packaging to the design of processing plants, the commissioning of plants, and the training of staff. The dairy companies, railways, cool stores, and shipping companies serving the New Zealand trade cooperate closely with the help of the Board to ensure that dairy products are efficiently stored and transported. The supervision of transport in New Zealand and stowage in ocean-going ships is the responsibility of the Board's shipping inspectors. Research and Development
Research and development of existing and new products are carried on at several levels in New Zealand. As the purchaser and reseller of the industry's export production, the Board interprets market needs, present and future, and passes the information back to the dairy companies to help them plan their manufacturing decisions. The Board helps to mold the pattern of manufacture by offering financial incentives to companies to manufacture new products for which assured markets may not exist. Pure and applied research is carried out chiefly by the New Zealand Dairy Research Institute. Some of the applied reseaz~h occurs in dairy, factories under the direction of the Institute and, in nmch of this work, the Dairy Division of the Department of Agriculture assists. Buyer's Needs
The Board supplies dairy products in standard forms, or in special forms to meet buyers' individual requirements. Buyers seeking special characteristics in products generally discuss these with the Board's technical staff. Consultations between supplier and buyer on the technical level are particularly important in the case of milk powders, which may be used in a great variety of processing operations. More than half New Zealand's export output of skimmilk powder, for example, is sold to sophisticated specifications developed to the customer's special processing requirements.
J O U R N A L OF D A I R Y S C I E N C E VOI,. 53, NO. 4
TODAY
New Zealand Dairy Industry A. J. GOLDFIHCH
Marketing Division, Dairy Board, Wellington, New Zealand grass growth. Temperatures do not rise nmch above 70 to 75 F in summer and the countryside remains free of snow and ice in the winter. The equable clinlate makes unnecessary the Northern Hemisphere practice of housing cat-
Introduction
As the world's largest international trader in dairy products, New Zealand and its dairy industry will repay study by anyone having an interest in dairying. Many of the delegates to the 1970 International Dairy Congress in Australia plan to return home by way of New Zealand 1,200 miles a~ross the Tasman Sea from Sydney. They can be sure of a warm welcome to New Zealand. E a r l y contact with the authorities will ensure they will see plenty to interest them, including some of the finest dairy farms and dairy factories anywhere. I t should be remembered that dairying in this South Pacific country is export-oriented. Over 90% of milk sales from farms is used for manufacturing, and of this volume 84% is for the manufacture of exports. The New Zealand dairy industry consists of approximately 100 cooperatively owned companies which jointly control a national administrative and marketing organization. This is the New Zealand Dairy Board. The Board is the world's largest exporter of dairy products. Its shipments of manufactured products during the year ended May 31, 1969, were in long tons: butter, 216,000; cheese, 85,000; milk powders, 150,000; casein, 68,000; other products 6,000. The second important point about New Zealand's dairy industry is that it depends for most of its income on earnings in export markets and is the only major dairy industry in the world that does. New Zealand, therefore, has a special interest in the maintenance of fair prices on international nmrkets, and abhors the subsidizing of dairy produce export sales by other countries. I n General Agreement on Tariffs and Trade and in other international forums, whenever the opportunity offers, New Zealand representatives speak out against the subsidizing of dairy produce exports which, in their view, leads to breakdowns in the normal structure of world commercial markets.
FIe. 1. The province of Taranaki is one of the principal dairying areas of New Zealand. The picture show a corner of a typical dairy farm. In the background is Mt. Egmont, which precipitates a bountiful rainfall throughout the dairying region. tie for p a r t of the year. Concentrated feedingstuffs are not necessary, either; the cattle are grass-fed throughout the year. New Zealand's geographical position and strict quarantine practices continue to keep the country free of serious animal diseases. Farming System
Climate
New Zealand has the ideal climate for dairying. Plenty of sunshine and well-distributed rainfall throughout the year encourage vigorous
To make the most of natural advantages, the typical New Zealand dairy farmer has developed patterns of livestock management different from those in the Northern Hemisphere. H e concentrates on dairying, keeping no other livestock
493
494
JOURNAL
OF DAIRY
VI~t 9, Tht' world's htrg('st d:th'y pvodtt('ls n z : l n u facturJng Ill;lilt. Ownl:(| by LIIC New Ze;t]and t~o[)perlltiw' [):lit')" (~Olllp[llly i1[ T e [{;Lp~l, Wnikato. This f:~ctory processes 4()(h00() g:t]lons of milk a (b}y in the flush of the seaso, and lllallufactures 4(},00() h,ns of milk powder a yct~r. A fleet of 52 mi]k tank trucks keeps it supplied.
than cattle, not engaging in arable farming operations. Most farms are one-family units and average 90 cows. Output per man in dairying in New Zealand is the highest in the world.
/~.anufacturing The dairy factories are the world's largest and are highly mechanized or automated. The emphasis is on large-scale operations, with the highest standards of hygiene. Most butter factories manufacturing for export have outputs in excess of 3,000 tons a year. Most of the milk powder exported is manufactured in plants with capacities of from 4,000 to 40,000 tons a year. The cheese factories and the casein plants are the world's largest. The dairy factories are owned by companies cooperatively controlled by the farmers. Administrative duties are performed by executives who form a loosely knit corps. The factories are operated by managers who nmst be registered by the Department of Agriculture. There is a free flow of technical information among managers. A factory instruction and inspection service operated by the Department helps to maintain quality and uniformity of products.
Quality Control On the farms and in the factories great emphasis is placed on quality and strict control procedures. The milking of cows is entirely mechanized. Differential payments to the farmer in favor JOURNAL OF DAIRY SCIENCE V O I . 53, NO. 4
SCIENCE
AUTOS[ATED (~ON Ti¢OI, S
F1(;. 3. Four main control t,(mters :~re in the Te R.Im milk powder p l . . t . . d permit a high ,lczree of a~¢tom~ttcd control over all nlanufacturi . g processes :tnd the supply of essential services. The picture shows oJ~c of these (,enters, featuring two panels of the main production control. An electrical control console panel embraces 90 scts of press-button controls which iudieatc motor load conditions throughout cvaporation, drying, powdcr transport, and clean-in-place operations. The picture also shows a production control panel coinplete with warning alarms and a graphic representation of the three processing plants, from holding wells to powder hoppers, indicating the state of all processing operations and allowing for variable control. of high-quality milk, coupled with stringent hygiene govermuent regulations enforced by inspectors, help to ensure production of the highest quality milk. In the factories, the aim is tile manufacture of the highest quality products. The system of payment is based on a quality grade awarded to the product, providing the factory management with a powerful inducement to manufacture to the highest standards.
Government Grading Dairy products manufactured f o r export are moved to port stores where Government quality grading offices are located. Grading is regarded as a vital part of the preparation of the products for sale. New Zealand was the first country in the world to establish government grading of export dairy produce; this was begun 1894. Grading is performed by the Department of Agriculture, a state agency completely independent of the dairy industry. The Government grading officers make entirely separate and detached judgment on the quality of the manufactured products. A certificate identifying the grade awarded to the produce is issued, and the grade is also stamped on each con-
OUR
INDUSTRY
tainer. The New Zealand Government grade certificate is accepted throughout the world as an accurate indication of quality. I t offers protection to the buyers, and forms the basis of each sale. Dairy Board
The New Zealand Dairy Board is a statutory body which acts as the administrative head of the industry and as its export marketing agency. All dairy companies are cooperatives. The shareholders in each company are the dairy farmers who supply it. F r o m among suppliers, they elect their dairy company's board of directors who are responsible for operation of the company, including determination of the products it will make. Of the Board's members, 11 are elected by the cooperative dairy companies and two are appointed by the Government. The Board acquires all export dairy products from the manufacturing companies, sells them overseas, and returns the proceeds, less marketing costs, to the companies. The Board sells its products throughout the world and is currently exporting to over 90 countries. The principal market for butter and cheese is the United Kingdom, but nearly 90% of the milk powders and casein is sold in other markets. Sales are made in the United Kingdom through the Board's own sales organization. I n other markets, the Board sells through local agents, or it sells direct, on a contract basis, to some large buyers. The greater part of the New Zealand dairy product export trade is supplying butter and cheese for repacking in the countries of consumption, and supplying milk powders and casein for processing. The Board is the world's largest supplier of milk powders and anhydrous milk fat for the manufacture of condensed milk and other food products. A considerable and increasing volume of trade is also carried on in consumer packs of butter, cheese, milk powders, and other products. To all buyers, the Board offers complete technical services, ranging from advice on technical problems connected with processing or
495
TODAY
packaging to the design of processing plants, the commissioning of plants, and the training of staff. The dairy companies, railways, cool stores, and shipping companies serving the New Zealand trade cooperate closely with the help of the Board to ensure that dairy products are efficiently stored and transported. The supervision of transport in New Zealand and stowage in ocean-going ships is the responsibility of the Board's shipping inspectors. Research and Development
Research and development of existing and new products are carried on at several levels in New Zealand. As the purchaser and reseller of the industry's export production, the Board interprets market needs, present and future, and passes the information back to the dairy companies to help them plan their manufacturing decisions. The Board helps to mold the pattern of manufacture by offering financial incentives to companies to manufacture new products for which assured markets may not exist. Pure and applied research is carried out chiefly by the New Zealand Dairy Research Institute. Some of the applied reseaz~h occurs in dairy, factories under the direction of the Institute and, in nmch of this work, the Dairy Division of the Department of Agriculture assists. Buyer's Needs
The Board supplies dairy products in standard forms, or in special forms to meet buyers' individual requirements. Buyers seeking special characteristics in products generally discuss these with the Board's technical staff. Consultations between supplier and buyer on the technical level are particularly important in the case of milk powders, which may be used in a great variety of processing operations. More than half New Zealand's export output of skimmilk powder, for example, is sold to sophisticated specifications developed to the customer's special processing requirements.
J O U R N A L OF D A I R Y S C I E N C E VOI,. 53, NO. 4