Dairy Industry and Dairy Products

Dairy Industry and Dairy Products. Dairying in North America began with the earliest European invasions. Spaniards brought cattle to Veracruz (Mexico) in 1525; English cattle reached Jamestown in 1611.

Colonial Era and Nineteenth Century.

From colonial times the dairy remained women's work, including butter churning and cheese pressing, well into the nineteenth century, long after commercial sales flourished in the public markets of seaports and river towns. Dairying acquired more than local significance in parts of New York, Pennsylvania, and New England, when farmers could no longer compete with wheat shipped by canals and railroads, from newly settled lands further west. Dairy farming eventually took hold in part of the “Old Northwest” as wheat culture followed the westward‐moving “frontier” beyond the Mississippi Valley.

From the 1850s cheese making was reorganized into small “factory” associations where the more adept cheesemakers (women and men) could work on greater volumes of milk gathered from neighboring farms. By the early 1900s, almost all cheese was made in factories and Wisconsin had displaced New York as the banner cheese state. Butter making lingered on farms until the 1880s when, despite the threats from oleomargarine, De Laval's steam‐driven cream separator from Sweden first led to an expansion of cooperative “creamery” associations and large‐scale “centralizer” plants, especially in the Middle West. Not before World War I did creameries supply more than half the nation's huge butter output, with Minnesota the banner state. Gail Borden (1801–1874) patented condensed milk (concentrated and sterilized under heat in a vacuum pan) in 1856 and by 1899 twenty‐four condenseries were manufacturing condensed and evaporated milk countrywide. By that time sanitary bottling procedures and pasteurization techniques (partial sterilization by heat) were making milk products safer and ending the dreadful sequence of nineteenth‐century urban epidemics associated with tainted milk.

Dairy farming remained a seasonal and, California excepted, a family enterprise. Milk yields increased somewhat owing to more ample feed and better cow barns but the “dairy quality” of the stock improved little before importations of Shorthorns, Ayrshires, Holstein‐Friesians, and Channel Islands breeds after the mid‐nineteenth century. Under competitive pressures to preserve the fertility of their soil and raise the return on its use, dairymen sought a more balanced crop program and more nutrient‐rich diet (including unripened maize, alfalfa, and clover preserved in airtight silos from the 1880s) in order to extend lactation further into the winter months. The Babcock Test (1890), developed by Stephen M. Babcock at the University of Wisconsin, provided a more accurate test of milk quality based on butterfat content, and stimulated cooperative herd improvement through selective breeding; official animal testing and disease eradication programs (especially Bovine Tuberculosis) followed under sponsorship of state agricultural colleges. By the middle of the nineteenth century, annual milk yields per cow had nearly doubled, averaging 3,883 lbs. by 1900.

Technical advances in milk processing and distribution brought hand‐separators, milking machines, cooling equipment, and storage tanks to commercial dairy farms, while refrigerated tank trucks and glass‐lined railcars by the 1930s carried milk to processing plants and profitable metropolitan markets. Ice cream, offered by confectioners in New York City and Philadelphia in the 1770s, was first manufactured for wholesale delivery in Baltimore in 1851 and gained popularity after the introduction of waffle‐cones at the Louisiana Purchase Exposition in St. Louis, 1904. The recovery of U.S. cheese production from the loss of lucrative foreign markets, following export of substandard “skim” and “filled” cheese, was facilitated from the late 1890s by the regulatory enforcement of state dairy and food commissions and by laboratory investigations of enzyme action in the “cold curing” of natural cheddar type cheese. It was the introduction of J.L. Kraft's patented “processed” cheese in Chicago after 1916, however, that changed the United States into a “nation of cheese eaters.”

Twentieth‐Century Developments.

The thrust of technological development in dairying, as in other industries, has been toward continuous production for mass markets and away from “batch” and “bulk” operations. From the 1920s, when dairying was already a $4 billion industry, such tendencies were driven by the imperatives of “big business” toward growth and restructuring. Private bankers determined that mergers and acquisitions, rather than direct investments, were the most economical modes of expansion and in 1923 the National Dairy Products Company set off a “merger mania” by absorbing the small margins of independent wholesalers, and soon displaced the Borden Company as the largest dairy corporation in capitalization and sales. Between 1921 and 1948, eight large dairy corporations emerged while thousands of local mergers occurred among smaller corporations. Over 500 of these local mergers involved cooperatives exempted from federal antitrust legislation by the Capper‐Volstead Act, 1922. The agricultural crises of the 1930s eventually brought federal dairy price supports and cartel‐like agreements to equalize prices paid to producers of milk used either for fluid or manufacturing purposes.

After 1900, the number of farms with dairy cattle barely increased, but many had become specialized dairy enterprises. From the 1930s, innovations in cattle breeding and feeding, including artificial insemination by proven sires and commercial availability of hybrid‐corn seed (maize), continuously raised milk output, but it was “genetically engineered” capacity rather than scientifically enhanced rations that accounts for spiraling milk yields. By 1980, high‐yield, low‐fat Holsteins constituted 80 percent of the national herd. By 1995, the herd, comprising only 9.46 million cows, averaged 16,451 lbs. of milk per head, compared with the peak herd of 27.7 million in 1945, averaging but 4,375 lbs. per head.

Although mechanization and the purchase of feed and specialized services had reduced the intensive labor of farm families as the twentieth century ended, more than 80 percent of dairy farms in the 1990s continued to be held by family or individual proprietors, 15.5 percent were partnerships that included family members, and 3.5 percent were family corporations. The trend in milk production, as in other agricultural sectors, was toward fewer but larger operations; only 6 percent of all farms reported milk animals in 1992, with California now the largest milk producer.

The post–World War II popularity of store sales of ice cream (earlier a soda fountain item), the rise of “Italian‐style” cheese pizza, and the conversion of yogurt from a “health food” into a fruit‐flavored dessert, as well as such marketing novelties as prepackaged sliced natural cheese introduced by Kraft in the 1950s, all boosted dairy consumption. Most fluid milk, along with an array of branded and packaged dairy products, was now retailed in self‐service supermarkets or convenience stores in wax paper cartons (1930s) or molded plastic jugs (1960s). Home deliveries had virtually disappeared.

On the manufacturing and marketing sides of dairying, the process of consolidation intensified in the 1970s when the $20 billion business industry became a target of Wall Street mergers, acquisitions, and divestitures in which giant food corporations took over divisions of large dairy conglomerates. By the 1990s transnational food conglomerates such as Philip Morris, Unilever, Nestlé, Con Agra, and Groupe Danone S.A. were major players in the dairy industry, which, however, represented only a fraction of their total food sales. The huge Minnesota‐based Land O' Lakes Co. (1921) and other regional cooperatives, in contrast, selling chiefly bulk milk and low‐branded dairy goods, had meanwhile raised their market share to 42 percent of corporate sales.

In 1996 the federal government began a phased termination of dairy price supports and greatly reduced milk marketing regulations with a view to lowering the public costs of handling vast milk surpluses in a deregulated market environment. The Agricultural Improvement and Reform Act of 1996 retained the restrictions on dairy imports permitted under the General Agreement on Trade and Tariffs (GATT), while seeking to promote maximum allowable exports of U.S. dairy products to global markets. Such changes introduced a higher degree of price volatility in domestic markets, where dairymen already faced a perilous future from changing consumption patterns related to health and dietary concerns (per capita consumption of all dairy products fell from a peak of 838 lbs. milk equivalent in 1931 to barely 517 lbs. by 1994, with butter the principal victim) and public uneasiness over the genetic manipulation of cattle and the increased use of antibiotics and bovine sumatropin growth hormone (BGH).
See also Agriculture; Food and Diet; Health and Fitness; Livestock Industry.

Bibliography

H.S. Perloff et al. , Regions, Resources, and Economic Growth, 1960.
Eric E. Lampard , Rise of the Dairy Industry in Wisconsin, 1820–1920, 1963.
Ralph Selitzer , Dairy Industry in America, 1976.
Sally McMurry , Transforming Rural Life: Dairying Families and Agricultural Change, 1820–1885, 1995.
A.C. Manchester and and D.P. Blayney , Structure of Dairy Markets, 1997.

Eric E. Lampard