In March 1890 a public meeting at Grassmere decided to form a co-operative company and establish a butter factory. The farmers of the district and of Woodford and Purnim were canvassed for support and at a second meeting on 14th March it was reported that 700 shares had been taken up.
Gilbert Nicol offered ground at Johnstone’s corner, Grassmere (also known as the Grassmere Junction), and this became the site of the factory, which opened on 18th September1890 by the Grassmere Cheese and Butter Factory Co-operative Co.
Nicol was elected chairman of the company. The other directors were Thomas McCullough, John Campbell and Robert Crothers.
There were 1400 shareholders when the factory was opened, all suppliers and all greatly proud of their venture. They were mostly farmers on the rich lands of Grassmere, Purnim and Wangoom that had formerly produced heavy crops of red skinned potatoes. They were confident from the start that the factory would be a success as it commanded a large area of dairy farms in one of the most productive belts of the Shire of Warrnambool.
This proved to be so in the first years of operation. In 1905 the plant was modernised and a butter of high quality was produced. The factory was well served with efficient managers, and the company directed by enthusiasts for both the principle of the co-operative business and for the successful operation of a farmer-owned industry.
Some of the others directors of the factory were: William Jellie; William Beveridge; A.H. Davis .
One of the families long associated with the factory was that of William Huffer who came to Grassmere as manager in 1918 from Heyfield in Gippsland, one of the great co-operatives butter factories of Victoria. He was with Grassmere from 1918-1944. His son William James Huffer who had been trained as as an engineer was there from 1940-1963. A sister of Miss V.M. Huffer was with the company from 1922-1957, thirty five years. The story of the Grassmere factory may be regarded as typical of many of the smaller cooperative butter factories throughout the Shire.
When William Huffer came to Grassmere in 1918 the butter production was six tons a week maximum. The milk came from high producing herds; it was separated on the farm and delivered to the factory by the farmers. Payment for cream was based at a price per pound of butterfat. Huffer had been trained in an efficient factory, in a district of high producing herds. He soon became convinced that the farm separation of the milk for the factory was not getting the best possible yield from the quality herds on the rich lands of the district.
The cream quality varied, which affected the butter quality. He made a though overhaul of the factory plant, and of the operating and administrative systems in the factory. He also urged that suppliers should bring whole milk to the factory.
More efficient methods from the time the cream was separated under the company’s supervision, renewed and modernised plant lifted butter production to 600 tons a week in the early 1920’s and to 800 tons in 1930.
By then the suppliers to the Grassmere factory came from Ellerslie, Framlingham and Framlingham East, Yarpturk, Winslow, Woolsthorpe, Nirranda, Warrnambool, as well as the original areas. Factory motor trucks picked up the milk and transported it to Grassmere.
In 1941 Nestles approached the Grassmere company with a proposal that all of its milk intake should be delivered to the Dennington factory for separation there. The cream would be returned to Grassmere for making butter, and Nestles would retain the skim milk. This was considered at the time to be a unique joining together for their mutual benefit of a cooperative company and a private manufacturing undertaking.
A Proposal was agreed. Later, thoughout Australia as a wartime measure the system was adopted in order to rationalise the use of manpower and primary and secondary resources. Grassmere factory later merged with the Murry Goulburn complex, and its milk delivered to the Koroit factory. At least ten of the cooperative companies in the south-western district merged with Murry Goulburn. Koroit their headquarters.
The Grassmere factory closed in 1963.
The factory and managers residence were bought by Thomas and Doreen Malone. The Malone family still own the property, and the great great granddaughter of Thomas McCullough, Cathryn McCullough married one of Thomas and Doreen Malone's son's, David.
Thomas McCullough, Obituary.
Melbourne "Argus" newspaper, November 4th. 1936. "The death occurred this week of Mr. Thomas McCullough, of Warrnambool, aged 81 years. Mr. McCullough was for many years a leading supporter of the co-operative dairying enterprises of the Western district. He came to Australia with his father from the north of Ireland about 70 years ago. As a young man he became a dairy farmer at Warrnambool, and took a leading part in the establishment of co-operative butter factories. For about 25 years he was chairman of directors the Grassmere and Framlingham Butter Co. Ltd. More recently Mr. McCullough was chairman of directors of the Western District Co-Operative Produce and insurance Co. Ltd., and was also a director of the Co-Operative Box Co. of Victoria Ltd. and the Co-Operative Insurance Company of Australia Ltd. Mr. McCullough left a widow, two sons and three daughters."