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Few dairy farms, processors remain in Alaska and Hawaii

Editor’s note: As part of our series, “From Cow to Curd: A Look Across the Nation,” Cheese Market News takes a look at the cheese and dairy industry across the United States. Each month we examine a different state or region, looking at key facts and evaluating areas of growth, challenges and recent innovations. This month we are pleased to introduce our latest states — Alaska and Hawaii.

By Rena Archwamety

MADISON, Wis. — The dairy industries in Alaska and Hawaii, where costs of imported feed are high and opportunity to profit from milk sales is low, have dwindled over the past few decades to near extinction. However, a few businesses in these non-contiguous states have found opportunity to supply the local market.

• Hawaii

Until 1984, dairy farms on Hawaii supplied all the milk needed for the islands, and no milk was imported, according to a 2007 study, “Issues Related to Hawaii’s Dairy Industry,” funded by the state’s Department of Agriculture and dairy industry. Peak milk production was in 1988, where 160 million pounds were produced, and Oahu traditionally had the largest concentration of dairy cows and operations. Environmental issues, feed costs, transportation, milk prices for farmers, an aging ownership in the industry and changing market dynamics have factored into the decline of the industry, the study says.
Monique van der Stroom moved to Hawaii 25 years ago after studying dairy science at the University of Arizona. She became the farm manager for what then was the largest dairy in the state, milking 1,400 cows on the island of Oahu.

“There were 14 dairies when I moved here in 1993. One by one they closed down, due to high feed cost and low milk prices,” she recalls, adding that 95 percent of feed had to be shipped from the mainland.

“The farm I managed closed its doors as the last dairy on Oahu, in 2007.”

Two licensed Grade A fluid milk dairies remain in Hawaii — Big Island Dairy, which milks about 1,400 cows, and Cloverleaf Dairy, which milks about 300 cows, according to Grant M. Tomita, milk control program specialist, Hawaii Department of Agriculture Commodities Branch. Both dairies are on Hawaii’s Big Island. Meadow Gold, owned by Dean Foods, was the only major dairy processor in the state until last month, when Big Island Dairy received final approval from the Hawaii Department of Health to begin processing and packaging milk. Currently about 80 percent of Hawaii’s fluid milk demand has to be brought in from the mainland.

“The two dairies supply approximately 20 percent of milk to consumers. The balance is supplied by milk imported from California,” Tomita says. “As with everything else in Hawaii, milk is expensive relative to mainland prices.”

In 2013, Ulupono Initiative ­— an investment firm established by eBay founder Pierre Omidyar — proposed a large pasture-based grazing dairy in Kauai that would produce roughly 1.2 million gallons per year.

However, the proposal has so far been unsuccessful and Tomita notes it continues to face opposition from the local community due to environmental concerns such as odor and runoff.

After the large dairy van der Stroom managed on Oahu closed in 2007, she decided to open her own farm, Naked Cow Dairy, with the idea of bringing back the small family dairy of Hawaii’s past. She couldn’t compete with mainland milk production in the fluid market, so she began to create gourmet butters and artisan cheeses to add value to the farm’s milk.

“The timing was right for people to start wondering where their food comes from and supporting ‘local’ and ‘food miles’ and ‘carbon footprint,’ and for Hawaii the big talking point became ‘food sustainability,’” van der Stroom says. “With all this starting to happen, we were able to capture a small market with locally produced cheese and hand churned butters. We also make yogurt.”

The farm has retained only a small number of cows since feed is very expensive and there is limited land available on Oahu for dairy cows, van der Stroom says. Her creamery gets some additional milk from one of the dairies on the Big Island. All of its cheeses and butters are made with local ingredients.

Naked Cow Dairy’s cheeses include Pika Moon, a Gouda-style cheese with Hawaiian chili peppers; Pink Hawaii, a Gouda-style cheese with pink peppercorns; VOG, a Gouda-style cheese smoked with Guava wood; Tomme; and yogurt cheese. The company makes a sweet cream unsalted butter popular with local chefs, as well as Garlic and Herb Butter, Manoa Honey Butter, Toasted Coconut Butter, Alaea Sea Salt Butter and Kona Coffee Butter.

“I hope the industry can made a comeback, but the few remaining dairies are struggling to remain,” van der Stroom says. “I see the future as maybe a collection of smaller farms.”

• Alaska

Around 1935, several dairy farmers relocated from Wisconsin and Minnesota to the Palmer, Alaska, area to join 203 families as part of the Matanuska Colony. This agricultural community was one of President Franklin D. Roosevelt’s New Deal projects created to help rebuild after the Great Depression.

“Matanuska Maid Cooperative had been formed back in the 30s or 40s when the colony projects started,” Phil Kaspari, district agriculture agent, Delta Junction, Alaska, says of what used to be Alaska’s largest dairy processor. “It went through trials and tribulations, was state-owned for quite some time, and sold off about 10 years ago. It was a private venture for a while but couldn’t manage itself and cash flow.”

In the last 10 years, the number of dairies in Alaska has dropped from about five or six to just one. Kaspari notes that the last Grade A dairy in Delta Junction, Northern Lights dairy, went out of business in May 2017. He says the closing of Northern Lights dairy was a “major blow” to Alaska’s agriculture industry, not just for the loss of milk but also the loss of a market for crops and feed.

“It was a family-run operation, and the parents were getting to where they couldn’t be as productive, and the children got kind of burned out,” he says of the dairy closing, adding that there also are ongoing struggles of trying to get help on farms in Alaska.

“It’s a fragile infrastructure here,” he adds. “For years, people had hoped that the dairy industry would drive the rest of the agriculture industry in Alaska.”

Havemeister Dairy, Palmer, Alaska, started as one of the original Matanuska Colony dairies in 1935. It is the only colony dairy remaining and the only Grade A dairy farm and processor now remaining in Alaska.

It milks about 80 cows, and its fluid milk products are sold at sold in grocery stores in the south central area of the state around Anchorage and Palmer, where the largest percentage of the state’s population is located.

Bryce Wrigley, president of the Alaska Farm Bureau says while there is only one Grade A dairy in the state, he has heard of another smaller one wanting to start up. There also are a number of very small operations — he estimates no more than 15-20 statewide — that sell raw milk via herdshares, which are allowed in the state.

As the state looks for ways to keep its dairy industry alive, some have floated the idea of legalizing direct raw milk sales.

“By allowing the sale of raw milk and making sure those dairies are inspected, our hope is that if something can be worked out with the state to allow that, it would kind of revitalize the number of people operating dairies and encourage some of those dairies to move forward with a Grade A dairy. We see it as a stepping stone,” Wrigley says. “We’ve just begun the initial dialogue with the Department of Environmental Conservation. They’re opposed on grounds that before pasteurization, most foodborne illnesses were raw milk related.”

Wrigley says he understands the food safety concerns but believes the state could find a way to inspect these dairies and promote safe production while helping to restart the dairy industry and ensure food security in the state.

“We have this issue in Alaska, more so than any other state, when food doesn’t make it up here — and that happens — when those disruptions occur, we want to have the means of providing a balanced diet, and milk is a big part of that balanced diet,” Wrigley explains. “Not just with dairy, but any food — about 95 percent of our food here is imported. That transportation chain is very long, and any breakdown along the way impacts the availability on store shelves.”

Most of the fluid milk imported to Alaska comes from Washington State, and the Darigold brand is common to see in Alaska grocery stores, according to Bob Gerlach, Alaska’s state veterinarian.

Several years ago, Wrigley says, a dairy extension agent came to Alaska from a land grant university to do a study on whether dairying in Alaska could be profitable, and what was causing the decline. He says there wasn’t really a reason people couldn’t make money dairying. Inputs were higher, but milk also sold for a higher price.

“His assessment was that with the right management, it could be successful,” Wrigley says. “You would need the right knowledge and have to be flexible and utilize local feedstocks. On our dairies, when we had them, local production was as good as it had been in (other parts of) America.”

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