Big Island’s Cloverleaf Dairy could be out of business by the new year after being forced to take a 23 percent cut in the price Meadow Gold of Hawaii pays for its milk.
Big Island’s Cloverleaf Dairy could be out of business by the new year after being forced to take a 23 percent cut in the price Meadow Gold of Hawaii pays for its milk.
“It’s a very sad day for our company. It’s a very sad day for our workers,” owner Ed Boteilho said.
The state Board of Agriculture on Tuesday unanimously approved Boteilho’s request for a waiver to allow Cloverleaf to sell milk below the state minimum price established by law.
Boteilho said he fought the issue as long as he could, but recently received an email from Meadow Gold saying the company would stop buying his milk if he did not sign the waiver.
“Subsequently, I have to let people go that have worked for me for many, many years,” he said. “It’s just very, very hard.”
Cloverleaf, which has been owned by Boteilho’s family since 1962, is a 900-acre, 700-cow dairy at Upolu Point — the last locally owned and operated large-scale dairy in the state.
During Tuesday’s meeting, Boteilho said the cut will result in his dairy losing more than $70,000 per month and that he could be forced to shut down in six months when the waiver expires because he can’t afford to operate with those lower prices, as reported by Hawaii News Now.
“I am being asked to come in here and submit to this threat and kill myself,” he told board members during the meeting.
In December, Ulupono Initiative, the same investment company backing Hawaii Dairy Farms’ proposed dairy in Mahaulepu Valley on Kauai’s south side, announced its interest in purchasing Cloverleaf.
Amy Hennessey, spokeswoman for Ulupono, said her firm made an offer, but were “unable to come to mutually agreeable terms, and Ed Boteilho declined to sell.”
“We wish him and his family the very best,” she wrote in an email. “We will continue to seek opportunities to support and expand our local dairy industry to help improve the supply of fresh local milk for Hawaii’s families.”
Meadow Gold, the state’s only processor, says that under previous minimum milk price regulations, it was growing increasingly concerned that purchasing raw milk from Hawaii’s producers was no longer financially viable.
“Because of the state of Hawaii’s previous minimum milk price regulations, we estimate that over the past six years alone, Meadow Gold of Hawaii has paid more than $4 million in higher raw milk prices from Hawaii’s dairy farms compared to mainland raw milk prices,” Jamaison Schuler, a spokesman for Dean Foods, the parent company of Meadow Gold, said in a statement.
“Recently, our mainland milk processing competitors have won competitive bids against us to supply local retailers with mainland milk based on raw milk prices that are much less than we were paying for raw milk from Hawaii.”
In order to remain a viable business, Meadow Gold says it must act to reduce its costs through the recent pricing waivers put in place by DOA.
“We’re pleased one of the state’s milk producers received a waiver today so that our plants in Hilo and Honolulu can continue to buy nearly 100 percent of the raw milk produced by Hawaii’s dairy farms,” Schuler said.
In December, the board approved a similar waiver for Big Island Dairy, a 900-cow dairy in Ookala.
Email Chris D’Angelo at cdangelo@hawaiitribune-herald.com.