Monique van der Stroom takes her cow Pickles out to graze on her Waianae farm that produces butter and cheese sold to Whole Foods Market and local restaurants.

The grass is dry, and van der Stroom has been praying for rain for weeks to irrigate her field so that the rest of her cows can graze. Morning showers on this particular Saturday are not enough to grow grass.

Pickles no longer produces milk; she’s van der Stroom’s pet. But the milk cows at the Naked Cow Dairy are also in a dry spell.

Monique van der Stroom, a 30-year veteran of the dairy industry, takes a walk with Pickles. Her pet cow no longer produces milk, and that could end up being the case for the entire state. Blaze Lovell/CivlBeat

They’re on a sort of maternity leave — a period that starts in a cow’s third trimester when milking stops. During these dry periods, van der Stroom typically buys milk from Big Island Dairy.

But with the planned closure of that dairy, van der Stroom is uncertain how much longer her farm can sustain itself.

“It might put me out of business,” she said. “If they close down, I’m out on the verge.”

The entire industry is on the verge in Hawaii, where there used to be 160 dairies that supplied almost all the milk sold in the islands.

Today, Big Island Dairy is one of the last two commercial dairy farms in Hawaii. The other one, Cloverleaf, in Hawi on the Big Island, is trying to finalize a tenuous sales agreement with mainland investors and a local manager eager to revitalize the industry.

On Kauai, meanwhile, plans for Hawaii Dairy Farm, which would use a pasture-based model for its cows, are on hold in the face of community opposition and lawsuits.

Oahu Dairies Thrived For Decades

Most dairy operations were once concentrated on Oahu.

One of the largest was the Hind-Clark Dairy in present-day Aina Haina (which means “Hind’s Land” after owner Robert Hind). It was sold in 1946 for what would be $13.8 million in today’s dollars. The Hind family used the money to develop 2,018 acres in the Wailupe Valley.

That was just one example of a residential development pushing out dairy farming.

This picture from a 1929 University of Hawaii report shows cattle being herded into a milk barn at the Hind-Clark Dairy. Screenshot from University of Hawaii

Hawaii was still producing most of its milk locally until 1982, when traces of the pesticide heptachlor used on pineapple tops fed to dairy cows, was found in milk. That — plus rising feed costs and competition with mainland milk — led to more dairies closing.

A shortage of good land and processors who pasteurize and bottle milk have added to the troubles.

“The dairy industry in Hawaii is really on the brink of extinction,” said Derek Whitesides, one of the owners of Big Island Dairy.

The islands’ milk production peaked in 1988 at 160 million pounds before dropping over the next 20 years to 18.5 million in 2008. Production actually rose slightly in the past decade, even as most of the last large dairies shut down, leaving only Big Island Dairy and Cloverleaf.

Van der Stroom ran Pacific Dairy, the last commercial dairy on Oahu, which closed in 2007. The dairy had 1,400 cows.

Operating Naked Cow in Waianae has been a struggle since day one, she said. Her cheeses, like the Kona coffee-flavored “Vog” or Hawaiian Chili pepper-infused “Pele’s Fire,” all rely on milk from her cows or from the Big Island.

“I don’t want to bring in mainland milk,” van der Stroom said. “That defeats the purpose.”

The 30-year industry veteran is not ready to quit, because she wants Hawaii to have locally produced dairy products.

“What we need is for more people to be willing to pay a little bit more for what it costs to produce milk in Hawaii,” van der Stroom said. “But that’s the hard part. Cost of living is so high. Where can you save money?”

“I don’t think most farmers farm to get rich,” she said. “They do it because they like the lifestyle. I love my cows.”

Big Island Dairy Had Big Plans

Derek Whitesides and his father, Steve, wanted to bring their Idaho know-how to the Big Island. When the father and son team bought Big Island Dairy in 2012, they began work on a model that would help defer costs associated with milking in Hawaii.

One of the largest is feed. The Whitesides grew some of their own feed, like corn and guinea grass, while also importing corn from Maui along with minerals, protein and alfalfa from the mainland.

“We were definitely pushing for a model that would be sustainable for most of its feed,” Whitesides said.

With Big Island Dairy, above, planning to close, Cloverleaf Dairy could soon be the last commercial dairy in the state. Courtesy of Big Island Dairy

Milk cows, as opposed to beef cows, need a fairly robust diet that consists of both grain and grass to produce enough milk.

Another stumbling block was Meadow Gold Hawaii, which gained a monopoly on milk processing in Hawaii after its competitor, Foremost, quit in 2004. Federal regulations dictate that milk must be pasteurized to kill bacteria before being sold in stores, and Hawaii does not allow the sale of raw milk.

Meadow Gold can set the price of milk it buys from local farms for processing. Minimum prices are typically set by state law, but the bottom was removed in 2014 when the Department of Agriculture amended rules allowing processors to buy milk from farmers at a lower price after Meadow Gold threatened to stop buying local milk.

“We weren’t getting paid what we felt we should have been getting paid,” Whitesides said. “That’s why we built (a processing) plant, to capture the local value of the product.”

Meadow Gold representatives declined to comment for this report.

Meadow Gold milk deliver trucks parked.
Meadow Gold, which brands itself as “Hawaii’s Dairy,” threatened to stop buying Hawaii’s milk in 2014 if milk farmers didn’t agree to lower prices. Cory Lum/Civil Beat/2018

To partially get around Meadow Gold, the Whitesides family built their own processing facility in 2017 for $13 million. About 15 percent of Big Island Dairy’s milk was bottled at its plant; the rest was sent to Meadow Gold’s Big Island processing plant.

Half-gallon cartons of milk sold by Big Island Dairy are priced competitively with mainland milk brands, Whitesides said. 

The milk is also fresher. Mainland milk, which now accounts for about 90 percent of what’s sold in Hawaii, spends about seven days on a ship in unrefrigerated containers. By the time it reaches the islands, federal regulation mandates it be pasteurized again before going onto shelves.

Milk produced locally can usually get from cow to consumer in 24 hours.

In 2017, Big Island Dairy’s herd of 1,500 milk cows produced nearly 9 percent of all milk in Hawaii. 

Community Opposition

Owning a processing plant, growing feed on one part of a dairy and keeping the cows on another part is a common model on the mainland, Whitesides said.

Lawrence Boyd, an economics professor at University of Hawaii West Oahu, also says that it’s a model that could save Hawaii’s dairy industry.

The economics are simple, Boyd said. There’s high demand for local milk, but not enough farmers to fill that demand. An abundance of tiny dairies won’t cut it, because they would price each other out of the market and still have to negotiate prices with Meadow Gold.

One or two large dairies with their own processing plants, herds that total 10,000 head of cattle and crops to feed those cattle could supply most of the state’s milk, Boyd said.

But dairy farming has been met with fierce community opposition in recent years.

A lawsuit claims water has been contaminated by animal waste from Big Island Dairy. Courtesy of Kupale Ookala

In 2012, residents were upset when they learned that Big Island Dairy used GMO corn to feed the cows.

Last June, Kupale Ookala, a community group represented by Oregon lawyer Charles Tebbutt, sued the dairy, alleging that the owners violated the Clean Water Act after residents claimed to have found bacteria in brown water downstream from the facility.

The Department of Health told Civil Beat in September that the dairy had been fined for wastewater discharge and that the department ordered the dairy to stop any further wastewater release.

Kupale Ookala claimed 5.8 million gallons of wastewater were discharged from the dairy from rainfall during and after Hurricane Lane, according to court documents filed earlier this year.

On Kauai, the proposed Hawaii Dairy Farms, backed by a $17.5 million investment by Ulupono Initiative, faced two lawsuits while still in its planning stages.

One was brought by Friends of Mahaulepu, also represented by Tebbutt, and regarded potential violations of the Clean Water Act in 2015. The Ulupono Initiative, the investment firm behind Hawaii Dairy Farms, agreed to pay over $500,000 in attorney fees as well as $125,000 to fund a stream restoration on Kauai and protect endangered species.

Ulupono is now considering whether or not the Kauai dairy may be a good investment, said spokeswoman Amy Hennessey. There’s been no onsite work on the project in over a year, and Hennessey said Ulupono should come to a decision next month.

Plans were for Hawaii Dairy Farms to produce around 1.5 million gallons of milk a year.

“Ulupono Initiative recognized the need for a local, sustainable dairy in the islands to produce fresh, nutritious milk at import parity pricing,” the firm says on its website. “We believe this dairy’s success could lead to additional pasture-based, rotational grazing dairies statewide.”

Opposition to agricultural projects is not unique to Hawaii, said Clare Gupta, a policy analyst at the University of California Davis, who spent a number of years studying the local food industry.

People who want local products also tend to associate locally produced food with other attributes like environmental sustainability, said Gupta.

“Those attributes are not always inherent with a product,” Gupta said. “So when something comes along and is touted as local, but it isn’t exhibiting those other attributes, that’s where tension can arise.”

A Last Chance At Cloverleaf?

Bobby Grimes has a few weeks to save what’s left of the state’s milk industry. He’s got lofty plans, like investing millions of dollars into Cloverleaf Dairy, and has even expressed interest in acquiring Big Island Dairy.

Grimes’ plans for Cloverleaf Dairy include $20 million worth of investments that would go toward a new milking facility and other projects, he said.

However, that all hangs on whether or not Grimes and Hawaii Agriculture, Energy & Earth Products, a company owned by Cleveland-based Gottleib Enterprises, will be able to close on the sale in the next couple weeks.

Grimes has been trying to acquire Cloverleaf from Ed Boteilho, the farm’s current owner, for over a year. Boteilho declined to be interviewed.

Hawaii may soon lose its supply of locally produced milk if Big Island Dairy doesn’t find a new owner and Cloverleaf Dairy can’t complete a sales transaction. Blaze Lovell/CivilBeat/2018

Grimes and Gottlieb are the most recent in a string of owners who wanted to acquire Cloverleaf after Boteilho announced he was ready for retirement.

The first was Ulupono, which reached a sales agreement with Boteilho in 2015. That fell through, Grimes said, after underground fuel storage tanks were discovered on Boteilho’s farm.

While Grimes was negotiating with Boteilho, Kees Kea, another local dairyman, moved in to close a deal with Boteilho last year. That agreement fell apart after it turned out Kea’s company didn’t have enough money to complete a sales transaction, according to state leasing documents.

Grimes, along with his team that includes a dairy manager, agronomists and other experts, has delayed plans for almost 16 months, he said, but he’s still optimistic

“I’d hate to see dairy die here,” he said.

Grimes’ plans are similar to those of Ulupono’s Kauai project. Hawaii’s Favorite Dairy, the new name Cloverleaf would operate under should the sale go through, would use a mostly grass-fed model, which could mean the cows produce less milk since they would be eating less grain, Grimes said.

While Hawaii’s Favorite Dairy plans to grow some feed to supplement the grass, Grimes wants to ween the cows off their grain-based diet.

“We have to teach the cows to go back out and eat grass,” Grimes said.

Overhauling dairy processes could also mean implementing a new business model that is less reliant on milk sales. Dairy cows fed a grass-based diet could provide higher fat milk, Grimes said, which would be good for butters, cheeses and yogurts, all products that sell for higher prices than milk.

Grimes and Naked Cow’s van der Stroom have been talking about moving her operations to the Big Island.

But given the environmental concerns, any dairy that wants to be successful needs to start with community engagement, said Gupta.

“You need to include people in the process and that means having meaningful engagement,” Gupta said. “It’s taking a bottom-up, grassroots approach rather than a top-down. Especially in a place like Hawaii, which has a historical legacy of outsiders coming in to plop down.”

The Ulupono Initiative was founded by Pierre and Pam Omidyar. Pierre Omidyar is the CEO and publisher of Civil Beat.

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