Valley milk heads north

MAT-SU — With the last Matanuska Maid Dairy products to hit store shelves this week, milk from the Mat-Su Borough’s four large dairy farms will be headed north to Northern Lights Dairy in Delta Junction for processing. How much and for long will depend on sales.

The northward flow of milk is nothing new. Northern Lights Dairy has been buying milk from Matanuska Maid Dairy for years. The difference is the Lintelman family, which owns Northern Lights Dairy, will send its own trucks around to Valley farms to make the milk pickup. The first trip is slated for Wednesday and another on Friday, according to Lois Lintelman.

Northern Lights Dairy expects to truck about 20,000 gallons of milk per month to match the amount of product it has been purchasing from local farmers through Mat Maid. That’s down from about two months ago, when Valley farmers were producing more milk — farmers like Wayne Brost of Point MacKenzie, who has cut his milking herd because of the uncertainties generated by the closing of the state-run dairy, which will fall silent by week’s end.

Meanwhile, it could be three months until the new Southcentral Dairy Venture will be ready to accept milk for processing into 100-percent Alaska Grown milk and/or cheeses under the familiar Mat Maid logo, which has been leased to the coalition of Valley entrepreneurs. Kyle Beus, acting general manager, said there’s remarkable progress at the new facility on the Palmer-Wasilla Highway, but there will still be weeks in which up to 60 percent of Valley-produced milk product — nearly 1,000 gallons — may need to be dumped because there will be no place for it to be processed.

Lintelman said the amount of milk Northern Lights Dairy will accept from Valley farmers will be directly related to the northern markets. With the exit of Mat Maid, Wilcox Family Farms of Roy, Wash., will supply the military installations in Alaska. How much of a dent that puts in Northern Lights’ presence at Eielson Air Force Base and Fort Wainwright near Fairbanks and Fort Greely near Delta Junction will impact the purchase of Valley milk supplies. Conversely, the loss of Mat Maid’s supplies at local Carrs/Safeway and Fred Meyer stores could mean a boost for Northern Lights Dairy — and Valley dairy farmers — if both Northern Lights’ shelf space and sales expand to fill the gap, Lintelman said.

“We will take as much milk from them as we can get rid of,” she said.

The limiting factors for the Lintelmans are markets and manpower. There are too few available employees to process the amount of milk products the Northern Lights facility can handle if sales or market expansion warrant an increase. Right now, Lintelman said, demand for Northern Lights products, including ice cream, is high.

Lintelman would not say how much Northern Lights Dairy will pay Valley farmers for their milk.

For about the past six month, Brost and the other local farmers have been receiving $26.50 per hundredweight (100 pounds) of raw milk, or about $2.28 per gallon (including cream), which can be used for pasteurized milk, cheese, ice cream and other products. Until then, Mat Maid was paying $21 per hundredweight, with another $2 in state pass-through funding for milk, Brost said.  Mat Maid had been paying about $20.75 to farmers for 20 years. Recently, Mat Maid was paying about $31 per hundredweight to import milk from the Lower 48.

Brost said he didn’t ask Lintelman how much she’d be paying for milk. With no other option, he will be obliged to take whatever she’s offering or dump milk into his manure pit.

“It will make very expensive fertilizer,” Brost said.

The recent $26.50 per hundredweight Mat Maid paid for milk was a respectable price, Brost said, even if it was less than what’s being paid for Outside milk.

“We can actually pay our bills,” Brost said, adding dairy farmers also had money left over to replace capital investments, like machinery. When the Southcentral Dairy Venture has its milk processing facility running, it will pay farmers $28 per hundredweight, according to the terms of the grant that is helping fund the operation.

Whether the milk from Brost’s and other local farmers’ cows goes into pasteurizer or a manure pit, their cows have to eat. Brost cut his milking herd by about one-third six months ago, leaving him 60 cows that cost about $7 a day to feed, milk and care for. The dry herd (cows that are pregnant or soon to be inseminated) of about 60 cows costs another $4 a day to feed and care for in cold weather. The other 60 cows in the 180-head herd are mostly calves that cost about $1 a day to feed. Brost estimates it costs $700-$800 a day to care for his herd, not including his capital investments.

“Even when we’re not dumping milk I’m not making a lot of money,” he said. “I could make as much selling my hay to the horse market.”

That notion is becoming more and more attractive to Brost. He says while he’d like to see the Southcentral Dairy Venture succeed so there will be a local milk product, he doesn’t plan on weathering many more economic catastrophes.

“If there are too many more tidal waves, I’m going to abort ship,” he said.

In an effort to help the local farmers, the state Creamery Board voted unanimously Friday to request $200,000 from the Alaska Legislature. That money would help dairy farmers supplement income effectively dumped along with their milk. Without the promise of help, Beus said, some farmers might opt to send their herds for slaughter rather than suffer devastating losses. If farmers sell their herds, Alaska’s dairy industry could be lost forever, which would also damage other aspects of agriculture — grain and hay farmers, Mt. McKinley Meats and even 4-H projects.

“If we lose it, we may never get it back,” Beus said.

While people in the industry are frustrated by the situation, dairy farmers appreciate what the administration has done to help, including keeping Mat Maid Dairy open as long as possible, in spite of its red ink, Beus said. “The Creamery Board has worked very hard to come up with solutions to help farmers.”