Nearly a year removed from the opening of Matanuska Creamery, Valley dairy farmers have gone from dumping their unsold milk to hustling to keep up with demand. It was May 21, 2008, when the creamery shipped its first locally produced milk to Southcentral consumers, and the past 12 months have seen the resurrection of the state’s dairy industry from near death.
“Well, we pulled through,” said Karen Olson, chief financial officer for Matanuska Creamery. “In fact, now we don’t have enough milk for the demand.”
  
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“That was really, really tough,” said Wayne Brost, a dairy farmer from Point MacKenzie. Although Brost doesn’t know exactly how much milk he had to dump when Mat-Maid closed, “it was very substantial. We were just dumping milk a year ago. We lost a lot of money. It was really tough sledding for awhile. I got beat up pretty good in 2008. It was like having your money in the stock market.”
Now, Matanuska Creamery can’t keep up with the dairy cravings of local consumers, Olson said. The plant processes a little more than 1,600 gallons of milk a day, but would like to be doing close to 2,000.
“The truth is, the dairy industry nearly died,” Olson said. “You can’t just turn off the cows, then say we want all this milk now. Anytime an industry is nearly destroyed, you can’t turn it around like turning on a faucet. But, the farmers are able to produce enough milk for us to make the plant work. To grow, we need more local milk, and we have no intention of getting our milk from anywhere but Alaska cows.”
Going from the brink of extinction in Alaska to not being able to keep up with thirsty consumers is a one-year turnaround Olson credits to a sound plan to sell a premium product for a premium price.
“I think what we have shown this past year is that milk consumers in Alaska are more sophisticated then they were given credit for,” she said. “People thought if there was a cheaper product on the market, farmers here in the Valley had to meet that low price, no matter what, and that’s not the case. The belief you have to somehow get down to the lowest common denominator is not true. People can tell the difference. They will pay the premium for premium milk.”
One of the reasons Matanuska Creamery milk has evolved into a top-notch product is its freshness. Milk that arrives at the Wasilla plant on the Palmer-Wasilla Highway is in stores the next day, Olson said.
“No. 1, this is a very small industry here to begin with,” she said. “We’re filling a niche market. We’re producing, in my opinion, a far superior product. I don’t know how you can get it any fresher. If you had a little home pasteurizing kit and took it right out of the cow, that’s the only way you could get it any fresher.”
That’s not to say the road to a successful first year hasn’t been rocky for the creamery. It relied on an initial cash infusion from selling cheese futures and had to clear some regulatory hurdles about the use of raw milk in its cheese.
“We ran into some problems, like everyone knows,” Olson said. “We had to get a loan to get some extra money to get started early. Of course, we wouldn’t be here without the U.S. Department of Agriculture and its initial grants. The purpose of that was to make sure we could stabilize the dairy industry up here by paying a sustainable price for milk.”
The commitment of Olson and the owners, who have worked for months without paychecks, has also been key to Matanuska Creamery staying open, Brost said.
“They had to do a hasty rebuild and start-up, which also costs you money,” Brost said. “They had to build the plant during one of the highest input cost times in our history. They have worked for months without a paycheck. The naysayers who said this plant was a handout and wouldn’t work have to eat their words.”
Despite start-up problems with cash flow, building schedules and regulating agencies, the real reason Alaska’s dairy industry is still in operation to day is the Alaska consumer, Brost said.
“I am so thankful to the local consumer who realizes we do have a fresh product,” he said. “And I reciprocate. They buy my products, I buy their products. I am just so, so grateful to the loyal Alaska Grown consumers. I was pretty down last year. It was pretty hard to find optimism when you’re dumping milk. I’m a heckuva lot more upbeat then I was at this time last year.”
Now the creamery employs 10 people full-time and another five or six on a part-time basis, Olson said. The focus going into the next year isn’t just survival, but growth.
“Well, to be honest, we hoped we’d be in this position sooner, but you can’t just turn it on,” she said. “We really are pleased.”
Being a dairy farmer in Alaska “is still not a bed of roses,” Brost said. “But it’s not nearly the bed of thorns it was.”
Comments
32 comment(s)Lisa Depew wrote on Oct 21, 2009 6:47 PM:
Hay Fields wrote on May 15, 2009 11:11 PM:
Joey B wrote on May 14, 2009 10:41 PM:
Intellabot wrote on May 11, 2009 8:55 AM:
Bailey wrote on May 8, 2009 4:08 PM:
TKI wrote on May 7, 2009 4:04 PM:
nocheese wrote on May 7, 2009 3:26 PM:
RahRah wrote on May 7, 2009 9:21 AM:
Ryan H. wrote on May 6, 2009 4:29 PM:
Am I the only one that sees how utterly insane this statement is?
Mat-maid was running 16000 gallons of milk per day when they folded up. Yet these clowns think that it works? It is just a matter of time until they A)Default on their current loans or B)Run out of cash. Either way, they will run back to Cole and Havimiester (AKA Palin) for another government bailout.
Mark. My. Words. "
Ryan H. wrote on May 6, 2009 4:17 PM:
They want to celebrate and claim sucess? Fine. First, payback the government and show me the books. Show me the debt to income ratio.
You know why they don't talk about that? Because they are broke and doomed to fail. "
Valley Local wrote on May 6, 2009 4:16 PM:
brvak wrote on May 6, 2009 3:22 PM:
jp wrote on May 6, 2009 2:36 PM:
Ryan H. wrote on May 6, 2009 2:30 PM:
BWAHAHAHA!!!
Wrong again Karen!
If that really were the case, then why did Mat Maid fail in the first place?
All you have 'shown' is that no matter how ridiculous and fool-hardy an endevor is proven to be, with enough political stroke and enough cash from the taxpayer via flim-flam loans through government, any bankrupt industry and failed business model can keep limping along! "
jp to valley local wrote on May 6, 2009 12:50 PM:
i remember years ago buying soft serve ice cream off the king of the road ice cream trucks, that used to be in anchorage. the ice cream from the milk up here does taste better than the import stuff, and i'll gladly pay more for better quality anyday.
Does the import milk even come from cows? "
Valley local wrote on May 6, 2009 11:40 AM:
Don't you mean wipe Milk off your face. In reality just making it a year means nothing. Competition is to hard. Production expensive and employee wages will drain the company. Bottom line they are only here because of grans and loans. When those dry up so will the milk. Do the math. 1600 gallons a day at $5 is $8000 not enough to sustain any sort of profitability. "
juliet delaney wrote on May 6, 2009 11:02 AM:
Yes it is good wrote on May 6, 2009 9:19 AM:
Ryan H. wrote on May 6, 2009 7:50 AM:
Why don't you 'focus' on paying off your fraudulent loans from the State Of Alaska?
Every dollar you people siphon off from the state is a dollar you take away from doing something useful, like fixing pot holes and paying teachers. "
Ryan H. wrote on May 6, 2009 7:47 AM:
BWAHAHAHA!!!
The real reason is unlimited government welfare via sweetheart, fraudulent loans. See, croney capitalists like Kristan Cole in in position to dole out hundereds of thousands of dollars to make this dog hunt.
It might not be this month or even this year, but the math is never wrong. The only way Mat Su Creamery is going to stay in buisness is with occasional cash infusions or 'loans' from the government. Just like GM, Chrysler and the banks!!! "
Jennifer wrote on May 5, 2009 10:43 PM:
Ryan H. wrote on May 5, 2009 8:14 PM:
Anyone want to bet on how long it is going to be before they run weeping back to Cole and Havimeister for another bailout?
Mat-Maid eventually went bust, so will this outfit.
In the meantime, thank Uncle Sugar&Auntie Palin for the bailout... er, ice cream! "
TOO MUCH wrote on May 5, 2009 7:38 PM:
jp wrote on May 5, 2009 5:17 PM:
Buy Alaskan wrote on May 5, 2009 12:33 PM:
Andy Fields wrote on May 5, 2009 10:16 AM:
So with that I want to say to all in the Alaska dairy industry, THANKS FOR STICKING IT OUT!! You could have made hamburger and housing tracts, but you stuck it out at huge expense so you are . . . my heroes! "
Virginia wrote on May 5, 2009 8:43 AM:
TTOSBT wrote on May 5, 2009 7:42 AM:
Sarah wrote on May 5, 2009 7:04 AM:
laura wrote on May 5, 2009 6:21 AM:
Bigger Picture wrote on May 4, 2009 10:21 PM:
Lauren wrote on May 4, 2009 7:24 PM:
No filler oil, so it doesn't get greasy when melted in the microwave. I definitely recommend trying this stuff. "