Dairy farmers banding together in co-op

MAT-SU — The region’s major dairy producers are forming a cooperative aimed at protecting their operations if a state-owned milk processing plant shuts down before a new facility opens.

Milk traditionally purchased by the state-owned Matanuska Maid Dairy could be sold to a new venture in Palmer when that plant goes online next year. With Mat Maid up for sale, dairy farmers are nervous about the possibility the Anchorage dairy plant will close down before a new one can open. The plant sale takes its next step this weekend as the state seeks public comment in Palmer on disposal of Mat Maid’s assets.

What dairy owners do know is that they can’t stop milking their cows if something goes wrong with either venture. Side industries that depend on the care and feeding of dairy cows would also suffer from a market disruption or collapse. The farmers and some processors are getting together to form a non-profit corporation, draft bylaws and figure out what to do with as much excess milk product as possible should the worst happen.

If dairy farmers “had to dump their milk for a month it would be pretty devastating,” said Kyle Beus, a former dairy farmer who now has a rural development grant to make cheese and other products from locally produced milk products. With some advice from the state Division of Agriculture, the Farm Services Bureau and a lot of work by an ad hoc group, Beus said a coalition is working hard on a timeline that boils down to “the sooner the better.”

A planned Palmer milk processing plant owned by Borough Assembly member Rob Wells and funded by a federal rural development grant is part of the overall picture. Beus said cheese and ice cream products could also soak up some of the excess product.

No specifics of the co-op’s structure are available, and organizers say the details are still being designed. Beus said if another new processing facility is to be constructed it would have to go into an existing building, as it’s too late in the season to build on a vacant parcel.

“There’s certainly a sense of urgency,” he said.

Farmers are worried

Dairy farmers have been talking about creating a cooperative for years and were pushed forward by Mat Maid’s impending sale, Beus said. With continuing losses reported against Mat Maid’s operating budget there is an assumption among dairy farmers that someone will cash in on the land and liquidate the facilities. Cows must be fed and maintained or butchered in the absence of a buyer, and no cows means a hit to people who grow barley and other products used in the industry.

“I think a lot of people don’t understand the ramifications of closing Mat Maid,” Wasilla dairy farmer Wayne Brost said. “If the cows go away I don’t think they’re coming back.”

The co-op idea is just beginning, Brost said. “It’s just a group of producers and potential processors who want to keep this industry together.”

Brost praised Dr. Donald McLean, a Wasilla dentist active in many local issues who is spearheading the drive to create a co-op. McLean could not be reached for comment.

The Division of Agriculture is moving forward with a proposed sale of the Mat Maid facility in Anchorage and a plant in Palmer for a target price of $3.35 million. A hearing Saturday is set to determine how to dispose of Mat Maid’s assets at 814 W. Northern Lights Blvd. in Anchorage and its bottling plant. It begins at 9 a.m. at the Division of Agriculture Conference room, located at 1800 Glenn Highway, Suite 12, in Palmer. It will last until 11 a.m. unless more time is needed to accommodate speakers.

Contact John R. Moses at john.moses@frontiersman.com or call him at 352-2270.