Got milk? Not enough

MAT-SU — Alaska’s dairy industry can now smile when it says “cheese.”

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.”

That’s a far cry from December 2007, when the longtime state-owned Matanuska Maid creamery closed its doors for good, leaving Alaska’s dairy farmers with nowhere to sell their milk. Matanuska Creamery owners Kyle Beus and Rob Wells had to accelerate their plans, Olson said. The resulting months of construction left dairy farmers hanging on until the creamery was ready to start producing local milk.

“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.”