Milk runs dry

MAT-SU — Fans of locally produced milk might have noticed bare cooler shelves at local retailers that carry Matanuska Creamery products recently.

The supply shortage is not lost on the creamery.

“We just don’t have enough cows in this state anymore,” said creamery president Karen Olson.

For some time the number of dairies in Alaska supplying the creamery’s milk stood at four. Last winter the number dropped to three.

Those three dairies, Olson said, are reluctant to expand their operations.

“When Matanuska Maid Closed in the end of 2007 it basically meant that the farmers had to dump a lot of milk, a great deal of milk before we could get going and they’ve really never recovered from that,” she said. “They’re not about to go out and get more cows right now.”

She said the creamery is making moves to get some cows into a vacant barn in the Point MacKenzie area and hopefully boost supplies that way.

Olson takes a long view when describing how milk supply has gotten to this point.

“There used to be like 32 million pounds of local milk produced just in the Valley like 20 some years ago but then it just started under state ownership farmers just started dropping off and the people who were left never had to worry about when they’d produce milk or how much because Matanuska Maid’s response to not having enough local milk was to get more in from the Lower 48,” she said.

The rate of milk production at Matanuska Creamery is below 1,400 gallons per day. At 8.6 pounds per gallon, that’s 4.4 million pounds per year, and precipitous drop, from its heyday in the ’80s.

The creamery’s break-even point is well above that 1,400 gallon-per-day level. Indeed, the goal was to be at 2,000 gallons per day by now, Olson said.

She said that while supply might be tight now, in the summer, when school is out and the creamery isn’t diverting a large percentage of its milk to fulfill its contract with the Mat-Su Borough School District, the creamery will likely have excess milk.

“If you have too much, then you’re in trouble, which happens once in awhile in the summertime to us and then you have to make it up in cheese which you don’t sell right off.

She said customers have asked her why the creamery doesn’t back out of its school contract. But the contract is something the creamery can count on, a steady customer not as fickle as the market. Plus, she said, backing out of the contract would likely put the creamery in a tough position if it ever wanted to get that contract back.

The school contract, she said, tells her that the stores must be selling imported milk at a loss.

“We underbid the outside milk by quite a bit, which tells me that when milk up here has to stand alone, on its own contract, its own freight and all that we can compete,” she said.

A solution a lot of milk producers in the Lower-48 use to sort of even out the dips and peaks in supply is to just not buy as much milk at slow times.

Alaska, Olson said, wouldn’t really work that way.

“If we starting being that business-like they’d all go out of business,” Olson said. “If we don’t buy the milk when it’s available then they just won’t be here at all.”

No farms mean no cows and no cows mean no creamery. It wouldn’t exactly be a smart business decision, she said.

Olson said she knows there’s a market here for the milk. The creamery just needs to get enough of it to meet that demand. The creamery is trying to get more people into farming, she said.

“We’re trying to reorganize but the first thing we have to do before anything is we have to get supply stabilized,” Olson said. “It’s sad because there’s so many people who really support local farming and local products and so on, but you can only sell what there is.”