Investing in Hawaii milk

LIHUE — Ulupono Initiative, the same investment company backing Hawaii Dairy Farms’ proposed dairy in Mahaulepu Valley on Kauai’s south side, has its sights on purchasing the last locally owned and operated large-scale dairy in the state.

Ed Boteilho, whose family has owned Big Island’s Cloverleaf Dairy since 1962, says Ulupono, which is financed by eBay founder Pierre Omidyar, has signed an agreement of sale and is going through 90 days of due diligence to acquire the facility.

“You’re looking at the last dairy standing,” Boteilho told Hawaii News Now in an interview last week.

Cloverleaf is a 900-acre dairy in Hawaii, Big Island and has approximately 700 cows. In comparison, Hawaii Dairy Farms’ plan initially calls for 699 dairy cows on 578 acres. Eventually, that number could reach as high as 2,000.

Ulupono General Manager Kyle Datta said the company’s interest in purchasing Cloverleaf — as well as its interest in opening a dairy on Kauai — is about fulfilling its mission of improving and increasing the local food supply.

“Ulupono cares about the health of our children statewide, and our families, and we feel it’s important to have fresh, local milk,” he said.

Once complete, the Kauai facility would more than double statewide local milk production, from 9 to 20 percent, according to HDF’s website.

The potential sale of Cloverleaf comes as another operation, Big Island Dairy, an Idaho-based company, received state approval last week to charge milk processor Meadow Gold less money for milk than what regulators previously allowed. Meadow Gold threatened to stop buying milk from Hawaii dairies if it couldn’t get relief from the minimum prices.

Hawaii Dairy Farms’ plan on Kauai calls for shipping milk off island for processing before being distributed around the state. None of the milk would be shipped out of state.

Meadow Gold is currently the state’s only processor.

Asked whether Meadow Gold’s recent demand for relief could have an impact on HDF’s operation, Datta said Ulupono feels it is important that the processor offer contracts to all producers, and that his company is confident it can compete.

“Our dairy is designed with the sustainable, grass-fed approach to be competitive with imports,” he said.

Jerry Ornellas, a Kauai farmer and member of the state Board of Agriculture, said it would be hard to see Hawaii lose its last locally owned dairy on the Big Island. Having been one of Kauai’s last dairy farmers himself, he said he can relate to what’s happening.

At some point, however, Ornellas said Hawaii — and Kauai — are going to have to stop talking about becoming food self-sufficient and actually do it.

“Unfortunately, the people advocating for small farms are (also) the ones advocating for rigid environmental controls,” he said. “It’s kind of a catch 22.”

Ornellas said he believes Ulupono has shown it has public interest in mind.

“It’s a tough one,” he said. “And I wish that the solution involved a lot of smaller operations, but I don’t think that’s realistic.”

Datta said there are few investors that really care about local food production. Ulupono is one of them and hopes to contribute to rebuilding agriculture in Hawaii, he said.

“We’re a community, the state is a community, and everybody has to pitch in, he said of agriculture.

“If we lose touch with ag, and we just go with golf courses, we lose touch with our roots,” he added.

Last month, HDF was awarded building permits for its proposed $17.5 million, 578-acre dairy in the Mahaulepu Valley and agreed to conduct a voluntary Environmental Impact Statement in response to public outcry over potential environmental impacts.

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