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State lifts milk price limit for last locally owned dairy

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The state Department of Agriculture, bowing to pressure from Meadow Gold Dairies, unanimously approved Tuesday a waiver that reduces the price the processor will pay the last locally owned dairy for producing milk.

Cloverleaf Dairy owner Ed Boteilho Jr. said he was essentially forced by Meadow Gold, the state’s only milk processor, to petition the state to allow the family-run farm to sell their milk at less than the government-imposed minimum price, originally designed to protect local farmers.

Representatives of Meadow Gold, owned by Texas-based Dean Foods, didn’t attend the board meeting but earlier threatened to quit buying milk from local dairies if it had to keep paying the minimum price.

“Under the old minimum milk price regulations, we were growing increasingly concerned that purchasing raw milk from Hawaii’s milk producers was no longer financially viable for our company or the consumers of Hawaii,” said Jamaison Schuler, a Dean Foods spokesman, in an email. “Because of the state of Hawaii’s previous minimum milk price regulations, we estimate that over the past six years alone, Meadow Gold of Hawaii has paid more than $4 million in higher raw milk prices from Hawaii’s dairy farms compared to mainland raw milk prices.”

It’s unclear what, if any, impact the change will have on prices consumers see on store shelves.

“The marketplace dictates the price for a commodity like milk so as supportive as the board of agriculture … would like to be, we can’t force Meadow Gold to buy milk that they don’t want to buy and they’ve stated that they’ll no longer purchase milk at the milk-controlled price,” said Scott Enright, agriculture board chairman. “So if a dairy, in this case Cloverleaf, wants to move forward doing business with Dean Foods Meadow Gold, they need to come to a mutually agreed upon price. We had 40 dairies 30 years ago. We’re down to two. That’s capitalism.”

The move forces Boteilho into a difficult situation having to immediately downsize operations and staff at the business founded in 1962. 

“You just have to keep going down until you can hopefully reach a plateau where you can survive. But a price like this means — and they all know it — there’s no chance I can survive, not in the long run,” Boteilho tearfully told reporters. “It’s been a good run, but this is the end result.” 

Boteilho said he is hoping to run the dairy business until the end of the year and may look to repurpose his farm.

“I may close down the milking part, but I have a lot of animals to raise,” he said.

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