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A large but fledgling farm company has made a major move to make Maui a bigger player in local beef production.
Mahi Pono LLC announced that it has acquired majority ownership and control of the beef marketing, processing and distribution cooperative known as Maui Cattle Co. from five ranches on the Valley Isle.
The deal also gives Mahi Pono ownership of a slaughterhouse formerly owned by the co-op, and is linked to an effort by Mahi Pono to expand its own ranching operation on former sugar cane fields in Central Maui.
Financial terms of the deal were not disclosed. However, the five ranches that formed Maui Cattle in 2002 retained a minority interest in the business and brand.
The acquisition, announced Thursday, is described by stakeholders as a move to increase beef production on Maui and reduce Hawaii’s overwhelming dependence on imported beef.
“This new partnership with Mahi Pono is good news for Maui’s ranching industry,” Alex Franco, Maui Cattle president, said in a statement. “It will allow us to continue doing what we have done for generations and hopefully even increase the production and distribution of Maui-grown and -grazed beef.”
About 94% of beef consumed in Hawaii is imported, according to Mahi Pono.
“In addition to growing local produce at our Maui farm, having a consistent supply of locally raised and finished beef will help our island take a step closer to achieving food security,” Shan Tsutsui, Mahi Pono senior vice president of operations, said in a statement.
Hawaii ranches, mainly on Hawaii island, Maui and Kauai, supply only about 6% of beef consumed in the state, partly because it is more economical to send local cattle to the mainland to be fattened up in advance of slaughter.
Maui Cattle was formed to help develop a bigger market for local beef by establishing one brand for several ranches that would foster better consumer recognition and avoid costs for each ranch to do the same thing in competition with one another.
The five ranches that formed the co-op are Haleakala Ranch, Ulupalakua Ranch, Nobriga Ranch, Kaupo Ranch and Hana Ranch.
Haleakala and Ulupalakua ranches are the dominant operations, together accounting for more than 4,000 cattle in recent years and nearly all of the 50,000 acres used among the five ranches.
Mahi Pono was formed in late 2018 by California-
based farm management company Pomona Farming LLC and Canadian pension fund manager Public Sector Pension Investment Board to buy 41,000 acres of mostly fallow Central Maui farmland from local firm Alexander &Baldwin Inc., which ended 146 years of growing sugar cane on the land in 2016.
Mahi Pono paid $262 million for the land and also inherited a few diversified farming operations, including some crops and a fledgling cattle endeavor with about 300 animals owned by Maui Cattle and raised by A&B on grasses and legumes planted in former cane fields. Maui Cattle paid A&B a fee for raising the
animals.
That cattle operation, which A&B named Kulolio Ranch, has grown under Mahi Pono to 1,400 animals on 5,000 acres today, and is projected to reach 2,000 animals by the end of this year.
Mahi Pono anticipates expanding its ranch onto another 4,000 to 6,000 acres over the next three years.
Under the new arrangement, the five minority ranch partners in Maui Cattle will sell calves to Mahi Pono to be raised on Kulolio Ranch. When these animals mature, Maui Cattle will process them and distribute beef under the Maui Cattle brand.
Currently, Maui Cattle produces more than 10,000 pounds of local beef weekly, which amounts to a little less than 1% of the market. Mahi Pono said it aims to double beef production over the next two to three years by expanding Kulolio Ranch and slaughterhouse cold-storage facilities.
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