Milk price
increase likely
on Big Isle

Dairies say they now don't
make enough to cover
their costs

By Gary T. Kubota
Star-Bulletin

WAILUKU -- Big Island residents may be facing at least a 10-percent increase, or 37-cent per gallon rise, in the price of milk in the near future.

A gallon of whole Mountain Apple milk sells for $3.79 at KTA Super Stores in Hilo.

The state Board of Agriculture yesterday began the process toward increasing minimum milk prices paid to dairies on the Big Island.

The board plans to review proposed amendments to milk pricing in late November, then have a public hearing before making a decision.

Big Island dairies say they haven't had a price increase in seven years and have been barely covering their costs.

Edward Boteilho, president of the Big Island Dairy Cooperative, said milk producers did not seek a price increase with Oahu dairies several years ago, in light of economic hardships caused by the closure of sugar plantations.

"We've been more than fair," Boteilho said.

Ernest Souza, owner of S&S Dairy Inc., said he and his employees have not had a pay increase in the last three years.

Meadow Gold Dairies Inc., which processes the farmers' milk on the Big Island, warned that an increase would widen the price difference between local and mainland milk and reduce Hawaii farmers' share of the market.

Eric Hara, controller for Meadow Gold Dairies, said the price of Safeway milk was from $1 to $1.50 a gallon less than local milk.

Hara said he expects retail prices for milk to increase on the Big Island by at least 10 percent, if not more, if the board approves the request of some farmers.

Big Island dairy officials said they feel there is enough of a demand for local milk because its shelf life is eight days longer than that of mainland milk.

The board went against recommendations from its staff to deny sending the request out for a public hearing, based on a cost production study that showed the more efficient farms on the Big Island have averaged a 3 percent profit for 1998.

"Indications are that 1999 will also show a similar profitability," the staff said.

Big Island farmers said the report included the operations of a farmer who received a grant, and did not represent the actual cost of operations.