New Valley dairy: planning measured growth to survive.

• Author: White, Rindi
• Position: ENTREPRENEURS

Dairying in Alaska has not been a walk in the park for the past several years. Dairy farms have closed due to illness and lack of funds, the state closed its long-running creamery, another creamery venture opened and recently closed, and meanwhile the price of milk in the store hasn't changed a lot.

What's a dairy farmer to do when the cows are making milk and there's no dairy to buy it?

Havemeister Dairy Farm, the Valley's largest dairy, decided to tackle the issue head-on and open its own milk bottling plant. Since Thanksgiving, Havemeister Dairy milk has been on the shelves in Three Bears, Fred Meyer, New Sagaya, Cubby's Market-place near Talkeetna and Steve's Food Boy in Big Lake.

Most Alaskans drink milk from Outside dairies. Freshness is the primary argument in favor of local milk--Havemeister Dairy milk is milked one day and on store shelves the next. Compare that with Outside milk, which is frequently eight or nine days old by the time it reaches Alaska.

Although previously dairies in the Valley have survived with state or federal assistance, Havemeister Dairy operator Ty Havemeister says he and his family are doing this one on their own.

"It's all privately funded," he says. "I don't have someone to go back to if this doesn't work out. I'm fine with that--that's reality."

If it succeeds, it will do so because there's a market for local milk. If the market isn't there, he says, then maybe dairies shouldn't operate here.

Valley Dairies have a Checkered Past

The state's largest dairy, Matanuska Maid, got its start in 1936, not long after colonists arrived in Palmer as part of a federal resettlement program. The company went bankrupt in 1986 and, in an effort to keep the dairies supplying the creamery running, the state stepped in to run the company. It continued operating until 2007, although it struggled financially. Under then-Gov. Sarah Palin, the state Creamery Board made the decision to pull the plug, cutting about 50 jobs at two plants and sending dairy farmers into a tailspin.

From that catastrophe, Matanuska Creamery emerged in 2008. With an infusion of federal and private funding, the new dairy venture began taking milk four months after Matanuska Maid closed. And although things looked good for a while, the new dairy had financial problems too, falling behind in payments to the state and on payments to farmers for their milk.

"Out of three dairy farms, there was over a million dollars of raw milk that was never paid for,"...