Hawaiʻi’s Imperiled Milk Industry Has A Rare Chance To Grow

Six years ago Hawaiʻi Dairy Farms canceled plans to build a dairy on Kauaʻi’s south shore amid fierce backlash from Poʻipū hotels and resorts and environmental activists who contended the cow manure would pollute the sea and air just downwind of beachfront pools.

“No Moo Poo in Maha’ulepu” bumper stickers remain a frequent sight on Kauaʻi roads today.

Now Aloun Farms, a prolific Hawaiʻi vegetable grower, has proposed the first new dairy in Hawaiʻi since that failed project. It would be on 500 acres in West Kauaʻi, a languishing agricultural region far from tourist accommodations that helped shut down the Hawaiʻi Dairy. 

Aloun Farms President and General Manager Alec Sou said his dairy’s proposed site — in a farm-friendly community begging for agricultural investment — should make it more attractive to Kauaʻi residents than the failed plan. The area has roughly 6,000 residents and fewer than 100 hotel rooms.

“The last dairy plan wanted to build upwind of Poʻipū — that’s Kauaʻi’s Waikīkī,” he said. “So the location was bad.”

With just one dairy left in Hawaiʻi after a precipitous decline, the state’s endangered milk industry has a rare opportunity to grow. But getting the industry back on its feet is challenged by high startup costs, the expense of imported feed and the difficulty of finding a site amid stiff land competition and environmental concerns.

Dormant farmland is abundant in West Kauaʻi despite the area’s agricultural roots. Thousands of neglected acres are the leftovers from the collapse of the Kekaha Sugar Company 25 years ago and a more recent exodus of the genetically modified seed companies that had filled the void after the plantation’s closure.

“We’d love to see more farming here but nobody has showed up yet,” said Mike Faye, manager of the Kekaha Agricultural Association, a farmer’s cooperative.

Kaua’i’s vast agricultural acreage is capable of producing far more food than the island’s 74,000 residents require. But access to the statewide market is complicated by the 30 miles of pavement that connect West Kauaʻi’s red dirt fields to Līhuʻe’s Nāwiliwili Harbor, where Young Brothers barges accept perishable freight only two days a week. This costs agricultural growers time, money and wear and tear on their trucks.

“You’ve got to figure out how to get your product from the field in Mana to the Costco store in Honolulu,” Faye said, “and you’ve got to shave every penny to do it.”

Bringing Down Prices

Though the vision for a West Kauaʻi dairy is still in its infancy, the implications should it succeed are impressive. It has the potential to reverse the near-demise of milk production in a state that once boasted 160 dairies. Just one commercial dairy on the Big Island remains.

Hawaiʻi imports more than 90% of its milk, making the food staple vulnerable to price fluctuations. The state ranked 49th in milk production in 2022, ahead of only Alaska, according to the U.S. Department of Agriculture.

The U.S. Bureau of Labor Statistics, which tracks costs for its Consumer Price Index, doesn’t separate out Hawaiʻi milk prices. But the price of an imported half-gallon milk carton on the shelves of an average Kauaʻi grocery store last week ranged from $5.29 to $8.99. In Honolulu, typical grocery store prices for a milk carton spanned from $4.99 to $7.29.

The West Kauaʻi dairy project aims to produce milk at $3 to $4 per carton, according to Sou.

Aloun Farms is lobbying the state Legislature for taxpayer bonds to fund the dairy’s design, construction and maintenance, arguing that reviving commercial milk production on Kauaʻi is in the public interest.

It’s not only a matter of cost savings: Local milk is fresher. Sou says it also has better flavor.

“It’s kind of embarrassing,” Sou said. “Our milk tastes shitty.”

The faltering statewide dairy industry also stands to benefit. Sou said he envisions a half-dozen dairies across the islands, including two on Kauaʻi, two or three on the Big Island and one on Maui. Oʻahu, he said, doesn’t have enough land or water availability to support a dairy resurgence in part due to land competition with housing and renewable energy projects.

The Aloun Farms project needs capital. With 600 head of cattle, it would cost roughly $6 million to establish the Kauaʻi operation Sou envisions, which, like the abandoned Hawaiʻi Dairy Farm venture, is modeled after New Zealand’s largely sustainable, grass-fed method of dairy farming.

Landowner approval is equally crucial. Aloun Farms wants to site its dairy on roughly a quarter of the 2,000 acres it leases from Gay & Robinson. Another 1,000 acres would go toward grass feed production.

Keith Yap, chief financial officer and treasurer of Gay & Robinson, said the land management company’s owners Bruce and Keith Robinson care about whether the West Kauaʻi community will embrace the project, so a dairy on their land requires broad support from residents.

“We have not said, ‘No,’ to them,” Yap said. “But quite frankly, it hasn’t got any legs yet.”

From Cabbage To Cows

Aloun Farms, one of Hawaii’s most prolific producers of Chinese cabbage, green beans, pumpkin and sweet corn, made a name for itself in Central Oʻahu in the 1990s as a local food producer focused on edging out vegetable imports. It arrived in West Kauaʻi in early 2022 and has quickly become one of the region’s biggest players.

Most of the vegetables harvested by Aloun Farms on Kauaʻi must be shipped to the much larger Honolulu market. Despite the added transportation costs and expense of staffing, the family farm company says its Kauaʻi venture pencils out.

West Kauaʻi has the abundant sun, expansive fields and laid-back rhythms of a farm town. Aloun started with 300 acres on Kauaʻi and now has 2,500 acres, as well as a 3,000-acre Oʻahu footprint. Last year the company acquired Kauaʻi Shrimp, further establishing itself as a major food producer on the Garden Island.

Developing a dairy alongside its shrimp and vegetable ventures could create 300 jobs and generate $5 million annually but Sou said state loans are crucial for developing infrastructure.

Kauaʻi Mayor Derek Kawakami, who grew up working at his family-owned grocery chain Big Save until the business was bought out in 2011, said in a prepared statement that he broadly supports improving food production on Kauaʻi but he has not yet seen any plans for a West Kauaʻi dairy.

Environmental Challenges To Dairies

Many eco-activists view cows as an environmental disaster. Environmental groups played a role in the litigation against Hawaiʻi Dairy Farms’ proposed Kauaʻi operation in 2015 and the shutdown of the 35-year-old Big Island Dairy in 2019. The state’s last dairy on the Big Island is also under fire for allegedly violating environmental law.

As pricey as an imported carton of milk has become, Gordon LaBedz, an environmentalist and retired family physician who lives in West Kauaʻi, said the cost of a local dairy to the natural landscape is even more profound — manure runoff into streams and ocean waters, increased climate impacts due to greenhouse gasses, and cows’ belching contributing to methane emissions

“There’s all these people trying to say you can have sustainable dairy farming and that’s a real bugaboo for me,” LaBedz said. “It’s impossible. Cows gotta go.”

In addition a federal lawsuit by the advocacy group Friends of Mahaʻulepu alleging the Hawaiʻi Dairy group violated the federal Clean Water Act, the failed dairy project was also sued by The Grand Hyatt Kauai Resort & Spa in nearby Poʻipū to force an environmental assessment.

Ulupono Initiative, Hawaiʻi Dairy Farm’s parent company, was founded by Pierre and Pam Omidyar, who also also founded and support Honolulu Civil Beat. Ulupono Fund, the initiative’s grant-making arm, is a funder of Civil Beat’s agricultural coverage.

Hawaiʻi Dairy Farms’ retreat was a blow to efforts by politicians and farm industry leaders working to reverse the state’s precarious reliance on food imports. Dairy farmers and large-scale agriculture in Hawaiʻi have frequently contended with environmental compliance and community pushback.

The last commercial dairy farm in the state is Cloverleaf, a farm with 450 head of cattle in Hāwī on the Big Island that produces a million gallons of milk a year, roughly a tenth of the market demand.

The dairy has been accused of knowingly polluting the ocean with animal and milk waste, a claim detailed in a legal threat by the California-based Center for Food Safety. A letter of intent to sue the dairy last year says the operation breached the Clean Water Act and could be causing a public health threat.

Cloverleaf owner Bahman Sadeghi, who also owns Meadow Gold, said he disagrees with many of the nonprofit’s claims but said he is “working toward an amicable resolution.” Agriculture, he said, must embrace efforts to protect the natural world if a revival of Hawaiʻi’s dairy industry is going to be a success.

“They’re not competing objectives,” Sadeghi said. “(Dairies) have to pay attention to this aspect — to be a good neighbor, to be a good steward of land, water and livestock. We just can’t have an industry that is robbing our future to benefit today.”

Bridget Hammerquist, president of the nonprofit Friends of Maha’ulepu, said she could potentially support a Kauaʻi dairy that doesn’t pollute streams, oceans and groundwater. She doesn’t know enough about the proposed West Kauaʻi dairy, she said, to take a position.

“Hawaiʻi Grown” is funded in part by grants from Ulupono Fund at the Hawaiʻi Community Foundation and the Frost Family Foundation.