Can a dairy farm survive in Alaska?

by Greg Booher Ledgeview Dairy Consulting & Journalism

My wife and I had the opportunity of a life time to take the ultimate road trip following my retirement from Lakeshore Technical College in Cleveland, Wisconsin. We traveled from Wisconsin across the prairies of Canada stopping to visit two dairy producers near Red Deer, Alberta who had completed training at Lakeshore Technical College. While touring Alaska, we visited one of the two remaining commercial dairies left in the state. We visited the Bob Havemeister dairy near Palmer in the Matanuska River Valley just north of Anchorage.

The agricultural history of the Matanuska River Valley area goes back to 1935 when the Franklin Roosevelt administration founded The Alaska Rural Rehabilitation Corporation (ARRC). The Matanuska Valley project was not the only rural rehabilitation project under the administration of the Department of Interior and the Federal Emergency Relief Administration. The projects were organized as colonies of families who homesteaded several areas of the country. The other colonies included Cherry Lake Farms, Florida; Dyess Colony, Arkansas; and the Pine Mountain Valley Rural Community, Georgia.

The history of the ARRC is a fascinating story about the federal government’s attempt to alleviate the effects The Great Depression was inflicting on rural America. The Alaskan ARRC colony was organized to help the needy farmers in the “Cut-Over Region” of northern Minnesota, Wisconsin and Michigan. Following the logging of the northern regions of the upper mid-west in the late 1800s and early 1900s, it was believed this territory would become good for farming. The “up-north” regions did not prove to be productive and coupled with The Great Depression the federal government was spurred to try several New Deal Projects for people who did not want a hand out but wanted to work and be selfsufficient American citizens.

ARRC was founded as a nonprofit organization to administer and deliver the program in the Matanuska Valley. The Matanuska Colony was made up of 202 families who were to be relocated from the upper mid-west. The participants in this relocation were allocated a house, 40 acres of land, and the necessary tools and equipment to begin their farming adventure in Alaska.

The federal government provided each applicant with a $3000 loan to enable the colonists to set up their farms and get established. ARRC administered these longterm, low-interest loans and became the entity for managing and operating the agricultural project on behalf of the United States Government. As the loans were repaid, the funds were revolved back to producers and others involved in agricultural pursuits.

The colonists were encouraged when they finally laid eyes on the fertile farm land of the Matanuska Valley. They found the silt loam soils to be productive but shallow, being under lain with sand and gravel, prone to erosion and therefore did not hold much water for plant growth. Temperatures throughout the year are similar to the upper mid-west but the 15.5 inches of rain a year in conjunction with the light textured soils has limited forage yields.

The success of the relocation programs were of moderate success and over time few of the original colonist have survived. Tillable farm land is currently selling between $4000-5000 per acre but is hard to get ahold of.

Bob’s parents came to the Mat-Su Valley as part of the first 200 families in the 1930s. Today, the Havemeister’s 120-cow dairy is the only remaining Colonist era dairy still operating in the Matanuska Valley. Ever since the homesteading days, Bob and his wife Jean, sold their milk to the valley’s cooperative. But in 2012, the cooperative was forced to close their doors and the only milk processor was lost. The closure of the processing plant resulted in several dairies loosing rather large sums of money.

This caused all but two farms to discontinue producing milk. In reality, the cooperative was able to buy milk from the Pacific Northwest for less than what they could afford to pay Mat- Su producers. A study done in 2004, indicated that several issues were plaguing Alaskan produced milk. The challenges include the poor supply and quality of prime dairy forage, the high cost of concentrates, the availability of veterinary services, high cost of farming and milking equipment, along with a reliable milk processor/ distributor.

The study indicated the average Alaskan dairy produced 15,000 pounds of milk per cow per year and received a pay price of $20.95 per hundred for their milk. Their total income per hundred was of $22.04 per hundred pounds of milk when cull cows and bull calf sales were included. On the expense side of the ledger, the total feed cost per hundred pounds of milk was $12.68 with a total cost including depreciation and interest of $19.99. This left a return of $2.05 per hundred or $307.50 per cow per year. Obviously costs have dramatically escalated since 2004 when the study was conducted so the loss of the sole processor was inevitable.

So in 2011, seeing the hand writing on the wall for their cooperative, the Havemeister’s son Ty, left his off-farm employment as a financial advisor to return home to the family dairy. With Ty’s return to the dairy, the plan was to install their own processing plant. Their current dairy facility includes a freestall barn with an inside bunk feeder and an older double 4 harrowing bone milking parlor. Producing enough quality dairy hay is a limiting factor to their milk production. Currently they are selling 2.25 million pounds of Havemeister processed milk to several major grocers.

Havemeister Dairy’s mission is to provide all natural, locally produced milk for Alaskans. Their products include whole milk, 2% and skim milk. They have been successful in getting their products into some of the largest supermarkets in the Anchorage area. This move to on-farm processing and wholesaling their milk has insured they are able to make a reasonable profit and secure their future as a dairy producer/processor.

Ty indicates they now have a stable market for their milk with a great potential for growth. Producers of vegetables, beef and now milk are capitalizing on the “Alaska Grown” movement. The future is bright for the Havemeisters. So bright the family would like to transition to a more up-todate facility for their cows and possibly start a second dairy close to their processing plant. So if you are looking for an adventure on the last frontier, the Havemeister’s may have an opportunity for you as an associate!


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