A socially minded investment organization is moving ahead with plans to establish a new model of dairy farming in Hawaii: a $17.5 million venture on Kauai called Hawai‘i Dairy Farms projected to start milk production in 2015.
The farm would be the biggest dairy in the state and roughly double the supply of local milk, according to Ulupono Initiative, the local investment firm that announced the project Monday.
Ulupono has partnered with a consortium of New Zealand’s top dairies, Dairy SolutioNZ Ltd., as well as local business partners to establish the farm on 582 acres leased from major Kauai landowner Grove Farm Co.
Construction of the dairy is expected to begin next year, and operations will be managed by Jim Garmatz, a dairyman with more than 25 years of experience, Ulupono said.
The investment firm is funding the project after studying how to raise dairy cows in Hawaii primarily on pasture land to avoid the expensive and volatile cost of importing feed from the mainland that contributed to the industry’s decline in recent years.
Kyle Datta, general partner of Ulupono, said the new farm represents an important step toward revitalizing Hawaii’s dairy industry and increasing local food production that is affordable and sustainable.
"We believe this dairy’s success could lead to additional grass‐fed dairies statewide," he said in a statement.
Hawai‘i Dairy Farms plans to use about 1,800 cows and increase local milk production to 20 percent of the market from about 9 percent produced now mainly by two dairies on Hawaii island.
Hawaii’s dairy industry once satisfied 100 percent of statewide milk consumption. But local milk producers suffered blows over the decades that included real estate development pressure forcing operations onto marginal lands, and a debacle in 1982 when tests found milk contaminated by heptachlor passed through cows eating tops of pineapple treated with the pesticide.
Imported milk began flowing in 1985, and since then has poured into Hawaii in greater amounts as local dairies dwindled.
Since 1999 eight Hawaii dairy farms closed under pressure from rising prices to buy and ship feed from the mainland.
Two major dairies on Hawaii island, Cloverleaf Dairy and Island Dairy, each with about 650 to 850 cows in recent years, are all that’s left of the local industry in terms of large-scale operations. They produce milk under Hawaii’s Fresh and Mountain Apple brands.
Ulupono, which is focused on improving renewable energy, waste reduction and local food production, announced its intent in 2011 to create a new model of dairy farming in Hawaii based on grass-fed cows. Ulupono spent two years testing which grass varieties grow best in different parts of the state.
Feeding dairy herds almost exclusively on pasture grasses is well developed in New Zealand, the world’s largest dairy exporter.
Ulupono is establishing the new farm after working with Grove Farm, Kamehameha Schools and Maui Land & Pineapple Co. on the grass tests. The investment firm said in 2011 that it anticipated an initial farm would be on Hawaii island, but a deal with Grove Farm advanced first.
Ulupono seeks to establish more Hawaii dairy farms, including potential ventures with existing milk producers. Returning Hawaii to a 100 percent local milk supply would take about 10,000 cows on as much as 10,000 acres, according to a Dairy SolutioNZ estimate.
