The Hawaii County Council unanimously agreed Wednesday to ask the state Board of Agriculture to deny a local dairy the ability to sell milk at a lower wholesale price.
Council members said allowing Big Island Dairy to get a waiver to sell milk below the legal price to processor Meadow Gold could start a chain reaction, forcing other dairies out of business and ending with a milk monopoly causing higher prices later. In addition, they said they had no assurance a cheaper wholesale price would be passed down to consumers.
The state Milk Control Act sets milk prices to assure an adequate supply. Currently, there are two large dairies in Hawaii County: Cloverleaf Dairy located in North Kohala and Big Island Dairy located in Ookala, as well as other small or start-up dairies, including Mauna Kea Moo, Naked Cow Dairy and Hawaii Dairy Farms.
The state took testimony last month about the requested waiver in the minimum milk price, $3.06 a gallon for milk processed on the Big Island, and between $2.36 and $2.71 per gallon on Oahu-processed milk — the latter fluctuates depending on the price of California milk.
Big Island Dairy owner Steve Whitesides, who lives in Idaho, told the Tribune-Herald last month his company needs to be competitive with mainland-produced milk, which comprises about 80 percent of the milk consumed in Hawaii.
Whitesides couldn’t be reached for further comment by press time Wednesday. A spokesperson for Dean Foods, Meadow Gold’s corporate parent, didn’t return a telephone message left late Wednesday.
Cloverleaf Dairy owner Ed Boteilho Jr. told the council that he’s just asking for a fair shake. He said the request for the minimum price went to the Board of Agriculture without consultation with, or even notification of, other dairy owners as the administrative rules require.
“The board should give fair treatment to a business that wants to stay in business,” Boteilho said.
The Board of Agriculture has set an Aug. 25 meeting on Oahu where the issue will be discussed, said Kohala Councilwoman Margaret Wille, who sponsored Resolution 481.
“If Big Island Dairy is allowed the waiver they could easily undercut the other dairies on the island, making them vulnerable to going out of business,” Wille said. “What happens when tomorrow comes and everybody’s out of business and their dairy has the leverage to raise the price now that everybody’s gone. … My fear is we could end up getting milk only from the mainland.”
Hamakua Councilwoman Valerie Poindexter agreed. Poindexter likened a monopoly milk producer to the county’s monopoly electric company, Hawaii Electric Light Co.
“I would hate to see Meadow Gold become the new HELCO,” Poindexter said.
Several council members struggled with the issue.
“We’re torn between price-fixing and monopolization,” said Puna Councilman Zendo Kern. “I don’t support price-fixing and I don’t support monopolization.”
Hilo Councilman Dennis Onishi asked the council to postpone the vote until representatives of Big Island Dairy and Meadow Gold could testify.
“I am pro-business,” Onishi said. “I would like to hear from the other company. … To me, it’s like a one-sided discussion.”
South Kona/Ka‘u Councilwoman Brenda Ford said the other companies were free to come to the council meeting to give their side of the story.
“The most important thing you can do for sustainable agriculture, is to protect your milk (supply),” Ford said. “If the other companies don’t want to come here and and answer our questions, then that’s on them.”