HILO — For at least a decade, Hawi dairy farmer Ed Boteilho has pushed the state for incentives to help keep local dairies alive.
Quotas and price controls make it impossible for dairy farmers to pass along their increases in feed, transportation, fuel and employee costs in the same way other businesses do, he’s said. Currently, milk is the only commodity in the state under regulatory price controls.
Boteilho was a frequent presence at Board of Agriculture meetings in Honolulu, warning state officials that one more bad move could send him out of the dairy business.
This time, he’s really leaving.
The state Board of Land and Natural Resources in Honolulu on Friday is set to vote on a transfer of Boteilho’s 880-acre land lease to Mauna Kea Moo, a dairy and cheesery that’s operated since 2014 on 1,395 acres of abandoned Hamakua sugar cane land owned by the state.
The lease assignment is valued at $2 million.
Owner Kees Kea’s plans are to eventually produce and sell organic cheese, yogurt and butter from the milk produced.
Boteilho, 72, said Monday he actually hates to leave the business, but his age and a recent heart attack make it essential he start taking it easy. His mother, Josephine, now 90, is the main shareholder and wants to put her estate in order for her children.
“It’s just time,” Boteilho said.
The Boteilho family has owned and operated Cloverleaf Dairy for 53 years. Boteilho, who will continue living at his 30-acre homestead adjacent to the property, plans a smooth transition for himself, his herd of almost 700 milk cows and his 13 employees.
“I’ll be around,” he said. “It will be a slow transition.”
Mauna Kea Moo representatives did not return phone messages Monday or Tuesday.
“Mr. Kea’s plans are to eventually produce and sell organic cheese, yogurt and butter from the milk produced,” a report by Land Agency Wesley Matsunaga said. “In the meantime, Mr. Kea intends to continue the dairy operations of (Boteilho’s dairy), to meet the milk quota he inherited/bought.”
Matsunaga is recommending the lease transfer proceed.
Boteilho had previously tried to work a deal with Ulupono, an investment company financed by billionaire eBay founder and Hawaii resident Pierre Omidyar, to sell his farm. That deal fell through.
Last year, the dairy was forced to take a 23 percent cut in the price Meadow Gold Dairy paid for wholesale milk. Meadow Gold, the state’s only processor, says that under previous minimum milk price regulations, it was growing increasingly concerned that purchasing raw milk from Hawaii’s producers was no longer financially viable.
The local dairies can’t compete with mainland prices, even though their milk is much fresher. Cloverleaf Dairy’s milk is sold under the Mountain Apple brand at local KTA grocery stores.
“I believe in the quality of our milk,” Boteilho said. “”I always believed it should be a natural grass-fed milk.”
The assignment of lease includes improvements (two warehouses and five employee dwellings for $576,000), trade fixtures ($276,500), livestock ($1,110,960), and milk quota ($76,000), according to Department of Land and Natural Resources staff.
In addition, Boteilho is seeking $42,764 reimbursement from the state for costs he incurred removing four underground fuel tanks and contaminated soil from the property that were discovered in the course of preparing it for sale.
The tanks were apparently installed and operated by the previous leaseholder, Hawaii Biogenics Ltd., which went bankrupt in 1976.
Four decades ago, there were about 60 dairies in Hawaii. Now, the Big Island has the only dairies in the state, with Cloverleaf, Mauna Kea Moo and Big Island Dairy the only large-scale operations remaining.
