Anchorage Daily News

WASILLA -- The Matanuska Maid dairy, the iconic Alaska company with roots in the Matanuska Valley colonist project, will shut down early next month, ending a colorful 71-year history.

It may take with it what's left of the dwindling dairy industry in Alaska.

The state Creamery Board, which oversees operation of the state-owned dairy, citing the dairy's increasing losses voted 4-1 Wednesday to close the plant on July 7. Point MacKenzie dairy farmer Vicki Trytten, the dissenting board member, resigned after the vote.

Trytten said Thursday she was shocked by the board's decision. She said she has no idea what she and her husband, Craig, will do when the dairy closes. Their cows produce about 700 gallons a day, almost all of which is sold to Matanuska Maid.

"I was just absolutely floored," she said. "How do we feed them (cows)? How do we pay our electric bill?"

In a statement released Thursday afternoon, Gov. Sarah Palin expressed dismay at the board decision. She noted the $600,000 state grant given to the dairy recently to keep it afloat at least through December.

"This is so very frustrating and shocking," Palin was quoted as saying." To now see a vote to shut down Mat-Maid without even knowing why we need to right now is perplexing."

Matanuska Maid has yet to provide any of the financial information on request "for quite a while" by the state, according to Palin. She said the state still expects Matanuska Maid to present alternatives to shutting down or to justify an immediate closure.

Meanwhile, the state is reviewing options to help Alaska dairy producers and others affected by the closure, she said.

The closure also affects several other dairy farms, about 50 employees at the two Mat Maid plants and a variety of dependent businesses, from feed suppliers to the state-owned Mt. McKinley meat plant.

Farmers around Point MacKenzie said shutting down the dairy would leave them with no market for thousands of gallons of milk produced daily.

"We'll need to take a big hole and start burying cows," said Bob Havemeister, whose 150 head near Palmer produce about 700 gallons a day.

Havemeister and other farmers said cows don't suddenly stop producing milk. The Northern Lights Dairy in Delta Junction can take only a fraction of the milk produced in Southcentral Alaska, said co-owner Don Lintelman.

Creamery Board chair Mac Carter said the board struggled Wednesday in Anchorage with the decision to close the dairy. But despite a recently awarded $600,000 state grant little hope remained of turning the company's fortunes around, he said.

"We're trying to be prudent. Right now, there is just no light at the end of the tunnel," he said.

Like dairies across the country, state-owned Matanuska Maid struggled with rising costs for everything from fuel to feed. In the past two years, the company lost more than $700,000. Losses continued to mount this year, and faster than expected, Carter said. He cited escalating costs, including shipping and milk prices, and a report by Matanuska Maid CEO Joe Van Treeck recommending shutting down.

Carter would not release the six-page report, saying it contains confidential employee contract information. But board member Rhonda Boyles said Van Treeck reported the prospect of spending $300,000 to replenish inventory at the end of June and possibly having to ask for state funds to cover bills.

She said the company expected losses of $440,000 this year, but by the end of April was already down $686,000.

Carter said the company plants in Anchorage and Palmer will continue to bottle water until the end of August. What happens after that is unclear, he said.

The closure would bring an end to a company that originally started in the 1930s as a farmers' cooperative and at one time gathered milk from dozens of dairies.

The company fell on hard times in the mid-1980s, went bankrupt and was taken over by the state in part to keep Alaska dairies from going under, including several farms at Point MacKenzie that were created as part of a state project to boost the dairy industry.

Farmers say that without Matanuska Maid what's left of Alaska's dairy industry may disappear. Only six commercial dairy farms are left, four in the Matanuska-Susitna Borough and two in Delta Junction that supply the Northern Lights Dairy.

Lintelman, who has run Northern Lights Dairy for nearly three decades, said the Matanuska Maid closing could hurt his business as well. Matanuska Maid supplied sour cream and cottage cheese that Northern Lights bundled together with milk to sell to stores. Those stores might not be interested in just milk alone, he said.

Meanwhile, Matanuska Maid employees will likely lose their jobs.

Terry Clark, a company director who oversees the bottling plant in Palmer, said he told his eight employees about the closure at a plant meeting Thursday morning.

Reaction was mixed, he said. Some wanted to know how they could save the company. Others questioned why the state would step in to help other industries but not the dairy industry.

"Everybody was sad," he said. "We thought this was a pillar of the agriculture community in the state."

Carter said he hopes two dairy projects that recently received federal funding, an ice cream plant and all-Alaska milk plant, may be able to buy some of the milk that goes to Matanuska Maid. The milk plant may open by November; the ice-cream plant may open this summer.

State agriculture officials have yet to decide how to dispose of the company assets, but Carter said the board decided Wednesday to retire the company's logo, which features a young, parka-clad girl.

"I don't think it's right for anyone else to take the logo," he said.

Daily News reporter S.J. Komarnitsky can be reached at skomarnitsky@adn.com or 352-6714.

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