Mat
Maid News & Press
Letter from Chairman of the Board, Matanuska Maid Dairy
to the Palin Administration
June 8th, 2007
Richard LeFebvre, Deputy Commissioner
State of Alaska Department of Natural Resources
550 West 7th Avenue, Suite 1400
Anchorage, Alaska 99501
Mr. LeFebvre,
It is with regret and sincere sorrow that I have to report what
I was trying to
avoid. Mat Maid has reached a point in time, it's life has taken
a direction that was
not the direction I, or the administration, staff, or the Creamery
Corporation Board
ever expected, or wanted.
There are many factors that have changed the dynamics of doing
business
concerning production of milk for consumption. First is the change
in supply, as
the market is tightening and larger producers in the other states
are taking
futures on products leaving us with no outlet to purchase from.
Next is the price of
cultured products, and additional milk that we previously secured
for Mat Maid’s
operations has increased on a monthly biases.
Adding to the stress of added changes that could not be foreseen,
our sales of
milk were hit hard by a change in the WIC program at local stores.
WIC recipients
were told that they had to purchase the cheapest brand available.
Then there was
a change in the grocery chain policy that we were responsible for
stocking our
product, which means additional cost to have someone local in each
area that we
supplied milk products to.
Home Land Security contacted us last year and required a change
in security for
the building that will set the cost around $600,000, obviously
we are not able to
make this kind of change, more added stress.
As early as last fall we were privy to information from the dairy
industry that there
would be a huge jump in costs, by June of this year. If you have
been watching
the news of late, dairies all over the country are closing nationwide
for the same
reasons. We are faced with increasing and changing circumstances
that are
beyond our control. As was stated by former CEO of Dairygold in
Seattle, Wes
Eckert said there is no future for milk in Alaska, the larger producers
in the other
states are consuming all small and medium dairies. Just this week
two of the three
remaining dairies in Hawaii closed and the only dairy left on the
islands will close
by the end of this summer, leaving milk to be shipped form the
mainland.
Because Mat Maid is owned by the state we are unable to secure
financing for
shortfalls within the corporation. in the last 20 years since Mat
Maid turned itself
around we have been working on a thin margin, cash wise. With this
little working
capital we were losing ground in the equipment that produces the
milk. Costs
don't go down but increase with time leaving us the job of making
miracles
happen and depending on the loyal employees to make things continue
to work.
Making the decision to close was not an easy one but one that has
taken time and
the lives of many into account. If we did not close now the projections
for
December would be close to $2.4 million, in the red. This is not
new and has never
been hidden. By April we were at $600M plus, using that as a basis
you can
project the cost and loss by the end of this year. I feel we are
safeguarding the
public interest in the decision that has made. It was announced
at last year’s
annual meeting that Mat Maid needed to be privatized. That is the
message still in
place and nothing since then has changed that position.
Please accept my sincere apology that this has had to happen at
this time for this
Administration to consider.
/s/
Mac Carter Chair
Creamery Corporation Board dba
Matanuska Maid Dairy
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