Mat
Maid News & Press
Matanuska Maid Dairy To Shut Down Operations
ANCHORAGE, ALASKA - JUNE 6, 2007 - Longtime Alaskan dairy processor,
Matanuska Maid will shut down its dairy processing operations on
July 7th, 2007. The decision to close came at a meeting of
the Board of Directors on June 6th, 2007 in Anchorage.
Matanuska Maid has struggled this past winter with sharp increases
in the cost of
supply, energy, and security. Since the beginning of this year, the
Board has
weighed many options presented by management to sustain the dairy
and
Southcentral Alaska’s dairy farmers who depend on Matanuska
Maid to market
their milk.
Owned by the State of Alaska since 1985, the dairy has operated independent
of
State subsidy or any other financial assistance. Although profitable
during that
time, the dairy has never had sufficient capital to invest in a new
modern facility
and invest in new equipment and products that maintain its competitive
position.
It also faces an inability to pay for newly mandated federal security
costs.
Operational costs this past winter exacerbated the financial situation
and the
board asked for assistance from the State shareholder, the Board
of Agriculture
and Conservation (BAC).
At the request of the BAC, and the Department of Natural Resources
(DNR), the
legislature appropriated $600,000 this past session for the dairy
to explore
management options and help to cover expenses, or to prepare to end
operations.
This appropriation is part of the State of Alaska capital budget
still awaiting the
Governor’s signature. In the interim, the administration of
DNR authored a letter
stipulating how the funds would be dispensed. The Matanuska Maid
board
unanimously voted to reject the terms of the letter, at its June
6th meeting.
Margins
and profits have declined the past two years, while market share
and
revenue for the dairy have also eroded due to high volume and
low-price
competition mounted by major supermarket chains.
Joe Van Treeck, President of Matanuska Maid Dairy stated that
he will assist the
board to provide an orderly and ‘dignified’ shutdown
of the dairy, if that is their
choice. He spent the last two days informing the employees, suppliers,
and
customers to let them know of the shutdown plans.
He said, “I appreciate the dedication of every one of our
employees, both those
working with us now, and the many retirees that have helped us
grow.” He also
emphasized that the board, in upholding its fiduciary responsibility
to shutdown
now, was necessary in order to be able to satisfy the company’s
creditor and other
obligations.
Matanuska Maid Dairy has enjoyed a major market share in the railbelt
of Alaska,
due to the loyalty of many Alaskans – now three generations – that
have
supported Alaskan processed dairy products made at the Mat Maid
Plant.
The closure of Mat Maid in Alaska mirrors similar conditions throughout
the entire
United States dairy industry, and most recently this month the
shutdown of
Hawaii’s two of the three remaining dairy producers, leaving
that state dependent
on imported mainland dairy products in the future.
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