I met with my employees today to tell them our big news first, and now let me tell you about it:
We are shutting down the farm. The last bananas will be the ones we are bagging now, which will be ready around the end of March, and then that will be it.
The background, I explained to our workers, is that when we moved the farm here from Kea‘au, we were able to offer a good profit-sharing plan, and one of the best medical and dental plans you could get. It had vision and all kinds of extras.
But after a number of years, we started having a harder and harder time. First we couldn’t keep funding the profit-sharing plan and we had to discontinue that. Then we had to start cutting some of the medical benefits.
Then last year we had to cut wages one time. That was pretty desperate, and we always intended to raise them again, but we were never able to. And now, looking down the road, we see Banana Bunchy Top Disease, which is already in the gulches here nearby.
It’s all related to the price of oil. As the oil price has risen, folks that could pass on the cost did, but farmers cannot. When the oil price dropped recently, the cost of fertilizer, plastic, all sorts of things that have oil petroleum costs embedded in their prices, didn’t come down with it. Those costs stayed up.
The oil price will go back up again, and anticipating that we had to make a decision. It’s not that we’re going bankrupt – we’re not. We just need to do what we need to do before it gets to that point.
We do have an option, as I explained to the workers.
A group that’s applying for a license to grow and distribute medical marijuana is interested in leasing some of our land, as well as the hydroelectric. Although I already knew we were shutting down when they first came to talk with me, I didn’t take it very seriously. But in the last few weeks, it’s become pretty serious.
My main concern is my workers. I told this other group that before I even considered leasing to them I’d need assurance they would give my workers first shot at jobs. They said they would. I also made some conditions regarding security. It’s not a sure thing, but on the outside chance they are granted a medical marijuana license, they will also have to take care of the community, especially in terms of security, so I can ensure that the community feels safe.
They are interested in me participating with their group because they know I know what I’m talking about when it comes to growing things, and about energy. We are talking but we haven’t signed any agreements about any of it yet.
I told my workers today that they can do whatever they need to do. If they want to take a layoff because feel they need to go out right now and start looking for a new job, they can. Or if they want to stay until the end of March, that’s okay too. They all said they will stick it out to the end.
I just heard the Alexander & Baldwin announcement that it’s transitioning out of sugar at its 36,000-acre sugar plantation on Maui. A&B’s Executive Chairman Stanley M. Kuriyama said, “The roughly $30 million agribusiness operating loss we expect to incur in 2015, and the forecast for continued significant losses, clearly are not sustainable, and we must now move forward with a new concept for our lands that allows us to keep them in productive agricultural use.”
“Transition” is the right word for what we’re doing, too. We don’t know exactly what the transition will look like, but we’ll still be around. The land that was in bananas is going to go into corn. A dairy that already leases land from us to grow corn is going to take the rest of that land and plant more.
We’ll see what happens with the rest, whether it’s the medical marijuana group or something else. There are options. Stay tuned.