Researchers from the U.S. Department of Agriculture and the University of Hawaii will arrive on Maui this summer to work with Hawaiian Commercial & Sugar Co. to study crops, growing conditions and other issues in developing biofuels on the island.
The 130-year-old plantation is working with federal and state partners to help determine not only its own future, but also the future of growing biofuel crops in Hawaii to power both the U.S. Navy’s Pacific Fleet and private vehicles across the state. The end result could be the development of a biofuel refinery for HC&S, said company General Manager Rick Volner Jr.
The goal is to transition HC&S into a leading “energy farm,” and develop the resources to sell commercial jet and diesel fuels to the government and private consumers.
Success could guarantee that the company would continue to employ around 800 people, and perhaps even more, company officials said.
“There are no firm deadlines for this project, but the sooner we can decide, the easier it will be for the board of Alexander & Baldwin (HC&S’s parent company) to fund some of these products, and obviously we will need to make some capital investments,” Volner said last week. “But we’re more interested in making the right decision than when we make it.”
A brushfire burned about 10 acres of cane field in Paia early this morning, Maui County officials reported.
Firefighters responded to the 1:22 a.m. fire at the Hawaiian Commercial & Sugar Co. site on Baldwin Avenue between Paia Elementary School and Rainbow County Park, Maui County spokesman Rod Antone said.
Plantation workers helped firefighters battle the blaze, which was declared under control by 3:30 a.m., Antone said. The cause of the fire is still under investigation. The fire may have started close to Baldwin Avenue. The cane burned was close to harvest and the company may be able to salvage some of the crop, officials said.
One of Hawaii’s last venerable Big Five companies, Alexander & Baldwin Inc., could be under pressure to break itself up.
A New York hedge fund manager known to agitate for change in his investment targets bought nearly 10 percent of A&B along with a partner, it was announced yesterday. The purchase triggered expectations the 141-year-old kamaaina company will be split into pieces to elevate stock value.
Neither A&B nor the hedge funds would disclose what the intent of the A&B stock purchase — a $168 million deal — might be yesterday.
“We expect to have a constructive dialogue with them as we do with all of our shareholders,” said Suzy Hollinger, A&B’s director of investor relations.
But stock analysts with insights to A&B and people with ties to the 2,300-employee company say the play almost certainly is a breakup of the conglomerate’s three core businesses — ocean cargo transportation, commercial real estate and agriculture.
“Are the parts worth more than the whole? That’s what this comes down to,” said local stock analyst Randy Havre, echoing views of two other analysts who closely follow A&B.
Sugar for March delivery closed at 28.45 cents per pound on Monday — a little off its above-30-cent peak struck last month, but still double its May 2010 low.
And it looks like sugar may have higher to climb.
Global supplies of sugar are projected to lag worldwide demand this year for the third year running. According to a new report by Czarnikow Group, a London-based sugar and biofuel broker, the supply/demand deficit could run as high as 2.8 million metric tons from September 2010 to September 2011.
Of course, when you consider that total supply for 2010/11 is expected to rise to 168.4 million tons from last year’s 157.4 million, that deficit doesn’t seem like a huge gap. And generally, if sugar becomes too expensive to use, end-consumers can just switch to cheaper sweeteners, like corn-based syrups.
Still, one can make the argument that sugar should be higher, especially considering that growing consumption is expected in emerging markets like China, where we’ve yet to hit the limit of their commodity appetite. Plus, over the past few years, we’ve seen drawdowns in world inventories of the sweet stuff, a fact that helped boost prices up to ever-higher highs in 2007/08 and 2008/09.
The supply shortfall springs from poor growing weather we saw earlier this year. Remember that Brazilian bumper crop we talked about back in August? Yeah, not so much. Brazil, the world’s largest producer of sugar, saw sugar cane production declines from a hotter summer than usual, while similar drought conditions stunted Russian beet production and South African cane yields. Meanwhile, in Indonesia and Australia, the sugar cane harvest withered under a deluge of super-wet weather.
Mike Atherton’s employees call him “Coach” for good reason. Since he bought Maui Tropical Plantation in 2006, the affable entrepreneur has been overseeing a comprehensive game plan to re-energize the 26-year-old attraction.
“We’ve painted the buildings, pruned the trees, spruced up the landscaping, basically given the grounds a complete makeover,” Atherton said. “I’m an outdoors, hands-on guy; I get as dirty as my gardeners do, and I love it!”
A native of Stockton, Calif., Atherton comes from a distinguished family. His maternal great-grandfather was Benjamin Holt, founder of the Caterpillar equipment company. His paternal great-grandfather, the Rev. Isaac Warren Atherton, was a missionary in the Hawi-North Kohala area of the Big Island from 1878 to 1880. His paternal grandfather, Warren Atherton, was an attorney, judge and politician who’s best known for authoring the G.I. Bill.
Atherton and two partners have owned and operated Jesus Mountain Coffee Co. in Nicaragua for 30 years. They acquired the Coffees of Hawaii plantation on Molokai in 2002, and Atherton came to Maui three years later, seeking land to start a similar venture there.
“At the time, C. Brewer & Co. was shutting down and selling all its assets, including Maui Tropical Plantation,” Atherton recalled. “The plantation was an agri-tourism attraction that had been open since 1984, so it had a lot of established growth. It also had a big parking lot, a store, a restaurant, dedicated employees and a good reputation. It was perfect; it just needed some tender loving care.”
Armed with enthusiasm and fresh ideas, Atherton and his hui bought the 60-acre plantation and the surrounding 1,940 acres.
The statewide drought appears to be easing as cooler La Nina conditions bring more rain to Hawaii, according to the National Weather Service.
But farmers and ranchers said a protracted amount of rain is needed before they can recover from several years of extremely dry conditions.
Some areas, such as southwestern Kauai and leeward sections of the Big Island and Maui, did not receive significant rainfall in October, continuing extreme drought conditions, National Weather Service officials said Friday.
Late Thursday, thunderstorms along with lightning passed by Hawaii, and most of the anticipated heavy rainfall missed the islands.
The weather service reported 0.15 inches of rain Thursday at Honolulu Airport and 0.6 inches at Lihue Airport but none for airports in Hilo and Kahului.
In October, while many places reported less than normal rainfall, some areas exceeded their normal monthly average, including Haiku on Maui with 5.71 inches — 12 percent above normal — and Honaunau on the Big Island with 5.54 inches of rain, 7 percent above normal.
Last year marked a sixth consecutive year of dramatic growth for Hawaii seed crop producers, according to a recent government estimate, though the industry dominated by seed corn may be nearing maturity.
The Hawaii office of the National Agricultural Statistics Service reported the value of the local seed crop industry rose 26 percent to $223 million in 2009 from $177 million the year before.
The gain further ingrains seeds as Hawaii’s largest crop by value, a spot seeds have held since pineapple was dethroned in 2006, though other crops contribute more to the local food supply and commercial sales.
Industry observers expect the strong pace of expansion, which began five years ago after hovering around $50 million for several years before that, will begin to cool as the industry matures.
Last season’s big jump reflected expansion of operations by some producers after large land acquisitions in recent years that allowed the companies to build up research and farming, according to Fred Perlak, president of the industry’s trade group, the Hawaii Crop Improvement Association.
“I think what you’re seeing here is the maturing of the acquisitions in the last two or three years,” said Perlak, who is also vice president of research and business operations for Monsanto in Hawaii.
In 2008, a report from the University of Hawaii-Manoa and the state Department of Agriculture estimated that between 85 percent and 90 percent of the state’s food was imported every year and concluded that there wasn’t much anyone could do to change the situation.
” … Even though Hawaii can conceivably grow anything that we consume, the quest to achieve 100% food self-sufficiency is impractical, unattainable and perhaps impossible, as it imposes too high a cost for society,” the researchers said.
Hawaii’s relatively small farms could never match the output or efficiency of the vast mechanized farms on the mainland, the report said. Island products would always be more expensive to grow and buy.
Still, the report was more a call to arms than a dark prophecy.
Pointing out that Hawaii’s geographic isolation left its food supply vulnerable to disruptions caused by forces and events beyond control, such as fuel costs, shipping strikes and farm production fluctuations, the report said it was of vital importance that the state not overlook the value of a small but thriving home-grown market.
A healthy agricultural base not only serves as a buffer against outside forces, it provides residents with fresher, tastier, healthier food and could put millions of dollars back into the island economy, the report said.
“I think we are at the crossroads,” says Dr. Matthew Loke, administrator of the state’s Agricultural Development Division and a co-author of the 2008 report with Dr. PingSun Leung of UH-Manoa’s College of Tropical Agriculture and Human Resources. “Whether we can seize those opportunities or not, that’s our challenge.”
Michelle Galimba has been moving her livestock across her 10,000-acre Kuahiwi Ranch to higher elevation in Kau on the Big Island in hopes of finding better pastures during a drought that is causing her business and others hundreds of thousands of dollars in losses.
“It’s pretty severe,” she said. “I’d say half of the pastures on our ranch is unusable or going to be unusable very shortly.
“They’re literally turning to dust. The soil’s drying up and blowing away.”
Galimba said South Point received 1.76 inches of rain from January through mid-July, compared with its usual 12 inches.
The National Weather Service said 2010 is bringing the worst drought on record for ranchers and farmers in some parts of the state, including Kau.
“If they don’t have more rainfall at a higher rate in the second half, it could be the driest year on record,” said Kevin Kodama, senior hydrologist for the National Weather Service in Honolulu.