After for more than 50 years in business, St. Croix’s Island Dairies will be shutting down Dec. 15 and laying off 25 employees, according to company president David Schuster.
Schuster, who is president of St. Croix Dairy Products, doing business as Island Dairies, said that the decision hasn’t been an easy one. Over the last few years, basic operating costs have increased significantly, sales have declined, and he can no longer afford to compete with the lower-priced imported products in the territory. This has forced Schuster to make the tough decision to end the 52-year ride.
“Raw materials have doubled in the last few years, my electricity bill is $22,000 a month, and water is $3,000; it’s unfortunate, but it’s just the way things work out,” Schuster said.
Island Dairies currently has 25 employees, who will be compensated one week’s pay for each year they worked, but Schuster is hopeful that the government will step in and purchase the facility, which would offset some of those costs.
“We have a 16,000-square-foot building and it’s commercially zoned in the heaviest commercially trafficked area on the island in Sion Farm,” Schuster said. “The government might want to put it to good use—it would help us in meeting our obligation to pay our employees.”
Schuster even had some ideas for the government, “The Department of Education could use the facility as a warehouse for the school lunch program or the Department of Agriculture could use it as a co-op marketing facility.”
“Whatever they want to do, they would be getting it at very reasonable costs,” he said.
Island Dairies opened its doors in 1959, and in 1981 St. Croix Dairy Products took over operations with a group of local shareholders, but then things started to spiral downhill at the start of the millennium.
“In 1981 we started out aggressive, and things were great for awhile. Over the last 10 years, but especially in the last few, things began to decline. The government changed, the economy changed, and we ultimately changed because we couldn’t afford to keep up,” Schuster said.
A major downfall occurred in 2005, when the government failed to assist Island Dairies in obtaining a certified Grade-A label on its milk, which would have allowed them to sell to cruise ships. Previously, in 2003, St. Thomas Dairies had lost its contract to sell milk to cruise ships because it wasn’t certified.
Then in 2006 the company suffered again when it stopped its milking operations and shut down its dairy farms due to high operating costs. While it saved money temporarily, Schuster said that the exorbitant operating costs continued to push the business into decline.
Schuster is sad that he has to let his employees go, but he’s also worried about himself and said that he doesn’t know what he’s going to do with his life now.
“I’m 58 years old, I don’t have Social Security or Medicare—I’ve got two kids in college, I’m going to have to get a job. I can’t afford to retire,” Schuster said.
