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The Honolulu Advertiser
Posted on: Monday, October 17, 2005

Family operation squeezed out by rising expenses

By Kevin Dayton
Advertiser Big Island Bureau

Junichi Nakamoto and his son, Shan, say their poultry farm will stop operating within a month, but they’ll keep the land in the family and continue the macadamia nut farming they’ve also been doing there.

KEVIN DAYTON | The Honolulu Advertiser

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KEAUHOU, Hawai'i — The cardboard cartons of Kona-Laid Eggs will soon be disappearing from Big Island stores, as one of Hawai'i's few remaining egg farms quietly winds down, ending a seven-decade family tradition.

Junichi Nakamoto, 74, said his brothers and one of his uncles started egg farming in the mid-1930s as a vocational education project at Konawaena School. Eventually, the family operation called Kona Poultry Farm peaked at about 30,000 birds.

When Nakamoto got out of the Army in the early 1950s, he and one of his brothers moved the growing business to a five-acre lot mauka of Mamalahoa Highway at Donkey Mill Road. They built a warehouse and cages, and later bought modern equipment to wash the eggs and distribute feed automatically.

In an effort to improve the farm and help it thrive, the Nakamotos studied similar operations on O'ahu, tried out various automated technologies and branched out into composting and macadamia farming over the years.

Still, huge Mainland competitors produced eggs and delivered them to Hawai'i stores more cheaply than the Nakamotos could, and the pressure prompted the family to scale back, shrinking the number of birds to fewer than 7,000 today.

This year, it fell to Shan Nakamoto, Junichi's 39-year-old son, to tally the costs of shipping, feed, insurance and new equipment, calculate the possibilities, and break the news to the family that it was time to stop egg production.

The elder Nakamoto agreed.

"We could have hung in there some more, but then we might come to the point where we lose everything," he said. "That's why the decision was made to get out while we still can get out and not lose what we have."

Jeri Kahana, manager of the commodities branch of the state Department of Agriculture, said the pressures on Kona Poultry are squeezing livestock operations around the state. There are eight egg farms left in Hawai'i, including Kona Poultry, and poultry farming is a dying industry here, she said.

Hawai'i's higher land prices, feed costs, transportation costs, and strict environmental regulations governing manure disposal are factors, Kahana said.

The relatively small local market is tough on farmers because there is little demand here for hens that are past their prime, or eggs that are below retail market grade, which can serve as another source of profit for farms on the Mainland.

"The only way I think that livestock farmers can stay in business is establish a niche market," she said. "But when you compare eggs, an egg is an egg."

In fact, the Nakamotos did establish a niche market of sorts for their eggs in Kona, where a carton of Mainland eggs might be priced as much as 50 cents a dozen below the Kona-Laid brand. Consumers bought Kona-Laid because they liked the freshness, or because they liked the idea that the eggs were produced locally.

The Nakamotos said they were always grateful for that support.

Junichi Nakamoto's wife was a teacher at Konawaena for many years, and for many years the farm boosted the family income, he said.

Said Nakamoto: "It made a difference for my family ... I had seven children and they were all able to get their education ... That's a plus that we can be thankful for, because people often forget, the children all learn how to work hard and they're all hard workers, and they weren't running around getting into trouble. We never had any problems. Our children were all good children."

Shan Nakamoto returned to work on the farm after graduating from Brigham Young University in 1991, and his brothers, Shane and Shawn, work there as well. But Shan said staying in business was a struggle, particularly during the last five years as the cost of importing feed and buying medical coverage increased rapidly.

"We've hung on for many years because of tradition. It's hard to give up tradition sometimes," he said.

Now, the family plans to sell off most of the birds to folks who want a couple of egg-layers at home, and some of the chickens will be slaughtered for stewing. Egg production will end in the next month, Shan Nakamoto said.

With the economy booming in Kona, he said it's a good time to be looking for other work. The Nakamotos will keep the land and intend to continue macadamia nut farming on the property.

"There's a lot of family history here, and we'd like the opportunity for the cousins and uncles and aunties that we have to have a place where they can still come back to and feel that spirit of the family, and what they used to do here, working together to support the family," Shan Nakamoto said. "That's what this whole place has meant to so many."

Reach Kevin Dayton at kdayton@honoluluadvertiser.com.