Idaho

Bringing the Economy Home

Idaho Dairy Farmers Struggle to Find Optimism

Courtesy Bettencourt Dairies LLC

Luis Bettencourt working at one of his 11 dairies in southern Idaho

It’s hard to find optimism about the state of Idaho’s dairy industry among the very people who operate farms, milk cows, and try to make a living selling their product.  The Idaho Dairymen’s Association reports there were 569 dairies in the state as of September 30th, 2011. That’s a significant drop from a few years ago when in 2008, 800 dairies were licensed to sell milk.

“I don’t think anyone would want to get into a losing business,” says Sharon Bettencourt. She and her husband Luis own one of the largest dairy operations in Idaho.  They have 60,000 cows spread across 11 facilities.  “At this point, we are trying to hang on to what we do have…there is no room for growth.”

While the number of dairies is on the decline in Idaho, the number of milk cows and the production of things like milk, cheese and cottage cheese are on the rise.  According to a study from Boise State University’s College of Business & Economics which looked at the economic impacts of the dairy industry in Idaho, the number of dairy cows here is up more than 35-percent.

John Brown / Getty Images

In 2008 there were 550,333 dairy cows in Idaho

“The producer has to be better at making more milk,” says Jeff Ackerman who is the dairy operations manager at Bettencourt Dairies.  “Production has grown because economics have gotten harder — we’re producing more milk out of the same number of cows, we have to, to squeak out any margins” says Ackerman.

There are several reasons Idaho dairymen are feeling the pinch.  One deals with the complicated pricing structure of milk and other dairy products.  Cheese and milk function much like other globally traded commodities. Dairymen can’t name their own price based on their costs.  At a time when the price of feeding a dairy cow has nearly doubled, that makes it tough Ackerman says.

Tim Flach / Getty Images

Holstein-Friesian cows being miked in dairy

“The cost of production has more than kept pace with the milk price. It’s outpaced it.  Good quality alfalfa hay cost $150 per ton three years ago. Today it’s as high as $275,” says Ackerman.

Plus, Idaho consumers pay less for a gallon of milk than most places in the U.S.  A gallon of whole milk costs just under $3.00 in Idaho, while the national average is more like $3.70.

For a small dairy, like the one Stacie Ballard and her husband Steve operate in Gooding, Idaho, rising feed prices and stagnant prices paid to farmers meant they needed to diversify.  The Ballard’s have 60 cows and make cheese that is sold at local markets around the northwest.  Plus, they run tours of their dairy and they are trying to make it a destination for school groups and tourists.

“I wanted to teach what I knew about the dairy industry” Ballard says, “we’re looking more at getting into tourism and retail dollars.”

The hang-up for the Ballard’s is financing.  They’ve tried to get a loan for the last three years to expand their dairy tours.  “If I went to the bank in 2007 they would have been falling all over themselves to give me a loan to expand my business” says Ballard, “now, it’s just harder.”

Jeff Ackerman at Bettencourt Dairies says even if a farmer has the capital to expand, he wouldn’t recommend it.  “I wouldn’t get into the business here, not in Idaho”, Ackerman says.  “Milk is too cheap and when you look at the input costs and what the average producer is getting paid.”

Here’s a look at the prices dairy farmers received for all milk in September 2010 and the preliminary numbers from September 2011.  Idaho farmers receive less per 100 pounds of milk (Hundredweight or CWT) than dairy farmers in 22 other states.

State
Sept. 2010
Sept. 2011
% Change
Florida$21.40$26.9025.70%
Virginia$20.50$25.1022.44%
Pennsylvania$19.60$23.6020.41%
Oregon$19.10$23.3021.99%
New York$18.60$23.1024.19%
Vermont$19.20$23.1020.31%
Missouri$17.90$23.0028.49%
Ohio$19.20$22.9019.27%
Michigan$18.10$22.6024.86%
Texas$18.40$22.5022.28%
Indiana$18.50$22.0018.92%
Illinois$18.70$21.8016.58%
Iowa$18.10$21.8020.44%
Kansas$18.60$21.8017.20%
Colorado$17.70$21.5021.47%
Arizona$17.00$21.4025.88%
Washington$17.40$21.2021.84%
Minnesota$18.20$21.0015.38%
Utah$17.40$21.0020.69%
New Mexico$17.00$21.0023.53%
Wisconsin$17.80$20.9017.42%
California$16.35$18.5013.15%
Idaho$16.50$17.506.06%

Source: U.S. Department of Agriculture

Comments

  • William Marcus

    If it’s a global trade issue, why can one state dairyman get a 25% increase while Idaho dairymen get 6%?

    • Emilie Ritter Saunders

      William, the way I understand it, the milk/dairy pricing system is based on 4 classes, each class has a different value. Additionally, farmers and processors in most states operate under federal milk marketing orders or FMMOs….According to the USDA, most Idaho processors don’t operate under these FMMOs which has added to the pricing differences across milk producing states.

      “Federal milk marketing orders (FMMOs) require regulated milk processors, called handlers, to pay minimum prices for milk and adhere to other specified rules. FMMOs are authorized under the Agricultural Marketing Agreement Act of 1937, as amended. There are 10 federal milk marketing orders, affecting about 60 percent of all milk marketed in the U.S. California’s state order, which operates much like federal orders, accounts for another 20 percent. The rest is priced under other state orders or is not subject to FMMO regulation (primarily Grade B milk). According to the USDA, the three major objectives of FMMOs are to: (1) assure consumers of an adequate supply of wholesome milk at a reasonable price; (2) promote greater producer price stability and orderly marketing; and (3) provide adequate producer prices to ensure an adequate current and future Grade A milk supply.” – Food and Agriculture Policy Research Institute

      This question of pricing is something we’ll be tackling in future stories.

  • Anonymous

    From having grown up in a rural area where there were many dairy farmers, albeit hardly on the scale of Mr. Betencourt’s operation, I am aware that few occupations require more hard work and effort. I do have to question the logic of producing fluid milk, a bulky product, on a mass scale, in a state such as Idaho where the population is small and the markets are distant. And since Idaho is not a center of grain production, especially corn, they seem to be at a competitive disadvantage in terms of feed costs.

  • Moynihan85

    Hang in the dairy farmers of Idaho! We love you, your cows, Idaho, and milk!!
    -Mary Kay. Milk lover. Boise, Idaho.

  • carlos pereira
About StateImpact

StateImpact seeks to inform and engage local communities with broadcast and online news focused on how state government decisions affect your lives.
Learn More »

Economy
Education