Higher milk and beef prices are two bright spots that have contributed to healthier financial margins across much of the Pacific Northwest.
“The last four to five years have been rough, and many producers are in a precarious position,” says Tami Kerr, executive director of the Oregon Dairy Farmers Association. “Some are starting to heal and need time and funds to pay down debt and make capital investments.”
Rick Naerebout, CEO of the Idaho Dairymen’s Association, agrees that one of the greatest opportunities for dairy producers in his state is to “continue to heal up financially.”
“Idaho dairymen, for the most part, are fairly well situated financially right now,” Naerebout says. “Milk prices pushed above breakeven in 2024, and on top of that, you have beef sales adding roughly 2 dollars per hundredweight to the cash flow. Losses in 2023 and early 2024 are being paid back, and we are starting to see production turn on. When comparing Q4 production for the state, the NASS report is a bit understated for Idaho when comparing them to checkoff assessments.”
Drew Johnson from Santiam Dairy in Turner, Oregon, says it seems “pretty upbeat and optimistic” in his area with high beef prices, decent milk prices and lower feed costs.
“Everyone seems to be pretty sound due to higher milk prices and lower input costs over the last year that have helped people to catch up. It seems like the dairy producers left in the business are the producers who are going to keep going,” Johnson says.
Fellow Oregon dairy producer Brian Christiansen from Meadowood Dairy in Turner adds, “Those with little to no debt are positioned decently because land prices are still high, but feed is reasonable and water is adequate.”
Water availability will help the 2025 growing season in Oregon.
“In one region of Oregon, the reservoirs are full, so producers will be able to grow what they want instead of lower-quality forages. They won’t have to purchase much additional feed,” Kerr says.
Markus Rollinger from Rollinger Family Farms in Sunnyside, Washington, is optimistic, especially about strong milk prices and the new Darigold plant opening in Pasco, Washington, later this year.
“I think if milk prices continue to stay up, it should be a decent year because feed prices have come down in the last 12 months and there really isn’t a reason for them to rebound,” Rollinger says. “I don’t know if there are big opportunities, but some good ones are getting paid more for our milk and if our farms can meet a low carbon threshold. Little things like this can really add up at the end of the year and add to your bottom line.”
Christiansen notes that organic producers in Oregon are doing well for the most part and says there is an opportunity for conventional producers to transition to organic since the market is in need of milk.
One of the greatest concerns for Washington dairy producers – especially those in the Yakima Valley – are environmental activist groups.
“In my region, we have seen a slow decline in dairy farms and cow numbers. This is largely due to environmental lawsuits,” Rollinger says.
Land prices and employee housing affordability were other concerns in Oregon mentioned by Christiansen and Johnson.
Bird flu
Dairies in Washington and Oregon had not been directly impacted by bird flu or highly pathogenic avian influenza (HPAI) H5N1 at the time this article was written.
Kerr is thankful Oregon has not had a positive test for bird flu on a dairy farm. However, a commercial poultry facility in her state tested positive, as have a few backyard flocks.
In Washington, the state veterinarian’s office put proactive measures in place early.
“Our state veterinarian has been strict and safe with regard to limiting or preventing transport of animals from infected states,” says Dan Wood, executive director of the Washington State Dairy Federation (WSDF). “We appreciate her attention to the safety of our dairy farmers in Washington state. We also began a statewide monitoring program before the mandate from the federal government.”
However, Idaho dairies were not so lucky during the 2024 outbreak.
“We saw a drop in production. For some cows, it was just a few pounds of milk per day, and for others a few more than that,” says Nick Luth, milk procurement specialist at Agropur. “Overall, the cows have bounced back and recovered well.”
Naerebout agrees that they “came out the other side just fine” when they managed through the bird flu outbreak in May and June 2024.
“Maybe the Trump administration can find a way to manage the disease that is a bit more logical and work with states better than the outgoing administration did,” Naerebout says.
Dairy processing
New processing facilities in Washington and Idaho are bringing excitement to dairy producers and industry leaders.
“We’ve been waiting a long time for the new Darigold plant in Pasco, Washington, to be completed, and I am excited to see it finally come online,” Johnson says. “Oregon is already a milk deficit state. With more plant capacity coming this year, we should be positioned to be able to have more milk marketing opportunities.”
Processing capacity has been “pretty well maxed out” in Washington, according to Rollinger.
“I think all of us are really excited to see the new Darigold plant start processing milk and to see everyone’s hard work finally start making product,” he says.
In Idaho, the Suntado processing facility opened and other expansion projects are underway or on the horizon.
“The majority of processing increases are coming from dairymen in our state that are vertically integrating, and we expect that trend to continue,” Naerebout says. “We will see some proprietaries expand, but in terms of volume, dairymen reinvesting in their communities to build processing has been the lion’s share of processing growth for over a decade now."
Policy
Labor regulations continue to be a challenge in the Pacific Northwest. Among Kerr’s dairy policy concerns in Oregon is “ag overtime, ag overtime, ag overtime.”
“Oregon is phasing in overtime and was at 55 hours in 2023 and 2024,” she says. “We dropped to 48 hours for 2025 and 2026 and will drop to 40 hours in 2027 unless we can adjust the bill passed during the 2022 legislative session. There have been no winners with the new law, as expected. Employees have had hours cut and their take-home pay has decreased. CAFO bills are also creating uncertainty with the implementation of SB 85 and new requirements for water supply plans.”
Johnson agrees.
“Ag overtime has really started to hurt this year because of the drop to the 48-hour threshold,” Johnson says.
Finding and retaining high-quality employees has been a concern for Johnson and area producers for the last several years, and the labor law has only made this more challenging.
“This is usually everyone’s biggest challenge,” he says. “As far as labor goes, farms are starting to automate more to make things easier for employees and to make their operations more labor-efficient. Lots more sort gates, automatic sprayers, robots, cow monitoring systems and rotary parlors.”
Washington dairy producers are no stranger to this issue, since their agriculture overtime law went into effect in 2021. Dairies in the state had no phase-in time period and the overtime threshold immediately started at 40 hours, while other agricultural industries had three years to phase it in.
“Losing the ag overtime exemption and paying overtime after 40 hours has had a big impact not only on dairy but all of agriculture in Washington,” Rollinger says.
Increased regulations are a key contributor to the decreasing number of dairy farms, Kerr says.
“Over the last 10 years, Oregon went from 240 dairy farms to 140,” she says. “We lost 25 dairies in 2022, and cow numbers held steady for several years but decreased in the last few years. Increasing state regulations have been a significant factor in consolidation, along with the price of milk and feed.”
The Washington state Legislature introduced a bill this year that had many in the dairy and cattle industries concerned.
“Some new legislators have introduced legislation to require annual reporting of GHG emissions from dairies and feedlots,” Wood says. “We are working to let them know that information is already available and that the better approach would be to support GHG reduction projects.”
The EPA is also causing problems for some dairy producers in Washington.
“We are pushing back against the abusive actions by the EPA, as they are trying to regulate farms beyond the authority the EPA has in the existing law,” Wood says. “We have also seen, in the waning days of the Biden administration, the EPA and Department of Justice manipulate data and sue some of our dairy farmers, creating a ‘double jeopardy’ situation for them.”
Additionally, Wood notes that the WSDF is working on funding for greenhouse gas (GHG) reduction projects, including digesters and non-digester technology. There is also routine legislation to extend the life of Animal ID and dairy inspection fees with no increases to the current fees.
On a federal level, trade, tariffs and lack of immigration policy were mentioned by many industry leaders in the Pacific Northwest, including Kerr.
“Growing immigration concerns spiked in early February when a family of four was detained by ICE at an immigration center in Medford. The family had visited the center multiple times and was in the process of establishing residency. The mother and adult son both work on dairy farms,” Kerr says.
Luth echoes their concerns about tariffs.
“There are a lot of questions regarding the new tariffs that have been put in place, ranging from how they are going to affect global trade as a whole and local processors that export products, along with the impacts on Class III and IV prices,” he says.
