You’ve seen the headlines this year and they go something like this: Best advice to U.S. dairy farmers? ‘Sell out as fast as you can’ – NBC News. More recently The Washington Post wrote: ‘Diary farming is dying. After 40 years, I’m done’. Even Industry magazines are talking about having a sale as soon as possible or at least to examine liabilities and transitioning into “something entirely different”. In Washington State we have 38% of the dairy farms that we had in 1997. Is this the end of the small dairy farm in Whatcom County?
No. Washington is still 10th in total milk production among the United States, Whatcom County has the largest number of dairy farms in the state with 123 dairies and over 50,000 cows, Washington was the only state to add new dairy farms (10) in 2012, Washington ranks 4th in milk production per cow in the United States. Dairy farms aren’t going anywhere in Whatcom County, Washington no matter how many articles the Washington Post or NBC News or NPR decides to write about the ill fate of diary farms. However, that doesn’t mean that small diary farms in Whatcom County are thriving in this economic environment either.
Last month I spent a day on a local dairy farm and spoke with a farmer about his herd and his plans. I was astonished at two things, his fortitude and his incredible lack of income. This man has been raising and milking heifers for 30 years and he plans to transfer the farm to his son. But the business is in transition. They are diversifying by farming separate products that make the bulk of the income. They still have their dairy, but they know that’s not where the money is going to come from – at least not for now.
Pricing and oversupply have made dairy farming a struggle in recent years and going organic hasn’t exactly been the boon everyone thought it was going to be with the glut of organic milk on the market. The Trump administration tariff wars with China, Canada and Mexico have also affected milk prices. In some states, small dairy farms are finding it hard to compete when huge Texas farms ship milk into the state and beat out local prices let alone when large local dairies beat out pricing.
Transition planning is important to think about now if you’re looking at aged equipment and not enough funds to develop a larger, self-sustainable farm. Consider other farming opportunities, farm rental or agritainment. Have you considered selling milk or ice cream directly? Today’s farmers must be innovative. That pumpkin patch might just make your October. That Easter hay ride might just make your April. Should none of these options appeal to you, look at alternative work opportunities, keep open the possibility of keeping your hand in the farm through rental, cropping or consulting. Talk to an experienced financial planner, (if you don’t already have one, give us a call, we can give you a few good planners to choose from). Planning now may make the difference between a smooth transition and walking away from the farm.
The best advice is not what NBC News thinks or what the industry experts think or what other farmers think, the best advice is to see the changes coming, evaluate (or develop) your own business plan and how you are going to achieve your goals. If you need help, the Small Business Development Center is ready to help your business take the next steps: https://sbdc.wwu.edu/ Contact them at (360) 778-1762. They have advisers who grew up on farms and are experts in the field. Remember, the first cows came to Washington in 1836. I don’t think they are going anywhere.