Report: Whatcom dairy farmers should expect further decline in milk prices

Larry DeHaan collects nursing bottles from calf hutches at his family dairy farm north of Lynden Thursday, March 28, 2013.
Larry DeHaan collects nursing bottles from calf hutches at his family dairy farm north of Lynden Thursday, March 28, 2013. The Bellingham Herald

Whatcom County dairy farmers should expect milk prices to decline in the coming years, but not remain so low that it will be a disaster for their budgets.

That’s the forecast from the U.S. Department of Agriculture, which recently released its long-term projections for the production and prices of milk.

After hitting $24.20 for 100 pounds of milk in 2014, the USDA expects the price to drop to $19.30 in 2015 and then stabilize in the coming years, remaining between $18 and $19 through 2023.

The projections cover all classes of milk. Many Whatcom County dairy farmers send milk to the Lynden Darigold plant, which makes powder milk.

For consumers, the retail price of milk as of March 20 nationally is generally down from a year ago, according to the USDA. Some dairy items, including certain types of cheese and yogurt, are up from a year ago, according to its Dairy Market News report.

The drop comes after a year of high wholesale milk prices, which gave dairy farmers a chance to repay debt and upgrade their equipment, said Larry Stap, a Lynden dairy farmer and the owner of Twin Brook Creamery. Stap used to sell some of his milk to Darigold, but now uses all of it for his business.

“Prices are down, but not catastrophic,” he said, adding that local dairy farmers are more concerned about potential regulation changes, such as water management.

Whatcom County farmer Larry DeHaan agreed, adding that the price drop is currently sustainable but might not be long-term. As a result, farmers might cut back on some capital investments and new equipment until prices strengthen again.

One area that concerns DeHaan is that the U.S. has become less competitive as an exporter. One reason is the stronger U.S. dollar, but the recent labor dispute at West Coast ports also is a factor. China has increased its milk supply the past year, leading to lower global prices, but demand will continue to grow there as well as in other Pacific Rim countries.

“Exports are our future,” DeHaan said.

As for the mood about the USDA forecast, DeHaan said having a glass-half-full attitude helps.

“I just love doing this every day,” he said. “Our goal is to enjoy the highs and weather the lows.”