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Many Washington dairies are struggling after years of trade wars and low milk prices

Paul Roberts, The Seattle Times on

Published in Business News

For fifth-generation dairyman Jeremy Visser, 2014 was a record-breaker. Amid soaring global demand for U.S. milk products, Visser made about $500 on each of the 4,000 cows he was running in Stanwood and four other Western Washington dairy operations.

But a year later, as those sweet trade conditions began to sour, Visser's fortunes also turned. In both 2016 and 2017, milk prices fell so low that Visser lost $100 on each cow. By 2018, the per-cow losses topped $300.

Visser pulled through, in part by mortgaging "everything I owned." But at least 50 dairy farmers he knows have left the business. The last few years "have been tremendously difficult on us," says the 42-year-old father of three.

Visser could be speaking for most of the roughly 350 dairy farmers still in business in Washington, which as recently as 2007 boasted more than 800 dairy farms, according to the U.S. Department of Agriculture.

Dairy is the state's third-most valuable farm product, after apples and wheat, with $1.2 billion in annual sales. But the business has been particularly vulnerable to economic shifts linked to changing consumer tastes, over-production, environmental regulation, and, more recently, global trade politics.

As a result, a sector known for its booms and busts has grown more volatile. That has forced survivors to adopt new strategies, with some shifting to smaller niche markets, while others try to grow their way out of declining incomes.

 

With trade relations still uncertain, and with some farmers struggling to repay loans taken out during the four-year price slump, the state dairy sector faces numerous hurdles, says Shannon Neibergs, an extension economist at Washington State University. Among bankers who lend to farmers, Neibergs says, "the dairy portfolio is recognized as their highest risk."

To be clear, Washington's dairy sector is faring better than big dairy players elsewhere in the U.S.

Wisconsin has lost some 1,600 dairy farmers in the last three years alone, according to the state's department of agriculture.

Many of the nation's big milk processors are also hurting. Dallas-based Dean Foods, the biggest U.S. milk producer, filed for bankruptcy protection in November, and Borden Dairy Co., also in Dallas, followed suit this month.

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