By Emily Hamann
The Bellingham Business Journal
It’s not difficult to see the Dutch heritage alive in Lynden. The bakeries, the windmills all pay homage to the Dutch immigrants who settled in Whatcom County at the beginning of the 20th century. Outside of downtown, that heritage is alive and well in the form of family dairy farms.
Dairy is a big part of the county’s history, but as farmers face pressure from increased land costs, lower profits and increased regulation, the role dairy will play in its future is unclear.
Washington as a whole is a major dairy producer — it was the 10th biggest producer of milk in the country, as of 2012, and a Washington State University study found that in 2011 dairy was a $1.3-billion industry in the state.
A USDA report released at the beginning of this year shows that Whatcom County has 98 dairy producers – that’s more than any county in the region, which includes all of Washington, Western Oregon and northern Idaho. According to the USDA, Whatcom County has more dairy producers than the entire state of Arizona.
The farms in Whatcom County tend to be smaller, however. The 64 dairy producers in Yakima County produce almost three times more milk.
Susan Kerr, a regional livestock and dairy specialist at the Washington State University Extension, says that Whatcom County’s dairy industry today can be traced back to the Dutch families who started coming here around 1900.
“It was a family business in their home country where they came from,” she said.
Many of the farms around today are family farms.
One of those is Twin Brook Creamery, which was started in 1910 by Larry Stap’s great-grandfather.
“That’s how a lot of the dairies in the county are, they’re multi-generational,” Stap said.
Twin Brook is a little different in one way – they bottle their milk in reusable glass bottles and sell it directly on store shelves. Only a few other local dairies, including Edaleen Dairy and Fresh Breeze Organic, do this.
Most dairies in the county are members of the Darigold co-op (or the Organic Valley co-op for organic farms). The members add their milk to the co-op, where it’s mixed together and sold under the Darigold brand. Darigold handles the processing and distribution.
“I have to do my own balancing. I have to do my own marketing. I have to do my own quality control,” Stap said. “Things that many dairies take for granted when they shop their milk off to a processor.”
Stap started bottling milk in 2007. His daughter and her husband wanted to join the dairy, and carry on the family farming tradition. Most dairies have to get bigger when this happens, add more cows, to make more profits for the new partners.
Stap wanted to try something else. Instead of making more milk, he wanted to try making his milk worth more.
“What we [found out] through very informal research – just driving around, talking to people – nobody was doing it in glass,” he said.
Stap decided to turn his milk into a niche product: conventional Jersey cow milk sold in glass bottles. (His neighbor Fresh Breeze also sells bottled milk, but it’s certified organic.)
It was a gamble. Especially in 2009, when the price of milk crashed. At that point, Stap was still selling some of his milk into the co-op.
“I was losing money conventionally and I was losing money bottling milk because I didn’t have enough volume yet,” Stap said. “We sucked up a lot of equity for a couple years there. But we eventually turned it around.”
Now that Stap no longer a part of the co-op, he can set his own prices and is sheltered from the roller coaster of monthly milk prices, which can be a good thing or a bad thing.
“We’re shielded from the lows, like right now, but you also miss out on the highs,” Stap said.
The price farmers get paid for their milk is set every month by the USDA.
This evens out the discrepancies that could occur based on geography. Whatcom County dairy farmers are far away from the major market in Seattle, meaning most of their milk gets turned into less perishable products like milk powder. Powder fetches a lower price than plain liquid milk. That means if the USDA didn’t intervene, dairy farmers in this county would make less money than the farmers closer to Seattle.
Instead, every month, the government takes the average price of all dairy products, and bases the farmers’ cut off of that.
That also means that the pay farmers get has little to do with how much it costs them to produce milk.
“The dairy industry has no way to pass on their costs,” Stap said.
Over the past few years, the cost of production has steadily risen, while the price of milk goes up and down.
While Stap is shielded from the price roller coaster, other dairies are not.
Larry DeHaan owns Storm Haaven Farm. He’s a member of the Darigold co-op. Milk prices took a nosedive at the end of 2014, and have been floundering ever since.
“It’s a very cyclical type market,” he said. “We are thinking positively, we are on the upswing currently.”
Over the past three months, prices have slowly been creeping up, but just pennies at a time. According to data compiled by the USDA’s Economic Research Service, last year it cost more to produce milk in Washington than farmers were paid for it.
“We’re friends with our banker,” DeHaan said. “And our banker is well aware of the nature of the dairy business.”
The squeeze is especially tight in the county, and Western Washington in general. Here, land is at a premium. Even the land that’s not being eyed for development is getting scooped up for berry farms.
“International owners are coming in and buying or leasing land for blueberries,” Kerr said. “That was land that was formerly available for dairyman to lease for corn or grain.”
A changing industry
The dairy industry has evolved dramatically over the years.
Through selective breeding, cows have become more efficient. One cow today can produce the milk of five cows in the ‘50’s Kerr said.
The market has changed, too. It has stratified, Kerr said, and producers can decide if they want to target their product for customers who like organic, who like grass fed milk, local milk, or any other preferences.
“I think that’s a very important part to American agriculture now is providing a product for everyone,” Kerr said.
Concern for the welfare of the cows is at an all time high, too.
“Cow comfort is a huge issue, industry-wise, but we’ve been at the forefront of that in Whatcom County,” DeHaan said. That’s because in rainy Western Washington, cows spend so much time indoors their barns must be as comfortable as possible.
“If they’re not comfortable, they don’t give milk,” DeHaan said. “Actually, I think my cows live more comfortably than I do.”
Part of that is due to farmers now paying closer attention to needs of each cow individually. New technology has made that easier than ever, especially new robotic milking machines.
Traditional milking in a milk parlor, like what DeHaan uses, involves workers herding the cows into a big room in groups at a time, several times a day, and manually hooking them up to the milking machines.
It’s a labor intensive process, and it doesn’t allow each cow to get specialized attention.
One year ago, Stap invested in three robotic milkers for his cows.
The robots are present in the barn all the time. When a cow wants to get milked, or when it wants some of the grain in front of the machine, all it has to do is go up to the machine. Automatically, a sensor reads the electronic tag the cow wears around its neck, and pulls up information on when it was last milked and how much milk it gave.
If it’s eligible to be milked again, based on parameters the farmer sets, the laser guided milking machine automatically attaches to the cow’s udders.
For the cows, it’s a much more comfortable, less-stressful process.
“You’re reducing any human stress factors that we induce on cattle,” Kerr said. “Their stress levels go down, and their milk production goes up.”
Traditionally, cows are milked two to three times a day, but depending on the cow, when it last gave birth, how old it is and a number of other factors, it could be able to give milk much more often than that.
Stap says the investment in the robotic machines has been more than worth the $200,000-apiece price tag.
Since he got them, he’s been getting 20 percent more milk, he said. It also eliminated the need for one full-time position. Stap was able to move an employee from milking to the bottling plant.
The electronic tags the cows wear also act as a fitness tracker and health monitor.
If a cow doesn’t give as much milk as usual, if it doesn’t walk around as much, even if there’s a change in the amount of time it spends chewing its cud, the computer knows and the farmers know to give the cow a check up to see if it’s having health problems.
It hasn’t just changed the way they milk at Twin Brook, but it’s totally changed the way they care for the cows.
“We went from a herd mentality to an individual cow mentality on our farm,” Stap said.
Environment and regulations
Here in Western Washington dairy farmers have an extra struggle that their counterparts on the other side of the mountains, and even their berry farmer neighbors don’t have to deal with — scrutiny over water quality.
Here, most dairy farmers like to grow their own grass feed for the cows.
To do that, they collect the cow manure, and store it in lagoons or holding tanks, and then spread it over their fields to fertilize the soil and make the grass grow.
If the manure runs off and ends up in a waterway, that could damage the ecosystem downstream.
Already, dairy farmers must do a lab analysis of their manure, record when and how much manure they apply to their field, and how much they harvest from each field.
They also must get the soil tested to make sure they only applied as much manure as the plants can use, and record the weather report when they apply to prove it didn’t rain immediately afterward.
“There are at least four agencies that take water samples regularly,” Dehaan said. Where Dehaan’s farm is located near the border, he sometimes even has the border patrol to deal with.
“I spend a great portion of my days talking to inspectors,” he said.
New regulations could make the inspections even more cumbersome. Most dairy farms are required to have a concentrated animal feeding operation permit through the state Department of Ecology.
The permit is redrafted every five years. It’s up for a rewrite now, and most dairy farmers aren’t happy about what’s in it.
“If it’s implemented in the way their second draft came out, a lot of dairies would quit,” Stap said.
The final version could be released sometime this month, and could go into effect next year. Stap said many of the rules in the released draft just add layers of regulation with no real benefit.
“They’re not driven by science, they’re driven by emotion,” he said.
One example he gave is the mandate for 100-foot buffer zones at the edge of fields where he could put down any manure.
“I did the calculation,” he said. “If I had that imposed on me, 17 percent of my productive land would go out of production.”
Another regulation would mandate that farmers with leaky manure lagoons make costly additional fixes.
“It would put most farmers out of business,” he said. “None of us could afford something like that.”
It’s already expensive running a dairy farm on this side of the state.
Many farmers either sold out, or packed up and moved elsewhere, Dehaan said.
“The dairy industry is rapidly moving to Eastern Washington and Idaho and New Mexico,” Dehaan said.
He remembers when the county was one of the largest dairy producers in the U.S. Now it’s fallen down in the ranking.
“The dairy industry has kind of been in the tubes for a year, year and a half,” he said. His optimism about the future varies day-to-day, he said.
“I had the option to be a university professor,” he lamented. “I have a master’s and I started on my Ph.D., but I have dairy in my blood.”
He stops lamenting during milking time, though, as he watches his cows head in to the barn from the rolling green fields.
“I think there is a good future for the dairy business in Whatcom County, and it may look different than it does now,” he said, but the bottom line is, “if people love cows, like most dairymen do, we will find a way to keep it an integral part of this community.”