Money is “screaming tight” for organic dairy farmers in the Skagit Valley as they confront declining dairy prices and higher costs.
MOUNT VERNON — Just off Cook Road east of Interstate 5 sits an unused 80-acre plot of land with the outline of a 49,000-square-foot building drawn in gravel.
The plot was meant to become a state-of-the-art expansion for the Dykstra organic dairy farm, complete with an automated milking system.
“Now it’s a big, expensive parking lot,” said third-generation dairy farmer Charlie Dykstra.
The construction was put on hold indefinitely after the price of organic milk tanked during the past year and a half, Dykstra said.
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The Dykstra farm isn’t the only organic dairy farm struggling.
“You won’t see a single dairy doing anything crazy right now,” said Dykstra, who manages the farm with his father and brother.
Conventional dairy farms have been struggling for years. Until recently, Dykstra said, it seemed organic dairy farms were somewhat shielded from the volatility of the conventional market.
Now, organic dairies are struggling alongside conventional dairies, further adding to the impact on the local agriculture economy.
As of 2014, there were 29 dairy farms operating in Skagit County, down from 52 in the beginning of 2003, according to statistics compiled by the Washington State University Skagit County Extension.
Five of those are organic, according to the U.S. Department of Agriculture.
Mount Vernon organic dairy farmer Alan Mesman said the price he’s getting for milk from processors has been dropping about a dollar a month for about the past year and a half.
“We went from the mid 30s down the high 20s,” Mesman said, referring to the price per 100 pounds of milk (slightly less than 12 gallons). “Things got really bad last spring.”
But in stores, consumers don’t see the price change, Dykstra said, as the shelf price for organic milk has hardly moved.
Organic dairy farmers attribute the price drop to a surplus of organic milk being produced as more dairy farmers have entered the organic market and consumer preferences have changed.
“It’s such a small market that it doesn’t take much to oversupply it,” said Bow organic dairy farmer Dean Wesen.
Even with a largely robotic milking operation, Mesman said he’s had to lay off two part-time employees because of the drop in the price he can get for milk.
“We’re screaming tight on money,” he said.
In addition to being affected by the surplus of organic milk, organic dairy farmers are also being hurt by the low price of conventional milk. And while milk prices are going down, Mesman said the price of the grain that is fed to the cows is going up.
Jay Gordon, policy director for the Washington State Dairy Federation, said he believes the organic dairy market will level out. It gained traction in the 1990s and early 2000s, Gordon said, and now it’s settling into the patterns seen in more mature markets.
Gordon said much of the price in the state is based on what will be paid by Organic Valley, a cooperative to which all the organic dairy farms in Skagit County sell their milk.
“But even Organic Valley — significant as it is — doesn’t exist in a bubble,” Gordon said.
Organic Valley Vice President of Farmer Affairs Travis Forgues said four years ago the co-op didn’t have enough organic milk, so they invited conventional producers to go organic.
“Last year, many of those farms came into organic,” Forgues said in an email. “So suddenly we had a big increase in the supply across the industry. That’s what we’re dealing with mainly.”
For now, Charlie Dykstra said all organic dairies can do is hunker down and wait out the price drop.
It’s a familiar tune for Andrew Dykstra, who started working on the family farm when he was in the second grade.
“There’s been hard times before,” he said. “And here we are.”
Dairy farms play an essential role in Skagit Valley agriculture, Andrew Dykstra said, and a threat to the dairy farms could affect crop farmers.
Without organic dairy farms and their need for organic feed, Charlie Dykstra said local organic crop farmers would lose a nutrient-rich crop rotation.
Dairy farms add nutrients to the ground, Gordon said, which is good for both organic and conventional crop production.
“The dairies are supporting the grains, which support operations like the Bread Lab and (Cairnspring Mills), which in turn supports the dairies by using their land to grow grains,” Gordon said.
Despite the tough times, Andrew Dykstra said there’s hope for the industry.
Organic Valley has been able to sell more milk at an organic premium rather than having to sell excess product at conventional price.
And Forgues said that as millennials start having children, he expects the demand for organic dairy products to increase.
“Many millennials grew up with organic and will want their kids to have the same quality dairy, produced by family farms in their region.”
Charlie Dykstra said the coming year will be a defining time for the organic dairy industry.
“2018 is going to be the year that will tell,” he said. “Only the strongest will be able to survive the current milk prices.”