Washington Limited By Geography

April 1, 2014 10:01 PM
Washington Limited By Geography

By Shirley Chapman

Despite the volatility of feed cost and milk prices, Washington producers have been slowly, steadily making gains in milk yield per cow.

Historically, Washington has been a leader in milk per cow, says Shannon Neibergs, associate professor and Exten­sion economist in the School of Economic Sciences at Washington State University. In 2013, milk per cow hit 23,820 lb., ranking it fourth among the top dairy states.

The economic downturn, the huge spike in feed cost, and the volatility of milk prices have been a mixed bag for producers across the country. Looking forward, Neibergs says that Washington producers seem to have "constrained optimism" about their future.

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Strengths. The weather tends to be more stable with rainfall helping agriculture on the west side of the state. The central part of the state has well-developed irrigation systems. That makes this state a great climate to grow forages and cows.

Producers here invest in good cow genetics, and they provide excellent cow care. Put genetics, good nutrition and strong management together and you have the recipe to fuel a steady increase in milk production per cow for years to come.

The state’s dairy industry also benefits from a strong land-grant university. Washington State University is committed to dairy research, nutrition and production. The College of Veterinary Medicine is another plus, providing field services, education and a diagnostic lab.

The state recognizes the impact of the dairy industry on the overall economy and is generally supportive. Even though university funding has decreased during the economic downturn, the university has been able to attract competitive funds to continue its dairy research.

Weaknesses. Washington is split down the middle geographically, as the Cascade Mountains run through state. The dairy industry on the western and eastern sides each face different challenges.

On the western slope, the cost and availability of land, plus competition from urban neighbors for that land, make it difficult to expand. Competition from other high-value crops, such as blueberries, is also a factor.

On the eastern slope, land prices are not as high, but public concern, even outcry, over dairy expansion can be great. Both sides face increasing costs to comply with environmental regulations when they expand. Although regulations have not become more restrictive, the cost to comply has increased—especially when updating aging facilities.

Growth does occur. But it is often when one producer exits and another leases the facilities. Now the dairy has two sites. Depending on proximity, this type of expansion can mean additional equipment cost.

Opportunities. Being on the coast, access to ports and the export market is a huge opportunity. There has been discussion about building a new powder plant, but so far it has been only that—talk.

Exports of milk solids now accounts for about 15% of total milk production in the U.S. This has been an area of growth that is expected to continue.

"Anytime you can expand demand, it is good for everybody in the industry," says Neibergs.
If processors can increase their share of the export market, a new plant could become a reality, and that in turn would increase demand for milk produced here.

Some producers have invested in making their own high-quality dairy products and then marketing them directly to consumers. Not all of them are organic.

Threats. Labor availability is a constant issue, and foreign-born labor is part of that equation. Being able to find the workers needed to staff the dairy can be difficult. Cull cow management is a potential threat for the entire industry. Slaughter plant consolidation means an animal’s final trip could be a long one; keeping cull cows in good shape and ambulatory is a challenge. 

Cull cows are an excellent source of hamburger, and they should be marketed as such. A lot of eyes are on the industry on this topic, and the industry must make sure it meets those expectations.

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