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Dairy farming a bit more complex than in years past

For Washington's dairy farmers, 2011 was neither the best of times (2008) nor the worst of times (2009) but something in between.

Regarded as a recovery year, 2010 offered hope that Yakima Valley dairy farmers would turn the corner in 2011. That didn't quite happen. The price dairy farmers received for their milk was up from 2010. But so were input costs - namely higher feed prices.

"We had a good year," said Tom deVries, a dairy farmer outside of Moxee. "The milk price was strong and feed costs were reasonable, but I suspect margins will shrink in 2012."

The price paid to dairy farmers averaged just a shade over $21 per hundredweight (100 lbs. or 11.6 gallons) in 2011. The previous year, the price hovered between $17 and $18 per hundredweight - generally a break-even price.

The amount paid dairy farmers does not automatically impact the consumer since retailers set their own milk price.

Experts are predicting that prices paid to dairy farmers will be lower in 2012 due to increased supply, even with an expected slight reduction in cow numbers. In addition, international milk production is forecast to increase, exerting additional pressure on U.S. dairy exports.

According to USDA figures, the price of corn, a major feed source for dairy cows and used to produce ethanol, rose more than 60 percent in less than a year. There was a steep increase last July, which didn't ease up until the end of summer.

Prices for other feeds also climbed due to drought and market factors, though not as dramatically as corn.

Dairy farmers like deVries, who grew a portion of their cows' feed, were generally in better shape.

This year he plans to also plant alfalfa and timothy grass on rented land which should allow him to harvest 25-30 percent of the required feed, instead of the 5 percent he was raising previously. To accomplish that requires a prudent use, and reuse, of resources.

"We use our water three times," explained deVries, who serves on the Board of the Washington State Dairy Federation and is vice-president of the Yakima County Dairy Federation.

"Water cools the milk before it goes to our cows for them to drink. What's left over is used to clean the feed lanes and milking parlor. Finally, that water is pumped out of a holding pond to fertilize the fields."

In 2008, the value of milk produced in Washington was just over $1 billion - a record. The following year, thanks to the recession, that dropped to $684 million.

In 2010, the value jumped to $950 million. While that represented a 39 percent year-over-year improvement, it was still more than $50 million below the 2008 level.

To help buffer against the economic rollercoaster, dairy producers have established other revenue sources.

Approximately 5,000 tons of composted manure from the deVries dairy, for example, was sold to neighboring farms last year. Those farmers benefited from lower fertilizer costs. But the dairy's economic impact didn't end there as deVries, who has 45 full-time, locally based employees, buys 80 to 90 percent of his feed from area growers.

In addition, farm services, milking equipment, tractors and irrigation equipment are purchased locally.

The commitment to community goes deeper than business relationships. Last year, deVries and his wife, Heather, supported a fundraiser for Sunnyside's Promise, an organization that mentors troubled youth. Led by area dairy farmers Tony Veiga, Bill Scheenstra and LaVonne Boogerd, the group raised $35,000.

The most high provile activity for deVries in 2011 was appearing in a segment for the PBS program America's Heartland with fellow dairyman and veterinarian, Bill Wavrin.

Seen by an estimated one million people in North America, the segment showed how deVries and Wavrin, in his capacity as a veterinarian, work together to balance feed rations and provide high-quality care for the cows.

"We have a really good program," said deVries. "I think there are a lot of misconceptions about dairy. People need to come out and see first-hand how well we take care of our animals while providing a safe and healthy work environment for our employees."

- The information for this story was provided by Mark Leader of the Washington State Dairy Products Commission

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