Revised Breaking News Story

As milk prices drop, dairy farmers struggle


Plummeting milk prices could cause dairies to shut their doors, though the dairy in Pullman are staying strong, for now.

The U.S. Department of Agriculture sets the price each month that dairy farmers will get paid for their manufacture-grade milk. With a lower demand, and milk being brought in from Europe, farmers are seeing this number continue to drop.

Knott Dairy, in Pullman, will be less affected than other national dairies, but not by much, said dairy director John Swain. Currently home to around 170 cows, university-owned Knott Dairy produces all the milk that goes to the creamery on campus, to create ice cream and the Cougar Gold cheese that has made the WSU creamery nationally famous.

The Knott Dairy is the only dairy within about 100 miles, said senior animal science and Spanish major Chris Blaschko, who works at the dairy. Also, since the dairy is here at the university, it is used mainly for education and experiments. Therefore it is not as influenced by national prices as much.

John Swain said that many dairies are closing right now as a result of two factors: record high costs of feed and record low prices for milk.

The price of milk has nearly been cut in half in the last few years, as it dropped from $19 to $10 since 2007, said Joe Harrison, a professor in the Livestock Nutrient Management Program and dairy specialist at WSU-Puyallup.

“Milk prices were good last year, so there was high-priced feed,” Swain said. “The prices are starting to come down, but there are a lot of high-price commodities in the inventory.”

In fact, it is estimated that some states are going to see a decline of more than 10 percent in the number of dairies that they have, said WSU extension economist Shannon Neibergs. While no states are protected, those with the most dairies will be the most affected.

“It is a really difficult time right now,” Harrison said.

Swain said that although the dairy business is constantly fluctuating, this is a new low.

“In this business there are peaks and valleys,” he said. “It is about supply and demand. The cow numbers are increasing, but with the economy the demand is down.”

He said that he hopes that none of the cows at Knott Dairy, but that he cannot predict what will happen. If the milk prices continue to drop, the dairy will be affected.

“Cows need to leave somewhere in the nation,” he said. “We hope it is not from us.”

The cows that are no longer being used at dairies will most likely be sent to slaughter, he said.

Knott Dairy itself is split into two parts, said Blaschko said.

One part is the student-run dairy, completely operated by student volunteers, and the other is owned by the university, she said.

Blaschko said that although the impact is not incredibly large for Knott Dairy, for other dairies, it is going to have a large effect.

“It is going to be huge,” Blaschko said. “It is going to be hard on a lot of farmers. They are going to have to be bought out because they can’t make money.”

This will end up having an effect on consumers, Blashko said.

“There will be less dairies producing milk, so the price of milk will go up,” Blaschko said.

While this problem is very clear at farms and dairies, it is not yet showing on supermarket shelves, Swain said. “It could be a while before students feel anything.”

Harrison said that shelf prices are much more static than the prices that farmers get paid.

“Store prices are inelastic; they don’t bounce around like at dairies,” he said. “There is still milk on the shelf for now.”

He also said that if milk prices are down for long term, consumers could see more changes in the price of all dairy products, including milk and cheese.

“These changes are happening, but they are not immediately passed on to the consumer,” said Harrison.