Mesa dairy farmer needs feed costs to drop

MESA -- There is not much profit for dairy farmers to cream off a gallon of milk these days.

Wholesale milk prices are up from a year ago, but so are feed costs. A lot more.

The margin hasn't been enough to ensure a good year for small dairy operators such as Travis and Sasha Thomasson of the Double T Dairy in Mesa.

"What we need are for feed prices to come down," said Thomasson, 38, who supports a family of six and 800 cows as a dairyman. "I hate to say this, but one farmer has to lose so I can gain, and we are both farmers."

Dairy farmers averaged just more than $21 per hundredweight of milk product last year, which was about $4 higher than in 2010, when most operators were close to breaking even.

Thomasson said feed costs this year could be the difference, because what dairy farmers receive has little to do with the cost to consumers. Retailers set their own milk prices.

The Washington State Dairy Products Commission reports that USDA figures show the price of corn -- a major feed source for dairy cows and used to produce ethanol -- climbed more than 60 percent in less than a year. That included a steep increase in July that lasted all summer.

Thomasson took over the dairy a decade ago from an older brother, but there is concern about the future of Double T Dairy. Unless the margin between feed costs and the wholesale milk prices improves, it will mean three consecutive years of slim profits.

Thomasson grows corn and other silage as feed on part of his land, but silage only accounts for 30 percent of what his cows need.

Rather than go to feed brokers, Thomasson deals directly with his neighbors for feed. But if the price of feed goes down, allowing him to profit more, it will hurt his neighboring crop farmers.

"Our feed suppliers would rather get a few dollars more, and I want to pay a few dollars less," he said.

Case VanderMeulen, owner/operator of the Coulee Flats Dairy in Mesa, has resorted to recycling to boost his profit margin.

All well water pumped on the 3,300-acre spread has multiple uses. First, it cools the milk after coming from the cows. Then, the water is stored for livestock to drink and to cool the animals during the summer.

Even the excrement from 4,200 cows goes back into the land -- either as crop fertilizer or added to the irrigation.

"Dairy farmers are master recyclers," VanderMeulen said.

Thomasson understands the milk business, having grown up on the family dairy in Enumclaw.

"We had pasture there, and when it rained, we had feed," he said, noting that Eastern Washington's arid landscape has less to offer his cows.

"I don't think people really understand how much work it is, 365 days a year," Thomasson said, adding, "We take a lot of pride in what we do."

Ten years ago, it was just Thomasson, his wife Sasha, and 170 cows.

"Our goal was to have enough cows to hire a worker so we could have a honeymoon," he said.

Now, three boys under the age of 8 and a 2-year-old girl complete the family and the dairy herd stands at 800 cows. Half are milk cows, and 400 heifers serve as replacement stock.

The recession signaled troubles for Washington dairy farmers. They still are trying to recover from 2009 when milk profits sank suddenly.

The state dairy products commission reported 2008 as a record milk year, at just more than $1 billion.

The next year saw a 30 percent drop in milk value. It improved in 2010, up to $950 million. But the trend to recovery went flat last year, and it may not improve soon.

Experts are telling the dairy products commission to brace for lower prices in 2012 for dairy farmers because of increased supply. That's despite an expected slight reduction in cow numbers.

And while corn and soybean meal prices have gone down, they remain high by historic levels. International milk production is expected to increase, applying more pressure on U.S. dairy exports.

Double T Dairy and Coulee Flats Dairy are part of the state's second-largest agriculture commodity industry. Statewide, milk products are second only to apples in annual product value.

Most dairies, representing almost 250,000 animals, are family owned. And according to the dairy products commission, 28 of the state's 39 counties have dairies.

-- John Trumbo: 509-582-1529; jtrumbo@tricityherald.com

This story was originally published January 31, 2012 at 12:00 AM with the headline "Mesa dairy farmer needs feed costs to drop."