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New Federal Rule to Hit Edaleen Dairy: Farm Too Large for Revised Exemption

Bellingham, WA
January, 14, 2006

By John Stark, The Bellingham Herald, Bellingham, WA

Jan. 14--After more than two years of deliberations, the U.S. Department of Agriculture is ready to impose changes to federal milk marketing rules that pose a threat to the survival of Whatcom County's Edaleen Dairy.

"We are going to do our best to survive it, but the future is very unsure for us," said Duane Brandsma, general manager of the 70-employee family business founded by his parents, Ed and Aileen Brandsma, 30 years ago.

The dairy, at 9593 Guide Meridian north of Lynden, is the only one in Whatcom County that processes, packages and sells its own milk and other products from its herd of about 2,700 cows. Until now, Edaleen and a handful of other similar Northwest producer-processors were exempt from provisions of the federal milk price support system that benefits most milk producers by stabilizing prices and supplies.

But the new federal rule removes the exemption for producer-processors that produce more than 3 million pounds of milk per month. Edaleen produces 6 million.

That leaves Edaleen with two painful alternatives:

* Cut production in half, from the current 6 million pounds of milk per month to 3 million. That would put Edaleen under the size limit that the new federal rule would impose for milk producer-processors who want to stay out of the price control system.

* Move into the federal milk price system and begin paying about $100,000 per month into that system - an amount that is meant to eliminate the difference between what Edaleen gets by marketing its own milk, and the price that other dairies get under the federal system.

"Right now we are trying to weigh those two options out, and find the lesser of two evils," Brandsma said. "Either one is hard to do. Your business is built on a certain amount of volume to pay your bank payments and everything."

Cutting back on production might mean going below the volume level the business needs to survive, while paying more than a million dollars a year into the system would force Edaleen to raise prices or slash its profit margins.

"The market's really tight," Brandsma said. "I'm sure we're going to try to pass on a little bit of it, but I know there's no way we can pass it all on and keep our customers. "

The new rule won't become final until dairy farmers across the Northwest vote their approval, but Brandsma said the vote is just a formality. Edaleen is one of just four Northwest dairies that will be hurt by the new rule. Other dairy operators welcome the USDA move because they believe it will ensure retention of a system that helps smaller dairies survive.

Bill Anderson, vice president for legal and public affairs at WestFarm Foods, said the end of the exemption for Edaleen and similar dairies is expected to raise income to the average western Washington dairy about $322 a month.

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