Water, labor, taxes challenge Idaho’s dairy growth
SUN VALLEY, Idaho – Growth in Idaho’s dairy industry has been nothing short of phenomenal, with milk production growing 522 percent, fueling a 633 percent growth in cheese production between 1998 and 2008, according to a study by economists at Boise State University.
That growth has slowed, and several factors are now challenging further expansion in the industry.
Those issues and impediments were the focus of a panel discussion at the Milk Processors of Idaho annual conference in Sun Valley late last week.
Water availability, access to immigrant labor and needed restructuring of tax incentives and financing topped the panel’s list of barriers to additional growth.
Idaho’s milk production in 1998, at 5.8 billion pounds, more than doubled by 2008 to 12.3 billion pounds. Growth has continued but at a slower pace, with dairymen producing 13.4 billion pounds of milk last year, according to USDA.
Scott Bedke, speaker of the Idaho House of Representatives, said water is a major issue as evidenced by a water call this year that would have fallowed hundreds of thousands of acres in Southern Idaho.
The state dodged a bullet this year with the mitigation of that call, but “the issue hangs over our head every year,” he said.
Water calls by fish producers in the Hagerman Valley who need first run spring water will continue and curtailments will kick in unless the ag community comes together to fix the problem, he said.
Recharging the aquifer is part of the solution, but the more immediate issue is reallocating water and “replumbing” the Valley. There’s plenty of water there, and the problem can be solved, bringing the ag community some certainty. But people are going to have to put aside their personal interests and work as a community, he said.
They should also keep in mind that a lot of institutional knowledge regarding water issues in the state Legislature is on the way out, he said.
Water is both a positive and a negative for dairy industry growth in Idaho, said Brent Olmstead, president of Milk Producers of Idaho, executive director of Idaho Milk Producers Association and state coordinator of Idaho Business Coalition for Immigration reform.
Water in Idaho is still cheap, although there are moratoriums on new ground water development. Additional possible moratoriums and incremental, partial curtailments demand consideration of the long-term health of the aquifer, he said.
Feed is also a concern with the loss of farmland to urbanization, increasing transportation costs and competition from ethanol, but labor is the biggest issue, he said.
“You can have water and feed and it makes no difference,” if you don’t have the labor to operate dairies, he said.
There are no visas to bring in year-round workers for animal agriculture, Immigration policy in the U.S. is broken, and Congress refuses to fix it, he said.
Idaho’s dairy counties are near full employment, and the only way to get more workers is through foreign labor, he said.
Other issues challenging dairy growth include transportation infrastructure; processing infrastructure, including wastewater capacity, training, workplace development and capital investments; tax incentives for businesses; investments in economic development; and export trade barriers, the panelist said.
They added that other than the funding challenges for aging roads and bridges, which could require tolls to resolve, strong efforts are being made to address most of the challenges.