Published 9:30 am Thursday, May 29, 2025
Idaho may be best known for potatoes, but its top crop by far is dairy, with production worth nearly $4 billion in 2024, according to the USDA.
While West Coast milk production is shrinking slightly, Idaho continues to rise.
Idaho’s dairy expansion came from a business-friendly climate — the state doesn’t have overtime pay for ag workers, for example — and lower producer costs, said Rick Naerebout, CEO of Idaho Dairymen’s Association.
The state is a great place to grow feed and dairies farm as much forage and grain as possible to keep costs low.
“Your biggest cost as a dairy producer is feed,” Naerebout said.
Experts expected West Coast dairy production to stabilize, despite challenges such as stricter environmental regulations.
“It’s a great place to farm. We just have to make sure we don’t put farms out of business,” said Steve Seppi, executive director of Washington Dairy Commission.
The West Coast dairy industry grew for decades, with California surpassing Wisconsin as the nation’s top milk producer in the mid-1990s.
About 10 years ago, oversupply and other factors led to price drops, business closures, consolidation and production declines, industry insiders said.
Starting in the late 1990s and early 2000s, many dairy farmers moved to Idaho from Pacific states.
Traditional row crop farmers seeking stability and better returns also entered the industry, Naerebout said.
The number of milk cows in Idaho more than tripled in the past 30 years.
The Reynolds family were row croppers near Kuna, Idaho when they purchased a neighboring dairy at a bank auction.
“For the big dairymen, it was way too old, way too little,” said patriarch Dave Reynolds, who initially had no intention of dairying.
But his son Tyler Reynolds took dairy classes at the University of Idaho. In 2012, he convinced his father to enter the industry and diversify the farm.
Now R 7 Dairy has more than 700 cows.
“It’s become over half of our business, and if you include the byproduct beef calves off of it, it’s stronger than that,” Tyler Reynolds said.
He’s hoping to expand, but the creamery R 7 ships to hasn’t committed.
Scaling up creates efficiencies and the family sees other dairies getting bigger through consolidation, some with the help of out-of-state financial backing.
Anja Raudabaugh, CEO of Western United Dairies, a trade organization representing 75% of California milk production, said consolidation trends began in earnest about a decade ago following a milk price spike and subsequent crash.
Farmers who would have normally invested in their dairies began selling out due to age and business challenges, she added, in an email.
Other farms expanded to become more efficient and survive.
Seppi said consolidation hit quicker in more expensive coastal states like Washington.
He added many farms moved to areas with lower costs and less regulatory burden. Some dairies folded after continued pressure from environmental agencies.
Twenty years ago, the Skagit Valley had 80 dairy farms.
Now there are 10 and that figure will likely decrease soon, said Jason Vander Kooy. He and his brother Eric Vander Kooy own Harmony Dairy near Mount Vernon, Wash., and milk 1,400 cows.
“The next generation, they see the parents struggling, so they’re not going to continue with farming,” he said.
“It’s just a constant battle,” he said. “We have to compete with states like Idaho and South Dakota, where they have much lower costs, and we all get paid the same price.”
Vander Kooy added that local farmers are locked into selling milk to Darigold, but the cooperative has stumbled.
Darigold announced this spring that it would slash milk payments for farmers by approximately 20% to 25% to finance cost overruns at a massive new processing plant under construction in Pasco, Wash.
Other options for dairy farmers are limited, Vander Kooy said. “It’s either we go organic, go on our own or close the doors.”
He has a son and nephews who could take over the farm one day.
“We can trace back dairy farming in our family before Christopher Columbus in Europe. I don’t want to be the last generation, so we’re going to make a go of it,” Vander Kooy said.
Tami Kerr, executive director of Oregon Dairy Farmers Association, said the state’s milk production per cow runs lower because it’s geared toward components, not volume.
Most Oregon milk becomes value-added products such as Tillamook cheese.
Brothers Robert and Stewart Kircher said they’re part of a premium niche with organic dairy.
“It seems to be growing. We’re getting asked to produce more milk,” Robert Kircher said.
The Kirchers are partners in Forest Glen Oaks and Forest Glen Jerseys, two dairies with a combined 2,200 cows near Dayton, Ore.
Their milk goes into products such as yogurt for Nancy’s Probiotic Foods and A2 milk, which many lactose intolerant people can drink, that is sold in Costco.
Despite specialty production, the Kirchers’ dairies aren’t immune from typical industry pressures.
“The last 10 years have been pretty tough,” Robert Kircher said. “We’re getting near to what we were seeing pricewise in 2014. But 10 years ago, all your costs were a lot lower.”
Kerr said Oregon has lost about 100 dairy farms in the past decade and only 140 remain.
The brothers said selling calves to the beef industry has created a strong revenue stream for dairy farmers.
“The impact on the beef market is huge from dairies,” Stewart Kircher said.
With high beef prices, dairy farmers are breeding only enough heifers to replace their own stock.
More beef-on-dairy calves are being produced than heifers, and milk supply is likely to stay tight for the near future, Raudabaugh said.
The Kircher brothers expected a milk deficit in the Northwest because of farm closures, the beef-on-dairy trend and other factors.
According to CoBank, the U.S. cattle herd continues to shrink from the lowest inventory since 1951, and roughly 20% of the nation’s beef supply comes from the dairy industry.
Cow characteristics dairy farmers don’t want to return to their herds go to beef, and dairies have used genetics to produce better quality animals for feedlots in the past decade, experts said.
“We don’t get quite the same rate of gain on a dairy-beef cross, but the quality of meat is sometimes superior to a purebred Angus,” Naerebout said.
Advancements in genetics, nutrition and technology have played a major role in boosting milk production and quality.
In the past 50 years, the number of U.S. milk cows has decreased by about 2 million but dairy production has nearly doubled, according to USDA data.
Selective breeding with artificial insemination has become the norm.
“Every generation of animal that comes in is better at converting feed to milk,” Naerebout said.
Feed is optimized for goals such as animal longevity and whether the final product is liquid milk or other products.
Ruminant collars track how much cows are eating and other health factors.
Cows often are kept in climate controlled barns to make them comfortable and healthy, increasing yield.
Just 10 years ago, many farmers were skeptical of rotary milking parlors, but those machines have increased production.
Experts anticipate the dairy industry will continue to lean on science and technology to gain efficiencies and deal with a shrinking labor force.
Positive signs for the dairy industry include stable prices and increased consumption for most categories, experts said.
California’s production dipped in 2024 due to highly pathogenic avian influenza, but is on track to rebound to 2023 levels, Raudabaugh said.
Milk consumption is rising because consumers are gravitating toward minimally processed foods, whole ingredients and nutritional value, insiders said. Sales of plant-based alternatives are down so far in 2025.
“The dairy category from a consumer perspective is performing really strong,” Seppi said. “Looking forward to 2030, projections are still positive for dairy production in the U.S.,” he said, adding he expected slight growth.
Idaho ranked No. 4 for milk production in the U.S. in 2024 with about 7.5% of national output — Texas edged past it for third place.
Naerebout was confident Idaho would overtake Texas again.
The Lone Star State is naturally constrained by water availability, while Idaho has managed its resources to allow for additional agricultural expansion, Naerebout said.
“A decade from now, I see our industry still growing,” he added.
U.S.
Production — 225.9 billion pounds (down 2%)
Milk per cow — 24,178 pounds (up slightly)
Dairy cows — 9.34 million (down slightly)
Milk value — $50.9 billion (up 11%)
California
Production — 40.3 billion pounds (down 1.5%)
Percent of national production — 18%
Milk per cow — 23,585 pounds (down 1.2%)
Dairy cows — 1.71 million (down slightly)
Milk value — $8.6 billion (up 6%)
Idaho
Production — 17 billion pounds (up 1.2%)
Percent of national production — 7.5%
Milk per cow — 25,375 pounds (up slightly)
Dairy cows — 671,000 (up slightly)
Milk value — $3.9 billion (up 12%)
Washington
Production — 6.3 billion pounds (up slightly)
Percent of national production — 2.8%
Milk per cow — 24,125 pounds (up slightly)
Dairy cows — 259,000 (up slightly)
Milk value — $1.5 billion (up 10%)
Oregon
Production — 2.5 billion pounds (down 4%)
Percent of national production — 1.1%
Milk per cow — 20,950 pounds (up slightly)
Dairy cows — 117,000 (down 4%)
Milk value — $596 million (down slightly)
Source: USDA National Agricultural Statistics Service
