While problems remain, Darigold CEO sees strong growth potential
By MITCH LIES
SALEM -- A top dairy executive says the future of the dairy industry is bright -- with one exception.
"Unfortunately, it is going to be very difficult for the family farms to be sustainable," said Harold Strunk, CEO of Tillamook County Creamery Association.
The creamery association is a cooperative of 110 dairy farm families, including many small dairies.
"Given the input costs, and where that continues to go, along with the energy costs, it is putting a lot of pressure on those family farms," Strunk said. "I think you are going to see more and more consolidation to the larger operations that have a better economy of scale to compete."
Strunk spoke as part of a panel of chief executive officers during the Oregon Dairy Industries annual conference, April 4 in Salem.
Jim Wegner, CEO of Darigold, also spoke about the volatility of milk prices and the impact on dairy farmers.
"There are times when producers are able to make a healthy profit, and there are times when they are losing money," Wegner said.
"We just came out of a period of 2008 and 2009 where it was a devastating time for producers, and we are going back into a time like that right now," Wegner said.
The volatility, he said, "has caused a lot of chaos in the health of our producers."
But Wegner painted a bright future for the dairy industry, and, in particular, the Northwest industry.
"In Oregon and Washington, we live in the ideal spot for milk production," Wegner said.
Oregon and Washington dairy farmers are "perfectly situated" to access growing global demand brought on by increased population, he said.
"New Zealand does not have the land mass to supply that additional growth," Wegner said. "China does not have the water nor the land mass to do it. And ... the United States now is where the opportunity is to supply world markets."
One key to taking advantage of export opportunities, Wegner said, is adapting products to fit foreign markets.
"(Foreign buyers) get a little bit frustrated when U.S. suppliers come over there and lay out the products they have and say, 'This is what we have. How much do you want to buy?'" Wegner said.
"What we need to do more of is ask those customers what do they want to meet their needs of that growing population," he said.