The Flathead’s Last Dairy Farms

By Beacon Staff

Click the image above or use the arrows to see more images from the Flathead Valley’s last two dairy farms.

Dairy farming has never been an easy life; there are market vagaries, early morning milking and sometimes-uncooperative cows to contend with. You make a living, but not much of one, which is why dairy farming in the Flathead is nearly a bygone era.

“We don’t call it work; if you enjoy what you’re doing, it’s playing,” said Bill Hedstrom, who with his wife, Marilyn, keeps 150 dairy cows on 80 acres in West Valley just outside the reaches of Kalispell’s north end box stores and development.

But, today, few are interested in playing anymore.

Back when Bill and Marilyn started dairy farming on Highway 93, some 30 years ago, there were about 25 other dairy farms in the valley. Now just one other – run by County Commissioner Joe Brenneman and his father Clifford Brenneman – is still hanging on. The rest have been sold, and in many cases, replaced by subdivisions.

“There’s a lot easier bucks out there,” Marilyn said, which is why when the land boom came here many farmers, seeing no one in line to take over the farm and buildings falling down around them, sold.

“They saw an opportunity to sell their land and retire comfortably,” she said.

Now, a rising tide of red ink caused by a collapse in milk prices is forcing other U.S. dairy farmers out of business – and making work more difficult for the two left here.

Milk prices are down more than 50 percent from last summer after hitting all-time highs in 2007 and notching the second highest prices on record in 2008. In January, milk futures were at a six-year low. Prices were forecasted to drop this year, Joe Brenneman said, but not to these levels or for this long.

“I am getting about what my dad got for milk when I was in college,” Brenneman said, or $10.34 for 100 pounds right now.

Prices are set by the state Milk Control Board, which makes some adjustments to the national rate set by the U.S. Department of Agriculture, which uses cheddar cheese futures on the Chicago Mercantile Exchange as a benchmark. It’s been months since the market price was high enough to pay the bills; according to the USDA, the local price would have to increase more than $5 to cover the average costs of running an American dairy farm.

The reason for the steep decline in dairy profits is simple, analysts and farmers say: too much milk and not enough demand for it.

“If there’s one thing farmers do best, it’s if a commodity is doing well, we quickly produce too much,” Brenneman said.

With the sour economy, global demand for milk – last year, up 16 percent according to the U.S. Dairy Council – has now dried up. Foreign sales were down 50 percent in the first quarter this year off the same period in 2008.

The result nationally, industry analysts say, could be a historic washout of dairy farmers — some say 20 percent or more by the end of the year. Already, many farmers are culling herds and, in some cases, have had to sell them.

There’s no glut in Montana, where the state’s 68 dairy farms produce enough fluid milk to satisfy little more than the local need. Still, it’s nerve wracking to see prices so low, especially given volatile prices in their costs like energy, fertilizer and feed.

Demand in the dairy industry is down, but consumers may not be able to tell from the prices at the grocery store – a frustration for farmers like Bill who figure lower prices would sell more milk.

Retail milk prices had fallen just 20 percent by June from the same time last year, with an average price of $3 a gallon, while farmers make less than $1 a gallon, according to the National Milk Producers Federation. In Montana, Bill puts the actual cost of a gallon of milk, including production and processing, at less than $1.50.

“Somebody is making some money,” he said, adding that in this business, “producers just have to take what somebody offers you.”

So, the Hedstroms are done playing. Not with dairy – just the traditional market. They’re building a processing plant on their property, where their milk will travel about 30 feet from cow to milk jug. And then, hopefully, into fridges in the Flathead.

Food production seems far away nowadays. We don’t see where our food comes from, Marilyn says, and even kids growing up in Kalispell – a relatively rural place – can’t always differentiate a dairy cow from a beef steer.

“I think people are ready to know their farmer again,” Marilyn said.

The Hedstrom cows don’t receive antibiotics or hormones, and the facility will still be regularly inspected for cleanliness and health codes – just like any other in the state. The milk will be pasteurized, meaning the bacteria is removed, but will be unhomogenized, meaning the fat will still rise to the top.

By October, the Hedstroms hope people will be able to drive onto the farm to pick up their milk. A viewing area will fill an agri-tourism niche, too, and act as an educational stop for local schoolchildren.

“Hopefully, that introduces some of them to it,” Marilyn said. “It’s a profession where people aren’t likely to just pick it up anymore. You’re usually born into it.”

That’s the case for Mary Tuck, Marilyn and Bill’s daughter, who, along with her husband Jared are helping drive the new processing plant. Eventually, they want to take over the daily operations.

“The reason we started the farm was we thought it was a good way to raise kids,” Marilyn said. “If it’s going to go on, if we’re going to keep milking, we had to do something different.”

If it works, the new business model could prove just the thing necessary to keep dairy farming alive here.