Risk Management

Idaho’s $4 Billion Dairy Boom: Why the Gem State is Defying West Coast Trends

Tue, 03 Feb 2026 14:38:52 GMT

While milk production across the West Coast faces a period of contraction, Idaho is carving out a different narrative. With USDA reporting the state’s production value near $4 billion in 2024, Idaho has transitioned from a regional player into a global dairy powerhouse. According to Rick Naerebout, chief executive officer of the Idaho Dairymen’s Association, this surge isn’t accidental. It is the result of a unique confluence of business-friendly policy, aggressive vertical integration and a fundamental shift in how dairy cattle are valued.

A Surge on a Massive Base

The sheer scale of Idaho’s recent growth is impressive. Naerebout reports the state has seen consistent growth rates of 5% to 8% per month year-over-year for the last 15 months. For 2025, Idaho is projected to be up 7.5% in total milk production.

“That 7.5% is on a very big base,” Naerebout explains. “It equates to roughly 3.5 million pounds of milk a day more this year than we had last year. We’ve definitely turned on the milk production.”

This growth has been facilitated by two primary catalysts. First, Idaho’s dairy producers are entering the current economic downturn with exceptionally healthy balance sheets following strong financial performances in 2024 and early 2025. Second, and perhaps most importantly, regional processors have finally lifted base restrictions that limited producers to fractional growth for years. With those caps removed, the Idaho dairy industry has surged to meet the available capacity.

The Magic Valley: The Heart of the Industry

The epicenter of this expansion remains the Magic Valley. While growth is visible across the state, approximately 75% of Idaho’s dairy industry is concentrated in this region. The concentration allows for an infrastructure of scale that is difficult to replicate elsewhere.

Idaho’s operations are notably larger than the national average, boasting nearly 2,500 cows per dairy. This scale, combined with a business-friendly climate — including the absence of agricultural overtime pay — allows Idaho producers to maintain lower costs than their neighbors in California or Washington.

Components and the “Black Calf” Phenomenon

Interestingly, the growth isn’t just coming from more cows; it’s coming from “better” milk. According to Naerebout, while volume is up 7.5%, the increase in milk components means the actual yield for processors is closer to 9%. This allows plants to produce more cheese, butter and powder for every pound of milk delivered.

Producers in Idaho, like other states, are also shifting culling practices.

“We’re hanging onto cows because they’ve got a black calf in them, and that calf is worth roughly $1,500,” Naerebout says.

The beef-on-dairy trend has become ubiquitous in Idaho, with adoption rates significantly higher than the national average of 70%. For many Idaho producers, the day-old calf has become a high-value commodity that provides immediate cash flow with minimal risk, as many are partnered with large feedlot operators, like Simplot, or feedlots to take the animals immediately.

Resilience Through Risk Management

The dairy industry is notoriously volatile, yet Idaho has shown remarkable resilience. Over the last 30 years, the state has only seen negative growth twice: in 2009 and 2013. Naerebout attributes this to a sophisticated approach to business that sets Idaho producers apart.

“Our dairymen are very savvy businessmen,” he notes. “We have a higher-than-average use of hedging tools. They insulate themselves from market downturns by making sure they are hedged.”

This financial discipline, coupled with being well-capitalized, allows these large-scale operations to weather economic storms that might shutter smaller farms in other regions.

The Shift to Vertical Integration

Perhaps the most significant structural change in Idaho’s dairy landscape is the move toward vertical integration. Unlike the traditional cooperative structure involving hundreds of members, Idaho has seen the rise of “processor-producers.”

Facilities like Idaho Milk Products and High Desert Milk were founded by small groups of dairy families — sometimes fewer than six — who pooled their capital to build their own processing plants. While Naerebout describes the startup phase of these ventures as “absolute hell” where families nearly lost everything, those who survived are now capturing the margins that previously went to third-party processors.

“They are capturing more margin for their business and using it as a form of risk mitigation,” Naerebout says.

This evolution from simple milk producers to sophisticated industrial processors represents the future of the Idaho dairy model.

Looking Ahead

As the industry faces a tightening economic window, Idaho’s producers remain focused on the long term. The goal for many is not just survival, but the creation of viable, multi-generational businesses. By combining aggressive adoption of technology, sophisticated risk management, and a willingness to invest in the processing side of the value chain, Idaho is proving that even in a mature industry, there is still significant room for a “growth state” to thrive.

“Idaho has been, and will likely remain, a growth area for plants and processors alike,” says Phil Plourd, president of Ever.Ag Insights. “It’s a hospital environment where all the stakeholders seem aligned around growing the industry.”

With strong components, high-value beef-on-dairy calves and a business environment that rewards scale, Idaho is well-positioned to remain the cornerstone of Western dairy production for the foreseeable future.

Your Next Read:
The 2026 Dairy Outlook: Navigating Volatility, Genetics and the Beef-on-Dairy Revolution

Fraud Alert: Don’t Fall Victim to These Common Schemes

Tue, 02 Jan 2024 20:38:10 GMT

Farmers routinely handle high-dollar transactions — and the nature of the payments, often through unsecure methods, leaves them susceptible to foul play.

Those unsecure methods include mailing personal checks and buying parts from an unknown online vendor. However, one of the biggest fraud trends Angela Lewis, deposit control manager at Southern Bank in Chillicothe, Mo., is seeing involves how many operations handle employee payroll.

“We see employees commit fraud, especially through written checks from employers,” Lewis says. “Employees will steal the account number and routing number off the bottom of checks and create fake checks.”

Mail fraud and check washing is another tactic that can quickly drain thousands of dollars from an account.

“If you have mailed a check that was paid, but the recipient never received it, you may have been a victim of check washing. In fact, check washing is the No. 1 form of fraud we are seeing with our business customers right now,” Lewis says.

Check washing typically involves a check being stolen from a mailbox and then a scammer “washes” the check in chemicals to remove the ink and/or uses a copier to print fake copies of the check. Other criminals can then purchase the fake checks and deposit them.

To protect your operation from scammers, Lewis shares these tips:

Use online banking. “As a business, you should enroll in and use online banking daily to review copies of all checks issued to ensure they were not altered,” she says. “Also make sure to review the backs of checks to verify the endorsement information matches your intended payee.”
Follow up. If you are going to mail checks, make it a habit to follow up with the people or businesses to make sure they receive it.
Switch to online payment options. Your financial institution likely offers e-checks, ACH automatic drafts or other online bill pay options.
Confirm the goods. When it comes to making purchases from an unknown source, such as on Facebook Marketplace or Craigslist, Lewis shares it’s a good idea to meet the seller in person and verify the goods prior to sending the money. “Newer scams we’re seeing involve the use of payment apps, such as Cash App, Paypal, Venmo and Zelle, and social engineering to convince people to send money for fraudulent goods or services or to send money to fraudulent accounts,” Lewis says. “Once the funds have been sent, they are difficult to recover.”

If you do fall victim to a scam, there are a number of organizations, in addition to your bank, available to help. For example, several states have a division within their department of agriculture dedicated to this type of crime.

According to the Tennessee Department of Agriculture’s public information officer Kim Doddridge, the organization’s agriculture crimes unit is responsible for tracking and investigating crimes in Tennessee related to agriculture, forestry and wildland arson, animal health and agribusinesses. While many of their cases are related to livestock cruelty, arson and equipment theft, Doddridge shares they have dealt with reports of cattle purchasing scams, cattle selling scams and email scams.

In addition, USDA’s Office of the Inspector General has a fraud hotline to report violations of laws and regulations in regard to USDA programs. These can be reported anonymously either online or by phone.

What is Livestock Risk Protection (LRP)?

Wed, 28 Jun 2023 19:31:34 GMT

While many tools for managing risk exist for livestock producers today, livestock risk protection (LRP) may be a valuable option for producers no matter how large or small the operation.

What is LRP?

Livestock risk protection insurance serves as a price insurance policy developed as a price risk management tool for feeder cattle, fed cattle and swine, and is administered by the USDA Risk Management Agency (RMA), according to a University of Tennessee publication , written by Andrew Griffith, assistant professor and livestock extension economist.

LRP is used to establish a floor selling price and protects producers against catastrophic price declines, such as those at may occur due to a disease outbreak, drought, pandemics or other industry disruptions. However, LRP allows producers to benefit from price increases.

This program does not protect against any type of production risk, such as mortality, condemnation, physical damage, disease, individual marketing decisions, local price aberrations or any other cause of loss, Griffith notes.

“LRP is not designed to enhance livestock producers’ profits, nor does it guarantee a cash price for the cattle,” notes Griffith. “LRP strictly protects against declines in a regional/national cash price index.”

Additionally, LRP provides flexibility for producers in the timing of purchase, length of coverage, number of head covered, target weight of livestock at the end of coverage and the coverage price level, Griffiths adds. Compared to using futures and options as a risk management tool, producers are not subject to margin calls or quantity minimums.

How Do I Sign Up for LRP?

Signing up for LRP requires two forms: the policy/application and a specific coverage endorsement (SCE).
The policy/application is first completed with the provider prior to purchasing LRP. Local agents can be found using USDA’s RMA agent locator site.

When deciding on a specific coverage environment, there are several options to consider.

LRP policies begin on the effective date of insurance purchase and run for the selected number of weeks (13, 17, 21, 26, 30, 34, 39, 43, 47 and 52), completing on the end date. The insurance period for a producer should be the number of weeks closest to when the livestock will be marketed.

Additionally, LRP coverage levels can range from 70% to 100% of the expected ending price (approximately the futures price for the given time period), and is calculated based on the chosen coverage price relative to the expected ending value, Griffith explains.

However, he adds, “It is important to note not all coverage levels or all weeks of insurance periods are offered each day. Therefore, a policy meeting the goals of the operation may not be available today, but such a policy may be offered at a future date.”

Requirements of LRP

To insure livestock using LRP, the livestock must be owned by the producer or family member, and ownership must be maintained until 60 days prior to the SCE end date for the insurance to maintain its value. Livestock do not have to be sold to receive an indemnity payment, as there is no restriction on livestock being marketed after the end date of the SCE.

“Any portion of insured livestock disposed of prior to the last 60 days of coverage results in that portion of the coverage terminating with no indemnity being paid for neither that portion nor any of the premium being refunded,” Griffith explains.

How are LRP Insurance Premiums Figured?

Premiums are figured using the expected ending value of the livestock (near the futures price for the particular end date, derived from the futures market) and a coverage price level (percentages of the expected ending value, chosen by the producer).

Then, the expected ending value is compared to the actual ending value (cash price for the commodity on the end date) to determine if an indemnity payment is to be received by the producer. Specifically, the actual ending value is based on the weighted average price as defined in each SCE.

LRP insurance is offered under the Federal crop insurance programs and premiums are subsidized by the federal government. RMA subsidizes 35% to 55% of the premium cost of a SCE based on the coverage level chosen. Additionally, premiums of LRP insurance are not collected until the end date.

(Farm Journal)

When Does LRP Pay?

“If, on the end date of the policy, the regional/national cash price average (not the producer’s cash price) is below the insured coverage price, the LRP insurance pays an indemnity to make up the difference,” explains Farm Credit Services of America.

While LRP is a price risk management tool available to livestock producers to protect against major financial losses due to catastrophic price declines, it is not meant to increase producer profits. It’s to reduce losses when prices decline and save the producer from losing the farm, Griffith says.

If considering implementing LRP as a risk management tool, find a local agent to discuss more details and determine which SCE is best for your operation.

For more information, visit these USDA RMA provided Fact Sheets:
Livestock Risk Protection Feeder Cattle
Livestock Risk Protection Fed Cattle
Livestock Risk Protection Swine

Is the Livestock Industry Prepared for a Foreign Animal Disease Outbreak?

Wed, 10 Feb 2021 16:07:03 GMT

Foreign animal diseases (FAD) are a constant threat to the U.S. livestock industry. But the country seems more tuned in to this struggle than ever before with the recent COVID-19 pandemic. National Pork Board’s chief veterinarian Dave Pyburn and National Cattlemen’s Beef Association’s chief executive officer Ethan Lane shared their perspectives during the Coalition for Epi Response, Engagement and Science (CERES) Biosecurity Infectious Disease Symposium at Colorado State University on how prepared the pork and beef industries really are when it comes to the threat of FADs.

Pork Industry Adopts AgView
When African swine fever (ASF) was discovered in China in August 2018 and rocked the global pork industry, the National Pork Board, among others, began looking at ways to increase foreign animal disease preparedness efforts in the U.S. One of the many positive steps forward since then has been the creation of AgView, a voluntary option for producers to keep records on animal movement that could be easily shared with their state veterinarian in the case of a FAD outbreak.

“We wanted to find a way to add to that data that’s currently available to both state and federal animal health officials as they look to respond to a FAD. Not only did we want to help find the disease more quickly and eradicate the disease more quickly, but also get back to some business continuity as quick as we can,” Pyburn said.

After evaluating the current preparedness plans, the National Pork Board decided one area the industry needed to hone in on was pig movement and contact tracing.

“That’s the majority of the way that we move animal diseases in our country today – through animal movement,” Pyburn said. “So, we asked ourselves how we could supply real time pig movement data to officials so that they could have the information needed to respond more efficiently and quickly to enable business continuity to whatever degree possible.”

That’s where the idea of Ag View came into the picture – creating an opportunity to work hand-in-hand with current systems in place and ultimately help improve that response.

Beef Industry Sees Similar Challenges
Lane said he sees a lot of similarities between what the pork industry is doing and what the beef industry is doing in the area of FAD preparedness.

“I think we’re trying to tackle a lot of the same challenges, in accessing that information and interfacing with a lot of different state programs,” Lane said. “The states are all warehousing data in different ways, that’s a lot of what cattle trace has been focused on and what our inner NCBA working group has been focusing on.”

Dealing with different views from producers, making sure they are assuaging everyone’s concerns about how information like this can be used to help them and balancing all of this against the need to quickly access information in the event of an outbreak, is a challenge, he explained.

“Whether it’s debating how many different data points are really necessary to quickly get to the right information or how do we ensure the safety and security of that information to some practical challenges on the ground, particularly with cattle movements,” Lane added. “If you look at our Western guys that are using pastures and grazing permits sometimes in different states, a pasture ID versus centering that on a home ranch operation. Those become very important data points to work through and that’s been a large part of the focus on our conversation over the past few years.”

Teaming Together
The AgView system could be launched for other livestock species, Pyburn said. Discussions have been underway between the pork and beef industries about how this system could bring other commodities and their information into this same system.

“In the end, what the federal and state animal health officials want is one dashboard to be able to use no matter what that foreign animal disease is,” Pyburn said. “We’ve got some foreign animal diseases, like foot-and-mouth disease in particular, that will involve both of us so it we’re going to want all of that data in one spot for those folks to respond.”

In addition to teaming together among species, Pyburn said it requires a team effort from producers, too. AgView is 100% voluntary. The nice thing about AgView is that producers can have their current data in the system, and it’s only visible to the producer that has entered the data, he said.

“The only time the data goes forward is if we actually have a foreign animal disease outbreak and there’s a need for it because the producer is involved in the incident or is within the outbreak area. When that happens, the state or federal animal health officials will request permission from those producers to be able to see it,” Pyburn said.

The producers still have the right to say no and that data will go nowhere. But Pyburn cautioned that may also hamper the animal health official’s ability to get back to some animal movements that would ensure business continuity.

“I think there’s going to be some need, or some want on the part of the producer, to be able to supply that data,” he said.

Meanwhile, on the cattle side, Lane said the industry is likely moving into an arena over the next few years where there is going to be a mandatory component for producers that are moving cattle across state lines.

One of the concerns Lane often hears is the cost and the fact that at the end of the day, a lot of the cost will be borne by those producers on the ground.

“We are going to need to have more extensive conversations on Capitol Hill,” Lane said. “We are going to probably be seeking out additional resources to implement a more comprehensive system so that cost isn’t being borne solely by the beginning of the supply chain.”

Watch these webinars for more:

Don’t Take Your Eyes Off of African Swine Fever

Technology, Traceability and the Beef Industry of the Future

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What Happens If? An Answer to the Question Everyone’s Asking

Vilsack Weighs In On Parallel Between COVID-19 and Animal Disease Outbreaks

Ranchers Split on Need for Traceability System

African Swine Fever: Trust Your Instinct, Be Prepared

What Makes Foot-and-Mouth So Infectious?

Tool Helps Develop Custom Biosecurity Plan for Disease Prevention

7 Steps to Create a Biosecurity Plan