Darigold has slashed milk payments to farmers by approximately 20% to 25% to finance cost
Darigold has slashed milk payments to farmers by approximately 20% to 25% to finance cost overruns at a 500,000-square-foot processing plant under construction in Pasco, Wash.
Darigold Chairman Tim Kuenzi told the cooperative’s members in mid-April that payments will be reduced by $4 per hundredweight, approximately 11.5 gallons, through at least the end of June and probably the rest of the year.
Darigold will divert $2.50 of the $4 reduction to finish the Pasco plant this year, according to a letter to members signed by Kuenzi. The remainder will balance operating losses. The cooperative will evaluate check reductions monthly, Kuenzi said.
Darigold broke ground on the plant at the Port of Pasco in 2022. The $600 million facility was scheduled to open in early 2024.
The plant is approximately $300 million over budget, according to people familiar with the matter. Darigold declined to confirm the cost overruns.
Darigold spokesman Chris Arnold said in an email cooperative members collectively agree to support capital investments.
The 107-year-old Seattle-based cooperative has about 300 members in Washington, Oregon, Idaho and Montana and has 11 processing plants in the Northwest.
“It’s a big deal. There are a lot of guys who don’t want to quit farming, but can’t keep farming if this continues,” he said.
Skagit County dairy farmer Jason Vander Kooy, a co-op member, said high prices for beef and bull calves have softened the blow, but the milk-check reduction could still make the difference between making money and and losing money.
