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Andersen Dairy: Milking diversification

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Jack Dunn, president of Andersen Dairy Inc. in Battle Ground, isn’t putting all of his milk cartons in one basket.

Andersen Dairy Inc., which processes milk, is part of a wider operation that includes Andersen Dairy Farms (that’s where the cows are – all 1,100 of them), Green Willow Trucking Company Inc. (which uses 30 or more tractor/trailer rigs to deliver product to stores) and Andersen Plastics (which manufactures bottles for the dairy and food industries).

“Our bottles go all over the world,” said Dunn.

Focusing on Andersen Plastics, Dunn said the company is constantly changing “to stay competitive and help our plastic business grow.” For example, he said that consumers will soon see Andersen’s newest innovation – the Copa di Vino, which is a wine cup with a lid that will be sold in four-packs of various flavors.

“I think you’ll see it everywhere,” said Dunn. “We think it will be fairly huge volumes.”

Andersen Plastics recently installed a pair of Copa di Vino molds at one of its facilities, and Dunn said employees are running the two machines 24/7.

“It helps create jobs, and expands our plant,” he added.

With only nine milk processors left in the Pacific Northwest, Dunn noted the importance of “creating business relationships instead of competitive relationships.” For example, Andersen sells bottles to the DairyGold processing plant that bottles milk for McDonalds. Andersen also sells bottles to other milk processors, such as AlpenRose and Sunshine.

Founded in 1966 and owned by Ron Andersen, the Andersen operation currently employs a staff of 215. Andersen Dairy Farms supplies 30 percent of the milk processed by Andersen Dairy Inc., and Andersen Plastics has three plants operating in Clark County.

This diversification, according to Dunn, helps offset the many challenges that affect the milking operation, such as higher corn prices caused by the drought in the Midwest and climbing fuel prices. These economic pressures, he said, are causing the number of dairies in the U.S. to shrink.

“Second and third generations [are choosing] not to continue on,” said Dunn. “It’s a hard life; it’s all work, and land is more valuable than the farm business.”

As an example of the vagaries of milk and feed prices, consider this: alfalfa hay has risen from roughly $230/ton to $275-$295/ton in the last year, said Dunn, and the Andersen cows consume 250 tons per month. Yet, the price per hundred-weight for milk has fallen from $21.24 in June 2011 to $15.16 in June 2012, he said.

In an effort to reduce feed costs, Andersen grows 1,000 acres of corn locally, on land rented from the Port of Vancouver and the Department of Fish and Wildlife. Ten percent of the corn is left in the fields for migratory birds.

“It’s not just our farm – all farms struggle to be profitable,” said Dunn. “When milk prices cycle up, we get close to breaking even. Diversification keeps us in business.”