Darigold Cuts Farmer Milk Checks to Cover Construction Cost Overruns 2025

Dairy farmers in the Pacific Northwest are facing unexpected financial strain as Darigold, one of the region’s largest dairy cooperatives, reduces milk payments to offset cost overruns from major construction projects. The decision has drawn sharp criticism from producers, who say the cooperative failed to adequately communicate the financial burden they would bear.

Construction Costs Lead to Smaller Milk Checks
Darigold, owned by more than 300 family farms across Washington, Oregon, Idaho, and Montana, has been investing heavily in modernizing its processing facilities. A key project is the $600 million Pasco, Washington, processing plant, intended to increase efficiency and meet growing demand for dairy products. However, rising construction expenses—driven by inflation, supply chain delays, and labor shortages—have pushed costs beyond initial estimates.

To compensate, Darigold has begun deducting a portion of farmers’ milk checks, effectively passing the financial burden onto its members. Many producers report significant reductions in their payments, with some seeing thousands of dollars less per month—a major hit to already tight margins.

Farmers Frustrated by Lack of Transparency
The move has angered many dairy farmers, who argue they were not properly informed about the potential for such deductions. Unlike temporary market-based price fluctuations, these cuts are directly tied to Darigold’s internal financial decisions, leaving producers feeling blindsided.
“We understand the need for upgrades, but the way this was handled is unacceptable,” said one Washington-based Darigold member, who asked to remain anonymous. “Many of us operate on thin margins, and these deductions could be the difference between staying in business or shutting down.”

Some farmers are now questioning whether the cooperative explored alternative funding options before reducing payouts. Critics suggest Darigold should have secured additional loans, phased construction more gradually, or sought outside investors rather than placing the burden entirely on producers.
Long-Term Benefits vs. Short-Term Pain
Darigold defends the decision, stating that the upgrades are necessary to remain competitive in a challenging dairy market. The new Pasco facility, once fully operational, is expected to improve processing efficiency, reduce waste, and allow the cooperative to expand into higher-value dairy products.

“We recognize the impact these deductions have on our members, but these investments are critical to ensuring Darigold’s long-term success,” a company spokesperson said. “The current challenges are temporary, and we believe the benefits will far outweigh the costs in the future.”
However, some farmers remain skeptical, noting that the dairy industry has faced years of volatility due to fluctuating milk prices, rising feed costs, and labor shortages. For smaller farms, the additional financial pressure could force them out of business before seeing any benefits from the upgraded facilities.

Broader Implications for Dairy Cooperatives
The situation highlights a growing tension in agricultural cooperatives, where large capital projects—while necessary for growth—can strain relationships between the organization and its member-owners. Unlike publicly traded companies, co-ops rely on their producers for funding, meaning farmers often bear the risks of expansion.

If Darigold’s approach proves too burdensome, some members may consider switching to other processors or even exiting the industry altogether. The cooperative’s leadership will need to balance fiscal responsibility with transparency to maintain trust among its producers.