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Needing Milk

Yogurt growth driving demand

March 25, 2012
By MIKE ZUMMO , The Leader Herald

The demand is there.

At this time, the supply is not.

The demand comes from the growing Greek yogurt manufacturing throughout New York state, especially in Fulton County, as Fage USA looks to expand its operations in the county.

Article Photos

Rob Dygert, owner of Dygert Farm in Palatine, points to the new air-operated door opening and closing system at the farm Wednesday.

The Leader-Herald/Bill Trojan

According to Fage, it takes about 4 pounds of milk to make 1 pound of yogurt.

A news release from New York Farm Bureau says New York is fourth in the nation in milk production, and a recent survey by Cornell University indicated the demand for milk in New York state will increase by 15 percent.

According to a report released by U.S. Sen. Charles Schumer, D-N.Y., there were 13,200 cows in Montgomery County in 2010 and 1,900 in Fulton County. Montgomery County produced 316.5 million pounds of milk in 2010 and Fulton County produced 51.5 million pounds.

Fage this year is spending $100 million of its own money to expand, starting this spring with a 120,000-square-foot building addition, which would increase the company's yogurt production from the current 80,000 tons to 160,000 tons.

"Obviously, we need a lot of milk," Fage spokesman Russell Evans said.

Schumer said Montgomery County needs to increase output by 47.7 million pounds of milk and Fulton County would need to increase output by 7.7 million pound to meet the demand by the yogurt producers.

At least one dairy farm in the area is expanding.

Rob Dygert said his family's farm recently went from a 54-stall barn to a 100-stall freestyle barn with a milking capacity. He said the new facility will double the farm's capacity.

"We didn't do it to support the yogurt, but we did it to support the family lifestyle," Dygert said.

Dygert did say there are obstacles for farmers looking to increase their production, one of which is whether a farm can get the feed it needs for the cows and have the borrowing capacity to expand production.

The price of milk also has been dropping since last summer.

"It's $6 off what it was last year," he said. "Grain prices have stayed the same or gone up, which makes the margin really, really tight."

According to the New York Farm Bureau, the state needs to provide incentives for dairy farmers.

Dean Norton, president of the Farm Bureau and a dairy farmer in Genesee County, said in the release the state needs to adopt tax-deferred farm savings accounts and pass the farm refundable tax credit to give farmers an incentive to increase supply.

"On one hand, they say they're trying to help the dairy farmer, but on the other hand, they're asking us if we really want to do it," said Lee Hollenbeck, vice president of the Fulton County Farm Bureau and a former dairy farmer.

Schumer's proposal, the Dairy Augmentation for Increased Retail in Yogurt Act, would expand the eligibility for tax credits that would allow business owners to write off capital expenses on their taxes, giving dairy farmers to receive the same tax break on livestock purchases that other businesses receive on equipment.

The bill also would provide dairy farm operators with a tax-preferenced savings account, which would allow dairy farmers to make deposits in the accounts during high-income periods and hold it until leaner times when additional revenue streams are needed. The funds would not be taxed until withdrawal.

"These proposals pack a one-two punch that allow farmers to put more of their hard-earned dollars back into their own business," Schumer said. "We need to make sure that when our yogurt producers come calling for milk, New York dairy farmers are on the other end of the line."

Mike Zummo is the business editor. He can be reached at business@leaderherald.com.

 
 

 

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