As the Greek yogurt industry continues to boom in the state, experts are warning that if farmers cant boost the states milk supply by 15 percent in the coming years, yogurt plants will be compelled to buy out-of-state milk to get enough to meet demand. Two to three gallons of milk are needed for every gallon of Greek yogurt, which is thicker and creamier than traditional yogurt and attracts customers with its high protein and low sugar count.
To discuss how to solve that dilemma, Gov. Andrew M. Cuomos administration Wednesday hosted its first New York State Yogurt Summit, where industry leaders and farmers brainstormed about how the state can continue to lead the Greek yogurt charge.
The two-hour-long summit in Albany offered a few legislative solutions that could help dairy farmers expand, but asking farmers to suddenly start pumping out large quantities of milk could be a stretch, said Bruce W. Krupke, vice president of the Northeast Dairy Foods Association, who participated in the discussion.The association represents 120 dairy plants across eight Northeast states.
A recent study conducted by the University of Wisconsin predicted that in two to three years the Northeast regions dairy industry New York, Vermont and Pennsylvania will need to produce an additional 170 million to 335 million pounds of milk per month to keep pace with the growth of the yogurt industry.
If these projections are true, then dairy producers are going to have major concerns, Mr. Krupke said. Because if dairy plants cant find milk, theyre going to find it somewhere else or not build in our region.
A legislative fix pitched by the Cuomo administration could encourage dairy farmers to expand their cattle herds by doing away with costly environmental regulations. Farmers would be able to expand their cattle herds up to 300 head instead of 200 without complying with regulations that add from $50,000 to $100,000 a year in expenses.
But Mr. Krupke pointed out that changing the program called the Concentrated Animal Feeding Operation cap would help only about 20 percent of the states roughly 3,600 dairy farmers.
You still have about 80 to 90 percent of the producers in the industry saying, what about us? he said
As the pioneer of todays $6 billion industry, New York produces about 70 percent of the nations Greek yogurt. Leading that charge has been Chobani in Chenango County, which has 47 percent of the market. Fage USA in Fulton County, the only other Greek yogurt manufacturer in the state right now, produces 14 percent. Experts say the demand for the product is predicted to explode in the next year, when two more plants are launched in Genesee County by South American company Alpina Foods, and a joint venture started by PepsiCo Inc. and the Theo Muller Group from Germany.
But dairy farmers in the north country are wondering why they should care about that demand, which primarily is helping dairy farmers in Western and Central New York. The hype in the media about Greek yogurt hasnt translated into improvements for dairy farmers here who are still combatting low milk prices and crop losses this season, said Michael B. Kiechle, president of the Jefferson County Farm Bureau, who owns a 400-acre dairy farm with 120 head of cattle in the town of Philadelphia. Some farmers in Jefferson and Lewis counties who are members of Dairylea Cooperative, Syracuse, occasionally ship to yogurt plants in Central New York when theres excess demand.
But members based in Jefferson, Lewis and St. Lawrence counties serve local plants mostly.
Right now farmers here are in survival mode and not thinking about growth, he said.
Dairy farmers in the north country could profit by the establishment of a yogurt plant here in the near future, said Jay M. Matteson, agricultural coordinator for Jefferson County.
But the countys 240 dairy farmers now have their hands full keeping up with demand at the regions dairy plants that continue to grow: Great Lakes Cheese in Adams, Crowley Foods in LaFargeville and Kraft Foods of Lowville. Another highlight for the industry was Upstate Niagara Cooperatives $11 million investment to retrofit the North Lawrence dairy plant in St. Lawrence County to produce private-label yogurt and other dairy products.
We have this tremendous opportunity to meet the demand of manufacturers, but because of the national pricing system theres no local incentive for our dairy farmers to meet that demand, Mr. Matteson said.