Jul 10, 2014 - 4:30pm

New York’s Governor Makes Big Moo-ves to Support Yogurt Industry

COOL by Daniel Acker.JPG

Where was your beef born?
Photo: Daniel Acker/Bloomberg

The humble cow can, it appears, accomplish great things. It can jump over the moon. It can start a fire that devastates a great American city (allegedly). And, in the case of New York and Greek yogurt, it can boost a state’s economy and create jobs.

In 2013, New York’s dairy manufacturers employed an estimated 9,470 people with total wages of $513 million, up from 7,759 jobs and $400 million in wages in 2010, according to  New York Gov. Andrew Cuomo’s office. The number of yogurt plants in the state increased to 29 in 2012 from 14 in 2000. The net economic effect is estimated at $9 billion for the state.

New data from NASS also shows that New York produced more yogurt than any other state in 2013. Last year, New York produced 741 million pounds of yogurt, up from 695 million pounds the previous year. That’s 15.7% of the country’s total yogurt production — and 150 million more pounds than the second-largest producer, California, churned out.

The state is so infatuated with the fermented dairy treat that New York lawmakers recently named yogurt the official state snack. And the 2014 New York State Fair for the first time will include a yogurt bar with New York-produced yogurt in the fair's Dairy Products Building.

For New York, It’s All Greek…and Then Some

A big part of that New York’s yogurt success is due to America’s love affair with the Greek stuff.  Greek yogurt went from being 1% of yogurt sales in 2007 to capturing 44% of the market in 2013, according to Forbes. Two of the most recognizable brands, Chobani and Fage, have their production plants upstate and are expanding their operations at a rapid pace, and other yogurt producers can’t churn it out fast enough. 

U.S. Chamber member O-At-Ka Milk Products Cooperative recently completed a $16 million expansion of its Batavia, NY plant, as USAToday recently reported. O-At-Ka –already the largest employer in Genesee County—is adding another 15 employees, and plans to make liquid protein concentrate out of excess milk. The concentrate can be used in a variety of products and is one way to give yogurt the extra protein and thick consistency of Greek yogurt without all the messy straining of traditional Greek yogurt, USA Today explains.

More Cows, More Problems

But while the popularity of Greek yogurt is certainly helping New York dairy farmers, a larger part of the state’s yogurt-driven economic boom can be attributed to the governor’s office.

Cuomo held his inaugural Yogurt Summit in August 2012, bringing together dairy farmers, yogurt executives and state officials to find new ways to support the industry’s growth in New York. Soon after, Cuomo announced that the state would lift the cap under the state’s Concentrated Animal Feeding Operations regulations (CAFO) from 199 dairy cows to 299 dairy cows, allowing smaller farms to have more cows while being exempt from some permitting processes.

“The costs of complying with the CAFO requirement can cost hundreds of thousands of dollars which makes expansion economically unfeasible. This new regulation will help farmers save money therefore allowing them to expand and create jobs,” Cuomo’s office explained. “There are more than 800 dairy farms with 100-199 cows that could benefit from this reform and expand milk production for yogurt manufacturers. The Farm Bureau estimates that if just 10%of those farms add 100 cows to their herd, milk production would grow by more than 160 million pounds of milk per year. The CAFO threshold increase can be made while still ensuring environmental protections.”

A permit requires farmers to handle the increased manure load, Bloomberg reports. Farmers must pay a certified planner as much as $15,000, obtain engineering designs for new systems that can cost $50,000 and execute them for about $100,000, the review said. That’s in addition to the $382,000 needed for cows, land and holding pens.

Cuomo’s new cow cap went into place in July 2013, and the backlash from environmental groups was immediate. In August, the environmental groups, including Riverkeeper Inc. and EarthWatch, filed a lawsuit in the state Supreme Court in Albany. The suit, according to Bloomberg, alleges that New York is putting rivers, lakes and drinking water in danger because farmers will add cows without manure-mitigation systems.

Oral arguments were heard on May 16, 2014 and the case is still pending.

The 2% Solution: Waste Management

Far less contentious was Cuomo’s decision to put $450,000 towards the creation of the Dairy Acceleration Program (DAP) to assist farmers in reducing their energy costs, improving business operations, and enhancing environmental planning. Eligible farms can apply for DAP funding to cover 80% of a project’s cost. The farm is responsible for the remaining 20%. In August 2013, Cuomo increased the DAP program by $1 million and in January 2014, he added an additional $850,000 towards the program.

Cuomo also announced in January another $21 million in funding that is now available to help New York’s dairy farmers install anaerobic digester technology that produces renewable biogas used to produce electricity and heat from organic wastes. Farms, food processing manufacturers or municipal wastewater sites are eligible for up to $2 million per project.

The governor is unapologetic when it comes to his efforts to make New York the Yogurt Capital of the nation. “When government and the private sector work together, as we have done with New York’s dairy industry to eliminate barriers to growth, the result is positive economic activity that translates into jobs and new opportunities for New Yorkers. New York’s dairy farmers and yogurt producers are the cream of the crop in their industry.”

Read more on New York’s yogurt economy at FreeEnterprise.com

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About the Author

About the Author

Sheryll Poe is a former senior writer at the U.S. Chamber, who covered public policies affecting businesses including the three "T's" - transportation, trade and taxes.