Despite NY Yogurt Boom, Dairy Herd Numbers Still Lacking
Despite the recent yogurt boom here in upstate New York which has led to more manufacturing jobs and more economic activity, the number of dairy cows in the state has not increased to meet the higher demand for more milk.
Greek yogurt leader Chobani which has a large plant in neighboring Chenango County, goes outside New York to purchase some of its milk due to a lack of sufficient supply.
There are a number of reasons for the static herd numbers, including struggling dairy farmers leery about making long-term investments in more cows.
Reports show while Greek yogurt is now in high demand, Americans are drinking less milk.
Greek yogurt has gone from being a niche product to a $1 billion-plus seller in a short time, locally dairy processor Byrne Dairy is in the process of acquiring final approvals to build a $30 million dollar Greek Yogurt and chees manufacturing plant here in Cortland County to tap into the growing yogurt market.
South American yogurt maker Alpina Foods opened a plant in Batavia in western New York in September, and Muller Quaker Dairy, a joint venture between PepsiCo, Inc. and the Theo Muller Group, is building a yogurt plant in Batavia that is expected to be in production this summer.
It takes about four gallons of milk to make a gallon of Greek yogurt, which is thicker than traditional yogurt,. The Chobani plant alone used 1.3 billion pounds of milk last year, a 48 percent increase from 2011. The plant in New Berlin takes in about 70 tanker loads a day.
Even as more tankers offload at yogurt plants in New York, the number of milking cows in New York has held steady since 2010 at an average of around 610,000, according to federal agricultural statistics.
Farmers and dairy experts explain that the path from the farm to the supermarket shelf is complex and an increased demand in one area can be offset in other areas, such as the long-term drop in milk consumption.
Wholesale milk prices are not a simple matter of supply and demand. Dairy farmers typically belong to cooperatives and do not sell directly to yogurt makers. Federal marketing orders set minimum wholesale prices under a complicated system that farmers complain is volatile and can leave them producing milk at a loss. Dairy farmers, already dealing with high feed costs, think long and hard before spending money on more cows.
Still, New York farmers produced 3 percent more milk in January compared to a year before thanks to more production per cow, a long-term trend related to how cows are bred, fed and treated.
The Cuomo administration has announced measure aimed at encouraging dairy farmers to grow their herd numbers. Currently, farms with up to 200 cows are exempt from regulations requiring extra steps to prevent pollution from waste. The administration has proposed raising the limit to 300 cows.