Upstate New York has embraced the unlikely moniker of “Silicon Valley of Greek Yogurt,” but as the protein-packed craze continues to sweep the nation, many of the state’s dairy farmers are left facing the need to expand their dairy herds in a market that doesn’t necessarily obey the laws of supply and demand.
Greek yogurt product has tripled since 2008, and now more than 40 yogurt plants dot the state, making New York the yogurt capital of the country. According to National Public Radio, the question now is whether the state’s dairy farmers can keep up with demand.
A variety of programs passed by Gov. Andrew Cuomo and the state Legislature have helped, including grants for modernizing milking equipment, new business plans and anaerobic digesters. However, despite these efforts, New York’s dairy herd is no bigger than in 2012.
Small dairy farmers like Mike Kiechle would like to expand but aren't ready to take the risk.
One of the problems stopping Kiechle and others like him from adding to his herd revolves around milk pricing. The federal formula sets the milk prices farmers are paid by region, and this price doesn’t rise because the nearby Greek yogurt plants need more milk to meet consumer demand.
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However, the consumer demand for Greek yogurt is unlikely to simmer down soon. The Wall Street Journal shows that today more than one-third of the yogurt sold in dairy aisles are Greek yogurt as more Americans are reaching for hearty, portable meals.
"It has posed a real conundrum" for retailers and yogurt-makers deciding what to put on shelves, Gary Hirshberg, co-founder and chairman of Stonyfield told reporters. Almost all varieties of traditional yogurt, from low-fat to whole milk, have "lost space to that behemoth called Greek," he says.
Greek yogurt is doing more than just pushing out regular yogurt. It is also forced grocery managers to drop other refrigerated products, including croissant dough and margarine. See, “The Greek Yogurt Culture War.”