Can dairy farmers keep up in ‘the Silicon Valley of Yogurt?’

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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.

Read more here  or click the audio player above the full report.

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.”

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new york  |  September, 04, 2013 at 04:20 PM

Gee I have been saying this for years now. Live within 10 miles of chobani and have yet to see much improvement with my milk prices even though the politicians keep telling me how wonderful dairy is doing in new york. I do get a whopping 25 cent per cwt premium on my milk check.

Colorado  |  September, 06, 2013 at 06:36 AM

Producing for yogurt or cheese or export it does not matter, pay prices do not reflect increased demand. When will this fiasco end? The big story in Colorado has been how the new cheese plant here will be such a great financial opportunity for dairymen. Show me the money.

new york  |  September, 06, 2013 at 07:04 AM

One way to get dairy farmers to upgrade and expand would be for new york state to allow natural gas drilling. It would give farmers the capital they would need to make these improvements without going into outrageous debt just to milk cows.

Batavia, NY  |  September, 06, 2013 at 08:16 PM

There is not a milk shortage in NY state. Nor will there be one. Maybe the processors would like more milk to be produced so they can pay the dairy farmers less, that seems to be true. But there is no shortage of milk. Cuomo throwing money stolen from the taxpayers at a few small farmers is meaningless. More milk will come if the price is higher. That is basic economics.

new york  |  September, 07, 2013 at 07:06 PM

Ken I usually agree with you, but how is giving money to consultants really going to help small to medium farms? Just like giving money to insurance companies for margin protection really does not help farmers just the insurance companies. I agree there is no shortage of milk, just a shortage of intelligence from leadership both inside and outside the industry.

New York  |  September, 12, 2013 at 09:51 PM

It's not likely that there will be a shortage of milk anytime soon. The producers in New York have increased in production year after year,and given the increased forage inventory's from this year,and the lower grain price there will be expansion. So lets all expand flood the market then complain of lower milk price.

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