Greek yogurt demand prompts dairy incentive bill

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A U.S. Senator from New York sees green for the state’s Greek yogurt industry and hopes that proposed federal legislation will help dairy producers cash in on the yogurt’s growing success.

According to The Saratogian, dairy farms may need to increase milk production by 15 percent to supply the growing number of large Greek yogurt plants planned in central and western New York.  To meet this demand, New York dairy farmers will need to increase milk production by nearly 1.9 million pounds annually.

U.S. Senator Charles Schumer, D-N.Y., hopes that his recently introduced legislation will help give dairy producers the financial tools to grow to help meet the challenge.

"The yogurt industry could be a cash cow for upstate New York dairy farmers," Schumer said.

His legislation, the Dairy Augmentation for Increased Retail in Yogurt products (DAIRY) Act, would allow a 50 percent bonus depreciation for cows currently in production that one farm buys from another. It would allow farmers to set up a tax- preferenced savings account where earning could be deposited during high-income periods and held tax-free until needed for leaner times.

"It’s like a dairy IRA (Individual Retirement Account)," Schumer said of the savings account.

Some New York producers, however, are far from convinced that expanding their herd and increasing milk production is the best option. One farmer, David Wood, owner of Eildon Tweed Farm, believes that demand needs to actually increase before expanding their herds.

"I don’t agree with having to increase production ahead of time," Wood told The Saratogian. "If the milk price goes up, then we will produce more. Right now, a lot of farms are culling their herds because the price of beef is high and the milk price is declining."

Wood pointed that dairy farms increased production when milk prices were high, thus creating more supply. More supply led to the recent price decline. Last year’s peak of $22-per-hundredweight has since fallen to $18.50.

"It’s not taxes that are keeping us from expanding," Wood said. "It’s the price of milk."

National retail sales of Greek yogurt more than doubled in 2011 reports The New York Times. In a 52-week period ending in October, Greek yogurt sales jumped to $821 million. Sales are expected to continue through the end of the year.

Greek yogurt’s popularity played a distinct part of this year’s Super Bowl after New York Governor Andrew Cuomo put up the yogurt as part of a friendly wager with Massachusetts Governor Deval Patrick. Greek yogurt was also featured in a Dannon commercial played during the Super Bowl to a record audience of 111.3 million people.

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geoffrey Vanden Heuvel    
Chino, California  |  March, 16, 2012 at 08:40 AM

Thank goodness for David Wood, the dairyman quoted in the article. Pay us more and we will give you all the milk you want. Right on!

geoffrey Vanden Heuvel    
Chino, California  |  March, 16, 2012 at 08:40 AM

Thank goodness for David Wood, the dairyman quoted in the article. Pay us more and we will give you all the milk you want. Right on!

WI  |  March, 16, 2012 at 08:54 AM

Just what we need some lame brained senator who thinks he knows how marketing and especially the dairy markets work proposes some new program to help farmers. LEAVE US DAIRY FARMERS ALONE WE WILL SURVIVE WITHOUT THE GOVERNMENT! The government is broke when will you figure that out MR Schummer?

WI  |  March, 16, 2012 at 10:22 AM

Did I read this correctly, 1.9 million pounds, thats only 100 cows producing 20,000 pounds .Please check to see if this is the correct number. Maybe 19 million? 190 million?

Mi  |  March, 21, 2012 at 10:58 PM

Mark, your right on with your remarks. The larger yogurt plants (Dannon, Chobani) currently use over 2 million lbs of milk per day, each. Sen. Schumer is lacking a few zeros, not a problem they often have in Washington!

Ky  |  April, 23, 2012 at 06:34 PM

Had similar thing here. Cheese plant said not enough milk so they are building new one in south Dakota not ky. Now they are telling s

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