Rebuilding New York's Economy: A Farming Industry on the Rebound

1:30 PM, Mar 24, 2013   |    comments
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  • Photo of cows inside Ted Postma's farm in Chenango County, a mile from Chobani. He has 450 cows / By Haley Viccaro, Albany Bureau
  • "USA" spelled in winter wheat, Penn Yan, New York. AP file photo

By Haley Viccaro, Albany Bureau

ALBANY, NY (GANNETT) - New York's agriculture industry is thriving with large food companies and increased initiatives to raise milk and apple production.

The growth of yogurt companies statewide has made a large economic impact by providing local farms with an outlet to ship their milk directly. Chobani, Fage, Alpina and other companies set their focus on New York because of the state's milk quality, the companies said.

Farms are on the rise after decades of decline.

In 2008, there were 36,600 farms covering about 7.1 million acres of land statewide. That's 1,600 more farms than the state had in 2006 - and that's before the yogurt boom in recent years.

"The fact that we have a yogurt boon here in New York is great because it allows us an opportunity for another marketplace for our milk to go," said New York Farm Bureau President Dean Norton.

New York ranks fourth in highest overall milk production behind California, Wisconsin and Idaho. The U.S. Department of Agriculture said the state's total milk production in 2010 reached 1.27 billion pounds, an increase of about 290 million compared to the previous year.

The state has proposed initiatives to raise overall production by increasing the number of cows on farms and the pounds of milk per cow. Average production per cow in 2010 was more than 20,000 pounds with 611,000 cows in the state, the USDA said. The number of cows in New York has decreased by 8,000 since 2009.

Farms must comply with Concentrated Animal Feed Operations, or CAFO regulations, that restrict the number of cows on farms at 200 without a permit. Gov. Andrew Cuomo is loosening the limit and allowing for the expansion to 300 cows on farms.

"The governor moved to have the CAFO regulation rules changed and we are waiting to have them come out, which we should see in early spring," Norton said. "So now it's incumbent upon us, the producers, to use those tools that are being put at our disposal to try and advance our businesses."

Jim and Ted Postma own a 600-acre farm less than a mile from Chobani's plant in South Edmeston, Chenango County. They have 450 cows, 200 are milking cows, and they are considering expanding their herd after the CAFO regulations are changed.

The Postma farm was located in Chobani's backyard and relocated to another area close by after the company continued to expand.

"Chobani claims that they need more and more milk all the time but, as far as us individually, our objective is to make as much milk out of the cows that we have as we can," said Ted Postma, co-owner of Postma Farms.

Without Chobani, their milk would be shipped to other plants in the state that are farther away.

"We actually thought we would have an empty building sitting there for a long time, and we were surprised when that didn't happen," Postma said.

Cultivating Yogurt

Chobani is the number one selling Greek yogurt producer in the country. The company started making yogurt at its plant in South Edmeston in 2007 and reached about $1 billion in sales by 2012. They employ more than 1,300 individuals at the site.

The company's New York plant gets its milk from about 850 farms, and about 93 percent of their milk comes from farms in the state. Chobani receives four million pounds of milk per day and ships more than two million cases of yogurt nationwide each week.

"We move close to 10 percent of New York's milk into this plant, so the economic impact is large," said Chobani Chief Operating Officer Halil Ulukaya. "Our focus is bringing that quality milk in upstate New York and making high quality milk, adding value to it. I'm sure the local farmers are happy coming to their backyard, instead of miles away and having to pay transportation costs."

Fage also opened a yogurt plant in the state located at the Johnstown Industrial Park in Fulton County in April 2008.

Fage announced in December a $100 million expansion at the Johnstown site, which they said could be operational by the first quarter of 2014. The expansion is expected to double the plant's output and add 150 jobs.

"We came to New York because milk is one of the great reasons, first of all we were already in New York, New York State made us feel welcome here," said Fage's Chief Financial Officer Rob Shea during a yogurt summit at the Capitol last October.

Expanding Companies

Alpina opened its first North American manufacturing facility in Batavia, Genesee County, in September 2012. The Batavia plant is Alpina's 10th production facility in the world.

PepsiCo started selling yogurt in the Northeast in July 2012. PepsiCo, in collaboration with Theo Muller, invested $206 million in a 363,000-square-foot plant in Batavia that employs about 180 people and produces an estimated five billion cups of yogurt a year.

Alpina chose Genesee County for its plant because the location is convenient to ship their products to places throughout the country, said Roger Parkhurst, Alpina Foods' U.S. director of operations. He said they ship to Chicago, New England, Philadelphia, Pittsburgh, and Washington D.C.

"Equally important though was the location to the raw material, and western New York is ideally positioned for milk supply that we need to make strained Greek yogurt," Parkhurst said.

The Batavia plant receives all of its milk supply, about 20,000 gallons daily, from farms in the state within an estimated 100-mile radius. Parkhurst said the plant shipped more than 42 million cups of yogurt this year.

The Chenango County Farm Bureau said small and large farms are needed to provide local products to companies and continue feeding the U.S. population. County Farm Bureau President Bradd Vickers said the issue for farmers is turning a profit and keeping farms in business.

"What we don't even think about is that the world population is going to double, and who do you think they are looking at to feed them," Vickers said. "How are we going to do that if we lose farms?"

Easing Costs

To help ease the costs for local farmers, the governor announced last March $12.2 million in funding to help more than 200 farms in 27 counties protect nearby streams and rivers from contamination and runoff.

Senate Republicans also announced a plan called "Our Grown in New York" to reduce local farmers' taxes and eliminate energy tax surcharge. The initiative would help farmers expand markets and increase profitability, but it hasn't passed the Assembly.

"I think we are strapped with giving our farms to our children because of extra taxes incurred by our various state officials," said Robert Noble, owner of Noblehurst Farms in Linwood, Livingston County. "Farms in New York State are about 97 percent run by families, and it is very difficult to pass it on to your younger generation when you're strapped by taxation."

The Finger Lakes region and some western counties have increased milk production and cow numbers while the North Country and the Capital Region have raised production per cow. Other regions in the state, including the Southern Tier, have experienced an overall decline in production and cows, according to the Farm Bureau.

New York is in competition with other states and has lost in some cases.

In December 2012, Chobani opened a $450 million plant in Twin Falls, Idaho, and the company expects the business to have a local economic impact of $1.3 billion each year.

Chobani said the Idaho plant would allow for the production of new product lines including Chobani Champions Tube, Chobani Bite and Chobani Flip. Ulukaya said there is a lot of milk supply in Idaho and it was picked as the location for Chobani's new plant due to multiple factors including milk demands and shipping across the states and overseas.

Wine, Beer Increases

New York's wine, beer and spirits industry has also been growing in the state with more than 450 wineries, breweries, distilleries and cideries. New York ranks third in highest production nationally and the industry has a $22 billion total economic impact statewide.

The governor held a Wine, Beer and Spirits Summit in October with producers in the industry to address production and manufacturing issues. Cuomo gave $1 million for advertising and discussed ways to promote the state's local products.

"New York's vibrant beer, wine, cider and spirits industry supports thousands of jobs across the state and is a major driver of tourism in many communities," Cuomo said in a statement following the summit.

On March 4, Cuomo announced the creation of a one-stop shop for the state's wine, beer and spirits manufacturers to have a single government contact to assist with business regulations.

Farm Bureau spokesman Steve Ammerman said farmers are faced with high property taxes and high labor costs and any additional funding or cuts in taxes would help local farmers meet the milk demand from yogurt plants in the state.

"They want to be successful, they want to make money, and they want to be able to grow their operation to provide for their family," Ammerman said. "You need to have a large farm in order to feed your family and make a good income."

About this series

The yearlong Albany Bureau series "Rebuilding New York's Economy" will look at the key factors affecting New York's economic recovery and whether it is succeeding. Upcoming installments will look at the farming industry and the impact of the property-tax cap.

Coming next month

New York has among the highest property taxes in the nation, and a tax cap implemented in 2011 was supposed to be the panacea. But has it worked? While it has reigned in some taxes, particularly school taxes, it has left some local governments and schools squeezed to near bankruptcy.



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