While area dairy farmers struggle with red ink from their white milk production, two greek yogurt plants under construction in Batavia are ready to change that scenario. 

A $206 million plant by PepsiCo and a German dairy business, and a $20 million plant by Alpina Food will soon serve as anchors in the Genesee Valley Agri-Business Park.  Management from both facilities have publicly stated that they will rely on WNY dairly farmers to supply all of their milk.

The bonus to this dairy boom is the new-hire, work force of  240 employees needed to operate these Greek yogurt plants. That good news is improved further by the fact that the ag-biz park itself could end up creating 1,500 jobs.  Add to that the needed manufacturing supplies – such as yogurt containers – along with the resultant yogurt sales, and the overall number of new WNY jobs created by the Greek yogurt boom could reach 5,000.

The small downsize to this good economic news is that when the first Greek yogurt plant opens in September, WNY farmers will be unable to meet 100% of the plant’s milk needs. Estimates are that Western New York farmers will have to increase milk production by 15 % over the next four to five years to keep up with production demands. In the meantime, manufacturers will turn to dairy farmers in Pennsylvania to supplement the NYS milk supply.  Unfortunately, this means that it will take several years for the Greek yogurt dollars to fully impact the WNY dairy community.  Regardless, dairy farmers throughout the region are talking about the Greek yogurt boon and how to capitalize on the the opportunity. 

The most immediate challenge for small (199 cows or less) dairy farms is increasing the size of their herd to increase their milk production  Currently, if a small dairy wants to add a significant number of milk-producing cows, they are restricted by a cap imposed by insurance regulations.  Additionally, adding a 200th cow requires small farmers to meet strict Environmental Protection Agency regulations which can result in a minimum investment of $250,000 in equipment and infrastructure expenses.  However government officials are working to reformat the associated regulations, making it possible for the small farmer to join in the Greek yogurt boon.

Now if a new raw milk pricing system could be put into place, dairy farmers migh actually have a chance to cover their costs and consistently make a profit.

QUESTION OF THE DAY: What is it about Greek yogurt that makes it such a boon to the dairy industry?  Write your answer in the discussion/comment section below.

Tomorrow…how the people of Vermont are helping their dairy farmers earn a better wage.