Schumer says growing popularity of Greek yogurt requires more upstate dairy production
Federal savings accounts for farms — similar to those used for retirement or education savings — would help New York dairy industry expand to meet demand fueled by the Greek yogurt boom, Sen. Charles E. Schumer said.
The accounts are included in a package of tax incentives proposed as part of the DAIRY Act.
“Upstate New York was recently dubbed the ‘Silicon Valley of Greek Yogurt’ and I want our dairy farmers to have the financial tools to keep pace with that exciting growth in a way that stabilizes risk for them during the up-an-downs of the market,” Schumer said.
The DAIRY Act is cosponsored with Indiana Republican Sen. Mike Crapo. It would provide dairy farm operators with tax-deferred savings accounts as a means to manage fluctuations in the market. The legislation would also allow farmers who purchase cows that are already in production to write off the purchase as a capital expense, lowering their overall tax burden.
Farm Savings Accounts would give farmers greater financial stability while helping them invest in growth, said Farm Bureau President Dean Norton.
“Not only will it serve as a safety net, but it will provide added incentive to save as dairy farmers look to grow their farms to capitalize on the increased consumer demand for dairy products made in New York,” said Norton.
The New York Farm Bureau has estimated that the state’s dairy farmers would have to expand their output by 15 percent in order to supply the boom in Greek yogurt, which requires roughly three times the amount of milk as standard yogurt.
New York farmers will have to produce 1,879,860,000 additional pounds of milk each year for yogurt produced at the Alpina and Pepsi Project Wave plants in Batavia, Chobani in Chenango County and Fage in Fulton County.
In the Rochester Finger Lakes Region, there are 140,600 dairy cows and production must grow by 471,300,000 pounds of milk per year, according to figures provided by Schumer’s office. In Western New York, there are 55,600 dairy cows and production must grow by 160,875,000 pounds of milk per year.
The DAIRY Act would also expand the eligibility for a tax incentive that allows business owners of all types to write off capital expenses on their taxes.
Dairy farm operators can now deduct 50 cents of every dollar spent on qualifying livestock purchases, which include the purchase of any “new” dairy cow not previously used for a business purpose. However, dairy cows purchased from another herd do not qualify for the tax benefit.
Schumer’s legislation would expand the definition of qualifying livestock to include all dairy cows purchased by a dairy farm operator for business use, regardless of whether the dairy cow’s original use had commenced with another farmer.