Schumer suggests tax incentives for dairy farmers to produce more for yogurt industry
WASHINGTON, D.C. – American’s love for Chobani is not only good news for upstate dairy farmers, but even better news for New York’s stagnant economy.
More Greek-style yogurt businesses are setting up shop in the Empire State due to its proximity to the largest population centers in the country, not to mention that New York is the nation's third largest dairy state. Since Agro Farma Inc. launched number-one brand, Chobani in Columbus in 2007, Fage yogurt expanded its manufacturing into U.S. markets by acquiring a hub in Johnstown, and now PepsiCo is in the business, with plans to open a plant in Batavia this summer.
Because it takes roughly four gallons of milk to make one gallon of Greek-style yogurt, the New York Farm Bureau estimates that dairies will have to expand their output by 15 percent to meet the booming demand. In the Southern Tier, that means approximately 96,000 dairy cows will have to produce 260,000 million more pounds of milk per year.
U.S. Senator Charles Schumer, D-NY, hopes to help farmers produce a projected 1.9 billion pounds more milk statewide by establishing new tax incentives on spending and saving. The Senator will introduce legislation in the next few days allowing farmers who purchase cows that are already in production to write off the cows as a capital expense, lowering their overall tax burden. Schumer’s bill would also establish federal savings accounts targeted to farmers to help them save and grow during booms and weather-driven or market-based downturns. The accounts would be structured to reward savings during periods when business is strong and defer taxes on those savings until farmers must withdraw funds to cover new expenses or manage cash flow.
“When companies need machinery or equipment to operate, it can be written off as a capital expense on their taxes ... but that’s not extended to farmers when they buy cows. Farmers should get this incentive, get 50 percent off the cost of buying a cow from another farmer,’ said Schumer during a press call Wednesday.
The savings accounts would operate like a 401K or education savings account, he said, saying, “A Dairy IRA ... it makes a great deal of sense.”
“Finally we have some good times in the dairy industry ... and we want upstate to be able to harness that trend and turn it into success and profit in every corner,” the Senator said.
More Greek-style yogurt businesses are setting up shop in the Empire State due to its proximity to the largest population centers in the country, not to mention that New York is the nation's third largest dairy state. Since Agro Farma Inc. launched number-one brand, Chobani in Columbus in 2007, Fage yogurt expanded its manufacturing into U.S. markets by acquiring a hub in Johnstown, and now PepsiCo is in the business, with plans to open a plant in Batavia this summer.
Because it takes roughly four gallons of milk to make one gallon of Greek-style yogurt, the New York Farm Bureau estimates that dairies will have to expand their output by 15 percent to meet the booming demand. In the Southern Tier, that means approximately 96,000 dairy cows will have to produce 260,000 million more pounds of milk per year.
U.S. Senator Charles Schumer, D-NY, hopes to help farmers produce a projected 1.9 billion pounds more milk statewide by establishing new tax incentives on spending and saving. The Senator will introduce legislation in the next few days allowing farmers who purchase cows that are already in production to write off the cows as a capital expense, lowering their overall tax burden. Schumer’s bill would also establish federal savings accounts targeted to farmers to help them save and grow during booms and weather-driven or market-based downturns. The accounts would be structured to reward savings during periods when business is strong and defer taxes on those savings until farmers must withdraw funds to cover new expenses or manage cash flow.
“When companies need machinery or equipment to operate, it can be written off as a capital expense on their taxes ... but that’s not extended to farmers when they buy cows. Farmers should get this incentive, get 50 percent off the cost of buying a cow from another farmer,’ said Schumer during a press call Wednesday.
The savings accounts would operate like a 401K or education savings account, he said, saying, “A Dairy IRA ... it makes a great deal of sense.”
“Finally we have some good times in the dairy industry ... and we want upstate to be able to harness that trend and turn it into success and profit in every corner,” the Senator said.
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