While two leading Greek yogurt brands are expanding their operations at their main production plants in upstate New York, another, the American division of a major South American company is building a $20 million plant in Batavia, NY. New York’s dairy farmers are also benefiting as Greek yogurt takes much more milk to make. Basically it takes three pounds of milk to make one pound of Greek yogurt compared to a single pound of milk to make a pound of traditional yogurt. Greek yogurt has most of the water and whey strained out, making it much denser and richer in protein. As an example one leading manufacturer reports they take in three million pounds of milk a day, from which they produce a million pounds of yogurt.
Sales of Greek yogurt have increased nearly 40 percent since 2011, and production has risen almost 60 percent in the past five years.
In August 2012, New York Governor Andrew Cuomo hosted the state’s first “Yogurt Summit” to help ensure New York’s place as the yogurt industry’s premier destination. According to the governor’s office, the number of yogurt processing plants in the state has increased from 14 in 2000 to 29 in 2012. The state’s yogurt plants doubled production from 2005 to 2011 and the dairy and yogurt industries have added $8.9 billion to New York’s economy.
As many of these Greek yogurt manufacturers are expanding their facilities, analysts expect that strong sales growth will continue this year.
All this yogurt production has a positive impact on the prices for used equipment, simply based on supply and demand. This is good news for secured creditors and borrowers alike, as strong equipment values support solid asset based loans. We expect strong prices for equipment sold at auction in the food and dairy sector into the foreseeable future.