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Job Impact Statement 6 NYCRR Parts 360 & 750

Job Impact Statement

  1. 'Nature of Impact.' This rule is expected to create jobs and employment opportunities.
  2. 'Categories and Numbers Affected.' There are currently approximately 855 dairy farms that have 100-199 mature dairy cows in New York State. The Department of Agriculture and Markets estimates that as a result of this rulemaking approximately 285 of these farms will increase the size of their herds to more than 200 mature dairy cows over the next decade. Based upon input from dairy industry experts and agricultural service providers in the field, it is estimated that approximately 50 dairy farms are positioned to expand above 200 cows within the first year of the policy change. From that point, the balance of herd growth above 200 mature milking cows is likely to occur at a rate of 10-30 farms per year. This rulemaking is forecasted to increase the total NYS herd size by approximately 25,000 milking cows based upon 285 dairy farms expanding on average by 90 cows per farm. Based upon cow labor needs, it is estimated that one dairy farm job is created for every 40-50 cows added, so the addition of 25,000 cows over the next several years equates to 500-625 new on farm jobs.

    The Cornell University study, Schmit and Bills (2012; http://dyson.cornell.edu/outreach/extensionpdf/2012/Cornell-Dyson-eb1211pdf) finds that new on-farm jobs lead to additional jobs in the agricultural services industry (feed, animal health, fertilizer, farm equipment, crop protection, construction, milking systems, fuel, trucking, etc.). Therefore, a total of 700 to 875 jobs could be realized at the farm production level. The same study estimates job multipliers at the dairy processing level, as well. For every job created in the dairy processing sector, approximately 5 additional jobs are created in the various food processing service industries (dairy processing systems, manufacturing services, packaging, trucking, construction, fuel, marketing, etc). A June 2012 study by the NYS Department of Labor (http://www.labor.ny.gov/stats/PDFs/enys0612.pdf) shows that Greek yogurt processors have created approximately 1,300 jobs since 2007, with another major yogurt plant set to add nearly 200 jobs by the summer of 2013. Considering the multiplier for dairy processing jobs, the growth since 2007 equates to an additional 7,500 jobs, totaling 9,000 jobs overall in the dairy processing and associated service industries. Increasing milk production in New York State is considered critical to maintaining the processing plants responsible for the jobs and, based on the positive trends for Greek yogurt consumption, will be a key element for continuing the job growth in dairy processing and associated support industries.

    The Schmit and Bills study referenced above also finds that, like jobs, economic growth by farms and dairy processors is also coupled with multipliers, because those industries tend to make large portions of their business expenditures within the state. For dairy farms, for every $1 of output, $0.67 of additional economic activity is generated by the agricultural service industries. Assuming a milk price of $17.50/cwt and an eventual increase in milk production of 500 million lbs/year (5 million cwt/yr), the value of the increased production to farmers equates to $87.5 million/year. Applying the economic multiplier brings an additional $59 million/year, totaling nearly $150 million in additional economic activity with this policy. When applied to the dairy processing sector, the study finds that for every $1 of output, $1.18 of additional economic activity is generated by the dairy processing service industries. While the impact of this policy on Greek yogurt production is not quantified, Chobani estimates that it will achieve $1 billion in annual revenues in 2012 (http://www.nado.org/wp-content/uploads/2012/09/yogurt.pdf). The economic multiplier is substantial when added to direct economic output from dairy processing plants. With positive trends in Greek yogurt consumption, increasing milk production to help maintain and grow New York's dairy processing industries will likely result in significant economic growth. The Division of Milk Control has recently reported that they are aware of 37 different dairy processing projects that are under consideration. Of those 37 dairy processing facility projects, 26 are new plants. The majority of these new processors are primarily engaged in manufacturing of cheese; however at least 5 are yogurt facilities. Cumulatively, these new dairy processors represent a 10 % expansion of facilities inspected by the Department. The remaining 11 dairy processing projects involve expansions and upgrades. Specifically, 2 of these are larger dairy processors engaged in the manufacturing of yogurt.

    It is possible that some non-discharging Medium Concentrated Animal Feeding Operations (CAFOs) with 300 or more mature dairy cows may decrease the size of their herds to less than 300 mature dairy cows to relieve themselves from the permit requirement, but the number of Medium CAFOs downsizing for this reason is expected to be insignificant. CAFOs that are required to obtain an ECL SPDES permit must submit Comprehensive Nutrient Management Plans at the time that they are initially permitted and an annual Nutrient Management Plan thereafter. These Nutrient Management Plans are prepared by certified planners. This rule making will decrease the number of Medium CAFOs that must have permits and submit Nutrient Management Plans (although some of these farms may voluntarily elect to maintain permit coverage and submit Nutrient Management Plans). As a result, it is estimated that a negligible number of certified planners may lose business as a result of this rule. These certified planners, however, should still have opportunities to prepare Nutrient Management Plans, provide other necessary agricultural services and may in fact see an increase in business from dairy herd expansion over time.
  3. 'Regions of Adverse Impact.' There are no regions in the State where this rule making will have a disproportionate adverse impact on jobs or employment opportunities.
  4. 'Minimizing Adverse Impact.' There are no unnecessary adverse impacts on existing jobs. This rulemaking is expected to create new on farm jobs and increase employment in the agricultural services industry, dairy processing industry, and food processing service industry.

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