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Why is Pennsylvania Perfectly Prepared for Dairy Processing? | Dairy News

Pennsylvania Governor Tom Wolf announced the signing of HB 1059 on November 3. The bill passed the General Assembly on October 26 with bipartisan support. The bill passed the state Senate by 41 votes to 50 and the House of Representatives by 139 votes to 201.

Among other things, the bill provides for Pennsylvania Economic Development for a Growing Economy, which will be known as the PA EDGE, and creates tax credits in four key areas of Pennsylvania’s economy.

While we value the other three areas of the bill — resource manufacturing, semiconductor manufacturing, and a regional hydrogen center — the fourth critical piece is Pennsylvania dairy processing. I predict what a blessing that will be.

This support for the Pennsylvania dairy industry, based on recommendations from multiple studies and reports, is long-needed. We appreciate the time and effort from both sides of the aisle that went into the development of the legislation, reviews, revisions and presentation for the final votes in both houses.

The bill offers dairy processors established (or currently located) within the Commonwealth an attractive give-and-take deal, including incentives such as US$15 million in tax credits annually over eight years. The tax credits would be approved when the facility became operational and no company is eligible to receive a total of more than $120 million during the program years.

Processors need to make some commitments to be eligible for PA EDGE. The principal commitment is a minimum $500 million capital investment to construct a processing facility. And an effort must be made to use local labor, creating a workforce of 1,200 people. The jobs must be permanent and new jobs in the company, the remuneration of which corresponds to the requirements of the applicable wage law.

I forgot to mention that eligible recipients of the tax credit will receive a credit of $0.05 per gallon or equivalent, provided milk is produced and purchased in the Commonwealth.

PA Perfect for milk processing

What does the Pennsylvania dairy have to offer a large processing facility? (Don’t get me started.)

Aside from our beautiful landscape, we have water and this fact helps our agricultural industry, including dairy, to thrive.

I did some research with the National Oceanic and Atmospheric Administration and found that annual rainfall has actually increased over the past two years, an important consideration given that some of our western states are suffering from reduced rainfall and drought.

And the government has forecast increases across our state as a whole to continue at least until the middle of this century.

Research from multiple sources, including the University of Minnesota and Penn State, shows that water is the key nutrient for dairy cattle digestion and promoting health. But that’s not all a dairy farm uses water for. There must be an adequate water supply to clean and disinfect equipment, flush stalls and cool cows in very hot weather.

Besides our water supply, I have to mention the soil in most parts of the state. Pennsylvania generally has a good sand to silt to clay ratio, which encourages good plant and forage growth, which is essential to the dairy industry.

Another thing that makes Pennsylvania attractive as a dairy processor is that we have a lot of liquid milk available — and we can produce more.

Most of our farmers could increase their production levels through changes in management strategies, and quite quickly. I’ve also heard many talk about buying more cows. They’re just waiting for the opportunity. I’m happy that PA EDGE will offer at least some of them this opportunity.

Pennsylvania has a large workforce and a strong network of community colleges and secondary schools that work with industry to provide a semi-skilled and skilled workforce for businesses and industry.

Financial aid and educational grants make enrollment in community colleges reasonable and affordable. Many companies offer on-the-job training to hire and retain qualified workers.

And besides the number of workers, I believe that Pennsylvanians have a strong work ethic. This is important for any company wishing to invest in our state.

Oops, I almost forgot our road system. We certainly get bashed for our potholes and cracked sidewalks, but few places in the country have the road system we do, providing access to major population centers and routes north, south, east, and west.

I think we have everything. So thank you, Governor Wolf, and thank you, General Assembly of Pennsylvania and the sponsors of HB 1059 and everyone who voted for it.

The Pennsylvania Milk Marketing Board is always available to answer any questions or concerns you may have. I can be reached at 717-210-8244 or email at [email protected]

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