New greenhouse type free stall barn, Owen Farm, Woodhull, New York
New greenhouse type free
stall barn, Owen Farm, Woodhull, New York
2.0 Agricultural Inventory
The following represents an overview and
inventory of the agricultural industry sector of the Steuben County,
New York economy:
2.1 Natural Resources
for Agriculture
2.2 Agricultural
Land and Districts
2.3 Land Use and Development Trends
2.4 The Economics of Steuben
County Agriculture
2.5 Relationship to Other
Planning
2.6 Agricultural Innovations
and Trends
2.7 The Forestry Sector
2.8 Strengths, Weaknesses,
Opportunities and Threats
2.1 Natural Resources for Agriculture
The total area of Steuben County is about 1,408 square miles (approximately 901,120 acres). Elevation ranges from 714 feet along Keuka Lake to 2,400 feet in the southwestern part of the County (the Call Hill area in the Town of Hartsville). The growing season, as a result, varies considerably. It generally ranges from 115 to 120 days in the southwest portion of the County, 135-140 days in the major river valleys (Canisteo and Cohocton) and 140-145 days in the northeast section. Keuka Lake, moreover, moderates temperatures sufficiently along its borders to accommodate vineyards. Precipitation averages 31 to 36 inches per year, with the lower figure common in the river valleys and the latter found in the higher elevations.
County soils as a whole have been classified by the U.S.D.A. Natural Resources Conservation Service according to their capabilities for agricultural use. The 1978 Soil Survey of Steuben County, New York indicates that five soil associations characterized by "dominately deep soils that have a fragipan and that formed in glacial till" represent over 506,400 acres or 56% of the County. These include the Bath-Lordstown, Mardin-Ovid-Lordstown, Mardin-Volusia-Lordstown, Oquaga-Morris-Wellsboro and Volusia-Mardin associations.
The Soil Survey also rates specific soils as to their suitability for growing crops. Tables 2.1 and 2.2 following list soils by their agricultural and woodland capability classifications. There are eight classifications in terms of general agriculture, ranging from Class I to Class VIII (listed as 1 to 8 on table) based on the extent of limitations for cultivating crops and maintaining pastures. Class I soils have few limitations that restrict their use and Class VIII soils are generally unusable. This information is found in the "Suitability Class - Crops" column. There are five forestry classifications ranging from Class 1 to Class 5 based on the woodland management and productivity capacities of each soil.
Generally, the County's soils must be rated as moderate to good. Some 58.3% of the County can be described as good to very good for agricultural production. These include large areas of Class I to Class III soils usable for crops such as silage corn, beans, peas, potatoes and hay plus a few other soils suitable for grape production. It must also be noted that the Soil Survey typically maps soils in units of 5 acres or more. Some smaller pockets of soils that can support specialty crops may exist within these. Additionally, the wide use of vinifera grafted on native root stock has made still additional soils usable for vineyards where the climate permits the same.
Overall, therefore, the County's soils provide a sound foundation for agriculture although some soils are best suited to permanent sod, pasture or trees becuse of drainage, stoniness or slope limitations. Those soils listed in Table 2.1 are also threshold candidate areas for a voluntary Purchase or Lease of Development Rights program should the County decide to develop one. There are, in Steuben County's case, other equally important factors but the existence of such prime soils should be a necessary prerequisite to participating in such programs.
Table 2.1 - Most Productive
Steuben County Soils
Note: * With drainage
Crop class suffices: e = erosion, w = wetness and s = shallow
or stony
Forest class suffices: r = steep slope, w = excessive water,
x = stoniness and o = no limitations
Table 2.2 - Less Productive Steuben County Soils
Note: * With drainage
Crop class suffices: e = erosion, w = wetness and s = shallow or stony
Forest class suffices: r = steep slope, w = excessive water, x = stoniness and o = no limitations
2.2 Agricultural Land and Districts
Agricultural land within Steuben is concentrated in the Northwest and Southwest portions of the County with additional pockets of activity in the Addison-Tuscarora, Pultney-Wayne, Caton and Hornby areas. Farmland also follows the I-86 corridor from Corning to Bath.
The Northwest section is an excellent producer of potatoes, other vegetables and grains. It includes several hundred acres of rich muck land in the vicinity of Arkport and approximately 25-30 potato farms. Dairies of all sizes are also found in this area and it supports several corn silage operations. This rolling land is part of the Western New York dairy region known nationwide as a large milkshed. It is an easily accessible area via Routes I-86 and I-390.
The Southwest section of the County is more remote, higher elevation, somewhat colder and less accessible. Land prices are inexpensive. It supports dairy, beef, corn silage, hay and pasture production and grows excellent Northern Hardwood tree species. A substantial and very successful poultry operation is located in West Union Township. This area also includes a significant Amish farm community in Jasper and Woodhull. Many of these families are engaged in wood processing enterprises and farms tend to be much smaller.
The Addison area, too, includes an Amish farm community and a number of small to medium sized dairy operations. Still another is located in the Prattsburgh-Wheeler area. Prattsburgh also includes another smaller muck area. Dry beans, grain, dairy and corn silage production is found along I-86. The Keuka Lake (Pultney and Wayne) area includes a very successful wine and grape industry. Several wineries are found in Hammondsport and along the Lake, the emphasis having shifted from bulk wine and grapes to farm wineries over the last two decades.
The County recognized this activity by establishing 25 official agricultural districts over the years. This large number reflected the sheer size of the County and the diversity of its agriculture. However, it has proven to be an administrative problem with an average of three districts up for renewal every year. The County Agriculture and Farmland Protection Board, as of April, 2000, had reduced the number to 23 by consolidating No.'s 1, 24 and 25. It is now in the process of further consolidation to facilitate future administration, combining No.'s 7 and 8 and No.'s 2 and 15, for example. A map is attached to indicate the present layout of these districts. There is a concurrent effort to recruit additional farms to the districts. Ideally, these will be consolidated into no more than eight districts to allow one renewal per year and more time for education and promotion of district benefits.
The land area included in agricultural districts is constantly changing due to the renewal process. The seven districts renewed in 1999-2000 represented 72,967 acres of land and 231 different farms. There was a combined loss of 73 farms from eight years earlier but district acreage actually increased by 3,085 acres. This reflects farm consolidation taking place across the country and exhibits a positive effort on the part of the Agricultural and Farmland Protection Board to include as much viable agricultural land as possible within its districts. The following Table 2.3 summarizes data regarding Steuben County's districts.14 It demonstrates that 791 farms, representing 274,304 acres or 30% of the County, are included in agricultural districts. This compares well with the 348,971 acres of farmland the Census Bureau recorded in 1997 but opportunities to expand districts do exist.
Table 2.3 - Steuben County Agricultural Districts
2.3 Land Use and Development Trends
Steuben County's population has been relatively stable in recent years yielding only limited development pressures on the County. Those that do exist are accounted for by proximity to the Rochester area and Keuka Lake. There has, nevertheless, been a significant loss of farmland within the County, about 7.8 acres per day between 1992 and 1997, some of which reflects new commercial and residential development.15
Growth patterns within the County are revealed in Table 2.4, which indicates that the towns in the Northwest and Northeast sections of the county, are the fastest growing. Highway interchange development spreading south from the Rochester direction and new development near Keuka Lake accounts for most of this. It is impossible, however, to describe any section of the County as rapidly growing.
There is new land development in Corning,
Erwin and Hornellsville that has displaced some agriculture but
it has simply off-set losses in the Cities of Corning and Hornell
and is not reflected in overall population growth. Indeed, the
County has lost population since 1980 while New York State made
very small gains. Farmland conversion pressure, therefore, has
been limited to selected areas and the general loss of farmland
can probably be attributed more to other factors such as low profitability.
Table 2.4 - Population Growth, 1990-1999 16 17
2.4 The Economics of Steuben County Agriculture
Some 348,271 acres of Steuben County is farmed, approximately 39% of the land mass. About 124,500 acres or 36% of this land is wooded, in addition to 355,400 acres of other forested land, meaning that fully 78% of Steuben County is in farm or forest use and this largely accounts for its character.18 There were 943 farms generating sales of at least $2,500 in 1997 and 631 of these produced $10,000 or more of product. Altogether, these farms produced some $78,665,000 in sales in 1997, of which $54,906,000 or 70% was livestock-related. These various products accounted for 2,713 full or part-time jobs (including 698 owner-operators primarily occupied with farming). This is the agricultural economic base of Steuben County and it is fairly diverse with a very strong dairy sector composed of both small and large size farms.19 Table 2.5 and the chart following provide further data.
Table 2.5 - Market Value of Steuben County Agricultural Products, 1997
The three charts following illustrate additional trends with respect
to sales of dairy and other agricultural products. Sales of agricultural
product increased by 7% between 1987 and 1997 (before adjustment
for inflation). Grain sales gained 38% and hay and silage sales
increased by 56%. Nursery and greenhouse crops grew by 297%, a
major expansion in activity shared with Schuyler County. Miscellaneous
livestock operations (e.g., poultry, hogs, sheep) increased by
38% and other crops added 11% in sales for the decade.
Notwithstanding these increases, there was a 31% decline in fruit sales and a 27% drop in vegetable sales. Also, dairy sales declined by 2% and cattle and calve sales lost 3% although both had experienced significant gains between 1987 and 1992. The fruit decline is attributable to a loss of orchards and movement of grape supplies into wine rather than juice. Wine marketings do not count as agricultural sales in the Census of Agriculture, a fact which leads to understatement of agricultural activity in Steuben County.
Overall, Steuben County agriculture has fared reasonably well and, as stated above, the numbers above do not account for several positive changes in the wine and grape industry. This is because winery sales are not counted by Federal agencies as agriculture but, rather, as food manufacturing. New York State, however, is the second largest producer of wines in the U.S. with 125 wineries in 1999. Most of these (106) have been established since 1976 when the Farm Winery Act was passed. Moreover, 12 are found on the Keuka Lake Wine Trail and Steuben County is home to 7 commercial and farm wineries.
The farm wineries produce fewer than 150,000 gallons each but are growing and expanding at a steady rate with the success of the wine trails throughout the Finger Lakes. Less than half grow their own grapes, relying instead upon other local growers, broadening the impact of the industry. The Agricultural Census indicates, in fact, there were 62 grape producers and 1,362 acres put to this use in Steuben County in 1997. This includes juice grape operations as well as wine grapes.
Wineries along the Keuka Lake Wine Trail produced 113,000 gallons in 1997 and had storage capacity for 282,000 gallons. This does not include recent gains attributable to expansions at Bully Hill and Heron Hill nor does it include the totals for wineries that didn't report to the surveys conducted for this purpose. Bully Hill indicates on its website that this winery alone produces 200,000 cases (approximately 40,000 gallons) annually and Heron Hill produces 15,000 gallons of estate wines. Wine trail capacity in 1985 was only 185,000 gallons and production was only 60,000 gallons. Capacity has grown by 52% and production has expanded by 88% over the last 12 years, as the following chart indicates:
Grapes used were 48% French American, 41% Vitis Vinifera and 11% Native American varieties in 1997. The French-American varieties were first introduced to the region by Steuben County's Dr. Frank. Demand for Native American and Vinifera grapes was expected to grow by approximately one-third by 2002 with a 15% increase in use of French American hybrid varieties. This diversity has helped to stabilize the industry and allowed it to continue to grow by using additional soils.
The New York Wine and Grape Foundation, source of the above data, also indicates the Keuka Lake Wine Trail attracted an estimated 79,000 visitors in 1997 and this was up from a meager 2,000 visitors in 1985, only 12 years earlier. Major expansions at various local wineries over the last 2-3 years suggest that Wine Trail tourism along Keuka Lake is just beginning. Heron Hill, in fact, estimates that visitation was up another 47% since it expanded its tasting rooms last year, according to a recent news article.
Clearly, this element of the agricultural sector has been a bright success story for Steuben County. Assuming a minimum of $30 per gallon, the Keuka Lake Wine Trail represented over $3,390,000 in sales in 1997 and, with 7 out of 12 of those wineries being from Steuben County, this added a minimum of $2,000,000 activity to the County economy, not including multiplier effects or tourism benefits.
Potatoes are another niche product for Steuben County. It is the second largest producer in the State, with 46 producers using 5,091 acres for this purpose in 1997. Most of these potatoes go into the potato chip market, mainly to Pennsylvania processors. There is one relatively large table stock producer, however. The market is of a strictly commodity type and is shrinking somewhat, as the following chart indicates. Production per farm has also dropped slightly, from 29,807 cwt down to 27,233 cwt, an 8.6% decline.
Beef is one of Steuben County's strengths. It is the largest beef producer in the State and the industry has shown some growth recently - helped, no doubt, by the presence of Empire Livestock in the County and the nearby Taylor Packing operation in Wyalusing, Pennsylvania (which slaughters 1,800 cows per day). The average size of beef farms in the County is, however, relatively small at a little over 14 cows per herd, up from an average of 12 beef cows per farm in 1987. The following chart illustrates these patterns.
Given the large numbers of cash crops and substantial population of small farmers, many part of the Amish community, one can assume farm sales are probably being under-reported. This is a problem with the industry in general but the nature of farming in the County suggests it is more widespread in this instance and agriculture is of a significantly larger presence in the County than the numbers alone indicate.
Also, agricultural industries in the Northeast as a whole have faced particularly difficult times over the last 15 years with radical price changes in the milk industry. A number of farmers have, as a result, gone out of business. Others have expanded and some have specialized by raising cattle. Still others have engaged in side businesses ranging from growing pumpkins to recreational leasing.
These changes are responsible for the shifting sales patterns illustrated in the chart following. The most dramatic changes, however, simply reflect responses to opportunities. Steuben County's rapidly growing nursery and greenhouse industry, for example, included 55 Christmas tree growers with $1,283,000 of sales in 1997, a major agricultural niche. Another individual has developed a full-time business growing medicinal herbs.
Steuben County agricultural activity puts it at or near the top in New York State with respect to several lines of farming. This is partly a reflection of the County's size. Nevertheless, a host of relatively good soils that have supported grape, grain, potato and vegetable production combined with the capacity to grow good corn silage as a dairy feedstuff have given it a very diverse and strong agricultural economy.
It is also an agricultural economy that is fairly well-balanced between livestock and crop businesses, the County being ranked 11th and 14th, respectively, within the State of New York in these categories, yet ninth in total agricultural sales. The County is ranked as follows among New York State's 61 counties with respect to various agricultural activities:20
Table 2.6 - Steuben County Agriculture By State Rank, 1997
New York is one of the top states in the nation in milk production
and Steuben County is, in fact, ranked 93rd out of 2,563 producing
counties in the U.S. for dairy sales. It is also ranked 25th nationwide
in oat acreage, 33rd in hay acreage, 34th in rabbit sales, 35th
in corn silage acreage and 54th in potato acreage.
Sales of dairy products in the County have, as the chart below demonstrates, held steady or grown while cow numbers have declined.21 This reveals the substantial consolidation in the dairy industry. Additionally, low milk prices throughout the early 1990's (a trend temporarily reversed in 1998 with some very high pricing) may have distorted the sales trends.
One must also consider the substantial multiplier effects connected with farm sales when evaluating the size and nature of an agricultural economy. Farmers typically purchase most of their goods and services from within a 20-25 mile range of the farm, while their product is marketed outside the region. This export of product and import of dollars puts them on the high side of multiplier scales according to a Cornell University study.22
That Cornell research, conducted for 1991, indicates the following range of multipliers, by sector of the New York State economy, for both total income and full-time equivalent jobs:
Table 2.7 - Economic Multipliers
by Sector, New York State, 1991
The data suggests agriculture, forestry (see Section 2.7) and wineries generate $188,871,000 for the County economy (see Table 2.8 below), not including dairy processors like Crowley's and Polly-O that pull in milk from the larger region. Indeed, the Economic Census indicates $241,100,000 of dairy products were shipped from the County in 1992.
Table 2.8 - Economic Impacts
of Steuben County's
Agriculture, Forestry and Wine Industries, 1997
Agriculture accounts for as many as 4,110 jobs, not including lumber and wood products (discussed in depth in Section 2.7 hereof), wineries or dairy processing that add a minimum of another 1,991 jobs. These are found not only on farms, but also at accountant offices, feed mills, cheese plants, farm stores, automobile and truck dealers, truckers, veterinarians and the like.23
Steuben County farmers also own and must maintain and replace 1,122 trucks, 3,425 tractors, 2,524 balers, combines and mower-conditioners and numerous other pieces of farm equipment and machinery. They purchase over $3,207,000 of petroleum products, $15,730,000 of feed, $6,982,000 of hired farm labor and approximately $35,397,000 of other products and services from Steuben County and other nearby enterprises, many of which would not be considered farm supply businesses.24
Likewise, various out-of-County businesses serving the regional agricultural community depend on Steuben County farm trade including, for example, slaughterhouses, feed manufacturers and equipment dealers. For these various suppliers to survive and prosper, a core critical mass of farmers must be preserved and vice-versa. Otherwise, competitiveness cannot be maintained.
Cornell University also prepares a "Dairy Farm Business Summary" of financial data from participating farms. The 1999 Summary for the Western and Central Plateau Region, that includes Steuben County, breaks down average accrued income and expenses for 68 dairy enterprises.25 This information is included in Table 2.9 following. It illustrates the wide range of contributions each farm makes to rural economic activity, supporting suppliers, technicians, service providers, banks and insurance companies.
Table 2.9 - Western and Central
Plateau Region
Dairy Farm Income and Expenses, 1999
The average dairy surveyed (150 cows) ended the year with assets of $970,753 and an average farm net worth, not including non-farm assets and liabilities, of $643,657, reflecting the larger sized farms that predominate in the County and throughout Western New York. Dairy farms, therefore, are very significant economic development sites as compared with other manufacturing or service enterprises. There were approximately 60 dairy farmers with roughly 10,000 cows in this size category in 1997.
These milk producers represent major investments in Steuben County, as much as $58,245,180 based on the average. Also, there are another 300 smaller dairies who have made major investments in the County. "Farm Business Summary" data for New York State dairy farms of 65 or fewer cows indicated average assets of $406,242, suggesting there is another $120,000,000 invested in the Steuben County dairy industry by this group of farmers. Some will, of course, get absorbed into larger farms over the years but those investments will, nonetheless, remain if the industry as a whole is maintained.
2.5 Relationship to Other Planning
Although Steuben County has not formally adopted a county comprehensive plan, it does have an Economic Development Plan that involves agriculture. There have also been some other planning efforts with impacts upon on the industry. Some of the most important are reviewed below:
Steuben County Economic Development Plan
The Steuben County Legislature, with leadership from the County Planning Department, has created an economic development strategy. This document gathers essential background data on the local economy, sets forth several specific objectives and establishes an action plan to implement the strategy. Among its goals and recommendations are the following items relevant to agriculture:
· Maintaining a diverse economy by encouraging use of indigenous resources, promoting tourism and maintaining and "strengthening agriculture and agribusiness as a major sector of the economy."
· Supporting these efforts through continued use of the County's Economic Development Fund to finance new projects that will result in the "creation or retention of employment opportunities" or otherwise improve quality of life within the County.
· Encouraging County businesses to "market Steuben County products and indigenous resources, especially to consumers purchasing similar goods from outside the County."
· Providing "the necessary infrastructure to promote economic development," doing so through the inventory and prioritization of improvements on "primary economic development routes" and the exploration of methods for reducing electricity costs.
· Providing "a positive climate for economic growth while maintaining Steuben County's natural environment and quality of life," including education and technical assistance in promoting compact and mixed-use development where infrastructure exists to support it, so as to preserve open space and critical environmental areas.
· Identifying critical environmental areas (that would presumably include prime farmland) using a Geographic Information System (GIS) approach.
· Holding a periodic workshop to "familiarize potential applicants with available funding and technical assistance for economic development."
· Convening a "task force to explore opportunities to: 1) market products indigenous to Steuben County; 2) develop value-added businesses using County agricultural products and natural resources and; 3) identify opportunities for County businesses to supply other County businesses with needed products and services."
Southern Tier Central Agri-business Retention and Expansion Project
The Southern Tier Central Regional Planning and Development Board initiated a project in 1996 to "identify and analyze economic development issues critical to the agricultural sector of Chemung, Steuben and Steuben Counties" with a focus on business retention and expansion. It included surveys of both agricultural producers and agri-businesses. A broadly-based advisory committee provided oversight. Recommendations included the following:
· Supporting establishment and renewal of Agricultural Districts.
· Providing information and peer support for non-traditional agriculture.
· Coordinating efforts to reduce electrical rates for producers and agri-businesses.
· Training producers in marketing and adding value to farm products.
· Providing technical assistance in business planning to producers.
· Establishing retention of agri-businesses as a regional priority.
· Providing further property relief for both producers and agri-businesses.
· Linking agri-business retention efforts to those for other businesses.
· Identifying and support the expansion of agri-business clusters.
· Providing financial incentives for agri-business start-ups and expansions.
· Assisting agri-businesses in diversifying product lines.
· Linking with other regional and national efforts to improve commodity prices.
Southern Tier Central (STC) also administers Appalachian Regional Commission (ARC) and Economic Development Administration programs within the three-county including Steuben. These provide grants-in-aid for various economic development purposes.
STC has used these and other sources of financing to establish several revolving loan programs available to agri-businesses and others. These include the low interest loans provided through the affiliated Regional Economic Development and Energy (REDEC) and REDEC Relending Corporations. An example is the Entrepreneurial Micro-Enterprise Revolving Loan program now being established using ARC funds. It will provide low-interest loans of up to $20,000 to leverage other commercial financing for small business start-ups and expansions. This will specifically include those businesses with the potential to "improve the local economic impact of existing natural resources and outputs" and "diversify the local economy."
STC also serves as the regional economic development agency. It prepared a report in 1993 called Economic Development Overview and Strategy Considerations. This study indicated there was strong inter-county linkages between Schuyler and Steuben Counties insofar as the dairy and wine industries. It also documented the importance of the forestry sector to the economy.
Sullivan Trail Resource Conservation & Development (RC&D) Council
The Sullivan Trail RC&D Council was formed in 1973 to encourage rural economic development in the Counties of Chemung, Ontario, Steuben, Seneca, Steuben and Yates. It has secured numerous grants through USDA and others to address flood protection, agri-tourism, erosion control, rotational grazing and wood products issues among others. It has developed impressive brochures and Internet sites promoting the region's farm markets, wood products and tourism potential. It has funded training of producers in the utilization of intensive rotational grazing to lower the costs of farm inputs and helped to pilot the use of wood in the construction of highway bridges.
Still other programs have addressed the need for assistance with farm nutrient management and on these projects, the Council has worked cooperatively with local Soil and Water Conservation Districts, Cornell Cooperative Extension of Steuben County and the Natural Resources Conservation Service. It has, too, developed a professional marketing piece aimed at consumers and promoting various farm markets and agri-tourism attractions in selected counties. Unfortunately, not enough Steuben enterprises have participated to date to make it feasible to include the County in that particular program.
Local Comprehensive Planning
Local land use planning can be of great impact on agriculture, for example when towns require residential lots sized so large that any new development is bound to consume excess agricultural land. This is the principle inherent in the County's recommendation to promote compact development in areas with infrastructure and the capacity to absorb it (see discussion above). Towns can also have positive impacts, however, by including impacts on agriculture as part of their site plan review criteria.
Overall, land use planning within Steuben County has tended to operate at a very fundamental level. There are 48 individual municipalities and about half have some form of zoning or site plan review regulation. These are generally found in the Corning, Hornell and northern sections of the County. These regulations do not, for the most part, include strong agricultural protection mechanisms. It is also apparent that many planning Board members could benefit from education regarding the Agricultural District Law, Agricultural Data Statements and farm issues in general. There have been some instances of farm/zoning conflicts (e.g. regarding issues such as the applicability of building setbacks to hog barns and migrant housing) suggesting the need for more knowledge of New York State law on this subject. The County is, however, simultaneously with the preparation of this Plan, considering a proposed Right-to-Farm Law.
Schuyler County Agricultural and Farmland Protection Plan
Steuben County shares many features with its neighbor, Schuyler County (e.g., large dairies, thriving wine industry) and the latter has already assembled an Agricultural and Farmland Protection Plan. That plan potentially impacts on Steuben in several ways because the counties form two-thirds of the Southern Tier Central region and have numerous opportunities to work together. The Schuyler plan goals include the following:
· Preserving a critical mass of both farmers and agri-businesses to support competition and providing a foundation for a sound agricultural economy, through the purchase or lease of development rights and other farmland protection mechanisms.
· Increasing the economic returns associated with farming to achieve parity with the typical non-farm wage earner and produce a rate of return on farm investments so as to be able to attract private capital.
· Diversifying and broadening the agricultural economic base to provide new income opportunities, increasing agricultural sales in greenhouse, fruit, vegetable, poultry, sheep, goats, beef and other diversified products.· Increasing public recognition of the value of agriculture and farmland and developing a better understanding of farm issues by non-farmers.
· Attracting new entrepreneurs and younger households to farming ventures and expanding the availability of capital to finance such enterprises.
· Protecting farmers from development and regulatory intrusions that threaten their ability to operate in a normal competitive fashion as agricultural enterprises.
· Integrating agricultural development into town and County economic strategies and land use plans so as to take advantage of the farm opportunities that will inevitably result from growth of the community as a whole.
These strategies are clearly compatible with those recommended herein and the two Counties should pursue opportunities to work together in addressing them wherever possible. Other nearby counties such as Tompkins and Wyoming have also adopted comparable goals and objectives as part of their economic development and agricultural protection programs.
2.6 Agricultural Innovations and Trends
The single greatest challenge facing agriculture today is low profitability. Finding the right niche market in which to make a decent living is every farmer's battle. Some have chosen to leave the farm for other opportunities but recent innovations and trends offer hope for keeping them on the land. These include the following:
· New generation farm cooperatives are being formed across the country to market agricultural products and purchase supplies. These are taking shape around the original concept of cooperatives, which was to serve the narrow but compelling interests of small groups of producers united by specialized needs. Many of the larger cooperatives have failed in this regard by serving too many interests. Producer cooperatives of this sort can secure growing contracts in advance, advertise and promote using a collective theme and, by operating from a narrow scope, focus their efforts on highly profitable lines of business.
· Small-scale agriculture and farm diversification is also regaining favor in some quarters as farmers realize the opportunities to earn higher margins off small crops and enterprises. Specialization can increase profits and is the answer for many farmers but when it is used solely for the purpose of increasing production without corresponding management to lower the costs of inputs, the market can quickly become flooded with too much product.
Only price supports and farm consolidations have allowed farmers to earn reasonable incomes under such conditions and they are now ever more subject to the whims of governmental policies and market prices on a relatively few products. Dependence on the market price of a single commodity can lead to financial ruin, but diversity can help to spread the risk and allow a farmer to address niche opportunities. Indeed, specialization can work in synchronization with diversification (e.g. a beef stocker who also raises vegetables).
· Adding value to farm and forest products before they leave the County is also a method increasingly being used by farmers and others to increase profitability. There are, for example, various international and other firms marketing on-farm equipment which, for investments of $100,000 to $300,000, can put a dairy farmer in the business of producing yogurt, ice cream, butter and other added value products. With proper marketing and exploitation of access to the nearby urban markets, this could offer dairy and goat farmers a means of becoming "price-makers" rather than "price-takers." New York State's farm tax breaks and the proposed Steuben County Industrial Development Authority Tax Abatement Program (see Recommendations) could be used to further enhance these opportunities.26
· A corollary to the above trends is more and more emphasis on direct marketing of farm products. Farm stands have gained in popularity and add to the tourist charm of an area. The Ithaca Farmers Market provides an excellent example of how to do this. Such a market locally could become an ever more important tourist attraction through linkages to other tourist attractions (e.g. the Keuka Lake Wine Trail), thereby providing opportunities for local farmers to earn extra income. Some Southern Tier Central farmers already depend on direct marketing for much of their income by selling farm products to the New York City markets and over the Internet.
· Green-labeling of farm products is another trend which is of particular importance to Steuben County because it sits on the outside edge of the largest environmentally conscious market in the world - the New York City metropolitan area. The County is also poised, of course, to tap the much nearer Rochester market. Green-labeling in this context can take many forms. It can include organic products, fresh produce, pastured poultry, natural beef or firewood taken from forests managed under environmentally friendly conditions.
There are examples and/or opportunities for many of these in Steuben County. One of the challenges, of course, is to avoid diluting the value of the green-label by employment of lax standards, balancing this concern against setting standards so high that small farmers cannot participate. The organic food industry faces such an issue at the moment with too many farmers claiming to be organic who are really not. A similar problem existed with New York State's Seal of Quality program. It's new "Pride of New York" program, however, appears much more workable and is now being used by some 180 producers across the State. Unfortunately, only two of these are from Steuben County - a Christmas tree grower and a beef producer.
Another interesting and instructive example of green-labeling is the Chesapeake Milk™ program piloted, in 1999, by Penn State University, EPA, the Chesapeake Bay Foundation and others. It labeled milk, produced under water quality programs designed to protect the Bay, with an environmental certification and then added a 5¢ per half-gallon premium onto the price. Those premiums were returned to participating farmers as a profit share and for use in covering the costs of environmental improvements.
The test program indicated there were several difficulties in implementing a green-label program. Convincing retailers that there was value in a consumer-funded environmental initiative was challenging when Chesapeake Milk™ was, in some stores, priced as much as $0.60 per half gallon over other conventionally produced milk. Consumers, aware that only $0.05 of the purchase price was actually going to the stewardship fund, were disenchanted. Pre-order requirements from distributors and consumer confusion were also problems.
Consumers will not buy large volumes of green-labeled products with high premiums and the test program indicated that preliminary work with retailers, distributors and processors to market the products and establish a reasonable relationship between price and value are critical. Green-labeling, therefore, must be viewed from a practical perspective. It is simply one of several methods of adding value to agricultural products. No panacea, it nonetheless offers a potential method of recovering some of the costs of environmental regulation.
Trees are one of Steuben County's most important agricultural crops. Still, their value is often underrated because the crop rotation period is so long and the economic returns not as frequent or obvious as they are with other agricultural industries. Some 479,900 acres or 53% of Steuben County is considered timberland. Sawtimber represents 247,300 acres with the remainder consisting of seedlings, saplings and pole timber.27 A total of 95% of the timberland is owned by farmers or private individuals. It is a valuable income-producing asset for these landowners. Private corporations own another 13,900 acres of woodland. The State and County governments also own 10,400 acres of forested land..
The following is a breakdown of privately owned woodland in the County by forest type:
Table 2.10 - Steuben County
Private Timberland by Forest Type, 1993
These largely hardwood forests produce high quality timber and
spectacular fall foliages that attract tourism throughout the
Northeast. The Forest Service studies indicate the most common
species, in terms of numbers of live trees, are Soft Maple, Hard
Maple and Ash. However, local industry representatives suggest
Red Oak is also the top species. Significantly, some 245,100 acres
or 51% of Steuben's timberland is considered by the Forest Service
to be either fully stocked or over-stocked and, altogether, the
County's timberland represents 583,200,000 cubic feet of growing
stock.28 This timberland
includes an estimated 1,379,400,000 board feet of sawtimber and
is growing by 38,800,000 net board feet per year.29
The following table compares Forest Service estimates of growth
compared to average annual removals of sawtimber:30
Table 2.11 - Steuben County
Average Net Annual Growth and
Average Annual Removals of Sawtimber by Species Group, 1993
(All figures, except percentages, are in board feet)
The 1,379,400,000 board feet of sawtimber suggests average production
of 2,874 board feet per acre. Managed stands, according to local
industry representatives, typically produce 2,000-3,000 board
feet per acre and the Forest Service numbers, therefore, may slightly
overstate yields for Steuben's largely unmanaged woodlands. Moreover,
annual growth in the case of managed stands is about 100 board
feet per year per acre. This suggests a gain in sawtimber of roughly
50,000,000 board feet per year as compared to the Forest Service's
estimate of 60,300,000 board feet. The growth and cutting rates
for softwoods may also be off the mark somewhat, as these species
are, in fact, being cut regularly. Overall, annual growth does
appear to exceed removals, but probably not by as wide a margin
as indicated in the FIA reports.
The Forest Service data indicates cutting
rates within the County are twice New York State's 0.8% average
and well above those of neighboring Pennsylvania (1.0%) and the
New England region (1.3%).31
The rates for most species are sustainable, with the exception
of Beech (which is low value, often diseased and needs to removed
anyway) and high-quality Oak (particularly Red Oak). Indeed, the
ratio of annual growth to removals as well as other evidence,
indicates a continually maturing forest within the County. Except
for the Oak being cut at rates exceeding other species, both hardwoods
and softwoods are not being harvested to the extent they could
or should be in many cases. This is not good for wildlife management,
the long-term vitality of woodlands or the forest industry. Too
many large trees crowd out the understory vital to regeneration
and to the animal populations for cover and as food. More timbering
using best management practices would create a healthier forest
for the long-term.
There are, nevertheless, serious concerns with the harvesting
patterns that have been taking place throughout much of the hardwood-rich
Northeast and in Steuben County, in particular. The trend has
been to "high-grade" forests to remove the better quality
trees while leaving behind the less-valuable stock. This is what
is happening with the Oak. It is a result of the general lack
of demand in the region for low-grade logs and species. There
is a threat that local forests will be taken over by these species
or simply prevented from regenerating if markets are not identified
for them as well. The situation is, ironically, exacerbated by
the large number of small logging and milling operations that
tend not have uses for the low-grade materials. Fortunately, there
are companies operating in the County (e.g. Cotton-Hanlon) that
have employed sustainable forest management practices and made
deliberate efforts to cull or market low-grade materials. Other
industry representatives (e.g. DEC) have also helped to highlight
the problem and promote practices such as commercial thinning
to address high-grading issues.
Hardwood lumber production Statewide is up 50% since 1990. Hardwood lumber is also a niche business from a world-wide perspective. It is less affected by cheap softwood imports from South America, plus little cutting of hardwoods is allowed on Federal lands, giving eastern producers some opportunities. Steuben County is an excellent source and the contributions of the industry to the County economy, if not up to potential, are substantial. The following table summarizes some estimates of economic impact based on the FIA 1996 report on roundwood production in Steuben County:
Table 2.12 - Steuben County Roundwood Products, 1996
* Per thousand board feet (MBF) based on NYS-DEC Stumpage price report for Winter, 2000
The above figures do not include waste chip
or roundwood sales for pulpwood. There are a number of Pennsylvania
plants still taking these materials from Steuben County, even
after Proctor and Gamble stopped doing so. This represents additional
economic activity. The economic multiplier for wood products,
as indicated earlier, is 1.78 and this suggests the $7,944,000
in estimated sales (rounded) actually generates a total annual
economic impact for Steuben County of $14,140,000 (some $6,196,000
of additional activity from related enterprises). These numbers
are substantiated by County Business Patterns - 1996 data from
the Census Bureau, indicating that the County had 12 lumber and
wood products manufacturers, employing over 95 individuals and
with a combined payroll of $1,923,000. The Empire State Forest
Association reports, based on 1992 data, that New York State forest-related
enterprises produced $2.25 in valued-added for every dollar of
payroll generated, suggesting total additional impact from wood
manufacturing in the area of $6,260,000, almost exactly the same
figure as the multiplier data indicates. Not included are many
of the single-proprietor sawmills and over 100 portable sawmills
(many Amish owned) operating in Steuben County according to DEC
representatives.
The forest industry as a whole can fairly be described as somewhat
underdeveloped but these statistics indicate it is a very substantial
economic asset to Steuben County. The Coastal Lumber and Cotton-Hanlon
operations in nearby Schuyler County provide a good illustration.
These businesses, separate entities since 1993, account for timber
management on approximately 35,000 acres of forest land within
the region and pull in timber from a 150-200 mile range for processing
as both green and kiln-dried hardwood lumber. They also supply
pallet material, sawdust for animal bedding and stove pellet manufacturers,
veneer logs, bark for landscape mulch producers and chips and
low-grade logs for use by pulp and paper companies. Some sawdust
is, too, burned to generate steam and some low-grade lumber is
exported to Canada for use as flooring material.
Coastal Lumber is one of the largest hardwood producers in the nation and has over 30 processing and distribution facilities in both the U.S. and abroad, including plywood manufacturing plants and wood treating operations. It processes approximately 20,000,000 board feet of hardwood annually at its Schuyler County facility (more than all the product harvested in Steuben County. Cotton-Hanlon, though a substantial forest industry in its own right with a large presence in Steuben County, supplies less than 10% of this volume. This is an indication of the importance of the Coastal facility and forestry in general to the regional economy.
Moreover, below average cutting rates for certain species within the County suggest there is additional harvest potential. The quality is relatively good at present with 75% of hardwoods rated as Grade 3 or better, just slightly below the State average of 76%. The County's hardwood stock also primarily consists of lighter-colored woods which have been more in demand in recent years. It represents a self-replenishing resource if managed correctly. Farm and woodlot owners in the County can, if they want to do so, generate income from it and this, in turn, benefits the tourism industry by helping to maintain the County's appealing character.
Much like the remainder of the agricultural sector, Steuben County's forest industry would benefit by the development of secondary processing and value-added industries that would utilize locally produced wood. Craft-related enterprises that would mesh with the County's tourism industry are a distinct possibility. Other niches could include specialty products for marketing to nearby metropolitan areas (e.g., fence boards, quality dimension lumber, wood flooring, wooden lawn furniture). The Gunlocke operation in Wayland, as an illustration, is reportedly the largest user of Walnut lumber in the nation. The Mills Pride company manufactures solid wood doors for the ready to assemble market and is another excellent example.
Unfortunately, Mills Pride chose to locate in Sayre, Pennsylvania rather than New York due to taxes and other considerations. Nevertheless, it does provide an outlet for regional wood products of the sort needed. Other Pennsylvania manufacturers also look to Steuben County for logs and this suggests the opportunity to do more value-added processing locally. A great deal of Steuben's high quality timber also gets exported to Canada and re-imported as construction quality lumber, indicating a regional demand and supply waiting to be matched up.
The key is to approach development from the standpoint of the market first and the resource second. Nevertheless, the resource is available locally and, therefore, Steuben is a natural location for these industries if the County is willing to provide tax incentives to level the playing field with neighboring lower-taxed Pennsylvania. An appropriate vehicle is the agricultural industry tax-abatement program recommended herein. It would offer new secondary processors of agricultural products (including lumber) five years of no real property taxes on improvements and then phase them in at approximately 10% a year such that the property wouldn't be fully taxable until the sixteenth year. Inexpensive electricity can be used as an additional incentive in some instances.
While finding uses for low-grade sawtimber is a challenge (and a necessity), there are some distinct opportunities given the large quantity of growing stock available. These include pallet manufacturing, firewood, wood pellets and wood chips for sale to Western Pennsylvania pulp and paper mills. Mulching facilities are another possibility and the County's geography puts it within reasonable trucking distance to all the major metropolitan markets that would purchase the product. Export opportunities also exist in high-grade products if enough volume can be identified and marshaled on a regular basis.
There are, too, a number of possibilities to complement Steuben County's tourism industry by using its forest land to develop recreational attractions. If such activities are constructed as recreational leases they also hold the potential to generate added income for forest owners and, thereby, help the industry. Forest land is ideally suited to mountain biking, wilderness camping, hunting and other similar endeavors. If promoted properly in conjunction with area bed and breakfasts and restaurants, such activities can contribute in substantial ways to the economy. Some 20,000 acres of the Cotton-Hanlon acreage is, for example, leased for hunting to help off-set the average $9/acre/year holding costs associated with the timberland.
Unfortunately, New York has been a high tax state and, while many recent reforms have helped to lower taxes on farmers, seniors and other residents, forest land is still often taxed at rates that exceed the annual income which can be derived from forest management.32 This can produce poor stewardship when farmers and other landowners are forced to do quick harvests to pay taxes. This has, in turn, led to some backlash efforts by individual municipalities to regulate all forest activity with very negative impacts on the industry. The County has, for this reason, been considering a County law that would standardize local regulation and avoid excessive requirements on forest owners and users. The best approach probably involves encouragement of sustainable forest management practices, combined with right-to-forest protection and positive tax relief.
Section 480(a) of the Real Property Law provides a measure of relief for participating landowners, but there is a strong disincentive to promote this program because the tax "costs" (savings to individual landowners) must be made up within the municipality and the strings attached in terms of management are too entangling. Clearly, there are no compelling reasons for private owners to hold onto forest land except for speculative purposes and this poses a substantial threat to long-term maintenance of forest land uses.
A better solution for taxing forest property would be to collect at the time of harvest based on a percentage of sales or some similar measure of productivity. This is a matter that should be pursued by the Agricultural and Farmland Protection Board, working together with organizations should as Farm Bureau and the Empire State Forest Association. At a minimum, more training for local assessors and more effective programs for determining the real economic value of forest land are needed.
2.8 Steuben County Agriculture - Strengths, Weaknesses, Opportunities and Threats
The Steuben County Agricultural and Farmland Protection Board, in the course of preparing this Plan, analyzed the strengths, weaknesses, opportunities and threats applicable to the County's agricultural industry. These are reflected both in the goals and objectives and the recommendations of this report but some of the major items in these categories include the following:
Taxes
Taxes were, for many years, the greatest concern of farmers and a competitive disadvantage for New York State farmers. Agriculture Value Assessment helped but in rural communities it did not solve the problem. Several recent tax laws, however, have had a significant positive impact in lowering farm taxes and actually creating a marketable advantage for New York State. There is, for example, a Refund of School Taxes program for farmers which provides for a full refund of school taxes paid on farmland and buildings for farma of 250 acres or less and a prorated refund for in excess of 250 acres, (not including the residence). The refund is received on farmers' New York State Income Tax returns. While small and part-time farmers who could be a source of future agricultural expansion may not always qualify, this is of extraordinary benefit to production agriculture. The Law was also modified in 1999 and more farms qualified for the program.
The STAR Program, too, provides reduced assessment for school tax on those portions of the property not subject to refund or for farmers not eligible for the school tax refund. This includes substantial tax relief for farmers over age 65 (many Steuben farmers are in this "Enhanced STAR" program) and a $30,000 assessment break for farmers under age 65. There is need of an educational program to ensure all farmers are getting maximum benefit from the STAR and Refund of School Taxes programs as well as other farm tax incentives. These include a 10 year exemption on all real estate tax on new farm buildings, a requirement that assessors use depreciated values for farm buildings and the exception of certain classes of farm structures from real estate taxation. This applies to silo's, manure storage facilities, bulkhead tanks and greenhouse structures (including those used for raising calves). There is also a New York State Investment Tax Credit on new capital purchases equal to 4% of the purchase price. Many young farm families have large carryovers of Investment Credit and the Board should work with Farm Bureau and others to achieve legislative changes which would make these dollars refundable.
Unique markets
Steuben County, because of its relative proximity to New York City and other urban areas, has access to special markets. These include substantial ethnic populations wanting Kosher, Halal and other comparable goods. There is also a demand among new immigrants for foods traditional to their cultures such lamb and goat and certain breeds of poultry. Likewise, the New York City market is particularly strong for organic products and anything which can be "green-labeled." Finally, Keuka Lake and the Keuka Lake Wine Trail provide access to tourists who could with proper marketing be persuaded to purchase complementary products such as local cheeses.
Low profitability
Agricultural enterprises have been subject to low profitability and this has had a particularly serious impact on Steuben County's dairy farmers. The earlier mentioned Cornell University "Dairy Farm Business Summary" for the Western and Central Plateau Region, indicates the 68 dairy farms surveyed (13 from the County) received a return on average total capital of only 5.5% before asset appreciation, after deducting an average of $44,655 for unpaid family labor and management income. The return was 7.9% with asset appreciation considered and this was during a relatively good year. Attracting new operators to farming under such circumstances is difficult, though not impossible. Many existing dairy farmers, unfortunately, have been living off their equity and recently adopted changes in milk marketing orders will worsen a situation only temporarily eased by the high milk prices experienced in the latter part of 1998 and early 1999.
Nevertheless, it is clear good management can make an extraordinary difference. Good managers employ assets to lower the costs of inputs, negotiate milk price premiums and secure all available existing premiums for protein, quality, and the like. These measures can increase the margin on milk by as much as 10% with no change in overhead or operating expenses and this can make all the difference in the world. Unfortunately, not all dairy farmers meet the requirements to qualify for milk quality premiums available to them - this represents lost income. Also, too many dairy farmers do not aggressively shop around for the best incentive package available to them; dairy farmers need to actively seek out their best marketing options.
This data indicates dairy farms can be very profitable and do have a future if farmers want it. Specialization in herd management, custom work, high-protein milk, breeding stock and similar ventures can produce the added cost control and value that permit success. This will be even more important in the future with component pricing of milk. For others the answer may be to diversify into related but complementary fields of agriculture or to grow larger. Still others will need to update practices to increase production using the same overhead. It is instructional in this regard that the majority of successful large western New York State dairy farmers use bST hormone treatments to increase milk production, but many central and eastern farmers do not. Is this due to lack of knowledge or are these farmers unconvinced of the economic value and merely being prudent? Or is it due to a personal belief that the use of bST is harmful to society or consumers? The answer is not clear and this is one of the challenges faced by all dairy farmers - getting information they need to make sound management decisions.
Nutrient management
Pressure on farm operations to do a better job with manure management continues to grow. The emphasis is typically on control of nutrients (phosphorous and nitrogen) as a means of limiting eutrophication of water bodies. Also, the Safe Drinking Water Act, among other State and Federal regulations, has imposed new standards for pathogens and other criteria. The Concentrated Animal Feeding Operation (CAFO) regulations, though now limited to very large farms, could well be made applicable to smaller farms in the future, with very serious economic impacts on the industry. There are, too, ever more strict standards on the use of farm chemicals.
There are benefits in terms of public health and gaining maximum fertilizer value from manure. Nevertheless, the additional costs of installing manure management systems, using integrated pest management techniques and environmental compliance can be enormous and many farmers, already operating at very low margins, could opt to simply go out of business and recover their equity by selling their farms for non-farm purposes. Others may simply be overwhelmed by the prospects of burdensome regulations and bureaucratic oversight. Either way, the threat to agriculture as an economic sector is substantial.
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