O-AT-KA Milk

Press release:

U.S. Senate Minority Leader Charles E. Schumer today called on U.S. trade officials to secure a level playing field with Canadian producers during the renegotiation of the North American Trade Agreement (NAFTA).

Schumer said that in recent years, Canada has established dairy pricing policies and has maintained high tariffs that have effectively created a “Dairy Wall” stopping most U.S. dairy products from accessing Canadian markets and distorting global trade.

Dairy farmers and producers, like the 340 dairy farmers who make up Upstate Niagara Co-Op, which supplies O-AT-KA Milk Products Cooperative Inc. in Batavia, have been severely hurt by Canada’s manipulative trade practices and it will only get worse without action.

O-AT-KA Milk Products Cooperative Inc., with more than 400 employees and majority owned by Upstate Niagara, has already lost millions of dollars in contracts due to Canada’s actions “Dairy Wall.”

Schumer said that the time to secure a level playing field with Canada by expanding market opportunities and eliminating Canada’s unfair pricing policies – is now and we cannot let this opportunity go to waste.

“Our hardworking New York dairy farmers and producers like Upstate Niagara Co-Op’s 340 farm family members across the Finger Lakes and O-AT-KA Milk Products in Batavia are the most competitive in the world, but they depend on stable and fair rules to compete in a global economy, to sell their dairy products, expand their business and create new local jobs,” Schumer said.

“As trade officials near a deal to renegotiate NAFTA – an issue President Trump and I both agree on – we must make it a top priority to begin reversing restrictive dairy pricing policies in Canada that are hurting our dairy producers at their core, and now is a real opportunity to do just that.”

Schumer explained Canada has an unfair advantage over New York dairy farmers and producers. In addition to Canada’s 270 percent tariff on milk, a program called the “Class 7” pricing program, a market-distorting supply management system, has caused severe pain to New York dairy producers like Avon’s Anderson Farm and their fellow Upstate Niagara Co-Op dairies since it came into force last year.

In fact, Canada has used the Class 7 program to triple its milk powder exports in the past year by creating excess milk production capacity within Canada, then dumping the resulting milk powder onto world markets. To further prove this dumping exists, Schumer added that Canada’s dairy farmers are some of the highest paid in the world, yet Canadian dairy companies are still able to be among the lowest cost sellers of Class 7 products globally.

Anderson Farm is one of the 340 dairy farm members of the Upstate Niagara Co-Op, which is the majority owner of the O-AT-KA Milk Products facility in Batavia. More than 400 employees work at O-AT-KA. Upstate Niagara dairies throughout the Rochester Finger Lakes Region like Anderson Farm depend on O-AT-KA to purchase their milk to then manufacture and sell milk products for the domestic and international markets.

Since Canada’s implementation of Class 7, O-AT-KA lost $19 million in annual sales of Ultra Filtered milk (UF Milk), a product used to make cheese and other dairy products that it had been exporting into Canada. Moreover, the production of this UF milk for the Canadian market had accounted for 20 percent (about 180 million pounds) of all of O-AT-KA’s milk volume.

This severely undercut a $16 million investment made by O-AT-KA in 2012 to build a two-story addition at its Batavia plant to manufacture UF Milk to support its export business to Canada. When Canada unfairly cut off UF Milk imports and implemented Class 7, it dealt a significant blow to the local agriculture economy and was a factor in the current U.S. milk inventory imbalance that is contributing to now drive the price of milk down.

Schumer was joined by Jim Anderson, fourth generation owner of Anderson Farm, O-AT-KA Milk Products Cooperative Inc. President & Chairman John Gould, local dairy farmers, and elected officials.

Gould, who also owns an Upstate Niagara Co-Op dairy farm in Genesee County, said “Canada has a long history of erecting barriers to trade when it comes to dairy and the creation of Class 7 is an example of that. Canada's Class 7 market manipulation has caused harm to O-AT-KA Milk Products and their farm family owners, whose investments in serving legitimate customers in Canada have been blocked.

"As NAFTA is renegotiated, it is time that Canadian gamesmanship ends and a constructive agreement is reached that allows market participation and access under rules that all trading partners can follow. We thank Senator Schumer for his leadership and work in keeping this important issue top of mind as negotiations proceed."

As U.S., Canadian and Mexican trade officials are closing in on a deal to revamp North American Free Trade Agreement (NAFTA), Schumer said now represents a real opportunity to dismantle Canada’s market-distorting policies and ensure a level playing field for American dairy farmers and producers.

Schumer noted that he has directly stressed the importance of securing meaningful changes in our dairy trade relationship with Canada to past and current administration officials, including current United States Trade Representative Robert Lighthizer, President Trump, Canadian Ambassador to the U.S. David MacNaughton, and the U.S. Ambassador to Canada Kelly Craft who have all committed to address this issue.

Right now, products manufactured by O-AT-KA Milk Products include non-fat dry milk powder, buttermilk powder, whey powder, canned evaporated milk, butter, fluid condensed milk, iced coffee, nutritional beverages and other various drinks.

O-AT-KA has gross annual sales of more than $300 million and is a significant employer and economic development engine in Upstate NY’s dairy and manufacturing industries. Schumer said that in order for Upstate Niagara member dairies and O-AT-KA to continue to be global leaders, Canada’s rapacious dairy-related trade policies need to be addressed and that NAFTA represents a major opportunity to do so.

Here's Schumer's letter to Ambassador Robert Lighthizer, United States Trade Representative:

Dear Ambassador Lighthizer:

As the North American Free Trade Agreement (NAFTA) renegotiations come towards a conclusion, I would like to again emphasize the importance of securing meaningful concessions from Canada to provide stable market access for our dairy producers. Securing meaningful and enforceable commitments that will allow U.S. dairy producers to compete with Canada’s on a level playing field should be a top priority in NAFTA renegotiations. As I have expressed to you many times, I strongly believe that we should not miss this opportunity to protect our dairy producers from Canada’s recent predatory trade practices.

As you know, Canada’s Class 7 pricing program, a market-distorting supply management system, has caused severe pain to New York dairy producers since it came into force last year. Canada has also maintained large tariffs on dairy products, including a 270 percent tariff on milk. New York’s dairy farmers and companies like Cayuga Milk Ingredients, O-AT-KA Milk, and Ideal Dairy Farm, rely on market-based trade with Canada for a significant percentage – millions of dollars – of their revenue. Not only are New York’s producers locked out of Canada’s ultrafiltered milk market, but in just a year’s time, Canada has used its Class 7 program to triple its milk powder exports, dumping powdered milk products into global markets and undercutting New York dairy producer’s exports. This Class 7 system is likely a violation of Canada’s World Trade Organization (WTO) commitments, but addressing it quickly through NAFTA renegotiation is needed, rather than waiting for years for a WTO determination. This Class 7 system should be dismantled through new NAFTA commitments.

In our discussions, you have committed to me that you would prioritize addressing this issue through NAFTA renegotiations. The President has also privately expressed to me his explicit desire to address this issue and has publically emphasized, many times, the unfair way that Canada has treated our dairy producers, noting just last month: “Canada must treat our farmers much better. Highly restrictive.”

Our hard working dairy producers are the most competitive in the world, but they depend on stable and fair rules to compete in a global economy. Again, I urge you to make meaningful and enforceable commitments that level the playing field for our dairy producers a top priority as NAFTA renegotiations conclude.

Thank you for your attention to this issue.

Press release:

Empire State Development (ESD) today announced that O-AT-KA Milk Products Cooperative Inc., a dairy cooperative based in Genesee County, will construct a more than 20,000-square-foot addition at its production facility.

In an effort to meet the growing demand of its customers, the cooperative will install a new retort beverage production line and install support equipment at its facility located at the corner of Cedar and Ellicott in the City of Batavia. The additional space will facilitate the addition of up to 20 new jobs; 440 jobs will be retained.

The cooperative expects to have the new line up and running sometime next fall.

Empire State Development President, CEO & Commissioner Howard Zemsky said, “The Finger Lakes Regional Economic Development Council is supporting the growth of food processing companies, like O-AT-KA dairy cooperative, which will be retaining hundreds of jobs and hiring additional employees to help them on their path to continued success.”

O-AT-KA’s production facility ensures there is a market for milk produced by more than 400 farms in the Western, Finger Lakes and Central New York regions.

The cooperative is majority owned by Upstate Niagara Cooperative Inc., which is headquartered in Buffalo, New York and also by Dairy Farmers of America, a cooperative with a strong presence in Central New York.

Michael Fuchs, O-AT-KA’s Chief Financial Officer and project manager said, “This project supports our continued growth and will allow us to meet growing market demands for our products.

"The support we continue to receive from ESD, GCEDC and our Board of Directors is a testament to their commitment to the livelihood of our dairy farmer owners and to our position as a leading employer in Western New York.”

Empire State Development is providing a total of up to $750,000 for the project through a Finger Lakes Regional Economic Development Council Grant. Genesee County Economic Development Agency also offered incentives for the enterprise. The total project cost is $34.5 million.

Supporting agribusiness is a top priority for the Finger Lakes Regional Economic Development Council and the locally designed the Finger Lakes Forward economic development plan.

Finger Lakes Regional Economic Development Council Co-Chairs Monroe Community College President Anne Kress and Greater Rochester Chamber of Commerce President & CEO Bob Duffy said, “The Finger Lakes Regional Economic Development Council is committed to supporting projects that grow jobs. Agriculture is an important industry and a key driver of our regional economy.

"This expansion project will also create solid opportunities for area farmers, shaping the future of the region’s agricultural industry, helping to move the Finger Lakes forward.”

State Senator Michael H. Ranzenhofer said, "Agribusiness is Genesee County's number one economic driver, and growing demand for milk products produced by our local dairy farmers will help to reinforce this important industry.

"Today's announcement by O-AT-KA Milk Products will further strengthen our local economy. I commend Genesee County's largest private-sector employer for continuing to create jobs for Western New York residents."

Assemblyman Steve Hawley said, “Economic development and business expansion, especially when it comes to the dairy sector, is tremendously important to our region. I am pleased to see that not only will O-AT-KA be expanding its production, but also adding 20 new jobs to solidify itself as a top-tier producer in Western New York.

"The support of businesses and job creation at the state level benefits our entire community, and this is a prime example of our state’s agricultural sector rising to one of the best in the nation. I look forward to the continued prominence of our area’s farmers and producers and am proud to share in their success.”

Steve Hyde, president & chief executive officer of the Genesee County Economic Development Center, said, “The GCEDC is proud to assist O-AT-KA Milk Products, the largest private sector employer in Genesee County, to expand its operations. O-AT-KA is an industry leader through innovation and commitment to excellence.

"Through our collaboration with Empire State Development and the Finger Lakes Regional Economic Development Council, we are demonstrating that companies like O-AT-KA can grow and prosper in New York State.”

O-AT-KA’s name was taken from the Seneca Native Americans, and means leaving the highlands or approaching an opening. The “highlands” refers to Wyoming County, New York and the “opening” refers to the Genesee River flowing into Lake Ontario.

The cooperative opened in 1959 with only five employees and has since grown to provide employment tomore than 440 people contributing to growth in the local economy. O-AT-KA has long-term business relationships with many Fortune 500 listed manufacturers, retailers and wholesalers.

Owners of an East Main Street welding business made a compelling argument before the City Planning & Development Committee Tuesday night and, as a result, are one step away from achieving their goal to convert a former auto repair shop into a storage facility.

“Absolutely,” said PDC Chairperson Duane Preston, when asked if Daniel and Joyce Mattice, owners of Tri-County Welding at 649 E. Main St., had a strong case for a proposal to transform five of the six bays of the former Mazur’s Auto Repair into retail storage units.

“Since he has the right to put a junkyard in there, this is definitely the softer of all choices,” Preston said. “Now it will be an enclosed building, cleaned up, with no dust, no junk and little traffic.”

The Mattices purchased the Mazur building at 643-645 E. Main St. through foreclosure last year and have put around $40,000 into upgrading it, while renting out the front of the building – office space -- to Anything Your Heart Desires floral shop.

They said they unsuccessfully tried to get someone to rent the auto repair shop before coming up with the idea of storage units. City zoning laws, however, do not permit storage units in an Industrial-1 zone, meaning that the Mattices had to seek an area variance.

Their request was recommended for disapproval by the Genesee County Planning Board last week, but their presentation last night – buoyed by statements from attorney Michael Del Plato – convinced the PDC that their plan could work.

“This is an opportunity to protect your property, and they should be able to take advantage of it,” Del Plato said, noting that there are many businesses in that area. “We can’t legislate through City Council every potential use; the local boards have to help us out here.”

Del Plato called the variance request “minimal” in scope with “much less density” than the building’s previous use, and noted that the business is in an “Industrial zone surrounded by commercial uses.”

Joyce Mattice said she had signed statements from the surrounding business owners in support of their venture, ensuring the PDC that there would be no hazardous materials or tires on site.

The PDC voted unanimously to approve the variance. The request now goes in front of the City Zoning Board of Appeals on Sept. 28, needing four out of five “yes” votes for final approval.

Preston said the Mattices’ request comes at a “transitional period” (in relation to zoning) in that the updated Comprehensive Plan is nearly finalized and will be addressed by City Council.

“In this case, we took into account the particular area and the makeup of the neighborhood,” he said.

In other action, the committee:

-- Approved a site plan for a proposed 2,700-square-foot addition at Genesee/Orleans Council on Alcoholism and Substance Abuse campus on East Main Street, which would be used as a methadone clinic to treat people with opioid addictions.

This action comes on the heels of a similar recommendation by the Genesee County Planning Board.

GCASA Executive Director John Bennett and project architect Raymond Murphy presented the plan last night, reiterating the immediate need for such a facility in light of what Bennett terms a “national epidemic.”

The new clinic, with an April 2018 opening target date, will be funded by an $820,000 grant from the state Office of Alcohol and Substance Abuse Services, Bennett said.

Plans are for it to be open in the morning from Monday through Saturday for people to take their prescription and head off to their daily tasks.

The addition will result in an increase of 38 parking spaces on the campus, raising the total parking capacity to 72 spaces.

-- Recommended approval of a 20,075-square-foot, one-story addition to an industrial use building at O-At-Ka Milk Products on Cedar Street.

The $2.5 million addition would be placed adjacent to the existing warehouse space to the west and south on the property. Work is expected to start in less than a month.

Press release:

U.S. Senate Minority Leader Charles E. Schumer yesterday (Aug. 2) called Canadian Ambassador Nominee Kelly Knight-Craft and strongly urged her to work with Canadian officials to persuade them to reverse the protectionist and restrictive trade policies that are currently harming the Upstate New York milk industry and farmers.

Schumer explained that the Province of Ontario and Canada’s federal government have adopted restrictive measures on the importation of milk products. These measures will cost tens of millions in U.S. dairy contracts. Producers like O-AT-KA Milk in Genesee County, Cayuga Milk Ingredients in Cayuga County and Ideal Dairy Farm in Washington County have all been harmed, he says.

Schumer said these policies are blatant violations of existing fair trade agreements with Canada. Schumer said this is an affront to current U.S.-Canadian trade agreements, and therefore urged Ms. Craft to push Canada reverse these unfair policies and work with the United States to keep current dairy trade agreements strong. 

“Canada’s restrictive dairy trade and pricing policies are blatantly violating our trade agreements signed by the U.S. and Canada, and they are hurting New York’s dairy producers who simply want to deal fairly with our Canadian partners," Schumer said. "That’s why I called the Canadian Ambassador Nominee and I urged her to push Canada to end these unfair policies and work with the U.S. to keep both of our dairy industries strong.

"These kinds of policies put our dairy farmers in grave jeopardy. Our New York dairy producers work hard every day to provide for their families and export quality products to the world – and they deserve to know that everyone’s competing on a level playing field.”

Schumer has long fought to protect the Upstate NY dairy industry and milk producers across the state. In September, Schumer urged the U.S. Department of Agriculture’s (USDA) Secretary Vilsack and the U.S. Ambassador to Canada, Bruce Heyman, to continue to pressure Canada to end these unfair policies.

The senator said it is critical that the federal government protects the Upstate NY dairy industry, and that these protectionist trade policies should not be allowed to continually impair the value of fair trade provisions the U.S. previously secured under our prior trade agreements.

In the Spring of 2016, Schumer visited O-AT-KA Milk, Cayuga Milk Ingredients and Ideal Farm as he urged the USDA and the U.S. Trade Representative (USTR), Michael Froman, to protect Upstate New York’s dairy sector from the then-proposed barriers to trade. Following that push, Schumer again urged these two federal agencies to ramp up all available resources to investigate new Canadian dairy trade policies that could hurt dairy farmers in Upstate NY.

The Canadian province of Ontario has already imposed limitations on American imports and recently Canada’s national government put out a proposal to expand these restrictions nationwide.

Schumer said that the Province of Ontario and Canada’s federal pricing policies, are designed to crowd out New York’s dairy sales and discourage Canadian cheesemakers from using imported ultra-filtered milk from the United States in their products. These new pricing policies essentially set the price of Canada’s products below that of New York’s ultra-filtered milk imports, which hurts O-AT-KA and Cayuga’s more efficiently produced ultra-filtered milk.

Schumer explained that Canada’s National Ingredients Strategy for dairy takes a similar approach to Ontario’s new Class VI pricing policy by incentivizing Canadian processors to shift away from using dairy imports from the U.S. Upstate New York producers have invested millions in order to be able to export to Canada because they have long enjoyed duty-free access for this specific product under the North American Free Trade Agreement (NAFTA).

Schumer said these Canadian trade barriers have already started to hinder development and growth of the Upstate NY dairy industry. Companies like O-AT-KA and Cayuga Milk Ingredients, along with Ideal Dairy Farm, rely on trade with Canada for a significant percentage – millions of dollars – of their revenue.

As the country’s third largest milk producing state, a significant impact on New York’s ability to tap into key foreign markets could also impact farmers in surrounding states. Therefore, Schumer said, any reductions in export sales could impact NY dairy manufacturers and their supplying farms, which are already struggling with depressed milk prices.

Pictured at the ribbon-cutting ceremony are, back from left: Mark Niederpruem, Warehouse manager; Dan Wolf, chairman of Upstate Niagara Cooperative, Inc.; Dave Nutting, VIP Structures; Front from left: Paul Battaglia, chairman of Genesee County Economic Development Center; Bill Schreiber, CEO; Michael Patterson, CFO; Larry Webster, CEO Upstate Niagara Cooperative, Inc.; and John Gould, chairman of O-AT-KA.

Submitted photos and press release:

O-AT-KA Milk Products is pleased to announce that it held a ribbon-cutting ceremony for its newly expanded warehousing storage and material handling facility in Batavia on July 11.

In attendance were O-AT-KA’s and Upstate Niagara Cooperative’s Board of Directors; key vendors and contractors for the project; banking representatives; local business leaders and invited guests.

“Project Rubicon affords O-AT-KA the opportunity to address three key focus points of our business; namely, employee safety, product quality and operational efficiencies," said Michael Patterson, O-AT-KA’s chief financial officer. "The viability of the project was supported via our strong relationships with the community, the municipalities and our key vendors and stakeholders."

O-AT-KA’s commitment to innovation is demonstrated within the expansion which added over 235,000 square feet to its Batavia plant. A second phase of the project has been initiated to capture efficiencies and optimize material handling equipment and processes. The new facility and equipment phase of the project allows the company to meet increasing customer demand, improve global competitiveness and allow for future growth of production capabilities. The project will significantly improve upon O-AT-KA’s already high standards of safety and quality.

“The implementation of Rubicon will advance our ability to serve customers, significantly improve our competitive position and is testimony to the vision and commitment of our farmer owners,” said Chief Executive Officer Bill Schreiber.

Founded in 1959, O-AT-KA is a manufacturer and co-packer of dairy-based products and ready-to-drink shelf stable beverages and is one of Genesee County’s largest employers. It is located at the corner of Cedar and Ellicott streets.

(Photos by Jim Burns.)

A Canadian proposal to reduce the amount of milk products imported from the United States, and to impose a tariff, could have perilous financial consequences for Western New York dairy farmers and cooperatives such as O-AT-KA in Batavia, which exports 20 percent of its goods to Canada annually.

At a press conference this morning in the plant's cafeteria off Cedar Street, Sen. Charles Schumer vowed to bring all his clout -- built over 18 years in the Senate -- to bear to stop the limitations being put forth by the nation's trade ministry in conjuction with its agriculture department under new government leadership.

Last year, U.S. dairies produced 200 billion pounds of milk; 85 percent of that was consumed by Americans and 15 percent was exported, said O-AT-KA CEO Bill Schreiber.

"Canada's trying to put in a new rule that would be devastating to O-AT-KA and Western New York," Schumer told the media, union employees, dairy farmers and local officials in attendance. "That ultra-filtered milk came in duty-free. Now they're trying to change that. ...  and the Province of Ontario wants to keep out (U.S.) dairy sales."

For O-AT-KA, the restrictions would amount to a loss of 180 million pounds of annual milk production -- which is 20 percent of $95 million in yearly sales, or $19 million, according to Schreiber. 

WIth more than 350 employees, the facility is one of the largest employers in the Genesee County. Upstate Niagara Cooperative, made up of nearly 400 dairies, is the majority owner of O-AT-KA.

WNY dairies are poised for growth, despite recent declines in milk pricing -- from $25 per hundredweight (the name of the commodity pricing unit) to $15 currently.

In 2012, O-AT-KA invested $16 million to build a new two-story addition to allow "ultra-filtration" capabilities in order to expand its product line and boost sales to other producers in the United States and abroad, especially Canada. Products include non-fat dry milk powder, buttermilk powder, whey powder, canned evaporated milk, butter, fluid condensed milk, iced coffee, nutritional beverages and other drinks. Ultra-filtered milk is used in cheese making.

Schumer said the recently proposed Canadian trade barriers could hinder plans for growth.

"We have good neighbors in Canada, but every so often something happens," the senator said. "This proposal would bring our mutual agreement to a screeching halt. It would put O-AT-KA and New York's dairy farmers in grave jeopardy. It would imperil the whole Upstate economy."

When asked "Is there really anything you can do?" if another nation, like Canada, implements a trade rule you don't like, Schumer replied: "Yes, a big leverage is tariffs. It's not a one-way street. It's not just exporting to Canada; we import from Canada, too."

It boils down to the fact that "we just have a stronger dairy industry and they're trying to build their's."

The rules, if implemented, would take effect in about six months.

"I'm here to go to bat for you," Schumer said. "I'm going to send a shot across the bough."

Schumer is calling on the U.S. Trade Representives and the USDA to work to protect U.S. dairy exports by ensuring that Canada doesn’t impose restrictive trade rules and honors its commitment to open borders to Upstate New York farmers.

The proposal to limit U.S. dairy imports comes on the heels of the "Trans-Pacific Partnership," referred to commonly as TPP, being signed in New Zealand last month after seven years of negotiations. Besides New Zealand, it is made up of Canada and 10 other Pacific Rim countries, including the United States, Australia, Vietnam, Brunei, Singapore, Malaysia, Japan, Chile, Mexico and Peru. Ratification is anticipated over the next two years.

According to the Toronto Sun (Feb. 4. 2016), the pact could impact many industries in Canada, including agriculture, and some opponents fear it could hurt the economy and result in layoffs in some sectors. As part of the deal, Canadian dairy farms are slated to get $4.3 billion in subsidies from their government over a span of 15 years to offset losses from an increase in dairy imports from TPP trading partners.

Schumer made it clear that he opposes big trade agreements like TPP, just as he opposed and voted against NAFTA during the Clinton Administration.

Here's a copy of Schumer’s letter to both the USTR and USDA:

Dear Ambassador Froman and Secretary Vilsack:

I write to you with strong concerns about reports that Canada is weighing policy and regulatory shifts that would undermine one of New York’s most important export markets. Just a few years ago, two dairy companies made investments worth tens of millions of dollars in Upstate New York to produce ultra-filtered milk specifically for export to the Canadian cheese market. These sales are possible as a result of the duty-free access for this specific product that Canada agreed to under the North American Free Trade Agreement.

Recent reports indicate that Canada is considering administrative actions to limit Canadian companies’ capacity to use this product in further processing and that Ontario is advancing a new, targeted pricing policy designed to crowd out New York’s dairy sales. Further restraints on dairy trade are unacceptable, particularly coming on the heels of Canada’s recent pledge to expand access to its tightly restricted dairy market under TPP. 

New York has made sizable investments in exporting into Canada under specific rules laid out by the Canadian government. Those sales now help support dairy farmers and rural communities across the state. New Canadian barriers to market access would have an outsized impact on New York’s dairy sector. As the country’s third largest milk producing state, a significant impact on New York’s ability to tap into key foreign markets also will impact farmers in surrounding states in the Northeast and Mid-Atlantic region. Moreover, this latest example of dairy market-access restrictions appears to represent a continuation of persistent Canadian regulatory and policy shifts aimed directly at impeding dairy trade. 

We must hold Canada to its commitments and ensure that our exporters do not encounter barriers to the products they are already shipping to Canada. I urge you to strongly reject this and similar efforts to impair the value of concessions the U.S. previously secured under NAFTA. Thank you for your attention to this important priority with one of this country’s largest trading partners.

Sincerely,

Charles E. Schumer

United States Senator

Officials with O-AT-KA Milk Products and Upstate Niagara Cooperative broke ground on a new warehouse expansion this morning at the company's plant off Ellicott Street, Batavia.

Participating in the top photo are Steve Hyde, Ray Cudney, Steve Golding, Bill Schreiber, Dan Wolf, John Gould, Dave Nutting and Mike Patterson. Second photo: Upstate's Board of Directors.

"This is an important day for the growth of the dairy industry in Western New York," said Wolf, a member of the cooperative's Board of Directors. "The 360 farms that I represent depend on this business and we're not going anywhere. This is our roots and we'll be here. We will continue to grow and develop here in Western New York, and (to) create jobs and so forth that go with that is critical to us."

Press release from Finger Lakes Economic Development:

Empire State Development today announced that O-AT-KA Milk Products Cooperative, Inc., a dairy cooperative based in Batavia, will be expanding their warehouse and material handling functions at their Batavia site. O-AT-KA is majority owned by Upstate Niagara Cooperative, Inc., headquartered in Buffalo and also by Dairy Farmers of America, a cooperative with a strong presence in Central NY.

O-AT-KA helps to ensure there is a market for milk produced by more than 400 farms in the Western, Finger Lakes and Central NY regions. A new warehousing facility and equipment room will allow the cooperative to continue to grow its production and create 24 new full-time positions within three years, raising total employment to more than 350 positions.

“We consider this project to be a game changer,” said Michael Patterson, O-AT-KA’s chief financial officer. “This not only enables us to meet our immediate needs but positions O-AT-KA for growth into the future. Three factors driving this initiative are worker safety, food quality and operational efficiencies. These three legs of the stool will be the backbone supporting O-AT-KA’s continuing growth here in New York State.”

The economic support and assistance from local and state agencies were critical factors in undertaking this project. New York State, through Empire State Development, will provide a $400,000 capital grant to assist in bringing off-site warehousing back on site by building a 195,000-square-foot warehouse and a 35,000-square-foot equipment room to their existing facility.

The company will also purchase new material handling equipment and repurpose existing equipment. The new space will afford the company more efficiency, provide safety for workers, and allow for cost savings, thereby boosting their competitive edge in the market place.

The growth of on-site warehousing also enables the company to grow its production of shelf-stable, dairy-based beverages. O-AT-KA has a goal of increasing its export business by 10 percent over the next several years, which will result in approximately 25 percent of the total production being exported.

As the No. 1 manufacturing employer in Batavia, O-AT-KA strives to foster productive, long-term relationships with their employees. The cooperative, which produces dry, condensed and evaporated dairy products, was established in 1959 with five employees and has grown to 332.

“Agricultural and food processing has been identified as one of the top Finger Lakes REDC strategies,” said Empire State Development President, CEO and Commissioner Howard Zemsky. “The O-AT-KA project aligns with the council’s goal to optimize business retention and expansion, and support the growth of food-processing companies in the region.”

“This commitment by New York State to O-AT-KA demonstrates Governor Cuomo’s support of economic development in Upstate New York and in particular to the agribusiness industry in Genesee County,” said Paul Battaglia, chairman of the Genesee County Economic Development Center. “We look forward to continuing working with New York State on other economic development opportunities."

"O-AT-KA has played a major role in our local economy for decades. Now, expansion plans, along with 24 new jobs, will help to secure the cooperative's presence in Batavia for years to come. I commend O-AT-KA CEO Bill Schreiber for selecting Genesee County to invest and grow," said State Senator Michael H. Ranzenhofer.

“I am pleased to see the growth and expansion of an important Western New York agricultural staple such as O-AT-KA. As a small business and farm owner for over four decades, I realize the integral part O-AT-KA plays in New York’s dairy industry and Western New York’s economy. Having grown up in Batavia, I have seen the company grow from just a few employees to over 300 people – truly epitomizing the American dream of entrepreneurship. As lawmakers we must continue to protect small businesses such as these and take measures to grow New York’s economy,” said Assemblyman Steve Hawley.

With 344 employees, O-AT-KA Milk Products is already Genesee County's largest private employer, and CFO Michael Patterson promised the Genesee County Economic Development Center Board a taxpayer-assisted expansion will result in a workforce expanded by 21 positions.

The expansion, at a cost to O-AT-KA of $20 million, will result in greater efficiency, a product and market expansion and greater employee safety, Patterson said.

"This is a real game changer for O-AT-KA," Patterson said. "It will allow us to grow while we focus on efficiency and employee safety."

Patterson described the region as "heavy with milk," and the expansion will help O-AT-KA improve its capacity to create new products and expand into additional markets.

O-AT-KA is seeking $2.26 million in sales tax and property tax exemptions.

In making a motion to set a public hearing on O-AT-KA's application, Board Member Craig Yunker said, "This is really important to our region and our dairy industry, which is the back bone of our local economy. I don't know of a more important project."

The date of the hearing, which the board approved unanimously, has not yet been determined, but will be within the next two or three weeks so the board can vote on whether to grant the tax exemptions at its next meeting.

“This is a tremendous investment being made by one of the largest private-sector employers in Genesee County,” said GCEDC Board Chairman Paul Battaglia. “It also demonstrates a long-term commitment to our community by the company in building a state-of-the-art facility to enhance its manufacturing operations now and in the future.”

Press release:

The Board of Directors of the Genesee County Economic Development Center (GCEDC) will consider a project from O-AT-KA Milk Products at its Aug. 13 board meeting. 

O-AT-KA Milk Products plans to add 205,000 square feet of warehousing space to its manufacturing facility on the corner of Ellicott Street and Cedar Street in Batavia. The project is expected to create 21 new jobs and the capital investment is approximately $20.9 million.  

The GCEDC Board meeting is public and will take place at 1 p.m. on Thursday at the Innovation Zone Conference Room at MedTech Centre -- 99 MedTech Drive, Batavia, on the first floor, across from Genesee Community College.

A proposed expansion of the O-AT-KA Milk Products plant at Cedar Street and Ellicott Street Road, Batavia, received a vote of approval from the County Planning Board on Thursday night.

O-AT-KA is contemplating adding a 194,543-square-foot building and a 35,279-square-foot building that will serve as warehouse space and a distribution center.

A spokesman for O-AT-KA repeated several times to reporters last night that the expansion remains a proposal at this time. There's no information available on how O-AT-KA's business might be expanding as a result of the new space.

The location of the new structures would be on the east side of the plant with vehicle access off of Ellicott Street Road.

The board recommended approval of a site plan review with recommended modifications for a stormwater pollution-prevention plan prior to final approval by the city.

Also on Thursday:

The board recommended approval of a site plan review for a 1,620-square-foot addition to the Pavilion Public Library. The expansion, which will include a new children's wing, is funded in part by a $200,000 donation from Edgar Mary Louis Hollwedel. Deborah Davis said the library is also seeking a state grant. The size of that grant could exceed $200,000.

The board recommended disapproval of a zoning map change on South Lake Road in Pavilion. Superior Plus Energy Services was seeking the change to develop a bulk storage and truck distribution center for bulk propane. The 32-acre site is currently zoned agriculture-residential and Superior Plus Energy is seeking a change to industrial. Staff's recommendation was for disapproval because the change would be inconsistent with the town's comprehensive plan and the Future Land Use Map, which plans for agriculture use or residential with minimum lot sizes of five acres.

A planned Dollar General store in Pavilion received recommended approval for its sign. The sign design presented previously by Moeller Sign Co. wasn't approved because it would have meant a sign larger than currently allowed in the zoning code. The new design complies with the code.

O-AT-KA Milk Products was issued a notice of violation by the DEC on April 24 for chemicals and waste materials being spilled into a lagoon south of Ellicott Street.

The company is complying with all DEC demands and requirements for dealing with spills from its dairy processing plant at the corner of Cedar and Ellicott streets, said David Crisp, director of business development for O-AT-KA.

The spills were brought to the attention of the DEC by Attica resident John Volpe (pictured above), a Native American well known locally for his environmental work.

Volpe said he's concerned about the health and well being of the fish, turtles, frogs and other wildlife in the lagoon, which is part of a 110-acre wildlife refuge owned by Chapin Manufacturing. The creatures, Volpe said, are part of the chain of life.

"This is how we look at our own life," Volpe said. "These are our teachers. All of our relations means just that. They’re all of our relations. You don’t leave out a worm or an eagle or whatever. We’re supposed to watch it and we’re supposed to protect it. That’s one of our jobs as among the people who walk this earth. It should be everybody’s job."

Volpe shared documents he said show serious environmental damage to the lagoon, including photos of more than 100 dead fish and dissection photos taken of dead animals -- such as turtles, frogs and fish -- showing medical issues (Volpe emphasized several times that he and his helpers never killed any animals, but merely took for samples and evidence animals they found dead).

The DEC letter accuses O-AT-KA of violating its SPDES (State Pollutant Discharge Elimination System) permit and three sections of environmental law.

The letter specifically accuses O-AT-KA of causing a drop in water quality standards for pH, solids and water color from spills on at least six separate occasions. The spills, according to the DEC, contained milk and/or cleaning solutions.

The letter also specifically cites a fish kill of various species April 15.

O-AT-KA was accused of discharging water that causes or contributes to conditions in violation of state code; discharging industrial waste in violation of state code; and discharging pollutants at a frequency or volume in excess of permitted standards.

The company was given until May 7 a turn over a document called "Best Management Practices" as well as a summary of response actions, investigations and corrective measures taken for each reported spill since August 2013. 

By yesterday, O-AT-KA was required to complete a facility review and submit a corrective action plan designed to prevent or minimize potential damage from future spills.

The DEC also required O-AT-KA to install a continuous recording pH meter.

Crisp said O-AT-KA has been fully compliant with the DEC's requirements, an assertion confirmed by Linda Vera, spokeswoman for the DEC in WNY. 

"O-AT-KA has taken a number of actions to mitigate and prevent additional discharges," Vera said.

Crisp said a DEC official was on hand one day recently when an alarm sounded from the new system indicating there was an increase in pH in the outflow line to the discharge pipe and the officials saw firsthand that plant workers responded immediately to correct the problem.

"It really comes down to how dedicated O-AT-KA is to the highest level of environmental protection," Crisp said. "That's why we're working with the DEC to assure O-AT-KA is in compliance with the SPDES permit."

There were two spills of milk, Vera said. One in August and another in October. She said steps were taken to prevent future spills and there have been no similar discharges since October.

"The remaining incidents were related to cleaning solution discharges," Vera said. "Action was taken after each incident to determine the source, and O-AT-KA added monitoring equipment and changed practices to mitigate the issue. During DEC's early May inspection, the probable source was identified. A deteriorated flooring in one of production areas allowed cleaning/disinfection solution to seep into a deteriorated pipe beneath floor. O-AT-KA is taking necessary actions to repair piping and floor."

It's still possible O-AT-KA could be fined for the spills, but the DEC has made no determination yet on further enforcement actions, Vera said.

One source we spoke to for this story suggested we look at the notice of violation delivered to O-AT-KA in context of how many DEC violation notices are handed out locally in a year, suggesting that there's nothing remarkable about a company getting a letter of violation.

According to the DEC's database of spills, there have been 76 incidents reported in the past 12 months in Genesee County. Eight of those have been tied to O-AT-KA, which more than any other source in the county. Only three of those spills -- where the size of the spill is known -- involve 100 gallons or more, and two of those involve O-AT-KA. Those are a spill of 125 gallons of milk product in August 2013 and 3,000 gallons of sodium hydroxide in January.

There were 48 incidents countywide reported in the prior 12 months, none involving O-AT-KA.

The series of spills has been a concern to Chapin, CEO Jim Campbell said, and company officials have met several times with O-AT-KA officials to review the measures taken to prevent future problems.

The 110-acre preserve includes nature trails available to employees and the area is teaming with wildlife, Campbell said. Andris Chapin, a family owner and chairman of the board, is keenly aware of environment issues, Campbell said, and once a year takes interested employees on a nature trail walk through the preserve. 

The company also has an environmental manager. He is Mark Volpe, who is also the plant manager and is John Volpe's brother.

Campbell said Chapin is confident O-AT-KA is responding appropriately. It's his understanding, he said, that O-AT-KA has spent more than $100,000 on preventative measures. He said O-AT-KA has recently brought in new executives with a good deal of technical experience in environmental issues.

"They've done a great job and have a great solution in place," Campbell said.

John and Mark Volpe started monitoring and measuring the Chapin's 110-acre habitat in 2008, acquiring and maintaining detailed records on the species and quality of life in the preserve.

It was through that process that John Volpe became increasingly concerned about spills from the O-AT-KA plant, which he said go back further than the August 2013 date covered by the DEC letter.

As he saw more and more environmental damage to the lagoon, he began raising concerns to the DEC, to the point, he believes, that some officials at the DEC started trying to avoid his phone calls.

In his workshop at his home in Attica, Volpe showed dozens of presentation boards displaying charts and tables documenting discharge dates, water temperatures, pH readings and photos of dissected animals and dead fish.

When Volpe found dead fish, he and his helpers photographed where each fish was found, collected them, brought them back to Attica, weighed and identified the species of each fish and photographed each one individually.

The dead fish included sunfish, bullhead and bass.

The DEC was slow to act on contamination issues at the lagoon, contends Volpe.

"Why didn’t the DEC do this and cite them sooner so maybe these fish would still be alive?" Volpe said. "This is not the first fish kill. We’ve had other fish kills."

Volpe's wife caught in a net one bass near death. It was blind, had lost all its slime and was emaciated. The Volpes have nursed it back to health. It's eating again and its eyes have cleared of the haze that covered the pupils. The fish has become more active in its tank.

The blindness and loss of slime is a result of a high pH in the water as well as sodium hydroxide and hydrogen peroxide reaching the lagoon.

Volpe is also concerned about the water temperature in the lagoon, which he said was above 60 degrees in March (he takes the water temperature every day) and the turtles and frogs need the water below at least 50 degrees to hibernate.

There is also evidence of frogs "toxing out," Volpe said. The toxins in the water cause their legs to shoot straight out, become rigid and they can't jump. Eventually, they die.

Volpe was arrested in February and accused of illegal possession of protected turtles and birds of prey. 

The DEC had known for years and years about Volpe's conservation efforts involving wildlife, his friend and supporter Mike Bastine said during a meeting at Volpe's house. It was only after Volpe started making waves about O-AT-KA that the DEC decided to come down hard on Volpe.

"If you look at the implications from the spills that he has documented, that has a much greater impact on the environment than the violations they subjected him to," Bastine said. "Is the issue really about protecting the environment and the animals and the life around us? No, not really.

"They think if they can shut that part of his work down, he's going to go away and say, 'they beat me,' that he'll have to throw in the towel because he can't defend himself. They're hounding us saying we need a permit to hold a feather or care for turtles, but that's our responsibility and that's our custom. It's our job. It's our duty to step in an assist."

In her e-mail response to a series of questions, Vera did not respond to the accusation that Volpe has been targeted for enforcement because of his O-TA-KA complaints.

She said the DEC had been monitoring O-AT-KA independently of Volpe, but found his work helpful. 

"DEC's actions have been ongoing, and are not dependent on Mr. Volpe's findings," Vera said. "However, some of the discharges discovered by Mr. Volpe, have provided assistance in mitigating the discharges and investigating potential sources."

Volpe said he's also concerned because the lagoon sits over the Batavia's aquifer. All of the city's water is pumped from wells in the area. He thinks the contaminants could seep into the aquifer.

City Manager Jason Molino said that really isn't a concern. Even if any contaminants reached the aquifer, the city treats all of its water before it's distributed.

Molino's confident, he said, the DEC has things under control.

"We've spoken with O-AT-KA and the DEC," Molino said. "I think the DEC is aware of the situation and has responded to it and are in constant communication with O-AT-KA. Otherwise, it's outside our jurisdiction."

This photo is from Genesee County's GIS map. The photographs that comprise the map were taken in April 2013. The Chapin Lagoon is in the lower left. O-AT-KA's plant is in the upper right. There is a dirt road that Hanson Aggregates uses running from Ellicott Street. Beside it is a drainage ditch, which apparently is how runoff from O-AT-KA reaches the lagoon. We have no confirmation of what the milky white substance is in the lagoon, but there is no spill around that time period reported in the DEC database.

Sign by drainage pipe that runs under Ellicott Street to a stream that runs to the Chapin Lagoon.

One of the no trespassing signs marking the property line of Chapin's 110-acre wildlife refuge.

It's a crisp, clear morning in Batavia with a temperature of 4 degrees.

Forecasters continue to call for a prolonged period of bitter cold with a mix of snow. Saturday, there's an 80-percent chance of a snow shower with temperatures rising to a balmy 24 degrees.

Photo: The O-AT-KA Milk plant.

O-AT-KA Milk Products will soon complete a $16 million expansion of its production facility in Batavia, but the potential of the expansion could be hindered, Sen. Charles Schumer said today, if Canada enacts new trade barriers to milk products.

Schumer appeared at the plant today to publicize the issue and encourage U.S. trade negotiators to make fair trade in milk products a priority.

"The $16 million expansion not just to stay status quo," Schumer said. "Their (O-AT-KA) products are in large demand. The market in Canada and the market in the U.S. are very similar. Our tastes are similar, so this is an opportunity to grow and you don’t want to stop it in its tracks. Many of the new products they’re making are booming. Again, a whole new market of 30 million extra people right nearby would be really important."

O-AT-KA employs 300 people locally and at least 16 jobs are expected to be added with the expansion. The expansion will go forward to meet growing U.S. demand for nutritious milk products, company executives said, but there won't be as many new jobs and as much opportunity if Canada cuts imports of U.S. milk products.

"O-AT-KA has been paving a path of innovation for Upstate New York for years," Schumer said. "They've been taking the milk our farmers produce and turning it into new products that consumers demand. Rolling back trade access now could rip the rug out from under O-AT-KA's grand plans."

The city and the Town of Batavia along with the GCEDC have come to terms on an agreement to provide sewer service to the Genesee Valley Agri-Business Park.

The agreement calls for GCEDC to construct the new sewer system and for the city and town to own and maintain one pump station each.

The city won't be asked to pay for a dime of the construction, according to GCEDC CEO Steve Hyde, but will be responsible for the maintenance of its pump station.

"In the long term, the revenue from the sewer system will be very, very significant," Hyde said. "The revenue will be into the hundreds of thousands of dollars annually as we build out the ag park. The revenue will far outweigh the cost of maintaining the infrastructure."

The plan calls for two new pump stations, one within city limits serving the park and O-AT-KA Milk, and the other within the town boundaries and serving the ag park.

The Batavia City Council will be asked to approve the agreement, which must be in place before the groundbreaking for the new Alpina Products plant, at a special meeting Thursday.

The majority of the funding for construction of the pump stations and sewer lines will come from grants received by GCEDC for the ag park project. O-AT-KA Milk will also pay a portion of the construction costs. The exact costs and expense split has not yet been released.

The citys' pump station will be built near Cedar and Ellicott streets with a sewer line running north to Main Street.

The town's station will be built near Main Street Road within the ag park and connect with the main sewer line under Main Street.

O-AT-KA Milk is planning a significant expansion and needs the additional sewer capacity. Even now, according to a city memo, O-AT-KA's sewer outflow occasionally exceeds the capacity of the Ellicott Street gravity sewer line.

WBTA contributed to this report.

From the Daily News (Wednesday):

• Randall J. Peterson, 22, of Rochester was sentenced to 12 years in state prison Tuesday in Genesee County Court. Peterson was one of four men involved in the shooting death of 23-year-old Desean Gooch in October, 2006. He pleaded guilty to first-degree robbery.

• Reporter Roger Muehlig writes: "Genesee County's Republican Committee is set to endorse Stephen M. Hawley for re-election to the state Assembly this year." The committee meets Thursday night. Hawley has already served one two-year term in the 139th District.

• Construction has begun on the Lowe's home improvement store off Veterans Memorial Drive in Batavia. Representatives have said they do not know when it will be finished. The nearby Target should be completed by July.

• Officials with Creamy Creation and O-AT-KA Milk Products dedicated the new Creamy Creation's 5,000-square-foot facility in Batavia Tuesday. Reporter Matt Surtel writes: "Creamy Creation is part of the Netherlands-based Campina, which is one of Europe's largest dairy cooperatives. The company was started in 1979, and moved its U.S. office from Wisconsin to Batavia in 1999." Creamy Creations produces creme liqueurs and nutritional beverages, among other products.

• Reporter Scott DeSmit writes: "Phillip E. Kroft Jr., 20, was charged with first-degree robbery, criminal possession of a weapon and petit larceny, police Detective Todd Crossett said. Kroft is accused of stealing a cell phone from a woman ... in the early summer of last year." When the woman tried to get her phone back, Kroft allegedly punched her in the stomach, wearing brass knuckles, police told DeSmit. Kroft also faces unrelated charges of rape.

For the complete stories, the Daily News is available on local newsstands, or you can subscribe on BataviaNews.com.