Oregon mega-dairy sued by state for release of wastewater, by contractors for unpaid bills

The Oregon Department of Agriculture asked a Multnomah County judge late last month to temporarily stop the dairy’s ability to create or discharge wastewater after eight months of non-stop permit violations.

The dairy’s California-based owner, Greg te Velde, said in court filings the state restrictions will force him to close the dairy and sell its cows for slaughter. He is mired in other lawsuits that could lead to foreclosure of the property.

Lost Valley Farm is the second largest dairy in Oregon, with state permission to manage a herd of 30,000 mature cows, heifers and calves. The mega-dairy is unusual in Oregon’s landscape of small and medium-sized family farms.

Te Velde bought the 7,288-acre ranch in January 2016 from GreenWood Resources for $65 million. It was formerly an iconic Boardman poplar tree farm that lined Interstate 84.

Te Velde, 60, got his start in Oregon through the largest mega-dairy, Threemile Canyon Farms, which has 70,000 animals about 30 minutes away. There, in 2002, te Velde leased from his family. Threemile Canyon Farms is partially owned by California dairy giant A.J. Bos, who is related to te Velde through marriage.

When te Velde applied for permits to start Lost Valley Farm, more than 4,000 comments poured into the state licensing agencies — most in opposition. Some Morrow County Commissioners supported the business, but environmental groups, family farm organizations and the U.S. Forest Service all expressed concern that the dairy would hurt the environment and surrounding farmers.

People were concerned the dairy would hurt the already nitrate-laden groundwater area, affect the Columbia River, spew methane into the atmosphere and signal a change in Oregon’s agriculture landscape toward large-scale factory farms.

In response, the permit forbade activities the state has allowed at other dairies — such as spreading manure over snow-covered or frozen ground — and required more groundwater monitoring wells than at any other farm.

Te Velde received his permits March 31, 2017, and they went into effect April 20.

Two months later, he received his first warning that he was out of compliance.

State agriculture and water officials visited the farm numerous times, according to the state’s lawsuit, sometimes multiple times in a week. They found that dairy managers were constantly flouting the conditions of their permits and refused to correct their actions.

Travis Love, who ran the farm, said in written testimony that he disagreed with the state inspectors’ evaluations that the farm was not complying with its rules. Still, he said he tried to correct the problems.

“We have been very responsive to each of those notices and timely corrected issues of concern, even when we have been skeptical as to whether they were required by the permit,” Love said.

However, state officials say that the farm routinely let wastewater overrun the storage facilities built to contain it, which could allow manure and other wastewater to seep directly into the soil and public waterways.

Lost Valley is within 10 miles of five public water supply systems — three are even closer — plus private wells and sources of drinking water.

Among the problems inspectors pointed out at the farm, Love and te Velde were storing waste and wastewater in areas not permitted for it: they never completed building all the lagoons and other facilities to store it; the existing facilities regularly overflowed when it rained; they removed parts from a storage tank after agreeing not; and the container that held dead animal bodies leaked.

Love also repeatedly neglected to notify state authorities when wastewater escaped, even though the Lost Valley permit required such notice and inspectors reminded him of that.

In his testimony, Love said that he should be cut slack because the farm is still getting up and running. He claims that the farm is now in compliance with all permits and that he and te Velde have undertaken expensive upgrades to deal with the wastewater problems.

He also said that they are treated unfairly.

“In my experience and discussion with other dairy farms, (Kevin) Coughlin’s approach to inspections and ODA’s approach to notices and penalties against Lost Valley Farm is much more stringent than at other dairies in Oregon,” Love said.

Te Velde agreed and said that he will have to close the farm if the state’s request for a temporary restraining order is granted. Without the ability to create wastewater, the dairy won’t be able to milk cows, he said.

Te Velde said he currently has only about half the 30,000 cows he’s allowed, and those will need to be sold for slaughter if he can’t milk them. The cows would be sold at a discount, and te Velde doubted his ability to buy them back quickly, resulting in a loss of revenue of an estimated $30 million, he said.

He also said he would need to lay off almost all of his 70 employees, many of whom te Velde said are Latinos whose lack of education and English-speaking skills would prevent them from getting other jobs. In addition, he said that he would be forced to shirk his local creditors, who are unsecured.

“Their ability to receive payment for the work they have graciously done in support of the dairy would be severely impacted,” te Velde said in written testimony.

Te Velde appears to already be in financial trouble.

In February, Dutch bank Rabobank sued to take control of Lost Valley Farm, as it has two of te Velde’s dairies in California, because he has not kept up with two of three loans. The herd and most of the other assets at Lost Valley are now subject to be taken by Rabobank.

Also in February, Irrigon company Custom Feed Services sued te Velde for more than $730,000 plus an interest rate of $359 per day since Oct. 24. The company said it harvested corn that the Velde’s employees fed to the cows, but was never paid for the work.

In January, dairy supply company DariTech sued te Velde for $385,709 plus interest. The Washington company claims that it supplied equipment for the storage and management of waste and wastewater. Te Velde paid $820,237 but stopped responding to invoices as of June 2017.

In November, IRZ Consulting sued for foreclosure because of an outstanding debt of $400,000. The consulting firm, which says it built and supplied all the equipment for the farm, claims that te Velde has refused to pay and that interest started to accrue at a rate of 18 percent since September.

Te Velde was also arrested in August in Washington on charges of patronizing a prostitute and possession of methamphetamine.

In the meantime, Tillamook County Creamery Association stopped buying Lost Valley’s milk.

“Based on a number of recent factors that indicate deterioration of the Lost Valley operation, Tillamook has made the decision to terminate our contract with Lost Valley Farm,” said the association in a statement.

When reached by phone, Te Velde declined to comment about any of the lawsuits.

By: Molly Harbarger

Source: OregonLive

Link: http://www.oregonlive.com/business/index.ssf/2018/03/oregon_mega-dairy_sued_by_stat.html

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