Court Orders Feds to Take Over Lost Valley Farm, Appoint Trustee

“[Owner Greg] Te Velde is unwilling, or unable, to comply with his duties as a fiduciary,” wrote Judge Fredrick Clement of the U.S. Bankruptcy Court of the Eastern District of California in his decision to allow a federal takeover of Lost Valley Farm in Boardman, Oregon.

“Since filing (bankruptcy), [te Velde] has continued his long-standing habits of methamphetamine usage and gambling," Judge Clement continued. "Drug usage has occurred once or twice per week, and he has gambled estate monies of $2,000 to $7,000 monthly. Te Velde borrowed $205,000 without court authorization, and in a one-month period took personal draws of $28,000 more than authorized.”

With that damning decision by Clement, te Velde failed in his efforts to maintain control of Lost Valley Farm in Boardman as well as the two mega-dairies he owns in California. Clement then ordered the appointment of a trustee to manage the three factory farm dairies.

According to an article in the Salem Statesman-Journal, "it's uncertain whether replacing te Velde with a trustee will hasten or slow environmental improvements at the dairy" since "creditors have said they are reluctant to approve any spending on environmental compliance until a consultant completes a report outlining the cost of all needed improvements."

Until that report is done, and even in its current questionable state, the dairy will continue to operate, selling the milk from its approximately 7,000 cows under the contract it has with the Tillamook Creamery Association's processing plant in Boardman. That is despite Tillamook's claims in bankruptcy hearings in June that the milk from Lost Valley violated the company's testing standards for safe levels of bacteria on at least 60 occasions.

"The Lost Valley mega-dairy has been a disaster from the beginning, and hopefully this decision will lead to it finally being closed down," said Friends of Family Farmers Policy Director Ivan Maluski in the Salem paper's article. "The Oregon Departments of Environmental Quality and Agriculture could have prevented this fiasco and should have denied this operation a permit at the outset. This situation makes it clear that Oregon needs stronger laws to prevent this kind of thing from happening in the future."

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Read my series of posts outlining the long history of problems at Lost Valley Farm since it opened just a year ago, including cows standing in manure from overflowing lagoons and a leak in a tank containing dead cows, plus massive groundwater pollution, lawsuits from the state of Oregon and the farm's creditors, and te Velde's own arrest for soliciting a prostitute and possession of methamphetamine in Benton County, Washington.

My article Big Milk, Big Issues for Local Communities reports on the issues mega-dairies pose to Oregon's air, water, environment and communities. You can also find out Why I'm Quitting Tillamook Cheese and read other coverage about factory farms in Oregon.

Lost Valley Farm Still Operating While Court Cases Pending

The headline that ran in the Oregonian is a good introduction to the latest news on the situation at Lost Valley Farm: "U.S. Department of Justice wants to take over mega-dairy over gambling, meth, money management."

Apparently the feds are taking a narrow view of Lost Valley owner Greg te Velde's withdrawals of more money from dairy accounts than is allowed by the bankruptcy court, as well as his use of some of the money for weekly gambling junkets, according the article. It goes on to say that the Justice Department is seeking to have a trustee take over the bankruptcy proceedings to prevent te Velde from siphoning funds for his own pursuits whenever he feels like it.

"According to court documents, te Velde said he spends $2,000 and $7,000 a month gambling at the Tachi Palace Casino and Hotel in Lemoore, California," the article states. "The 60-year-old dairyman also said he continues to smoke methamphetamine, a habit he said he picked up in college, including in the two days before his July 13 bankruptcy interview with creditors."

Milk cows at Lost Valley standing in overflowing manure from leaking lagoons.

In early July the Oregon Department of Agriculture (ODA), which had issued an operating permit for Lost Valley Farm just over a year ago despite te Velde beginning construction without proper permitting and never completing construction of the required manure lagoons to protect the area's groundwater, has asked a judge to impose criminal contempt of court charges against te Velde and issue remedial sanctions that would effectively shut down the dairy within 60 days, according to an article in the Salem Statesman-Journal.

I spoke with Wym Mathews, Program Manager for the ODA's Confined Animal Feeding Operations, who said that the contempt hearing was held on July 27th and will be continued on August 24th, at which time the ODA is hoping for a decision from the judge in the case on te Velde's violation of the stipulated judgement to clean up the facility. The ODA had issued a revocation of the dairy's waste management permit in late June due to contamination it said had been seeping into the soil in an area where groundwater is endangered and legally protected, among many other problems cited at the dairy.

Aerial photo shows half-mile long barns at Lost Valley.

Though the stipulated judgement initially indicated that ODA inspectors would be monitoring Lost Valley on a weekly basis to monitor operations and make sure the requirements of the judgement were followed, Matthews said that inspectors are only able to be on premises on a semi-weekly basis. He said that once the court charges te Velde with contempt, that starts a 60-day clock for te Velde to either clean up or shut down the dairy. He added that a complete shutdown would still require te Velde to remove the accumulated waste from the property and clean out all the facilities.

At last count on July 25th, Matthews estimates that just under 7,000 cows were still being milked at the facility, and that Tillamook Creamery's processing plant in Boardman is still buying the milk from the dairy. That is despite Tillamook's claims in bankruptcy hearings in June that the milk from Lost Valley violated their testing standards for safe levels of bacteria on at least 60 occasions.

Milk cows laying in manure from leaking lagoons at Lost Valley.

So it looks like Lost Valley will continue operating until at least late October, assuming the 60-day clock to clean up or shut down the mega-dairy starts ticking on August 24th. Which means it will continue spewing toxic pollutants into our state's air and water and placing the health of the people in nearby communities at risk. Let's hope Oregon's legislators and the ODA learn a lesson and pass sensible permitting rules in the next session of the legislature so that this sort of disastrous situation can't happen again.

I contacted the Tillamook County Creamery Association to confirm that they are still buying milk from Lost Valley, but they had not returned my call by the time of posting.

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Read the series of posts outlining the long history of problems at Lost Valley Farm since it opened just a year ago, including cows standing in manure from overflowing lagoons and a leak in a tank containing dead cows, as well as groundwater pollution, lawsuits from the state of Oregon and creditors, and te Velde's own arrest for soliciting a prostitute and possession of methamphetamine in Benton County, Washington.

My article Big Milk, Big Issues for Local Communities reports on the issues mega-dairies pose to Oregon's air, water, environment and communities. You can also find out Why I'm Quitting Tillamook Cheese and read other coverage about factory farms in Oregon.

In Discussion: Lost Valley Farm and Mega-Dairies in Oregon

When Chris Seigel, host of the Food Show on KBOO Community Radio, contacted me wanting to do a segment on my reporting on Lost Valley Farm and mega-dairies in Oregon, I saw it as a chance to get the word out about how these large factory farm dairies are affecting Oregon's communities and our air and water, as well as the health of Oregonians.

I immediately called in Amy Van Saun, staff attorney for the Center for Food Safety, and Ivan Maluski, policy director for Friends of Family Farmers, who have been working on the issues these out-of-state-owned, corporate factories present to the state. (Give our discussion a listen by clicking on the audio bar below the photo, above.)

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Read the series of posts outlining the long history of problems at Lost Valley Farm since it opened just a year ago, including cows standing in manure from overflowing lagoons and a leak in a tank containing dead cows, as well as groundwater pollution, lawsuits from the state of Oregon and creditors, and te Velde's own arrest for soliciting a prostitute and possession of methamphetamine in Benton County, Washington.

My article Big Milk, Big Issues for Local Communities reports on the issues mega-dairies pose to Oregon's air, water, environment and communities. You can also find out Why I'm Quitting Tillamook Cheese and read other coverage about factory farms in Oregon.

Lost Valley Farm: Governor Under Pressure to Shut Down Mega-Dairy

"Cows standing ankle-deep in a slurry of their own waste is just the beginning of Lost Valley mega-dairy's long list of horrifying infractions. Lagoons have overflowed with manure and untreated wastewater, running off into areas where it could contaminate drinking water supplies for local families. 'Mortality boxes' are overflowing with dead cows. And recently it was reported that the dairy doesn't even have enough water to provide operational restrooms to its employees. Lost Valley's 15,000-cow mega-dairy has been a serial permit violator since its inception."

Waste overflows are common at mega-dairies (here at Threemile Canyon).

This alarming statement comes from the Center for Food Safety, an organization working to protect human health and the environment, which has joined with several other environmental and food system organizations to demand that Governor Kate Brown shut down the dairy for good.

They contend that Lost Valley Farm, which owner Greg te Velde has been licensed to operate for just over a year, threatens the safety of area water supplies—already considered at risk to the point of being designated a Groundwater Management Area by the state's Dept. of Environmental Quality—as well as the Columbia River itself.

Waste from mega-dairies add to pollution problems.

The Oregon League of Conservation Voters (OLCV), a partner in the effort to shut down Lost Valley, said that the violations at the mega-dairy, while egregious, are not unusual for factory farms of its size.

"Oregon’s mega-dairies have demonstrated time and time again that they are polluting our air and water, and the state of Oregon has failed to prevent this pollution," the OLCV states in a petition calling for Gov. Brown to shut down the dairy. "The mega-dairy known as Lost Valley Farm is facing huge problems that are affecting our water quality and the health of our environment. These problems occurring at Lost Valley are not unique, and Governor Brown should not allow another company to take over this poorly planned and massive confined animal feeding operation (CAFO)."

Friends of Family Farmers (FoFF), an advocacy organization providing support for Oregon's small family farmers, has warned from the beginning that allowing mega-dairies like Lost Valley Farm and the nearby Threemile Canyon Farm—with its 70,000 cows producing 165,000 gallons of milk per day, along with 436 million gallons of waste per year—would endanger the state's small dairy producers, and pollute the area's air and water. In fact, since Threemile Canyon began operations in 2001, an average of nine family-owned Oregon dairy farms went out of business each month between 2002 and 2007. (Sign FoFF's message to Governor Brown.)

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Read the series of posts outlining the long history of problems at Lost Valley Farm since it opened just a year ago, including cows standing in manure from overflowing lagoons and a leak in a tank containing dead cows, as well as groundwater pollution, lawsuits from the state of Oregon and creditors, and te Velde's own arrest for soliciting a prostitute and possession of methamphetamine in Benton County, Washington.

My article Big Milk, Big Issues for Local Communities reports on the issues mega-dairies pose to Oregon's air, water, environment and communities. You can also find out Why I'm Quitting Tillamook Cheese and read other coverage about factory farms in Oregon.

Lost Valley Farm Owner Called "Drug-Addled" in Court Filing

In a court filing, Dutch agricultural lender Rabobank is seeking relief from a bankruptcy court in order to auction off the dairy herd at Boardman's Lost Valley Farm (LVF), owned by California businessman Greg te Velde, according to an article in the Capital Press.

In a previous court filing, Rabobank had claimed that te Velde was in default on more than $67 million dollars in loans from the bank on three dairies (two in California). The herd was to have been auctioned off at the end of April, but a last-minute bankruptcy filing by te Velde halted the auction. The bank is seeking to reinstate the auction order because te Velde claims he has "no cash on hand" and is asking the bank for another $4 million in advances to pay for "feed, water, and labor" at the facility.

Concerned that te Velde's lack of cash could have "potentially catastrophic consequences" to its collateral at Lost Valley Farm, Rabobank stated in the court filing that "te Velde’s 'erratic and unreliable' behavior is caused by 'habitual' use of methamphetamine." It goes on to state that "while Rabobank will act responsibly to protect the value of the LVF herd, Rabobank is not willing to finance the drug-addled fanciful dreams of this Debtor during a lengthy Chapter 11 case that involves about 24,000 cows, 28,000 other head of livestock, three dairies in two states and about $160 million in total debt."

Tillamook County Creamery Association, whose Columbia River Processing (CRP) plant in Boardman buys milk from Lost Valley, had threatened to pull out of the contract it has with the dairy. The bank said that "te Velde checked out of a drug rehab clinic in April to convince Columbia River Processing…to reinstate the milk-buying contract, but then returned to the facility." The article quotes  Patrick Criteser, CEO of the Tillamook creamery, who submitted a declaration supporting Rabobank's request, said that Tillamook "is buying milk from the dairy until Rabobank is able to conduct an auction but will stop after May 31."

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Read the series of posts outlining the long history of problems at Lost Valley Farm since it opened just a year ago, including cows standing in manure from overflowing lagoons and a leak in a tank containing dead cows, as well as groundwater pollution, lawsuits from the state of Oregon and creditors, and te Velde's own arrest for soliciting a prostitute and possession of methamphetamine in Benton County, Washington.

My article Big Milk, Big Issues for Local Communities reports on the issues mega-dairies pose to Oregon's air, water, environment and communities. You can also find out Why I'm Quitting Tillamook Cheese and read other coverage about factory farms in Oregon.

Top photo from Google Maps.

Lost Valley Farm Declares Bankruptcy, Halting Sale

There's just no end to the drama at Lost Valley Farm in Boardman, Oregon's second-largest factory farm dairy.

Today the farm's cows—estimates range from just over 11,000 to as many as 19,000—were scheduled to be auctioned to pay off the $60 million in loans owner Greg te Velde owed to Rabobank, a Dutch agricultural lender. In mid-April a Morrow County judge issued a preliminary injunction preventing te Velde from interfering with the auction, according to an article by the Associated Press, though the injunction left open a loophole that could be used to forestall the liquidation of the herd.

Advertisement for auction.

So late Thursday night, just hours before Friday's auction was to begin, te Velde crawled though that loophole by filing for Chapter 11 bankruptcy protection, a move that stops all foreclosure actions by the farm's creditors. An article in the Capital Press reports that the filing also encompasses te Velde's California dairy operations, Pacific Rim Dairy in Corcoran and GJ te Velde Dairy in Tipton.

"Together, the dairies have more than 40,000 cattle that are listed as potential 'hazard property' that poses a safety threat or requires immediate attention" wrote Capital Press reporter Mateusz Perkowski. "Te Velde’s companies owe between $100 million and $500 million to [nearly] 1,000 creditors and have between $100 million and $500 million in assets, according to the bankruptcy petition."

Cow standing in manure from overflowing lagoon.

One of the creditors te Velde is leaving in the lurch is Morrow County, which county Deputy Assessor Patricia Hughes said is owed more than $360,000 in back taxes.

The Oregon Department of Agriculture (ODA), in a direct message on Twitter, said that it "will continue to monitor Lost Valley Farm weekly by conducting inspections of the facility. ODA will also continue to assess compliance of the stipulated judgement and all of the CAFO Permit conditions. "

I also reached out to Tillamook, which is a major purchaser of the milk produced by Lost Valley. It had not responded by the time of posting, so stay tuned for updates as more information comes in.

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UPDATE: The Salem Statesman-Journal reports that Wym Mathews, in charge of compliance for factory farms at the ODA, told the paper that Lost Valley had been issued two notices of noncompliance for violations of the dairy’s wastewater permit, including manure spills, despite a stipulated agreement settling a lawsuit the state had brought against the dairy for previous violations.

"Te Velde’s Chapter 11 bankruptcy petition, filed April 26 in California, provides an automatic stay of time during which judgments, collection activities, foreclosures and repossessions are suspended and may not be pursued," the article states. "Oregon officials could not say whether it also prevents enforcement of the stipulated judgement. Under the judgment, Oregon has the right to revoke the dairy’s wastewater permit if te Velde does not comply with its terms."

In a subsequent interview, reported in the same article, Matthews appeared to change his story, saying only one notice had been issued, and that "there have been no other enforcement actions taken against the dairy since the settlement."

"'It was a big mistake to give this facility a permit, and ODA should have closed it down months ago after it became clear how badly it was being managed,'" said Ivan Maluski, policy director for Friends of Family Farmers, who was interviewed for the article.

 "'There were so many warning signs that ODA and other decision makers either overlooked or ignored,' Maluski said. 'Where is the accountability? What steps are being taken by ODA and the Governor to make sure this kind of thing won't happen again?'"

Read the series of posts outlining the long history of problems at Lost Valley since it opened just a year ago, including cows standing in manure from overflowing lagoons and a leak in a tank containing dead cows, as well as groundwater pollution, lawsuits from the state of Oregon and creditors, and te Velde's own arrest for soliciting a prostitute and possession of methamphetamine in Benton County, Washington.

My article Big Milk, Big Issues for Local Communities reports on the issues mega-dairies pose to Oregon's air, water, environment and communities. You can also find out Why I'm Quitting Tillamook Cheese and read other coverage about factory farms in Oregon.

Top photo from Google Maps. Photo of cows standing in manure obtained via a public records request by Friends of Family Farmers.

Lost Valley Defaults on Loans, Cows Will Be Sold

A recent report in the East Oregonian newspaper indicated that Rabobank, a Dutch agricultural lender, reported that Greg te Velde, owner of Lost Valley Farm, had defaulted on part of $60 million in loans for the Boardman dairy and two other dairies te Velde owns in California. "John Top, owner of Toppenish Livestock, said they will begin preparing next week for the auction, which is scheduled for April 27," the article stated. "However, according to a preliminary injunction filed in Morrow County, te Velde has not given the auctioneer permission to enter the dairy."

Today (Thursday, 4/5/17) I was able to reach Cody Buckendorf, Operations Manager at Toppenish Livestock, who said that that the auction company had been given access to the property and an on-site auction was going ahead on Friday, April 27th. He said that their first day on the property to process cows prior to auction was yesterday, (Wednesday, April 5), and that the bank was estimating there would be as many as 19,000 cows auctioned. When questioned about the conditions he observed at the dairy, he said that, contrary to the photos taken by the inspector that led to its shutdown (photo, above), "it was one of the cleanest dairies I've seen."

Reached by phone, Andrea Cantu-Schomus, Director of Communications for the Oregon Department of Agriculture (ODA), said that within days of te Velde agreeing to a stipulated judgement by Multnomah County Circuit Judge Stephen Bushong that the dairy limit wastewater production to 65,000 gallons a day and ensure its manure lagoons have enough capacity to handle water from storms, the problems documented by ODA inspectors "had been rectified."

She added that as long as Lost Valley is running a Confined Animal Feeding Operation (CAFO) under Oregon Administrative Rules, the ODA will be enforcing the CAFO permit and following the guidelines of the stipulated judgement, which includes weekly inspections by ODA inspectors.

Read my coverage of the problems at Lost Valley Farm that led to the auction. My article Big Milk, Big Issues for Local Communities reports on the issues mega-dairies pose to Oregon's air, water, environment and communities. You can also find out Why I'm Quitting Tillamook Cheese and read other coverage about factory farms in Oregon. Photo obtained via a public records request by Friends of Family Farmers.