May 11, 2018
CapitalPress.com
3
Bankruptcy shouldn’t stop Oregon
dairy cattle auction, creditor claims
Bankruptcy filing
by Lost Valley Farm
in Boardman, Ore.,
canceled auction
Capital Press File
The three largest co-ops in California have voted in favor of
joining a new federal milk marketing order.
Dairy co-ops tip
scale in FMMO vote
By MATEUSZ PERKOWSKI
Capital Press
A major farm lender is ar-
guing bankruptcy protections
shouldn’t stop the liquida-
tion sale of cattle owned by
a controversial Oregon dairy
that’s become financially un-
sustainable.
Since starting operations a
year ago, Lost Valley Farm of
Boardman, Ore., has encoun-
tered serious financial and
regulatory problems that now
threaten its survival.
The company’s owner,
Greg te Velde, recently filed
for Chapter 11 bankruptcy
protection to halt the foreclo-
sure of property at his three
dairies in Oregon and Cali-
fornia while he restructures
debt.
By filing a bankruptcy pe-
tition on April 26, te Velde
was able to cancel an auction
of Lost Valley Farm’s 14,500
cattle scheduled for the next
day.
Rabobank, one of his
main creditors, had previ-
ously convinced an Oregon
judge to order the auction be-
cause te Velde had defaulted
on $67 million worth of loans
for which the cattle served as
collateral.
Because te Velde isn’t able
to meet financial obligations
to feed, water and otherwise
care for the cattle, the herd’s
value is at risk of declining,
according to Rabobank.
Rabobank is now seeking
“relief” from the automatic
stay of te Velde’s property
foreclosure under bankruptcy
law to allow for an auction
and avoid “potentially cat-
astrophic consequences” to
its collateral at Lost Valley
Farm.
A bankruptcy judge will
consider the motion at a hear-
ing set for May 8 in Fresno,
Calif., during which te Velde
will also ask to use cash that
serves as collateral for debt.
Te Velde said he had no
comment about Rabobank’s
claims and Capital Press was
unable to reach the attorney
representing him in the bank-
ruptcy case.
After several loans went
into default, Te Velde had the
By CAROL RYAN DUMAS
Capital Press
Courtesy Paloma Ayala/LightHawk
This Nov. 27, 2016, file photo shows an aerial view of Lost Valley Ranch. notforsale
opportunity to restructure his
“massive debt load” during a
“lengthy” forbearance agree-
ment that expired at the end
of 2017, but he never devel-
oped such a plan, according
to Rabobank.
In its court filing, Rabo-
bank claims te Velde’s “errat-
ic and unreliable” behavior
is caused by “habitual” use
of methamphetamine, which
prompted a subsidiary of the
Tillamook County Cream-
ery Association to cancel its
milk-buying contract with
the dairy.
Te Velde has “no cash on
hand” and wouldn’t be able
to continue operating his
dairies without $4 million in
advances from Rabobank to
pay for feed, water and labor
at the facility, according to
Rabobank’s filing.
“While Rabobank will
act responsibly to protect
the value of the LVF herd,
Rabobank is not willing to
finance the drug-addled fan-
ciful dreams of this Debtor
during a lengthy Chapter
11 case that involves about
24,000 cows, 28,000 other
head of livestock, three dair-
ies in two states and about
$160 million in total debt,”
the company said in a court
filing.
Rabobank claims that te
Velde checked out of a drug
rehab clinic in April to con-
vince Columbia River Pro-
cessing — the Tillamook
creamery’s affiliate — to re-
instate the milk-buying con-
tract, but then returned to the
facility.
“As a regulated financial
institution, Rabobank cannot
continue to lend to a bor-
rower in this condition,” the
company said.
Patrick Criteser, CEO
of the Tillamook creamery,
submitted a declaration in
support of Rabobank’s re-
quest and stated the compa-
ny has withheld milk pro-
ceeds from Lost Valley Farm
due to agricultural service
liens filed by other unpaid
creditors.
The subsidiary, Columbia
River Processing, or CRP, is
buying milk from the dairy
until Rabobank is able to
conduct an auction but will
stop after May 31, Criteser
said.
“In no event, however, is
CRP willing to continue to
accept and pay for milk from
the dairy on an ongoing ba-
sis, other than that for a short
period and solely to facili-
tate an auction of te Velde’s
herd,” he said.
Washington snowpack lingers; irrigation supply plentiful
By DAN WHEAT
Capital Press
YAKIMA, Wash. — Irri-
gation water should be plen-
tiful throughout the summer
and into autumn, thanks to a
cool April that preserved the
mountain snowpack.
Statewide mountain snow-
pack, as of May 2, was 125
percent of normal. That’s up
from 113 percent a month
ago not because there’s been
any appreciable snow but be-
cause cool weather delayed
earnest snowmelt by two to
three weeks, said Scott Pattee,
water supply specialist of the
Washington Snow Survey Of-
fice of the USDA Natural Re-
sources Conservation Service
in Mount Vernon.
“We’re not increasing
snowpack, it’s just that we are
in later melt,” he said.
Snowmelt accelerated in
the last few days of April and
into May as temperatures rose
and nighttime lows began
staying above freezing in the
mountains, he said.
A year ago, statewide
mountain snowpack was 140
percent of normal from April
snows and cool weather. Pat-
tee commented then that it
could be one of the rare years
when Cascade Mountain gla-
ciers would gain a little.
Maximum
snow-water
content in the North Cascades
is normally April 7 and this
year it was more like April 20,
he said.
Snow water equivalent
snowpack in the Spokane ba-
sin was 138 percent of normal
on May 2. The upper Colum-
bia (Okanogan and Methow
rivers) was 166 percent. The
central Columbia (Chelan,
Entiat and Wenatchee) was
119, the upper Yakima was
105 and the lower Yakima
103.
Walla Walla was 114 per-
cent, the lower Snake River
was 128, the lower Colum-
bia was 121, south Puget
Sound (from Cascade crest
to lowlands) was 112, central
Puget Sound 139, north Puget
Sound 128 and the Olympics
138. Those numbers were all
up from a month earlier.
May 1 through September
streamflow forecasts for those
same basins are: Spokane,
122 to 140 percent of normal;
upper Columbia, 127-163;
central Columbia, 102-128;
upper Yakima, 104-109; low-
er Yakima, 78-102; Walla
Walla, 106-112; lower Snake,
83-130; lower Columbia, 93-
122; south Puget Sound, 85-
105; central Puget, 102-127;
north Puget, 103-116; Olym-
pics, 108-110.
“Fisheries and farmers
should be happy,” Pattee said.
“There should be plenty of
water for everyone.”
Long-range forecasts call
for a summer warmer and dri-
er than normal, but it’s of no
concern because of snowpack
duration, he said.
The five mountain res-
ervoirs serving the Yakima
Basin were at 87 percent of
capacity and at 117 percent of
average for this time of year,
according to the U.S. Bureau
of Reclamation. The reser-
voirs are normally full by the
end of May or early June.
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Weekly fieldwork report
Ore.
.COM
Hazelnut Orchard
ROP-18-3-1/109
Item/description (Source: USDA, NASS; NOAA)
• Days suitable for fieldwork (As of May 8)
6.8
• Topsoil moisture, surplus
3%
• Topsoil moisture, percent short
31%
• Subsoil moisture, surplus
2%
• Subsoil moisture, percent short
42%
• Precipitation probability
33-50% below/
(6-10 day outlook as of May 8)
Normal (East)
ROP-13-40-3/102
The voting is closed in
the producer referendum de-
termining whether California
dairy farmers will leave their
state milk marketing order
behind and join the federal
order system.
While nothing is official
yet, some industry spokes-
men are saying bloc voting in
favor of making the switch by
the state’s three largest dairy
co-ops has sealed the deal.
“We’re going to be the
11th federal order. There real-
ly is no doubt,” Geoff Vanden
Heuvel, board member and
economic consultant for the
Milk Producer Council, said.
The co-ops — California
Dairies Inc., Dairy Farmers of
America and Land O’Lakes
— represent 75 percent of
the milk produced in Califor-
nia, and only two-thirds was
needed to approve the order,
he said.
Those with milk outside
the co-ops who cast a vote
probably voted pretty heavily
for it, too, he said.
“I think it’s a big deal. It’s
a necessary transition for the
California dairy industry,” he
said.
“We’re going to be a fed-
eral order, so fasten your seat
belts. We’ve got a busy five or
six months ahead,” he said.
USDA officials have said
if the election is successful,
they are committed to a Nov.
1 start date. Joining the feder-
al order won’t be reinventing
the wheel, but it is different
system and there’ll be a learn-
ing curve, he said.
A USDA spokesman told
Capital Press on Monday the
agency expects to release the
outcome of the referendum in
early June. Officials at Cali-
fornia Dairy Inc. don’t want
to be presumptuous regarding
the outcome but are under the
impression the co-ops make
up more than two-thirds of
the voting population, Rob
Vandenheuvel, CDI senior
vice president of member and
industry relationships, said.
But nothing is official
until USDA announces it.
The voting population also
includes dairy producers out-
side the state who would be
affiliated with a California
order because they ship milk
to the state, he said.
Nonetheless, CDI plans to
use the next six months pre-
paring for the transition, he
said.
The three co-ops — which
petitioned USDA for a Cali-
fornia order in February 2015
— released a joint statement
saying they voted in favor of
establishing a federal order
for California.
Since the beginning, the
three co-ops collaborated to
create a potential California
order as a means of helping the
state’s dairy farmers receive
more equitable, market-based
milk prices, they said.
“We believe the proposal
will better address disparities
between farm-gate prices in
California and the rest of the
nation,” they stated.
Frustrated with some of
the lowest milk prices in the
country, California dairymen
want to move from the state
system and tie their fate to the
federal system in hopes of in-
creasing their milk checks.
Dairy producers under-
stand there’s a real benefit
to getting on the same level
playing field with dairy farm-
ers in the federal order, Lynne
McBride, executive director
of California Dairy Cam-
paign, said.
“It’s been a long time
coming. We’re excited and
think it will restore equity in
milk pricing,” she said.
Considering the amount
of milk and amount of pro-
ducers represented by those
co-ops, “we think it’s going
to move ahead,” she said.
“We’re finally going to
turn a page,” she said.
Western United Dairymen
is optimistic about the poten-
tial impact of the upcoming
change, Annie AcMoody,
WUD director of economic
policy, said.
“California
producers
have faced negative margins
for three years now, so we
are hopeful to see higher pro-
ducer pay prices,” she said.
Wash.
Idaho
Calif.
6.3
5%
14%
4%
10%
6
12%
15%
14%
13%
7
0
65%
10%
35%
33-50% below
33% below/
40% above
33% below/
Normal