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8 CapitalPress.com May 18, 2018 Dairy Subscribe to our weekly dairy or livestock email newsletter at CapitalPress.com/newsletters Longtime Portland dairy restructures its operations N.E. 21st Avenue site will close By GEORGE PLAVEN Capital Press Sunshine Dairy, a long- time Portland dairy produc- er, has filed for Chapter 11 bankruptcy protection and will close its 85-year-old West Plant building on N.E. 21st Avenue. Dan Boverman, chief re- structuring officer, said Sun- shine Dairy will continue to run its East Plant on N.E. Halsey Street near Portland International Airport. How- ever, the West Plant will be shut down and operations sold to Alpenrose Dairy, a cross-city competitor in Southwest Portland. Alpenrose will take over production at its fa- cilities, and the West Plant will eventually be sold to its “highest and best use,” Boverman said. The bank- ruptcy court still has to ap- prove the agreement, which could happen by late May or early June. Boverman said Alpenrose is expected to hire some of the current Sunshine Dairy employees, though it is not yet certain how many posi- tions will be affected. Be- tween the East and West plants, Boverman said Sun- shine Dairy has roughly 100 Joe Mabel/Wikimedia Commons The Sunshine Dairy plant on N.E. 21st Avenue in Portland will close as the company restructures its operations. The company will continue operations at its N.E. Halsey Street plant. employees. The East Plant, which makes yogurt and other non-dairy cultured products, is still profitable and will emerge from the bankruptcy proceedings as a going con- cern, Boverman said. Formed in 1935 by Greek restaurateur John Kara- manos, Sunshine Dairy sells milk, cream, butter, cheese and ice cream to Northwest grocery stores and restau- rants, including Whole Foods Market, Burgerville and Stumptown Coffee Roasters. Its largest vendor is the Oregon Milk Marketing Federation, made up almost exclusively of small to mid- size dairy farms in the Willa- mette Valley in Oregon and the Yakima Valley and Che- halis area in Washington. “Given the vast chang- es currently going on with Washington dairies lose economic challenge to Ecology rules Environmentalists lose issues, too Dairy Markets Lee Mielke Dairy prices mixed again By DON JENKINS Capital Press A state panel has discard- ed a claim by farm groups that the Washington Depart- ment of Ecology illegally disregarded whether new manure-handing regulations will bankrupt dairies. Ecology last year greatly expanded the number of dair- ies and other confined ani- mal feeding operations that need a permit similar to ones issued to factories that dis- charge wastewater. Ecology says the CAFO permits will better protect groundwater and waterways from manure. The Pollution Control Hearings Board ruled May 10 that the Washington State Dairy Federation and Wash- ington Farm Bureau can’t raise the economic issue while appealing the regula- tions. The board also tossed out two related claims that Ecol- ogy low-balled compliance costs and should have done more to ease the financial burden on dairies that em- ploy fewer than 50 workers. The dairy federation esti- mates that more than 90 per- cent of the state’s dairies are below that threshold. In all, the three-member board dismissed at Ecology’s request six of 18 complaints By LEE MIELKE For the Capital Press C Don Jenkins/Capital Press A lagoon holds manure at a dairy in Whatcom County, Wash. The Pollution Control Hearings Board will hear challenges by farm groups and environmental organizations to Department of Ecology rules for storing and spreading manure at a hearing set to begin May 21. brought by either the farm groups or a coalition of envi- ronmental organizations led by Puget Soundkeeper Alli- ance. The board will hear the remaining dozen complaints at a hearing scheduled to be- gin Monday in Tumwater and last one week. Farm groups are chal- lenging the practicality and scientific basis of the rules. Meanwhile, environmental organizations allege the rules fall short of complying with state and federal clean water laws. The appeals have been combined into one hearing. Ecology moved to dismiss some of the claims prior to the hearing, arguing the facts weren’t in dispute and that the law was on its side. In addition to three claims by three groups, the board dismissed three challeng- es raised by environmental groups. The organizations complained that Ecology was insufficiently concerned about climate change, didn’t name the farms that needed permits and ceded too much oversight of dairies to the De- partment of Agriculture. The board will still con- sider several complaints by Puget Soundkeeper and its partners that farmers should monitor water quality and obey strict limits on nitrate and phosphorous in fields. The farm groups will ar- gue that new manure lagoon standards and requirements for testing soils are unneces- sary and impractical. The farm groups had al- leged that Ecology’s CAFO permit violated Washington’s Dairy Nutrient Management Act. The act calls for the state to provide a stable busi- ness climate for dairies. The board rejected that argument, finding that the act imposed “guidance and not legal re- quirements.” The farm groups also complained Ecology didn’t consider the costs of smaller crops and fertilizer in weigh- ing whether the benefits out- weighed the expense of new limits on spreading manure. The board ruled that it would defer to Ecology’s expertise in deciding what to count. The board also set aside a complaint that the rules will particularly burden the 92 percent of the dairies with fewer than 50 employees, the state’s definition of a small business. The board agreed with Ecology that the department met its duty to soften the blow of new regulations by exempting dairies with fewer than 200 cows, unless the agency decides a small dairy is a “significant” pol- luter. Idaho farm trucking company seeks bankruptcy protection By MATEUSZ PERKOWSKI Capital Press An Idaho trucking com- pany that specializes in haul- ing farm goods has filed for Chapter 11 bankruptcy protection, which protects it against foreclosure while restructuring debt. Anderson Farms of Bur- ley, Idaho, operates 41 trucks that transport feed to dairies and distribute other agricultural products in the Northwest. The company owes be- tween $1 million and $10 million to fewer than 50 creditors and owns assets of less than $50,000, accord- ing to its bankruptcy fil- ing. It’s also a “substantial shareholder” in the Ander- son Cattle Co., a feedlot and cattle operation. Under Chapter 11 bank- ruptcy, companies can stay operational while develop- ing reorganization plans to pay back creditors. The company referred questions to its attorney, Steven Taggart, who was unavailable for comment as of press time. According to court doc- uments, Anderson Farms has asked a bankruptcy judge for permission to use about $1 million in cash that serves as collateral for cred- itors. Without that money, which the company expects to collect over the next month, “the debtor will be unable to operate or reorga- nize,” according to a court motion. A hearing on the matter was scheduled for May 9 in Boise. The trucking company’s bankruptcy filing comes at a time of stress for the dairy industry, which is coping with low milk prices. “There’s just no money in it right now,” said Steve Hines, a University of Idaho Extension educator. While some dairies are eking out a profit, others are living off the equity in their business or selling cattle, Hines said. Those reducing their herds would need less feed but others also aren’t stockpiling more feed than necessary, he said. “They don’t have the cash with the milk price to store hundreds of thousands of dollars in feed.” Suppliers to dairies with large unpaid accounts re- ceivable can face financial distress, but many have grown careful of finding themselves in this position, said Joel Packham, another University of Idaho Exten- sion educator. Some dairies own trucks for hauling cattle and may use them for hauling feed as well, potentially creat- ing competition for trucking companies, he said. Ultimately, though, the dairy industry is still reliant on transportation, Packham said. “They still need feed and they need someone to haul it for them.” WE SPECIALIZE IN BULK BAGS! 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Barrel hit $1.6525 Mon- day, the highest price since Dec. 15, 2017, but finished at $1.62, up 2 cents on the week and 9 cents above a year ago. The blocks were up three- quarter-cents Monday and stayed there Tuesday, at $1.64, as traders absorbed the morning’s Global Dairy Trade auction. The barrels lost 2 cents Monday and held there at $1.60 Tuesday. Dairy Market News re- ports that Central cheese- makers suggest that buying is day-to-day, as buyers wait for a potential price drop. Others are pleasantly surprised by a continued uptrend in orders. Milk continues at a discount- ed $1-$4 under Class III. With schools on the verge of clos- ing and spring flush in effect, cheese producers are not ex- pecting milk prices to increase unless unexpected heat brings overall milk production down a lot. Cheese is moving relative- ly well out West but buyers are cooling to rising prices. Butter fell to $2.3025 per pound last Tuesday but closed Friday at $2.3350, down 1 3/4-cents on the week and 7 1/4-cents above a year ago, with 52 cars sold last week. Monday’s butter inched up a half-cent, then jumped 4 1/4-cents Tuesday with 24 cars sold and hitting $2.3825, highest CME price since Oct. 18, 2017. DMN says 80-degree days have begun to grace the upper Midwest resulting in a notice- ably lighter cream supply, due at least in part to an increase in ice cream manufacturers clearing more cream. Western butter supplies are steady but churning re- mains strong. Class II demand for cream is increasing, but not enough to absorb all the cream. Butter exports are strong in that U.S. prices are favorable in the international market. Cash Grade A nonfat dry milk climbed to 86 cents per pound last Monday, highest price since Sept. 1, 2017. It closed Friday at 85 cents, up three-quarter cents on the week and 1 1/4-cents below a year ago, with 35 cars chang- ing hands. The powder was down a quarter-cent Monday and stayed there Tuesday, at 84 3/4-cents per pound. Dry whey closed Friday at 32 1/2-cents per pound, up three-quarter cents on the week. Monday’s whey was up a half- cent and stayed there Tuesday, at 33 cents per pound, highest price since it began trading on March 12, 2018.
