As a dairy scandal settles, a fight in Oregon about the future of farming

For two years, Oregon has dealt with a scandal involving the state’s second-largest dairy, Lost Valley Farm; investigations into the dairy’s sketchy permits and extensive violations have risen as high as the governor’s office. But the controversy around Lost Valley illuminates a broader debate in the state: whether or not Oregon should welcome more industrial, large-scale farming operations, and particularly large-scale dairies.

“Communities are very concerned about what [the expansion of industrial dairy] is doing to the environment, to groundwater, to small farms,” says Ivan Maluski, policy director at Friends of Family Farmers. “The average dairy farm in Oregon is a couple hundred cows,” he says, but the newer dairies are “orders of magnitude larger” and “really changing the face of the dairy industry” in the state.

Between 1997 and 2012, the average size of a dairy herd in Oregon nearly doubled and the number of dairy cows tripled. The number of midsize dairies dropped by a third just between 2007 and 2012. Still, most of Oregon’s 34,000 farms are small farms under 500 acres.

That’s why when, in 2015, Lost Valley owner Greg te Velde announced his plan to buy about 7,000 acres near the town of Boardman, where Lost Valley is located, and triple his herd size, Oregonians were concerned. The farm would house 30,000 cows and produce 187 million gallons of manure each year. His proposal drew 4,147 comments, just 15 of which supported the dairy. Nine environmental groups, including Food & Water Watch, Columbia Riverkeeper, Friends of Family Farmers, and the Oregon chapter of the Sierra Club, submitted a comment arguing that “the proposed facility poses a significant threat to Oregon’s waterways and public health.”

Te Velde, who lives in California, was already an experienced and influential dairy farmer when he decided to open Lost Valley. Records from the Environmental Working Group indicate that te Velde received $1.6 million in subsidies between 1995 and 2016, and he has donated thousands of dollars to the California Dairies Federal Political Action Committee. He had previously leased land from Oregon’s largest dairy, Threemile Canyon Ranch, which is also near Boardman and houses 70,000 cows. Both Threemile and Lost Valley primarily serve the Tillamook County Creamery Association, a dairy cooperative based in Tillamook, Oregon.

Lost Valley’s proximity to Threemile was one of the main concerns opponents of the expansion expressed in their comments. The addition of more cows to the Boardman area would potentially threaten already polluted groundwater, says Kendra Kimbirauskas, chief executive officer of the Socially Responsible Agricultural Project. “People rely on that groundwater for their homes and watering their animals and drinking themselves,” she says. “We shouldn’t be creating more pollution in an area that’s already highly polluted.”

In 2016, te Velde’s lease with Threemile was running out, and he was in a hurry to get his permits for the expansion approved and move to his new location. In his rush, he violated several parts of the dairy approval process. He illegally drilled wells into a dwindling aquifer without notifying state officials, and he began construction on Lost Valley before he had obtained the proper permits. He had also not obtained permits for the nearly 1 million gallons of water the dairy would require daily, instead falling back on a loophole in state law that allowed him to draw from an aquifer that had not been open to new wells in 42 years.

His situation attracted the attention of Lauri Aunan, Oregon Gov. Kate Brown’s natural resources policy adviser. Emails among staff of the governor’s office, the state Department of Agriculture, and the state Department of Environmental Quality indicate that officials were grappling with how to handle the rushed and incomplete approval process. The agenda for a meeting on March 6, 2017, closed with the question, “Should Oregon issue the CAFO permit if LVR has not secured the water it needs for dairy operations?” Internal memos indicate that state officials knew it was a possibility that te Velde would pull water from the aquifer.

Officials okayed the dairy despite its missing permits, and it opened in April 2017. Shortly thereafter, the state began raking in citations and more than $10,000 in fines from the dairy for mismanaging wastewater and manure. Lost Valley violated its permits for waste storage and management, the handling of dead animals, and reporting equipment failure. Inspectors discovered liquid manure and wastewater overflowing from lagoons and into cattle stalls. Pictures from the time show cows standing knee-deep in manure.

In February 2018, the state sued the dairy. The parties settled in March. The settlement allowed the dairy to continue operating in a limited fashion while it sorted out its wastewater treatment system. But in the weeks following the settlement, despite weekly visits from inspectors, Lost Valley has continued to violate its permits. The dairy’s days seem to be numbered; just weeks after the settlement, te Velde’s lender, Rabobank, began foreclosure proceedings. The bank said that te Velde’s owes it more than $60 million.

Meanwhile, Tillamook ended its contract with Lost Valley, though it is continuing to buy milk from the farm on a temporary basis. The company said in a statement that “abruptly ceasing operation of a working dairy farm is not in the best interest of the environment or the live animals involved,” and that “Lost Valley Farm has been subject to daily rigorous quality testing to ensure the milk meets our high standards.” But the company would not provide further comment on the specific measures being taken to ensure the safety of the milk. According to the statement, Tillamook’s temporary contract with Lost Valley ends at the end of April.

Now that the dairy scandal is coming to a close, advocates and residents are attempting to make sense of why the dairy was approved in the first place, and what the approval says about the future of farming in the state. Some have suggested that the approval could have been accelerated due to the relationship between te Velde’s landlord at Threemile, general manager Marty Myers, and Gov. Brown. Myers was appointed to the state’s Board of Agriculture by Brown in 2015, and Threemile has donated $14,500 to her campaigns since 2007.

And the dairy scandal has raised the stakes of ongoing conversations in the state about how to regulate air pollution from dairies, which can include ammonia, hydrogen sulfide, methane, nitrogen oxide, and more. The Oregon legislature is considering a bill that would require environmental regulators to adopt air emissions standards for dairy CAFOs. Advocates are also reminding lawmakers that they have taken no action on the findings of a 2008 report by the Oregon Dairy Air Quality Task Force, which recommended a mandatory dairy air-quality program be implemented by 2015.

The issue of air emissions from industrial agriculture has also reached Congress, where members are debating several bills that would ease emissions-related regulations. One, the Fair Agricultural Reporting Methods Act, would exempt CAFOs from reporting air emissions from waste. Another, the Farm Regulatory Certainty Act, would remove agricultural waste, including manure and fertilizer, from reporting requirements under the Resource Conservation and Recovery Act.

As for the outlook for industrial dairies in Oregon, Ivan Maluski, of Friends of Family Farmers, says he hopes the demise of Lost Valley will alert other potential industrial farms that “regardless of what the political dynamics are, you’re going to face a fight.

“Hopefully,” he says, “it’s going to send a warning sign.”