DEQ rep discusses sale if Vreba-Hoff dairies 2011.06.02

Written by David Green.

By DAVID GREEN

The three Vreba-Hoff dairies are now operating under one roof with a vastly reduced herd size down to about 2,450 cows.

With a new court-appointed owner following foreclosure—a banking company that doesn’t want to retain ownership—the Michigan DEQ wants to see one thing in the future: An operation that meets compliance standards like most other large dairies in the state.

Nicole Zacharda, an enforcement specialist with the DEQ’s water bureau, spoke at a public meeting Wednesday in Hudson about the transition from Vreba-Hoff ownership to Southern Michigan Dairy (a subsidiary of Rabo AgriFinance).

“The situation at Vreba-Hoff really got out of control,” Zacharda said. “I think the problems were operational, getting in over their heads.”

She said the company invested in a press treatment system to handle manure and that didn’t function as promised. Then the Earth-Mentor system was installed, but that still left problems. Liquids from the treatment system never met the standards accepted by the DEQ.

“I don’t think there’s a magic bullet,” Zacharda said.

She said the DEQ agreed with the Southern Michigan Dairy (SMD) plan to consolidate the three dairies for maximum efficiency.

SMD inherited a mess, she said, and the DEQ is working with the company toward recovery.

“We want to get a handle on things before it gets out of control again [wet weather]

Zacharda noted that the goal of Rabo AgriFinance is to put the three dairies (Dillon Highway, U.S.-127 and Waldron Dairy) back into production and to find a new owner.

Linda Kobliska, deputy general council at Rabo AgriFinance’s Cedar Falls, Iowa, office, said at the meeting that the bank is not interested in operating the dairies.

”Long term, we’re not going to be the ones running the dairies,” she said.

The bank is not yet ready to sell the property, but efforts are underway to prepare a marketing plan 

Zacharda warned there could be a significant investment in infrastructure needed. Many CAFO structures were built before the DEQ’s regulations were written, and dairies throughout the state have a deadline to demonstrate that their manure storage units meet state standards. All three of the SMD dairies are included.

“There’s some risk for a purchaser,” she said. “You might think you have two pits and find out that one or two of them do not meet standards.”

Zacharda addressed a variety of questions from the audience:

• The Lime Lake watershed (associated with the U.S.-127 dairy) and the Medina and Durfee drains (associated with the Dillon Highway dairy) have both been listed as impaired by the DEQ. Would the application of manure be stopped in those watersheds until they’re no longer impaired?

Zacharda said there are various factors considered in the TMDL (total maximum dairy load of pollutants), including wildlife and failing septic systems. 

“If we did DNA testing, it would not be all from cows,” she said.

Zacharda said later that although it’s easy and obvious to place blame on a large dairy that practices land application, the DEQ cannot exceed its regulatory  authority established by state law.

“Just as we do not regulate impacts associated with wildlife, we do not regulate land application of waste by smaller livestock operations absent evidence of an unlawful discharge,” she said.  “Without evidence of a discharge attributable to actions by the new Southern Michigan Dairies, there is no reason to impose more stringent requirements.  The DEQ does not act on assumptions, but rather the existence of evidence and reasonable enforcement of state law.”

She suggested that larger buffers could be installed through the CREP program to help keep runoff out of drains.

An audience member suggested giving the two areas time to recover before manure application resumes. The current injunction already prohibits application in the Lime Lake watershed.

“We’re going to have some hard decisions to make,” Zacharda said. “You don’t want a 40 million gallon [manure] structure to fail.”

She said there’s no cause for alarm currently—manure is still below the freeboard requirements in the structures—but the DEQ will have to make some decisions about application in the future.

“The department [DEQ] needs to be understanding and flexible,” Zacharda said.

• Can closer monitoring of the SMD facilities be expected?

“That’s not likely with the budget cuts,” Zacharda said. “We’ll have to rely on people like Jamie [Van Pelt] who has met the state’s requirements.”

Van Pelt served as the environmental compliance coordinator for Vreba-Hoff and has the same job with SMD. Van Pelt earned certification in wastewater treatment.

“The department thinks Jamie has been doing a great job with limited resources,” Zacharda said.

• What’s the status of the former Waldron Dairy?

Zacharda said its existing permit continues through 2013. She said the facility doesn’t have storage capabilities for more than the initial 700 head. Vreba-Hoff’s plans called 2,830 head.

• Why were the liens on the dairies lowered to $100,000 for SMD?

“Rabo could plead to a judge, ‘We got left holding the bag, too,’” Zacharda said.

A settlement was reached to make an initial payment of $50,000 with the final payment at the time of the sale. Zacharda noted that environmental penalties go into the state’s general fund and not to the DEQ.

• What’s the status of the satellite lagoon on Packard Road?

SMD has a Sept. 30 deadline to close the lagoon, Zacharda said, but Van Pelt added that the Natural Resources Conservation Service had varying definitions of closure.

Zacharda said it could be emptied and reverted to crop use, or emptied and used to collect rainwater for irrigation. A new owner could potentially buy it and reopen it for use as a lagoon.

What will happen if the rains continue, asked an audience member.

“I would not want to see any tankering to the satellite lagoon,” Van Pelt said.

Kobliska agreed, stating that needs to be emptied.

“There are a lot of unknowns with this,” Zacharda said. “I can’t answer all your questions.

”Everybody in this room has been touched by Vreba-Hoff, but at the end of the day something has to be done. We need to keep an open mind.”

Zacharda said later that over the years the sole intent of the DEQ was to compel Vreba-Hoff to stop violating state law and to operate successfully as other operations have.

Kobliska said her company is trying to work with the DEQ and do things right.

“Rabo’s name will be associated with the dairies and we want to protect our name,” she said. We’re going to deal with our permitees so they don’t have a disaster.”

Zacharda said her agency has advised Rabo against operating all three dairies together as one business.

“You could get in the same problem as Vreba-Hoff,” she said.

She would advise a potential owners to meet with the Environmentally Concerned Citizens of South Central Michigan (ECCSC)—the host group of the meeting—to discuss the problems they encountered under Vreba-Hoff ownership.

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