Vreba-Hoff faces foreclosure threat 10.13.2010

Written by David Green.

By DAVID GREEN

Vreba-Hoff Dairy is stuck in a position of having too few cattle and at the same time too many.

By not being able to operate at full capacity, Vreba-Hoff dairy owners claim they’re unable to make payments on fines levied by the state’s environmental agency.

But that’s just the problem, says the state. The two dairies northwest of Morenci are unable to adequately handle the manure created by the livestock, and that’s what brought the forced reduction in herd size.

A $580,000 lien against Vreba-Hoff’s two dairies was recently approved in Ingham County Circuit Court, on behalf of the Michigan Department of Natural Resources and Environment (MDNRE). Judge James Giddings is giving the state and the dairy until Oct. 18 to reach a settlement.

The lien covers $180,000 in unpaid penalties assessed against Vreba-Hoff—due to the concentration of pollutants applied to fields in irrigation—and $400,000 in financial assurance.

The MDNRE is seeking a reduction of 600 cows a month until the dairies meet standards set for manure application onto fields.

Vreba-Hoff’s troubles compounded last week with news that a mortgage company is seeking foreclosure on $55 million in loans.

Rabo Agrifinances, based in Delaware, filed a complaint Oct. 5 in federal court in Grand Rapids, alleging Vreba-Hoff has defaulted on loans; allowed property taxes to go unpaid; and failed to plant crops on a significant portion of the mortgaged land. Furthermore, Rabo claims the Michigan dairies are being devalued by the state government action listed above.

Rabo wishes to place the properties in receivership to prevent continued diminishment of value.

In addition to the Vreba-Hoff I and II dairies, the foreclosure affects Waldron Dairy in Hillsdale County; Blue Stream Farms near Convoy, Ohio; Wild Cat Farms near Payne, Ohio; and Williams Dairy Farm near Prospect, Ohio.

Rabo Agrifinance loaned the money to Vreba-Hoff in 2007 and 2008.

A judge will hear an emergency motion Oct. 19 to rule on the receivership request.

Chesterfield Dairy east of Morenci was placed in receivership in September 2009 with a debt of $8.5 million owed to AgStar Financial Services of Minnesota. Vreba-Hoff served as a consultant and developer of the dairy.

Chesterfield closed and was sold at auction. Bridgewater Dairy of Montpelier, Ohio, announced the purchase of the dairy in September and will reopen the facility under the name Oakshade Dairy.

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    SCULPTORS—Morenci third grade students Emersyn Thompson (left) and Marissa Lawrence turn spaghetti sticks into mini sculptures Friday during a class visit to Stair District Library. All Morenci Elementary School classes recently visited the library to experience the creative construction toys purchased through the “Sculptamania!” project, funded by a Disney Curiosity Creates grant. The grant is administered by the Association for Library Services to Children, a division of the American Library Association.
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    LEARNING THE ROPES—Kristy Castillo (left), co-owner of Mane Street Salon, works with Kendal Kuhn as Sierra Orner takes a phone call. The two Morenci Area High School juniors spent Friday at the salon as part of a job shadowing experience.
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    IN THE FIELD—2004 Morenci graduate Kayse Onweller works in a test plot of wheat in Texas. She’s part of Bayer CropScience’s North American wheat breeding program based in Nebraska, where she completed post-graduate work in plant breeding and genetics.
  • Front.winner
    REFEREE Camden Miller raises the hand of Morenci Jr. Dawgs wrestler Ryder Ryan as his opponent leaves the mat in disappointment. Morenci’s youth wrestling program served as host for a tournament Saturday morning to raise money for the club. Additional photos are on the back page.
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    SHERWOOD STATE Bank opened its Fayette office at a grand opening Friday morning, drawing a large crowd to view the renovated building. Above, Burt Blue talks to teller Cindy Funk, while his wife, Jackie, looks around the new office. The Blues missed the opening and took a quick tour on Tuesday. Few traces remain of the former grocery store and theater, however, part of the original brick wall still shows in the hallway leading to the back of the building. The drive-through window should be ready for customers later in the month.
  • Front.make.three
    FROM THE LEFT, Landon Wilkins, Ryan White and Logan Blaker try out their artistic skills Saturday afternoon at the Morenci PTO’s first Date to Create event. More than 50 people showed up to create decorated planks of wood to hang from rope. The event served as a fund-raiser for miscellaneous PTO projects. Additional photos are on the back of this week’s Observer.

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