$45 million. Let's see: If Veblen East has a capacity of 8176 head of dairy cattle, raising $45 million would require selling every one of those cows for over $5000. Anyone have cow prices handy?
Since taking over Veblen East, AgStar has sunk $2 million into keeping the dairy going. AgStar says that effort may be all for naught, given the dire economic and environmental situation at the dairy. AgStar says some parties have expressed an interest in buying the dairy, but "All of the offers indicate that, given the myriad of problems that plague the dairy, there is conclusively no going concern value to be maintained or salvaged by its continued operation and ultimate sale."
But someone has to keep operating the dairy, if for no other reason than to satisfy the state's orders to clean up its massive illegal manure levels, right?
The DENR has issued two notices of violation within the last year. Most importantly, DENR has set October 15, 2010, as the absolute deadline when Debtor’s manure lagoons have to be pumped to a predetermined level. AgStar’s retained experts and individuals in the employ of the state court receiver (VAST), who have worked on the environmental problems for some time, have advised that, it will be a challenge at best and impossible at worst for the Debtor to meet DENR’s lagoon requirements by October 15, 2010, if the cattle remain on the premises [AgStar Financial, Motion for Relief from Automatic Stay, United States Bankruptcy Court, District of South Dakota, Case 10-10146, Document 170, 2010.08.19].
In other words, there is so much cow poop at Veblen East, the owners will have to shut it down to clean it up. Would you buy a dairy in that situation?
The dairy may not last more than a month: AgStar says there's about a month's worth of silage left, and purchasing a year's supply fo silage would cost (by Rick Millner's estimate) $1.6 million, money Veblen East doesn't have.
AgStar is thus moving for relief so it can pursue the only viable business course: liquidate the herd, clean the place up so it's saleable, and turn the place back into a functioning dairy generating revenue and jobs sooner than standard bankruptcy foreclosure would.
Recall that Rick Millner took advantage of government assistance to get foreign investors to sink $13.5 million into the project in return for green cards. Those investors didn't care about the viability of the project; they bought their green cards and forgot all about holding Millner accountable for providing a return on their investment.
And now shoddy management and profiteering leaves Veblen with two bankrupt dairies, a huge chunk of its workforce in peril, a big purchaser of local ag products unable to pay its bills, and a watershed polluted.
If I caused that much damage, I'd be in jail. When will Rick Millner be held accountable for the damage he has done?
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Related: See Robert Reich's discussion of another bad egg in corporate agriculture, Jack DeCoster. This big-money miscreant owns Wright County Egg, the company that has made thousands of Americans sick with salmonella poisoning and now is recalling 380 million eggs. DeCoster is also a major investor in a second egg seller caught in the recall. DeCoster has a long history of illegal business practices... yet he has been allowed to stay in business, abusing immigrant labor and poisoning consumers and the environment. Reich offers a fine blog raison d'être: "Before we can get rid of corporate rotten eggs we need to know about them."
On August 13, at the Fort Pierre Livestock Auction, cull cows sold for 62¢-68¢/lb. Fall calving bred beef cows sold for $1050-$1130/head. In the right market milking dairy cows might be worth more if they are to be milked. If sold as cull cows they would sell at the low end of the range for cull cows. Most dairy cows would weigh 1200-1400 pounds.
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