Agribusiness  August 20, 2009

Johnson Dairy culls most of its 9,000-cow herd

EATON – Johnson Dairy, once one of the largest dairy operations in the state and the nation, is culling most of its cows as part of a national herd reduction program designed to help dairy operators limit production and increase depressed milk prices.

Johnson Dairy has been in Chapter 11 bankruptcy proceedings since January, when it filed a petition declaring it had debts of $50 million.

U.S. Bankruptcy Judge Sidney Brooks on Aug. 17 granted a motion by John Johnson, owner of Johnson Dairy, to sell the herd for slaughter under the Cooperatives Working Together, or CWT herd reduction program of the National Milk Producers Federation.

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Brooks’ order required Johnson to deposit the proceeds of the sale into a segregated interest-bearing account and forbids Johnson from using any of the sale proceeds until further order of the court.

The dairy was heavily financed by the now-closed New Frontier Bank in Greeley. The Federal Deposit Insurance Corp., which took receivership of New Frontier, and Daniel and Susan Kruse and William and Carol Bell, who claimed ownership of a portion of the herd, filed objections to the culling motion. A committee of unsecured creditors had filed a motion in support of the sale, according to Brooks’ order.

The NMPF, is removing 86,710 cows and 1.8 billion pounds of milk from the current herd retirement program. Since December, a total production capacity of 4.8 billion pounds of milk has been removed from the nation’s dairy industry, according to a press from the Arlington, Va.-based NMPF.

NMPF spokesman Jim Tillison said participants in the herd retirement program are being paid up to $5.25 per 100 pounds of milk produced by the culled cows between June 2008 and through May 2009. Tillison said he could not comment on specific deals with specific dairy operators.

The cows are being sent to area slaughter facilities, but Tillison couldn’t confirm that Johnson’s cows would be taken to the JBS facility in nearby Greeley. Dairy farmers in 38 states are taking part in the program.

In a related issue, the Weld County Board of County Commissioners on Aug. 19 approved a request by the dairy to allow already completed expansions of its feed area, manure composting area and a new storm water retention pond.

Chris Gathman, county planner, said the biggest change in the permit is a requirement that the dairy have a landscape plan that reduces dust and debris from being blown onto properties along the dairy’s southern boundary. Neighbors have complained to the county about blowing dust and odors from manure composting areas on the dairy site. 

EATON – Johnson Dairy, once one of the largest dairy operations in the state and the nation, is culling most of its cows as part of a national herd reduction program designed to help dairy operators limit production and increase depressed milk prices.

Johnson Dairy has been in Chapter 11 bankruptcy proceedings since January, when it filed a petition declaring it had debts of $50 million.

U.S. Bankruptcy Judge Sidney Brooks on Aug. 17 granted a motion by John Johnson, owner of Johnson Dairy, to sell the herd for slaughter under the Cooperatives Working Together, or CWT herd reduction program of…

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