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VOLUME XVII, NO. 6 |
TEXAS DAIRY REVIEW |
JUNE 2008 |
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DFA members ask for honest leadership Attorney sets Waco record straight Cold Stone Creamery — Gotta’ Have it for June Dairy Month DairyFest! — Golf Scramble & new events Hopkins County Dairy Festival set for June 14-21 |
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DFA members ask for honest leadership |
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By Sherry Webb A good marriage, friendship, or relationship is based on trust. But, what happens when that trust is broken and how is it mended? Dairy Farmers of America’s (DFA) corporate management are scrambling to mend the broken “marriage” between corporate and DFA owner members. With news of two recent DFA incidents that stand to tarnish the cooperative’s image and cast a cloud of distrust over its management abilities, owner members are asking questions and insisting upon straight answers. Members are looking to current Chief Executive Officer (CEO) Rick Smith to move forward with the transparency philosophy he embraces and to restore integrity to the nation’s’ largest milk cooperative. What's worse? No one seems to know which incident is worse: the $1million unauthorized transaction between two former DFA senior corporate employees or the federal investigation of DFA for alleged price manipulation of which DFA claims no guilt.
The recent discloser of an illicit $1million payment in 2001 arranged by former CEO Gary Hanman to former corporate board chairman Herman Brubaker struck a raw nerve with owner members. Concealed through a DFA affiliate, National Dairy Holdings, DFA learned of the payment when the books were consolidated. Angry members said this incident stands to remind them that while they are out “busting their butts” to produce milk, corporate executives, like Hanman, are sitting behind a desk pulling the purse strings and dipping into the till. Revealed in a letter The Hanman-Brubaker arrangement, revealed in a letter written to members by Smith on May 8, apologized to them for the misconduct of the two former senior executives and assured them the money has been repaid---with interest. Smith said he regards the incident as a “severe breach of trust” and emphasized it “would not be covered up.” He said a special board committee is investigating the matter. However, both large and small DFA operators from the southwest to the southeast, are not buying into the weak and vague information they were given. Where's the whole story? “You can bet there’s a whole lot more to it than that,” said one southwest producer. ”I want to know the whole story.” Members especially questioned Smith’s adamancy that “it would not be covered up,” perhaps indicating prior mishandlings have been. ”This is only one thing, -- but there’s a lot more,” said Clay McCarty of McCarty Dairy in Rexford, Kansas. “There are some good people at DFA but it’s time to get rid of the bad ones and Rick Smith needs to quit talking about becoming more transparent and just do it.” Speaking out Clay and his brother Ken, operate McCarty Dairy, a 1500-cow operation. Their brother, Mike, operates Bird City Dairy, a 2000-cow operation. The McCarty family, headed by Tom and Judy, has been in the dairy business for several years and prides themselves on practicing honest and good business ethics. They expect the same from the cooperative.
Clay said he and other dissatisfied dairymen
want to know why Brubaker “deserved” a million dollars; how many others
were paid to keep quiet; where the money came from and where did it go
when it was repaid; how much interest was collected and at what rate;
and is an outside audit being conducted. Clay said he would not let up on DFA until answers are given about this incident and other mismanaged affairs. “As owners, we are entitled to know what’s going on at the corporate level. We hire qualified people to handle our business and I have no objection to paying them the big bucks. But, we should know how they’re handling our business and we need straight answers.” DFA's desires
In a letter on May 18, Smith spoke of DFA’s
desire to "increase transparency, operate with integrity, and focus on
operating in the best interest of the dairy farmers who own the
cooperative." Leave a good legacy “Look what’s happened to Hanman. In 2006, he was named Industry Person of the Year and inducted into the Cooperative Hall of Fame. Smith will be associated with this if he does not do something to reinstate DFA’s image. I do not want DFA to be known as the ‘Enron’ of the dairy industry.” Mike McCarty agrees the severe blemish on DFA’s image can change if Smith will take the “bull by the horns” and use this opportunity to practice what he preaches about transparency. “As for the alleged price manipulation, DFA is a big business and no different than any other corporation that directs the market to its favor,” Mike said. “But, some of DFA’s policies must change. Transparency must be 100% and the coop should proceed with true intentions. Board members and delegates on the take should be weeded out.” Must regain comfort, trust He added it is crucial for members to regain comfort and trust with DFA and it is up to the cooperative to figure out how this can be achieved. Some members are of the opinion that if the façade that DFA has operated under for years is dropped, many corporate mishandlings will be discovered. Members admit their suspicions have escalated recently but maintain their questions and complaints in the past have gone unheeded or been ignored and the communication gap between members and management has created an obscure veil over DFA throughout its short history. Doug Unruh, a small dairy producer near Wichita, Kansas, said the revelation of the anti-trust suits and the Hanman Brubaker incident brings to mind other possible corporate concealments. Why it was revealed “The only reason we were told about the $1million dollar scam is because they were caught. Otherwise, we may not have ever known about it. But, how did this go on over a period of time and if this was able to happen, how many other things have gone on?” Unruh said DFA has treated dairymen “like we’re a bunch of dummies and are expected to keep our mouths shut and just do our jobs.” Unruh said some dairymen “actually fear” DFA’s retaliation methods if members get out of hand or ask too many questions. “I feel betrayed and disillusioned. To make things right and reinstate their credibility, DFA should divide the $1 million dollars among producers. I don’t want to be paying Brubaker’s and Hanman’s retirement, either. They should cut that off and use it as restitution for what they did.” Tail wagging the dog? A staggering thought about to erupt by irate members is how DFA got so out of control and when did the role of the members ---who own the cooperative---get reversed? Some members said, “the tail is wagging the dog,” instead of the other way around. They believe corporate management seems to have forgotten “who pays their salaries and who they work for.” “We don’t have control of our own ship anymore,” Clay said. In some instances, Hanman has been referred to as the "silver-tongued-devil" by those who feel he was at the core of any misdealings during his DFA tenure. “But, he couldn’t have run the largest cooperative in the nation by himself and other corporate executives should also be investigated,” said a disgruntled DFA member. Other member owner concerns are the equity program that needs to be reworked so members can collect their money at the appropriate time; milk checks need a line item that reflects true deductions; and a breakdown of the PPD. Open the book
“They need to open the book,” Clay said. “We
want to know where all our money goes.” “Yes, some of us are angry, but they need to put themselves in our shoes.” Concentrated effort
Most recently, Smith stated while DFA moves
forward, he will ensure abuse of power and privilege that compromises
the integrity of the DFA board and cooperative does not happen as in the
past. |
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Attorney sets Waco record straight |
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By Sherry Webb In the past few years, a new voice has risen in the midst of the dairy industry that has defended North Bosque River dairies blamed by the City of Waco for its poor lake water quality. This distinctive and pronounced voice belongs to environmental attorney, Jim Bradbury, of Ft. Worth, whose mission is to set the Waco record straight. In a letter to the Texas Commission on Environmental Quality (TCEQ), Bradbury objected to a recent Agreed Order hearing where the City of Waco was fined $54,000 by the agency for two spills in 2007. Bradbury pointed out many other deficiencies in the City of Waco’s sewage management and addressed the negligent enforcement actions by the TCEQ. Bradbury informed commissioners the two City of Waco violations of 100,000 gallons and 5,000,000 gallons that occurred in 2007 are “only the tip of a very large problem overlooked for far too long.” Bradbury disapproved of the TCEQ Agreed Order that credited the City of Waco with a reduction in its fine based on voluntary compliance--- even though the City failed to report the discharges for more than 24 hours. Ricky Garrett, who appeared at the recent Agreed Order hearing on the City’s behalf, admitted the City knew of the discharge within a couple of hours. “It is inexcusable the City delayed reporting for more than 24 hours. This is not the first time the City has failed to timely report a wastewater discharge,” Bradbury said. Bradbury said the Agreed Order penalty was inadequate based on the City’s history of sewage discharges into the waters of the State of Texas, including creeks, streams, the Brazos River and Lake Waco. In 2007, Bradbury said TCEQ files show the City discharged raw sewage in more than 400 separate incidents. “Even ignoring the two large discharges at issue in the Agreed Order, a mere 44 events placed more than 844,000 gallons of sewage into creeks, the Brazos and Lake Waco. The actual volume is much higher because the City has a demonstrated practice of not estimating the volume of discharges directly into the Lake.” Bradbury revealed five multi-day events in 2007 where the City’s lift station at the Lake was discharging directly into the Lake and the City made no volume estimates. He noted also that in one day, the City discharged 433,000 gallons of sewage into State waters and no enforcement action was taken or penalty assessed. “One single event in 2003 discharged 2.8 million gallons of raw sewage on the perimeter of Lake Waco and no enforcement action was taken by TCEQ. “The City has one lift station that routinely floods into Lake Waco and discharges directly into the Lake. The City’s problem was so serious that EPA pursued Clean Water Act enforcement against the City,” Bradbury said. Bradbury pointed out that while Lake Waco water quality has been blamed on upstream dairies, TCEQ failed to act on its obligation to enforce the Clean Water Act against the City of Waco. “The TCEQ must act,” Bradbury said, recommending the Agreed Order is remanded to the executive director to conduct an event and volumetric analysis of the City’s sewage discharges for the past five years. “Based on this analysis, the executive director can assess the appropriate penalty and initiate appropriate enforcement actions against the City of Waco and responsible personnel Wiley Stem and Ricky Garrett. TCEQ should coordinate with Region VI of EPA regarding joint enforcement of the Clean Water Act,” Bradbury said. “Finally, TCEQ should initiate an internal study of the City of Waco’s contribution to the alleged ‘taste and odor’ problems in Lake Waco.” |
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Cold Stone Creamery — Gotta’ Have it for June Dairy Month |
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By Sherry Webb I like it,” I love it,” “I gotta’ have it!” If you’ve ever stepped foot inside Cold Stone Creamery, you’ll know immediately what these words mean.
Cold Stone Creamery, owned by Brenda Richmond, is the place to indulge your pleasures, satisfy your sweet tooth, and come away a much happier person than when you went in. It took only one time—only one bite, and Richmond knew in her heart that Stephenville, Texas, needed a Cold Stone Creamery. Richmond experienced her first taste of Cold Stone ice cream at a store on the west coast and when she came back to Stephenville, she began to inquire about the possibility of owning a local franchise. “I didn’t do this to get rich,” Richmond said. “I just thought this town needed a good ice cream parlor and a place to have fun and enjoy the wonderful ice cream products.” After three long years of haggling with construction and trying to get approval from Cold Stone Creamery executives based in Scottsdale, Arizona, Richmond is finally living her dream. While serving up rich creations bombarded with nuts and chocolate syrup, fruity smoothies, or frothy shakes, Richmond’s exuberance and cheerful manner adds the final touch to her creamy products. “I wanted this to be a fun place for kids and people of all ages and enjoyable for our employees,” she said. Insisting that a good and fun atmosphere is part of the whole package, Richmond likes to celebrate the small things. “We keep track of our customers and when we had our 5,000th customer, we announced it and gave them a freebie. We love doing this and we like to keep up with our own milestones as we go along.” Growing up on her father Jake Westra’s California dairy, ice cream was nearly a staple, and very much a part of Richmond’s pleasant childhood memories. “My father ate ice cream every night,” she said. “I only wish he and my mother would have lived to see this. They would have loved it.” Richmond moved to Stephenville In 1990 when the dairies were booming. She had wondered why the biggest milk-producing county in Texas lacked a genuine ice cream parlor. That fact was one of her selling points to Cold Stone. “We need this here,” she told Cold Stone’s executives. The ice cream organization’s policy was to build only in a town with a population of at least 30,000. “But I carted one man all over Erath County and everywhere else to show him that this was a great town for an ice cream parlor.” Richmond said she had another hurdle to cross and that was to convince Cold Stone executives of the importance of having a drive through. “I actually polled people and asked them if a drive through was necessary.” Richmond won out and the drive through was established. It is Cold Stone’s first drive through in Texas. “48% of our business comes from the drive through,” she said. “It’s more convenient for some people and we make sure the waiting time is very short.” Renowned for its creamy goodness, Cold Stone brings to its customers fresh ice cream made daily at the local store. “It takes 12 hours to process the ice cream,” Richmond said. “Then it goes into a blast freezer that is set at 32 degrees below where it stays for four hours. It is then transferred into a 0-degree walk-in freezer where it sits for another six hours before its ready to serve.” To learn the ice cream process, Richmond and her daughter, Rachel Haringa, attended Cold Stone’s rigorous management training program. Rachel, who attends Tarleton State University when she is not dipping out ice cream, runs the store for her mother along with another manager, Andrea Henderson. “I have full confidence in both of them to handle everything,” Richmond said. Cold Stone offers its signature creations, smoothies and shakes, or whatever concoction a customer can imagine. If ice cream cones are your pleasure, the cones are homemade and dipped in rich dark chocolate. The ice cream of choice is scooped out of a dipping cabinet and laid on a frozen granite stone where all the toppings and goodies are kneaded into the ice cream, then formed into a ball, and dropped back into the cone. No chance of these toppings dripping off over the side. Scrumptious, delectable, and even “sinful” cannot begin to describe the full rich flavor of Cold Stone’s ice cream products. Each delicious bite hits every taste bud, leaving its customers smacking their lips and drooling over which flavor or kind to try next. It’s just one of those things you’ve gotta’ have! |
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DairyFest! — Golf Scramble & new events |
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By Sherry Webb Knock the dust off your clubs and get ready for the TCAA Golf Tournament, grab your sneakers and enter the Milk Town Trot or test your skills at the five man rock climbing wall provided by this year's DairyFest. Whatever your fancy, TCAA is offering old and new activities in celebration of June Dairy Month. DairyFest is on Sat., June 21, 4-11 p.m. The golf tournament is a four-person scramble on Thurs., June 19, at Par Country Club. Tee time is 9 a.m. $75 includes green fees, cart and lunch. But, don’t let your golf game break your June Dairy Month spirit because there’s plenty more activities scheduled. (TCAA) encourages people of all ages to come out and enjoy the DairyFest celebration that shows its support for area dairymen during June Dairy Month. This year’s family fun event promises signed autographs by Miss Texas, various activities, foods, and contests for people of all ages. Armbands will be available at booths throughout the park for $1 that includes the cost of the event’s great tasting foods, drinks and games. This year, the Milk Town Trot has been sanctioned and the course redesigned. The cost is $10 for kids 12 and under, $15 for pre-registered adults and $20 the day of the event. Pre-registered runners will receive a free Dairyfest T-shirt. There is a limited number for participation in this event. DairyFest provides many dairy foods such as cheeseburgers, grilled cheese sandwiches, ice cream, yogurt smoothies,, arts and crafts, dairy-related games, and entertainment.
DairyFest is to celebrate the success of
tricounty's largest economic influence and promote its future. |
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Hopkins County Dairy Festival set for June 14-21 |
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By Sherry Webb June is busting out all over in celebration of June Dairy Month designated to show appreciation to the many dairy producers nationwide. Hopkins County Chamber of Commerce and the famous Southwest Museum in Sulphur Springs, Texas host a special weeklong dairy festival. The Hopkins County Dairy Festival is from June 14 through June 21 at the Hopkins Civic Center. The weeklong event will be packed and chock-full of dairy activities to promote dairy foods and products and encourage the public to take part in the many dairy events. One of the main features of the dairy festival is the Texas State Championship Homemade Ice Cream Contest June 14 at 4 p.m. Hopkins County has gained notoriety for its dairies throughout the years. With as many as 600 dairies to its credit at one time, the declining number of dairies has not broken the spirit of community and they are proud of the 140 dairies that remain in the county today. Hopkins County Extension Agent Larry Spradling said the dairies have a tremendous amount of community support and that losing dairies has been due to several factors including new state and federal requirements, dairy buy-outs, and a growing population. “Most people just don’t want to live by a dairy.” Remaining dairies have grown with the times and positioned themselves to compete in today’s marketplace. Spradling said the average dairy today is about 300 head. Jack Kempenaar who milks 4,000 head in a high-tech rotary barn owns the largest dairy. “The biggest complaint by dairymen today is trying to buy heifer replacements. No one has grown them for the past few years and now, the ones they can find are very expensive.” |
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Clovis Dairy Fest provides food, education & fun |
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By Sherry Webb Dairy industry volunteers and United Dairy Women (UDW) are gearing up for the third Clovis Dairy Fest on June 28th at the Curry County Fair Grounds in Clovis, New Mexico from 5 pm to 9 pm. Entry is $1.00. The event is the collaboration of UDW, the surrounding dairy families, industry partners, local business, friends and sponsors. “We have had 200 volunteers each year helping us to put the event on,” said Michelle eavyside, representative for UDW. Country music artists Restless Heart will be performing while visitors can enjoy free yogurt, milk, ice cream, cheese burgers and more dairy foods. Primary sponsors are Dairy Max and Southwest Dairy Museum who make the event possible. “We are expanding the virtual Dairy Tour to include additional information about how dairy farmers are good stewards of the environment and the great things they currently do to protect the environment for the future--- like renewable energy,“ Heavyside said. Currently the Virtual Tour includes how seed becomes feed and how that feed is turned into a ration for a perfectly balanced diet for cows at all stages of her life. It also shows how animals are cared for with booths that focus on calves to cows, regular check-ups with the ‘The Moo Doc’ (veterinarian), pedicures (hoof trimmer) and how special care is given to taking care of the barn and equipment regarding sanitation. A section of the tour called from Milk Farm to You shows the special care of milk from the barn to the grocery store (tankers & processors.) The last section of the tour educates on the benefits of milk in regards to human nutrition. Industry businesses set up booths to help educate visitors on the dairy story from start to finish. Some of these include Pioneer Seed-shows the life cycle of seed-plant; John Deer Planting Tractor-talks about the equipment used to plant seeds; Compost Display-talks of the importance of manure in the planting cycle; Renewable Energy-demonstrates other uses for manure; Water Recycling- tells how water is recycled and put back on to the fields; John Deer Forage Harvester-demonstrates how equipment is used to harvest; Ag Bagger-tells how feed is preserved; Bovine Nutritionist-talks about how crops are turned into a balanced nutrition for cows; John Deer Feed Wagon-talks about how equipment is used to feed cows. |
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“Texas Advantage” offers alternative to workers comp |
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By Sherry Webb Many people aren’t aware farming is one of the most dangerous jobs in America. Recent reports show the national rate is 22.1 farm accident deaths for 100,000 workers. Nationwide, the most common type of injuries occur from tractor overturns and machinery entanglements; grain bin or silo entrapments; electrocution; chemical and toxic gas exposures, spills and fires; and farm animal incidents. But when an accident suddenly occurs, it is best to be prepared with an insurance provider and policy that will take care of the victim as well as protect the insured farmer or rancher. Garland Sargent, owner of Sargent Agency, LLC., said although immediate medical attention for the injured victim is of prime importance, complications and entanglements often follow an accident that can result in an ongoing nightmare for the insured if a particular incident goes to litigation. “Dairies are especially subject to accidents considering the massive machinery and equipment involved in their operations,” Sargent said. “Workers compensation is expensive and with the high cost of feed and other necessary expenses, many farmers feel they simply cannot afford it.” "Fortunately, Texas is the only state that does not require workers' compensation," Sargent said. Referred to as “The Texas Advantage,” employers of the State of Texas are very lucky" because they enjoy a privilege no other states have. "In Texas, all employers have the right to become nonsubscribers or to opt out of the state’s system. “The best choice for farmers is an occupational accident policy combined with employer’s liability, which pays any settlement up to the limit of the policy and all legal defense costs,” Sargent said. “The legal defense cost paid by the company does not erode your policy limit. These policies are available at limits of anywhere between $100,000 and $2,000,000.” Under these policies, medical attention for the injured is the first necessary step but the provider should also be requested to perform a blood test. “If the employee should test positive for drugs or alcohol, the employer has no further liability,” Sargent said. He added the claim should be reported as soon as possible and the company will inform the insured of any further steps. Sargent and the Sargent Agency has been working with Texas dairymen for more than 27 years. Sargent is an independent agent and represents all major carriers for workers’ comp, occupational accident coverage, and the occupational accident with legal protection. “The latter type of policy is the most popular choice among local dairymen, as it covers sudden and accidental losses as well as cumulative trauma, and occupational diseases,” Sargent said. “The occupational accident policy with legal coverage is very dependable, affordable, and does an outstanding job of responding to crises situations.” |
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