Easterday brothers say nitrate contamination is on Oregon land they were kicked off

After receiving a notice of noncompliance over fertilizer spills, Easterday Dairy is saying the Oregon Department of Agriculture got it wrong.

It could mean the difference between the company receiving a permit to eventually bring cattle back on the land or having to start all over.

The company has asked agricultural officials to reconsider the decision and to separate the Boardman, Ore., property they still manage from the larger portion they haven’t managed or accessed since a legal dispute began with the finance company that leases the land, Fall Line Capital.

Easterday Dairy is run by Cole Easterday and his brothers, Clay and Cutter. They’re the sons of former Easterday Farms and Easterday Ranches president Cody Easterday. Their father is currently serving an 11-year prison sentence for a “ghost cattle” scheme that defrauded Tyson Foods out of more than $250 million.

The request for reconsideration was provided to the Tri-City Herald by the law firm representing Easterday Dairy in the matter, Leverenz and Associates.

Recent violations

Oregon state investigators found that in a span of less than three months, from July 7 through Sept. 20 last year the Easterdays failed to properly control nitrate application within the limits required by their nitrate correction plan 36 times across 21 fields.

The department is now requiring Easterday Dairy to hire a qualified agronomist to fully test the soil and oversee all future application of nutrients.

They’re also being required to install runoff control in 21 of the fields that were impacted. These improvements will be required to be designed by a qualified engineer and approved by the state.

If Easterday fails to meet these requirements, the state may enforce civil penalties and revoke their permits.

But Easterday Dairy is saying most of the issues were in fields on the adjoining property that they were kicked out of, and can’t access.

Disputed findings

According to the request, one of the two leaks in question was on a portion of land currently leased to Walther Farms by Fall Line.

Easterday Dairy says they do not have access to the land to monitor or correct any issues since Fall Line revoked their easement in June 2022.

In late 2021, Fall Line chose not renew to Easterday Dairy’s lease, and Walther Farms took over. Easterday continued to monitor nitrate levels for a few months before disputes led to Fall Line revoking the easement that allowed them on the land.

Fall Line and Walther Farms have since been reporting separately to the ODA, but the remediation plan still covers the entire property, according to the documents.

Easterday Dairy said the second leak was in an area with one of their tanks, and two others they did not own.

They moved their tank from the area suspected of leaking onto a concrete pad, filled it with water to a tracking mark and sent pictures to the Oregon inspector to show it was not leaking.

The filing said Easterday Dairy also included video showing the pump working, without leakage, indicating the leak might have come from the two tanks not owned by the company.

The leaks in question occurred between June and August of 2022, and would have coincided with the period where the easement was being disputed.

It’s unclear who owned the tank on the leased portion of the property, but Easterday Dairy said in the filing that one does not belong to them either. This is the field where an inspector found irrigation run-off pooling, and the more significant contamination.

While Easterday did not include soil samples in a self report during this period, they did include aerial photos, which could be explained by the company not being able to access the land directly.

What comes next?

Easterday Dairy is asking the Oregon agricultural officials to rescind the notice and to adjust their current nitrate remediation plan to only encompass the production area they currently control.

The dairy committed to continuing to abide by the remediation plan for their portion. If the notice of noncompliance remains in place, it would impact their plan, which requires nine consecutive months of compliance.

It’s unclear whether Easterday Dairy intends to remain on the production land they’re currently farming.

They have been denied a Confined Animal Feeding Operations permit because of the heavy nitrate contamination caused by the former owner, Lost Valley Farms mega dairy, and the ODA’s findings that the Easterdays over applied nitrate-based fertilizer after taking over the property.

The water source for the dairy is an aquifer that is at particularly high risk for contamination. According to a 2018 Statesman Journal article, the aquifer was classified as protected in 1976 due to dwindling water levels. Nitrate contaminated water cannot be boiled to make safer.

While animals have not been on the property since Easterday Dairy took over, they have farmed the fields and the liquid fertilizer used contains nitrates.

It is the over-application of fertilizer at issue. The remediation plan breaks down the 7,500-acres into fields with allowable amounts of fertilizer that can be applied to each. Some fields allow for none at all.

Easterday Dairy is required to regularly monitor nitrate levels and take corrective measures.

Easterday Dairy was ordered to adhere to a remediation plan after it was found that they had intentionally over fertilized the property by more than 800,000 pounds of nitrate-based fertilizer during the 2021 crop season.

In order for Oregon officials to reconsider the animal feeding permit, Easterday would have had to show they were complying with the remediation plan for nine consecutive months.

The cutoff date for consideration for the permit was originally set for December 2022, making it increasingly unlikely they will be able to obtain the permit if the clock was reset in June 2022 due to the notice of noncompliance.

Without access to the larger portion of the farm and with no livestock allowed, it’s unclear if Easterday will continue to pursue their goal of reopening the dairy on the land.

Public records show Cole Easterday maintains a home on the production property.

Easterday Dairy had originally bought the 736-acre production area in 2019 in a self-financed deal for $16 million and was leasing the larger 6,542-acre farm land.

Fall Line cited the ongoing bankruptcy of the Easterday family businesses and findings by the state that said Easterday Dairy had been intentionally over-applying liquid fertilizer, in their bid to oust Easterday from the leased property last summer.

The bankruptcy case, which did not include the spun-off Easterday Dairy, was settled late last summer. Fall Line and Easterday Dairy have been wrapped up in a separate lawsuit since the easement was revoked.

That case appears to have reached a private settlement, but lawyers from either side have not said what it entails. Fall Line had asked the judge to evict Easterday. The dairy was asking for $14 million of their investment back in order to quit the production land, or for damages.

The case is officially settled, according to court records, but the judge has allowed it to remain open through July to give both parties time to work out details of the settlement.

Family legal issues

The Easterday family has been embroiled in legal issues since December 2020 when it came to light that Cody Easterday had stolen more than $250 million in a wire fraud scam that federal prosecutors dubbed a “ghost cattle” scheme.

Easterday had been charging Tyson Foods for the care of more than 265,000 head of cattle that never existed. Segale Properties was also defrauded after loaning Easterday money for the care and feed of the ghost cattle.

Cody Easterday pleaded guilty to one count of wire fraud, but remained out of prison for more than a year while he helped navigate a massive bankruptcy lawsuit for the family’s Easterday Farms and Easterday Ranches businesses.

The bankruptcy settlement schedule was finalized last summer, and Cody Easterday was sentenced to 11 years in prison in October 2022.

Tyson estimated their total loss, including lawyers fees and other costs, added up to more than $260 million. Segale was owed about $11 million. Judge Stanley Bastian set Easterday’s total restitution at $244 million.

He reported to a federal prison in California in December, but has filed two lawsuits against Tyson Foods in an attempt to reduce the amount of money he has been ordered to pay back.

So far only about $70 million total has been paid back, leaving Cody Easterday owing more than $170 million to Tyson and $7.5 million to Segale.