Dairy Air Michael Marsh, CPA Chief Executive Officer Western United Dairymen/Western United Resource...
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Transcript of Dairy Air Michael Marsh, CPA Chief Executive Officer Western United Dairymen/Western United Resource...
Dairy AirDairy Air
Michael Marsh, CPAMichael Marsh, CPA
Chief Executive OfficerChief Executive Officer
Western United Dairymen/Western Western United Dairymen/Western United Resource Development Inc.United Resource Development Inc.
January 11, 2007January 11, 2007
# of Farms & Cows Per Farm# of Farms & Cows Per Farm
0
2,000
4,000
6,000
8,000
10,000
12,000
1960196319661969197219751978198119841987199019931996199920022005
0
100
200
300
400
500
600
700
800
900
1000
Number of Farms Cows per Farm
Trend Trend towards towards
smaller # of smaller # of larger larger dairiesdairies
# Farms & Milk Production in CA# Farms & Milk Production in CA
1960196319661969197219751978198119841987199019931996199920022005
# of Farms Milk Production
Since 1960, the # Since 1960, the # of dairy farms has of dairy farms has decreased by 79% decreased by 79% – 9,764 to 2,0439,764 to 2,043– Numerous sellouts Numerous sellouts
in 2006in 2006
Milk production Milk production has increased by has increased by 380% 380% – 7 to 37 billion lbs7 to 37 billion lbs
CMAB StudyCMAB Study
Western United DairymenWestern United Dairymen
Largest dairy producer Largest dairy producer trade association in the trade association in the Western USWestern US
Represent 1,100 of CA’s Represent 1,100 of CA’s 1,950 dairy families1,950 dairy families
20 member Board 20 member Board
Environmental Environmental compliancecompliance
CDQAPCDQAP
Economic analysisEconomic analysis
Litigation supportLitigation support
Labor relationsLabor relations
Safety trainingSafety training
Government relationsGovernment relations
Political advocacyPolitical advocacy
Communications and Communications and media relationsmedia relations
Renewable energy and Renewable energy and biofuels - WURDbiofuels - WURD
Clean Air ActClean Air Act
Passed in 1970Passed in 1970
Amended in 1977Amended in 1977
Amended again Amended again in 1990in 1990
California California Agriculture Agriculture exemptexempt
Clean Air ActClean Air Act
2/4/2002 Earthjustice 2/4/2002 Earthjustice petitions 9petitions 9thth Circuit for Circuit for judicial reviewjudicial review
5/14/2002 USDOJ 5/14/2002 USDOJ announces settlement announces settlement of Earthjustice petition of Earthjustice petition on behalf of USEPAon behalf of USEPA– California agriculture’s California agriculture’s
exemption from CAA exemption from CAA to be eliminated to be eliminated
What were farmers to do?What were farmers to do?
Fugitive sources vs. Fugitive sources vs. stationary sourcesstationary sources
No tailpipe nor No tailpipe nor smokestack smokestack
National Academy of National Academy of Sciences - Air Emissions Sciences - Air Emissions from AFO’s: Current from AFO’s: Current Knowledge, Future Knowledge, Future Needs (2003)Needs (2003)
Most recent ag emission Most recent ag emission research – 1938research – 1938
SB 700SB 700
Florez (D – Shafter)Florez (D – Shafter)
““Regulate now, worry Regulate now, worry about the science about the science later.”later.”
9/22/039/22/03
Effective 1/1/2004Effective 1/1/2004
CAFO’s 7/1/2006CAFO’s 7/1/2006– VOC emissionsVOC emissions
Regulatory schemeRegulatory scheme
~ 3/15/2004 Draft ~ 3/15/2004 Draft BACT dairies to have BACT dairies to have digestersdigesters– 1938 study1938 study– Unilateral acceleration Unilateral acceleration
of timetableof timetable– Mathematical errors Mathematical errors
and erroneous and erroneous assumptionsassumptions
– Repeated requests to Repeated requests to correct and adhere to correct and adhere to legislative mandatelegislative mandate
CottonWood DairyCottonWood Dairy
Covered LagoonCovered Lagoon
Merced CountyMerced County
Currently 300kWCurrently 300kW
Soon to be 700kWSoon to be 700kW
Castelanelli DairyCastelanelli Dairy
Covered Covered LagoonLagoon
San Joaquin San Joaquin CountyCounty
160 kW160 kW
ON-FARM ENVIRONMENTAL COMPLIANCE COULD COST ON-FARM ENVIRONMENTAL COMPLIANCE COULD COST PRODUCERS BETWEEN $650 MILLION AND $2.6 BILLIONPRODUCERS BETWEEN $650 MILLION AND $2.6 BILLION
Source: McKinsey & Company, Foundations for Consumer-Driven Dairy Growth Strategy
On-farm producer compliance costOn-farm producer compliance cost
$ Millions $ Millions
550600
1,900
100100
Low Cost ScenarioLow Cost Scenario
650650
100100
2,6002,600
High Cost ScenarioHigh Cost Scenario
Fixed water costsFixed water costs
Variable water Variable water costscosts
Covered Covered lagoon lagoon digesters (air)digesters (air)
WUD/AWMP v. SJVUAPCDWUD/AWMP v. SJVUAPCD
5/1/20045/1/2004
Challenged draft Challenged draft BACTBACT
Challenged Challenged accelerated timelineaccelerated timeline
Challenged lack of Challenged lack of sciencescience
SettlementSettlement– DPAGDPAG
Dairy Permitting Advisory Group Dairy Permitting Advisory Group (DPAG)(DPAG)
Environmentalists, Environmentalists, academics, district staff, academics, district staff, dairy representativesdairy representatives
Reviewed existing and Reviewed existing and emerging emissions emerging emissions sciencescience
5 lbs. v. 12.8 lbs. v. 35 5 lbs. v. 12.8 lbs. v. 35 lbs.lbs.
APCO 19.3 lbs. (15.5 lbs. APCO 19.3 lbs. (15.5 lbs. VFA’s)VFA’s)
Regulation and litigationRegulation and litigation
5/20/04 Rule 4550 5/20/04 Rule 4550 regulating ag PM10 regulating ag PM10 emissions passed by emissions passed by DistrictDistrict
June 2005 June 2005 AIR v. SchakelAIR v. Schakel
December 2005 December 2005 AIR v. AIR v. VanderhamVanderham
Latino Issues Forum v. Latino Issues Forum v. SJVAPCD (Rule 4550)SJVAPCD (Rule 4550)
6/15/06 Rule 4570 6/15/06 Rule 4570 regulating CAFO VOC’s regulating CAFO VOC’s passed by districtpassed by district
AIR/CRPE v. SJVAPCD AIR/CRPE v. SJVAPCD (Rule 4570)(Rule 4570)
AB 32AB 32