Humboldt Creamery Follow-up On Tuesday Humboldt Creamery issued the following statement regarding the resignation of its long time CEO, Rich Ghilarducci, and the co-op’s financial problems that have subsequently come to light:
An independent joint investigation into the resignation was conducted by the Orrick Law Firm of San Francisco, Calif. along with the Hemming Morse Accounting firm, also of San Francisco.
Although full details of the investigation and findings to date may not be shared at this point, the Company has determined that it may share certain information surrounding the CEO's statement that the financials of the company could not be relied upon. In particular, the Company has determined that the CEO manipulated financial data and financial reporting, including but not limited to:
1. The overstatement of inventory levels.
2. The overstatement of accounts receivable, and
3. The understatement of accounts payable.
The CEO's manipulation disguised the true operational performance of the Company. The CEO's manipulation resulted in the presentation of inaccurate financial statements to lenders, the minority partner, Board members and potential investors. Board Sub-Committee Chair Dennis Leonardi stated “The results of the investigation highlight past misconduct, we are now focused 100 percent on creating the sustainable future for the Creamery.”
Board Chair Jim Renner said in response to the findings "Our focus through this whole affair has been to keep the lights on and the doors open. That continues to be our goal today.” The creamery continues talks with its lenders and key industry partners in formulating a plan that works for all parties. Creamery officials said that they expect to have a firm plan ready to announce within the next few weeks.
Founded in 1929, Humboldt Creamery is the oldest independent dairy cooperative in California and specializes in pasture based and organic dairy farming. It is owned and operated by approximately 50 family farmers and produces high quality fluid milk products, ice cream, and milk powder shipped nationally and internationally.
Mexican Tariff Dispute State and national agricultural groups are rallying in opposition to retaliatory tariffs that will be imposed on U.S. agricultural exports into Mexico. At issue is a NAFTA related trucking dispute over the termination of a pilot federal program to assess whether or not Mexican motor carriers that meet federal safety requirements can safely operate in the United States beyond the border commercial zones.
The pilot program was terminated in the FY2009 omnibus appropriations bill recently passed by Congress. As a result the Mexican government published a list of 90 U.S. products that will be subject to retaliatory tariffs totally $2.4 billion. Of the products currently on Mexico’s retaliatory list, 27 are California agricultural products (fresh and processed) representing approximately $214M in annual exports to Mexico (2007). The tariffs, ranging from 10-40%, took effect March 19. Ag groups are urging the Obama Administration’s and Congress to seek a speedy resolution to this issue by proposing legislation on a revised trucking program with Mexico.
Terry Barr Joins CoBank Terry Barr, a nationally recognized agricultural economist, will join the bank as Senior Director. Barr has worked for the National Council of Farmer Cooperatives since 1985, most recently as chief economist. In his new role with CoBank, Barr will continue to serve as a resource for NCFC, remaining available to participate in key NCFC membership meetings. In his new role at CoBank, Barr will direct the bank's agribusiness and commodities research, provide input that will help shape its portfolio- and risk-management strategies and work directly with customer and industry groups to enhance their understanding of the increasingly complex and important linkages between domestic and global food, agriculture, and energy markets.
Card Check Agriculture for a Democratic Workplace, the national coalition of agriculture and business groups, opposing the national Employee Freedom to Choose Act (EFCA), reported that Sen. Arlen Specter from Pennsylvania pledged to vote against the Card Check legislation. Specter also said he would vote against cloture, which is the procedural move that would open the door for the bill to come up for a vote. The Republican Senator said that he did not support the EFCA during this time of severe recession, as the legislation would likely result in further job losses.
Specter was likely to be one of the decisive votes in the Senate on EFCA as he was the only Republican to vote for cloture when the measure was last considered in 2007. Organized labor and the bill's Democratic sponsors had been working to secure Specter's vote to reach the 60 needed in the Senate to avoid a Republican-led filibuster. During his announcement, Specter noted his previous support for EFCA, but suggested that the current condition of the economy makes “this is a particularly bad time to enact employee’s choice legislation.”
Due to out-of- state travel, the next issue of “In The Know” will be distributed on April 10.
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