Humboldt Creamery Based on recent news reports from North Coast newspapers, Humboldt Creamery in Fortuna is being shaken by sudden and very questionable financial developments that threaten the co-op’s survival. Humboldt Creamery Association was founded 1929. Today, many of its 50 member dairies are owned by the families of the original members. Last years’ sales amounted to $130 million. The co-op processes fluid milk, powdered milk, ice cream and a full range of organic milk products. Humboldt aggressively promotes the sustainable practices of its members and is the fourth largest organic milk producer in the US. In addition to its main facility in Fortuna, it has a distribution warehouse in Stockton and a processing plant in Los Angeles.
Since long time CEO Rich Ghilarducci suddenly resigned on February 20, serious issues have surfaced regarding Humboldt’s financial stability. It’s alleged that Ghilarducci overstated sales revenues to such an extent that member milk payments have been substantially cut and bank loan repayments jeopardized. Additionally, interest and principal payments on approximately $400,000 in Series B Securities that had recently been sold by the co-op have been suspended. As evidenced by past co-op failures (Tri Valley, Cal-Can, Valley Nitrogen, etc.) the economic ramifications to the co-op’s members and the local community are enormous. Hopefully, the board of directors and the new interim CEO, Len Mayer, will be able to work their way through this very difficult dilemma. The situation bears watching because of the seriousness of the allegations that are directed at management
conduct and financial reporting practices that have brought Humboldt Creamery to the brink of insolvency.
Dan Dooley Appointment The UC Board of Regents announced the appointment of Dan Dooley as Senior Vice President for External Relations. As Senior Vice President, Dan will oversee the division at the UC Office of the President that includes communications, state governmental relations, federal governmental relations, alumni affairs and institutional advocacy. This new position is in addition to his current responsibilities as Vice President for Agriculture and Natural Resources, and represents a tremendous vote of confidence by The Regents and UC President Mark G. Yudof in Dan’s expertise and proven record in constituency building and legislative advocacy.
Governor’s Water Briefing
The following news article was posted on Wednesday by California Capitol…”As though the state’s fiscal problems aren’t daunting enough, California’s top water officials gave Gov. Arnold Schwarzenegger a grim Power Point presentation on March 16 showing that rain earlier in the month has done little to lessen the state’s worst drought in modern history. The officials, including Department of Water Resources Director Lester Snow, showed the GOP governor that at the time of year when water levels should be highest, Lake Oroville was at 66 percent of normal, San Luis Reservoir at 51 percent and Lake Shasta at 71 percent. On average, reservoirs are at 56 percent of capacity. Snowpack was at 90 percent as opposed to 100 percent last year. But because this is the third dry year in a row, parched ground is soaking up run-off, leaving it at just 64 percent
of the level it should be.”
“Snow reiterated several of the Power Point’s facts in a conference call with reporters March 18 in which he announced that the storms of late February and early March allow the State Water Project to increase its allocation to 20 percent. ‘It was after considerable deliberation we decided to increase,’ Snow said in the conference call. ‘We feel (the storms) provided enough flexibility for us to announce 20 percent. We wanted to do that because of concerns of economic impacts and broader concerns to the Central Valley and Southern California in terms of water reliability.’ Snow said if the State Water Project ended the year with a final allocation of 20 percent, which he thinks it will, it would mean ‘matching the lowest allocation in State Water Project history.’”
“Fully meeting the demands of State Water Project users is roughly 4 million acre feet. The 20 percent allocation is therefore 800,000 acre feet. One acre-foot is 326,000 gallons — enough water to cover one acre of land, roughly a football field, with one foot of water. It’s approximately the amount of water a family of four uses in a year. As he told the governor earlier in the week, Snow reiterated with reporters that this year’s 56 percent of capacity at reservoirs is down from 61 percent last year. The federally run Central Valley Project has already eliminated water to its agricultural users and [has] halved deliveries to its metropolitan and industrial users. Two years ago, the State Water Project met 60 percent of water demand and 35 percent in 2008, according to the Power Point.”
“Schwarzenegger has called for water conservation and, last year, declared drought conditions in the state. Schwarzenegger was also shown findings by a University of California at Davis study of the drought’s economic impact. The drought will cause farm revenue to fall by $1.2 billion to $1.6 billion. Total income loss this year will be between $1.6 billion and $2.8 billion and between 60,000 and 85,000 jobs will disappear. Water officials believe, at a minimum, the low range of estimates is accurate. To counter the contention by some that the current drought isn’t as bad a previous ones, the final page of the Power Point compares the current drought to 1991, the fifth year of a long-running drought that was the worst in 150 years. In February of 1991, the state began to ration water. Water for farmers was cut off. In 1991, agricultural losses totaled $500 million,
according to the Department of Water Resources. Catastrophe in 1991 was avoided by 40 days of rain, leading to triple-than-normal precipitation in March – the ‘March Miracle’ as it’s now known.”
“No such miracle appears headed to California this year. As he did for the governor, Snow on the conference call contrasted conditions in 2009 with 1991. There are 9 million more California residents. There is more demand for agricultural water as farmers have shifted from row crops to permanent crops and put an additional 400,000 acres under irrigation. Court rulings to protect various species have reduced the flexibility of moving water and climate change has led to more extreme weather patterns and a smaller snowpack. Snow told reporters water deliveries this year have been reduced by 170,000 acre feet to aid the Delta smelt, a consequence of one of those court rulings.”
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