State fines former Willamette Valley Cheese dairy, revokes permit, sale pending

Over the past 15 years, Willamette Valley Cheese Company, just outside Salem, has grown from a basement cheesemaking experiment to a regional tourist destination selling its award-winning cheeses throughout the Northwest.

In the creamery’s tasting room, at farmers markets and on its website, owner Rod Volbeda claims the key to the company’s success is its on-site herd of carefully cared for Jersey cows and its sustainable farming practices.

“We milk our own cows and make it into creamy, delicious cheese the same day,” the company’s website reads.

But from its beginning, the creamery’s dairy, called Volbeda Farms, has violated environmental laws that regulate the safe handling, storage and disposal of manure. By July 2016, the Oregon Department of Agriculture had cited the dairy nine times, for 19 violations, and fined it thousands of dollars.

Sometime before February 2015 — Volbeda says he can’t remember the exact date — the cheese company stopped using milk from its own cows, instead purchasing it from Darigold, a regional dairy cooperative.

But it didn’t tell its customers. And it still labels its products “farmstead cheese,” even though American Cheese Society rules allow the name's use only for cheese made with milk from the farmer’s own herd, on the farm where the animals are raised.

In July 2016, under pressure from state regulators, Volbeda transferred control of the dairy to his father, John Volbeda, whose Albany dairy had recently pled guilty to three criminal counts of unlawful water pollution.

Rod Volbeda maintained control of the cheese factory.

Conditions at the dairy rapidly worsened, culminating in a weeklong manure overflow in March that contaminated nearby Spring Valley Creek, a tributary of the Willamette River.

That prompted the Oregon Department of Justice to file a lawsuit and temporarily shut down dairy operations.

“ODA has made exhaustive efforts to bring defendants into compliance voluntarily and through administrative enforcement,” the Justice Department wrote to a judge in March.

In October, the Justice Department ordered John Volbeda to surrender the dairy’s permit, remove the cows, clean up the property and pay a $95,480 civil penalty.

Today the barns sit empty. The property housing the dairy and cheese factory has been sold to a Dayton farmer who plans to open a new dairy there.

Rod Volbeda continues to operate Willamette Valley Cheese.

He declined to be interviewed for this article.

In an email responding to the interview request, Volbeda insisted all of the environmental violations happened after he relinquished control of the dairy and did not involve Willamette Valley Cheese. He said he is only buying milk from Darigold, “until my cows are ready,” but declined to elaborate.

His father, John Volbeda, did not respond to interview requests for this story.

The family's businesses were linked

Rod Volbeda, 52, grew up on the 400-acre Albany dairy farm his parents, John and Lucyann, bought in 1972.

He worked as an apprentice cheesemaker in Holland, where his father was from, completed the food-sciences program at Oregon State University, and worked at Oregon’s Tillamook Cheese Factory before opening Volbeda Farms, at 8105 Wallace Road NW near Salem, in the late 1990s.

He launched Willamette Valley Cheese Company in 2002.

Volbeda now distances himself from his dairying family. But in interviews over the years he has described the interwoven business relationships among its members, including his parents, his brother, Darren Volbeda, and his sister, Coleen Van Dreal.

According to Oregon Secretary of State corporation records, John Volbeda’s company, Volbeda Dairy, was the registrant for Rod’s Volbeda Farms.

Another company, headed by John Volbeda, owned the recently sold property housing Willamette Valley Cheese and Volbeda Farms. And a company headed by Van Dreal, Farmstead Family Foods, was listed as an owner of the cheese company in 2012.

Volbeda Dairy took out a lien on all of Willamette Valley Cheese Company’s equipment in May 2016, according to Oregon Secretary of State Uniform Commercial Code filings.

Darren Volbeda managed his father's Albany dairy, and also has worked at Willamette Valley Cheese.

Willamette Valley Cheese is sold at a half dozen farmers markets and in more than 40 stores throughout the Pacific Northwest. Between 2010 and 2017 it won 11 awards from the American Cheese Society alone.

But in 1998, the dairy began racking up repeated violations with the Oregon Department of Agriculture, which regulates how facilities handle and dispose of manure through confined animal feeding operation (CAFO) permits.

In 1999 Rod Volbeda wrote to ODA to complain about the scrutiny:

“I have had two inspections in about one year, while CAFOS farther from Salem have had no inspections. The dairymen of Oregon need to know if this is going to be a reoccurring situation, this could make the difference in dairying in the Willamette Valley or going east.”

ODA officials responded that all dairies should expect increased inspections.

In 2010, around the time the cheese company opened its on-site tasting room, ODA cited the dairy for two violations: keeping manure piles on bare ground and failing to keep records to show it was complying with its permit requirements.

In 2011 ODA cited the dairy for broken gutters, run-off from the composting barn and pooled water in front of the barn. It ordered Volbeda to install a collection and pump system for the compost barn. In 2012 ODA found the dairy’s lagoon was full, its dry manure storage area was leaking, the pipe from the separator was not reaching the lagoon and its annual report was incomplete.

Serious problems began in December 2015, when ODA inspectors found the dairy had failed to notify the state that its waste management system had failed and was discharging manure into Spring Valley Creek. An inspector arriving for a scheduled inspection found manure flowing down the entry driveway ditch. It cited the dairy for six violations.

In January 2016, ODA modified the dairy’s permit, requiring it to take pictures of its manure collection, transfer, treatment and storage facilities each day and email them to the state each week. Failure to comply would result in a fine, officials warned.

In May 2016, ODA fined the dairy $5,700.

John Volbeda was also having problems at his Albany dairy.

In 1997 Volbeda Dairy paid $8,000 to settle a U.S. Environmental Protection Agency complaint alleging the dairy was discharging manure into Albany’s Truax Creek.

Multiple additional charges in 2009 and 2010 led to criminal prosecution. In 2011 Volbeda Dairy pleaded guilty to three counts of unlawful water pollution. It received a $30,000 criminal fine and three years’ probation. Darren Volbeda was listed as the dairy's operator.

Volbeda Dairy voluntarily relinquished the permit for its Albany dairy in May 2014 in lieu of having the permit revoked, Matthews said.

State agency cracks down

Dairies generally dispose of liquid manure by applying it to farm fields as fertilizer. Their permits regulate when and how much manure can be applied to ensure it is properly absorbed and doesn’t run off into public waterways.

That became a problem for the Salem dairy after about 80 acres of its property was repossessed in connection with a repossession of the Albany dairy property, according to the Department of Justice lawsuit. The bankruptcy happened after John Volbeda surrendered the Albany dairy's license in 2014, ODA officials said.

The loss of nearly half of the Salem dairy’s land meant there was too much waste, said Wym Matthews, who oversees confined-animal permits for ODA.

Willamette Valley Cheese also was discharging its creamery processing waste into the dairy’s manure storage lagoons, increasing the volume of waste.

In December 2015, ODA inspectors became aware of the situation, Matthews said. In January 2016 the agency ordered the dairy to submit a new plan for managing its waste, but the dairy never did, according to ODA records.

In February 2017, ODA cited the dairy for applying manure to a field with standing water after an inspector who happened to be driving past noticed the violation.

On March 9, ODA received an anonymous complaint alleging the dairy was pumping manure onto its field at dusk during a rainstorm, another violation. John Volbeda told the inspector he was pumping his manure storage lagoon onto the field so it would not overflow.

On March 15, an ODA inspector found the lagoon overflowing and waste being pumped onto a grassy area where it flowed directly into Spring Valley Creek. Samples from the flow showed E. coli levels hundreds of times higher than state water quality standards allow.

ODA officials told Volbeda to stop the discharge immediately.

Subsequent inspections on March 16, 17, 20 and 21 found the lagoon still running over and manure flowing into the creek. Samples continued to show E. coli levels in excess of state standards in areas off the field and near the creek. Volbeda was told to haul the manure offsite.

But further inspections on March 23, 24 and 27 found the lagoons were still too full.

On March 29, the Oregon Attorney General’s Office filed a lawsuit alleging the dairy violated state water pollution laws and the terms of its permit. The judgment in the case, issued last month, effectively shut down the dairy.

ODA’s Matthews said it’s the first time in his 15 years with the department that an Oregon dairy has had its permit revoked.

A new operator buys the property

John Volbeda dissolved Volbeda Dairy, his 45-year old company, in September.

The $95,480 civil penalty, levied against John Volbeda and his defunct company, will be reduced to $47,740 if Volbeda makes minimum monthly payments of $1,990, Matthews said.

Turley Farms, operated by Brian and Breanna Turley of Dayton, is in the process of buying the property housing the dairy and Willamette Valley Cheese. The deal is expected to close in January, Breanna Turley said.

Turley Farms has applied to operate a new dairy on the property. It requested to have 1,600 animals, up from 1,210 allowed under Volbeda’s permit.

Turley Farms has never operated a dairy, Matthews said. It owns a number of farms throughout the Willamette Valley and operates a trucking company specializing in transporting farm commodities and waste.

The company plans to truck much of the dairy waste to other farm fields. The milk will be sold to Darigold, Breanna Turley said.

The company also will dispose of the creamery waste – about 9,900 gallons of wastewater and 1,200 gallons of whey each week – for Willamette Valley Cheese, which Rod Volbeda will continue operating.

ODA is accepting public comments on the proposal through Dec. 8.

There are no state or federal regulations prohibiting cheesemakers from making false claims about the source of their milk or from using the term “farmstead,” Katie Bray, executive director of the Oregon Cheese Guild, said.

But the American Cheese Society, of which Willamette Valley Cheese is a member, allows the name only for cheese made with milk from the farmer’s own herd, on the farm where the animals are raised.

Those rules would be especially important for contest entries, Rebecca Orozco, the society’s communications director, said.

Willamette Valley Cheese last won an American Cheese Society award for farmstead cheese in 2015.

In an interview Tuesday, Darren Volbeda said that cheese entered into contests is aged for at least two years.

"The ones in the competition were old enough to be farmstead," he said.

The Oregon Cheese Guild’s Bray said she understands why Volbeda had not updated his web site, labels or marketing materials.

Cheesemakers buy labels by the thousands, to get a good deal, she said.

“I would imagine if the labels still say that, he’d be using up the old ones,” she said. “They make beautiful, delicious cheeses. And they’re good people. I know Rod would like to be farmstead again.”

The Guild’s website also called Willamette Valley Cheese "farmstead" and described Volbeda's "feed-to-cheese" philosophy.

Bray said she hadn’t updated the site for more than two years and changed the listing after the Statesman Journal questioned it Friday.

Tami Kerr, executive director of the Oregon Dairy Farmers Association, said she couldn’t comment specifically on the Volbedas’ violations.

But she said heavy rains last winter made manure management difficult for dairies across Western Oregon.

“As an industry, we have very high standards and our producers take that responsibility very seriously,” Kerr said. “Every dairy farmer in Oregon understands what our regulations are. That’s a part of doing business.”

tloew@statesmanjournal.com, 503-399-6779 or follow at Twitter.com/Tracy_Loew

To comment

The Oregon Department of Agriculture is seeking public comments on a proposal to allow Dayton dairy owner Brian Turley to take over the permit for Volbeda Farms, which previously supplied Willamette Valley Cheese Company with milk. The number of animals permitted would rise from 1,200 to 1,600. The permit also will allow the creamery to legally discharge wastewater and whey into the dairy’s manure handling system.

Mail comments to William Matthews, ODA/CAFO Program, 635 Capitol St. NE, Salem, OR 97301; or email to wmatthews@oda.state.or.us.

Comments must be received by 5 p.m. on Dec. 8.

ODA will schedule a public hearing if written request are received from at least 10 people or from an organization representing at least 10 people.