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Dairy Air

Dairy Air. Michael Marsh, CPA Chief Executive Officer Western United Dairymen/Western United Resource Development Inc. January 11, 2007. # of Farms & Cows Per Farm. Trend towards smaller # of larger dairies. # Farms & Milk Production in CA.

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Dairy Air

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  1. Dairy Air Michael Marsh, CPA Chief Executive Officer Western United Dairymen/Western United Resource Development Inc. January 11, 2007

  2. # of Farms & Cows Per Farm Trend towards smaller # of larger dairies

  3. # Farms & Milk Production in CA • Since 1960, the # of dairy farms has decreased by 79% • 9,764 to 2,043 • Numerous sellouts in 2006 • Milk production has increased by 380% • 7 to 37 billion lbs • CMAB Study

  4. Largest dairy producer trade association in the Western US Represent 1,100 of CA’s 1,950 dairy families 20 member Board Environmental compliance CDQAP Economic analysis Litigation support Labor relations Safety training Government relations Political advocacy Communications and media relations Renewable energy and biofuels - WURD Western United Dairymen

  5. Clean Air Act • Passed in 1970 • Amended in 1977 • Amended again in 1990 • California Agriculture exempt

  6. 2/4/2002 Earthjustice petitions 9th Circuit for judicial review 5/14/2002 USDOJ announces settlement of Earthjustice petition on behalf of USEPA California agriculture’s exemption from CAA to be eliminated Clean Air Act

  7. What were farmers to do? • Fugitive sources vs. stationary sources • No tailpipe nor smokestack • National Academy of Sciences - Air Emissions from AFO’s: Current Knowledge, Future Needs (2003) • Most recent ag emission research – 1938

  8. SB 700 • Florez (D – Shafter) • “Regulate now, worry about the science later.” • 9/22/03 • Effective 1/1/2004 • CAFO’s 7/1/2006 • VOC emissions

  9. Regulatory scheme • ~ 3/15/2004 Draft BACT dairies to have digesters • 1938 study • Unilateral acceleration of timetable • Mathematical errors and erroneous assumptions • Repeated requests to correct and adhere to legislative mandate

  10. Covered Lagoon Merced County Currently 300kW Soon to be 700kW CottonWood Dairy

  11. Covered Lagoon San Joaquin County 160 kW Castelanelli Dairy

  12. Covered Lagoon Tulare County 500 kW Hilarides Dairy

  13. 550 ON-FARM ENVIRONMENTAL COMPLIANCE COULD COST PRODUCERS BETWEEN $650 MILLION AND $2.6 BILLION • On-farm producer compliance cost • $ Millions 2,600 • Covered lagoon digesters (air) 650 • Variable water costs • Fixed water costs 100 100 • High Cost Scenario • Low Cost Scenario Source: McKinsey & Company, Foundations for Consumer-Driven Dairy Growth Strategy

  14. WUD/AWMP v. SJVUAPCD • 5/1/2004 • Challenged draft BACT • Challenged accelerated timeline • Challenged lack of science • Settlement • DPAG

  15. Dairy Permitting Advisory Group (DPAG) • Environmentalists, academics, district staff, dairy representatives • Reviewed existing and emerging emissions science • 5 lbs. v. 12.8 lbs. v. 35 lbs. • APCO 19.3 lbs. (15.5 lbs. VFA’s)

  16. 5/20/04 Rule 4550 regulating ag PM10 emissions passed by District June 2005 AIR v. Schakel December 2005 AIR v. Vanderham Latino Issues Forum v. SJVAPCD (Rule 4550) 6/15/06 Rule 4570 regulating CAFO VOC’s passed by district AIR/CRPE v. SJVAPCD (Rule 4570) AB 32 Regulation and litigation

  17. How do we connect the dots? Land Water Air Markets Sustainability

  18. Thank You! Western United Dairymen www.westernuniteddairymen.com 209-527-6453

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