The future of the dairy operation at Nordic Farms in Charlotte, one of the highest profile dairies in the state, is in question as the owner of the cattle and machinery filed for Chapter 7 bankruptcy last month.
Michael LaClair listed $2.1 million in debts and just under $1 million in assets in his bankruptcy filing of Aug. 17. LaClair did not return a call for comment.
Under Chapter 7 bankruptcy there is no plan to reorganize a business, only to sell all of the company’s assets to satisfy debts owed to creditors.
LaClair bought the dairy operation in February 2014 from Clark Hinsdale III, who owns the nearly 600 acres the farm sits on, directly next to U.S. 7 south of Shelburne, with an unobstructed view of Lake Champlain and the Adirondack Mountains.
Hinsdale, who financed the sale to LaClair, who was the longtime farm manager, is a creditor in the bankruptcy proceedings. He is owed nearly $500,000.
LaClair’s largest debt is to the Vermont Economic Development Authority, which loaned him nearly $1 million under its Vermont Agricultural Creditor Corp. program. Jo Bradley, CEO of VEDA, declined to comment for this story.
Other large creditors include Lely, maker of robotic milking machines, owed nearly $85,000; Bourdeau Bros. of Middlebury, a feed supplier, owed just over $26,000; Deere & Company, maker of agricultural machinery, owed nearly $85,000; and Poulin Grain, Inc. in Newport, owed just over $48,000.
In addition a number of banks and other lenders are owed about $250,000 for loans on a car, an RV, a mobile home and agricultural equipment.
Nordic Farms was the first farm in New England to install robotic milking machines in 2004. Hinsdale said thousands of dairy farmers have toured the farm over the years.
“Pretty much anybody who has robots probably saw them here,” he said. “I’ve always considered this to be a special farm in an incredibly special location.”
The entirety of the Nordic Farms land is protected in the Vermont Land Trust, Hinsdale said.
“None of that is jeopardized, with or without cows,” he said.
Hinsdale sold LaClair a “turnkey operation” in 2014.
“He worked for me for many years,” Hinsdale said. “My boys didn’t want to be dairy farmers. He had three adult children that did.”
Hinsdale said he has spent “a lot of my last three years” helping LeClair, with no money changing hands. He said LaClair was overwhelmed by three years in a row of low milk prices.
“He expanded into a down market,” Hinsdale said. “2014 when he took over was the best dairy year in the 21st century.”
By 2016, Hinsdale said, the price of milk had dropped by 30 percent, and it hasn’t recovered in 2017. The roughly three-year cycle of boom and bust that has traditionally existed in the dairy industry appears to no longer exist, he added.
“The good times are getting shorter and the bad times are getting longer,” Hinsdale said. “Some farm economists say we’re in new, uncharted territory.”
Hinsdale called in Matt Strassberg, director of the Vermont Agricultural Mediation Program, part of the U.S. Department of Agriculture’s mediation program, to help find a way forward for Nordic Farms.
Strassberg said he couldn’t comment on the specifics of the mediation, but said he is “actively working” with the parties involved, and hopes to have a conceptual agreement by next week.
“We’re not all going to get all our money,” Hinsdale said.
Source: Burlington Free Press