Art Schaap is hurting, and he’s looking to USDA for help.

The New Mexico dairy farmer whose cows have been contaminated with so-called “forever chemicals” is running out of resources to keep his operation going.

“We're kind of at the end of our rope,” says Schaap, who owns Highland Dairy in Clovis. “We can't go that much farther. We’ve exhausted a lot of our equity just to keep these animals alive.”

Schaap received more than two years'; worth of payments under the Dairy Indemnity Payment Program but those payments, which covered the lost milk sales but not the animals, dried up when the Biden administration took office. In 2019, DIPP payments were limited to a term of 18 months, but Schaap (pronounced "Skop") had already received some payments by then. He says since Sept. 30, 2018, when he had about 5,300 cows in the herd, he has lost about 1,500, mostly from old age, and estimates that it costs about $300,000 per month just to feed them, which doesn’t cover other costs such as electricity. He has been paying to feed the cows using money from two other dairy operations.

After this story appeared, a USDA spokesperson reached out to say the department wanted to make it clear that the 18-month limit had been imposed during the Trump administration.  

Registered lobbyist John Kern, who is representing Schaap, says his client is "exhausted financially. He’s hanging on by a thread.”

Schaap’s problems began in late 2018 when contamination of his cows was detected after testing found high levels of two types of per- and polyfluoroalkyl substances (PFAS) in his well water. The source appears to be the adjoining Cannon Air Force Base, which conducted firefighting exercises on its property using foam containing PFAS, a group of more than 9,000 highly persistent compounds suspected of harming human health.

Tests on Schaap’s cows showed high levels of two of those compounds, PFOA and PFOS, leading to cancellation by his milk buyer of their purchase agreement; then, the New Mexico Department of Agriculture suspended Highland’s Grade-A Permit for milk production. (EPA says studies on PFOA and PFOS “indicate that [they] can cause reproductive and developmental, liver and kidney, and immunological effects in laboratory animals.")

The Food and Drug Administration followed up with tests showing the cows were contaminated, and FDA and USDA determined in October 2019 that the “affected cattle were not suitable for food and meat and that the affected milk should not enter the food supply,” according to a lawsuit Schaap filed against the Air Force. (The litigation is pending.)

Since late 2018, Schaap has received about $13 million in payments under USDA’s Dairy Indemnity Payment Program, set up to cover losses by producers “when a public regulatory agency directs them to remove their raw milk from the commercial market because it has been contaminated by pesticides and other residues,” according to USDA’s website.

But when the Biden administration took office, the payments dried up, and Schaap is running out of options. Former USDA official Kristi Boswell, who was a senior adviser to former Ag Secretary Sonny Perdue, has been representing him in D.C., and says USDA officials have said they are working on regulations to implement changes in the program to address the issue. Highland is advocating that USDA buy the cattle rather than extend the milk payments.  

Schaap received 26 months of payments from USDA under the program, whose term was limited beginning in June 2019 to 18 additional months.

“We are hopeful that the rulemaking will be sent to OMB shortly and call for quick review and implementation,” Boswell said. “We hope that the program terms account for the reality that Highland lost access to the milk and beef markets for the contaminated herd and should address animals that died without a market while waiting on the updated regulations from USDA.” 

“We’re trying to get him a cow buyout,” Kern says, calculating the price tag at about $6.6 million for the value of the herd based on calculations using the indemnity program. Schaap, however, says that won’t cover all the losses, and says it’s unlikely he will be able to reopen the dairy.

USDA has not responded to requests for information about the pending regulation, but Maria Hurtado, a spokesperson for Rep. Teresa Leger Fernandez, D-N.M., says USDA officials have had “informal conversations” with OMB about the rule so OMB can expedite it once it is officially sent to the agency for review.

Fernandez and New Mexico’s two senators, Ben Ray Lujan and Martin Heinrich, have raised the issue with Ag Secretary Tom Vilsack, and New Mexico's Secretary of Agriculture, Jeff Witte, “has also been beating the drums,” Kern says. “But we can't get any movement.”

But Fernandez told Agri-Pulse that when she spoke with Vilsack about the issue, he “acknowledged that this was the right thing to do, to provide the indemnity, to purchase the cows, that buying the milk was simply not the final solution.”

Fernandez told Agri-Pulse she knows that approving government regulations is a “frustratingly slow process,” but that “in this case, everybody agrees that we must remedy this harm. And so it should be fast-tracked, because there is no disagreement on what the right thing to do is.”

The Senate and House Agriculture committees have made their desires clear in appropriations bills cleared by the House and by the Senate Ag Committee.

The Senate report accompanying the ag spending bill says the ag secretary "shall utilize the Dairy Indemnity Payment Program to purchase and remove PFAS-contaminated cows from the market, rather than paying for prolonged monthly production indemnities."

The House report contains similar language, but says "the [ag] committee directs the Secretary to utilize DIPP to provide monthly indemnity payments to affected producers, including those producers who are no longer milking their herds, for the value of their unmarketable milk, as well as to provide these producers with the option to receive an indemnity payment for the value of the herd and the costs of depopulation if remediation is not practicable."

The House report also “encourages the secretary to extend the timeframe for monthly DIPP payments to 36 months and to explore whether DIPP or other USDA resources could assist producers with costs associated with a longer-term return to farm viability, including testing and remediation.”

Fernandez says Schaap’s dairy is likely not the only one with PFAS contamination — one dairy farmer in Maine had his land contaminated by sludge, for example  — but she said USDA has not expressed concerns to her about the expense of the program should other farmers come forward to seek compensation.

Cannon Air Force Base said it was working with the Justice Department to respond to questions about its response to Schaap's situation "since the matter with Mr. Schaap is under litigation."

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This article has been corrected from its original version. John Kern is a lobbyist for Art Schaap, not an attorney.