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Counties, timber group want to resume Cascade-Siskiyou litigation

Capital Press Agriculture News Oregon -

Groups representing Oregon counties and timber companies want to resume litigation against the federal government’s expansion of the Cascade-Sisikiyou National Monument.

However, a federal judge is delaying proceedings in the two lawsuits until Dec. 1 to give the Trump administration more time to consider scaling back the monument’s size.

The monument’s boundaries were increased from about 66,000 acres to 114,000 acres in the waning days of the Obama administration, angering livestock producers and timber companies that rely on the public land for grazing and logging.

Most logging is prohibited within the monument and the designation also has the potential for grazing restrictions.

The Association of O&C Counties and the American Forest Resource Council both filed complaints against the expansion, arguing the national monument can’t include federal property that’s dedicated to timber harvest.

Those cases were stayed after the Trump administration decided to review the Cascade-Siskiyou National Monument and others created in the past two decades.

During the summer, Secretary of the Interior Ryan Zinke submitted recommendations implying the monument should be reduced by roughly 16,600 acres that were previously open to logging under resource management plans.

The Association of O&C Counties is dissatisfied with this proposal, since Zinke did not address the inclusion of more than 35,000 acres of so-called O&C Lands in the monument.

O&C Lands were once granted to a railroad but then repossessed by the federal government and devoted to logging, with Western Oregon counties receiving a portion of the timber revenues.

The counties’ lawsuit against the federal government should be re-activated since their fundamental problem would not be resolved under the recommendations delivered during the summer, according to the Association of O&C Counties.

“Since that time, however, the Secretary has completed his review and submitted his final report to the President and there is no clear prospect of relief. If anything, the opposite is true,” the group said in a court brief.

The American Forest Resource Council likewise argued that its lawsuit might as well be resumed since it won’t be mooted by anything other than a complete reversal of the expansion.

“This inevitableness means that a stay only kicks the metaphorical can down the road, while continuing to worsen the harmful impacts the Monument expansion is having on the timber industry,” according to AFRC’s court brief.

The timber group claims the monument’s expansion has effectively shut down timber harvests that were planned for the next 10 years in the U.S. Bureau of Land Management’s Klamath Falls Resource Area.

“Timber on federal lands is highly regulated, and the sudden evaporation of millions of board feet of timber in one resource area is not easily absorbed in another area that is under similar sustainable management,” the brief said.

Attorneys for the federal government said it “simply is not accurate” that timber harvests have completely ceased in the region, noting the expansion did not cancel timber sales that were already approved.

Delaying the litigation until Dec. 1 would prevent the court from wasting resources, since the Trump administration may reach a decision that “could simplify or moot the issues.”

Senior U.S. District Judge Richard Leon sided with the government in both cases and agreed to prolong the stay until Dec. 1, when the parties will submit a joint report on the status of the litigation.

Craft brewers aim to revive public hop breeding

Capital Press Agriculture News Oregon -

Craft brewers hope to give private hop breeders some more competition by funding a USDA-administered public breeding program based in Oregon.

The goal is to develop new public hop cultivars that are resistant to common fungal diseases and can be cultivated without licensing agreements by farmers in the Northwest and elsewhere.

In recent years, the trend has increasingly been for new varieties to be patented by private breeders, said Michelle Palacios, administrator of the Oregon Hop Commission.

“We’re seeing the public varieties become less and less competitive,” Palacios said.

Private breeders often want to closely control distribution of their hop cultivars, so their agreements with farmers are similar to contract production, said Fred Geschwill, a farmer near Woodburn, Ore., and president of the Hop Research Council.

“Their licensing agreements are very tight,” Geschwill said. “I grow it, give it back to them, then they sell it to the marketplace.”

Private breeders can better regulate supply and demand under this scenario, but farmers have less control over planting decisions and brewers have fewer suppliers competing for their business, he said.

While growers can still turn to traditional public cultivars, some of them have been losing their resistance to powdery mildew and other diseases over time.

For example, Cascade aroma hops have long been an industry staple but now they’re getting “long in the tooth,” said Chuck Skypeck, technical brewing projects manager with the Brewers Association, which will contribute an undisclosed sum to public breeding over five years.

“You can’t live on your good graces forever. You need to keep things in the pipeline,” said Skypeck.

As public funding for hop breeding has dried up in recent decades, the U.S. brewing industry has seen a resurgence — from fewer than 100 breweries in the 1970s, the number is expected to reach 6,000 by the end of 2017, he said.

“That landscape has changed,” he said.

Craft breweries don’t just need hops to impart bitterness, they rely on aroma varieties to create unique flavors that differentiate their brands, Skypeck said.

Unless they have desirable agronomic qualities and disease resistance, though, even the tastiest hops won’t gain traction on the farm, he said.

There currently isn’t a reliable mechanism for new hop varieties to be tested by brewers and growers, Skypeck said.

Aside from providing funding to USDA for breeding, the Brewers Association plans to form an advisor panel with members from both industries to guide research, he said. Trials of potential cultivars will also be studied in breweries and on farms.

“There are usually a lot more misses than there are hits,” Skypeck said of the breeding process.

Money from the Brewers Association will pay for one post-doctoral breeder position as well as a technician, said Ryan Hayes, a geneticist with USDA’s Agricultural Research Service. The hiring process has already begun for the post-doctoral position.

Once the initial five-year deal with USDA expires, the Brewers Association can enter into another agreement with the agency, he said.

Cultivars suited to moist Western Oregon may also be successful in New York and other regions where hop production is seeing a revival, said Geschwill.

As long as they source a certain portion of their ingredients from within New York, for example, farmers in that state can launch on-site breweries, he said.

Farmers in Michigan and Wisconsin are also experiencing more hop production, which would be aided by new public cultivars, said Skypeck said.

“They’re our partners in this industry,” he said. “It’s a unique solution, but we are a unique industry.”

Ruling reverses solar project on Oregon farmland

Capital Press Agriculture News Oregon -

A solar power project planned for 80 acres of high-value farmland in Oregon’s Jackson County has been shut down by the state’s Land Use Board of Appeals.

Earlier this year, Jackson County’s board of commissioners approved the project by excepting it from Oregon’s land use goal of preserving agricultural land.

Solar facilities on prime farmland must obtain such an exception if they’re larger than 12 acres.

The county’s decision was challenged by the 1,000 Friends of Oregon conservation group before LUBA, which has now agreed the project doesn’t qualify for such an exception.

LUBA’s ruling “re-establishes that these projects have to comply with statewide land use goals,” said Meriel Darzen, attorney for 1,000 Friends of Oregon.

Darzen said 1,000 Friends of Oregon doesn’t oppose solar energy but would prefer that sites are not developed on high-value farmland.

“I would still assume there are a lot of options,” such as industrial areas within “urban growth boundaries” or marginal lands, she said. “Just as with any energy facility, we think the siting considerations are important and should not be bypassed.”

Origis Energy, the project’s developer, said it’s too early to know if the ruling will have broader implications for solar energy siting in Oregon.

“The decision is certainly disappointing and our team is currently discussing and vetting all options at our disposal. We will make a decision on how to proceed shortly,” said Michael Chestone, a consultant for the company.

The project’s developer claimed that Jackson County was obligated to promote renewable energy under another statewide land use goal.

LUBA rejected this argument, finding that Oregon’s goal of energy conservation is not a requirement to build new renewable energy facilities.

Jackson County was also incorrect to approve the project due to its “comparative advantage” of being located in an area with adequate sunlight and topography near an electrical substation, the ruling said.

“That the subject property is flat, 80 acres in size and exposed to the sun does not render the property a ‘unique resource’” under Oregon law use rules, according to LUBA.

The project’s proximity to an electrical substation within the City of Medford’s “urban growth boundary” also doesn’t justify the land use goal exception, the ruling said.

It’s typical for industrial sites such as the substation to be located on the outskirts of an urban growth boundary near farmland, LUBA said.

If proximity to these areas were a legitimate reason for converting farmland, such “exceptions would become commonplace given the strong economic incentives” for new development to occur near cities on inexpensive land, the ruling said.

Such an interpretation “could easily subvert one of the principal structures of the statewide land use program: the urban growth boundary,” according to LUBA.

Fire destroys barn belonging to Oregon Farm Bureau president

Capital Press Agriculture News Oregon -

BORING, Ore. — A fire that destroyed a barn on the property of Oregon Farm Bureau President Barry Bushue may have been started by an electrical problem, but a fire inspector could not pinpoint the cause because the building was a complete loss.

Clackamas Fire District #1 spokesman Steve Hoffeditz said the cause will be listed as “undetermined.” The district estimated damage from the Oct. 26 fire at $40,000 to the building and $40,000 to the contents, which included shop equipment.

A passer-by saw the fire at Bushue Family Farm and reported it at 1:30 a.m., about the time the property owner awoke and did the same. Clackamas Fire, aided by firefighters from nearby Gresham, Ore., was able to confine the fire to the barn. No one was injured; the family was able to release goats that were in a corral next to the barn.

Bushue Family Farm grows berries and vegetables and at this time of year also has a pumpkin patch and hosts tours by schoolchildren. The farm resumed tours despite the fire. Barry Bushue could not be reached for comment.

Old pest makes a return to Northwest fruit, nut trees

Capital Press Agriculture News Oregon -

Invasive, crop-damaging insects such as Spotted Wing Drosophila, Japanese Beetles and Brown Marmorated Stink Bugs cause alarm and get research attention, but the latest problem bug to emerge is a home-grown pest that hasn’t been a factor for decades.

Researchers in Oregon and Washington say they’re hearing reports of damage from Pacific Flatheaded Borers, a beetle that seeks out weakened plants and can kill young fruit and nut trees. Oregon State University staff recently found several damaged trees in its new cider apple nursery beds, which were planted as a research response to the increasing popularity of hard cider drinks.

Nik Wiman, an assistant professor and orchard specialist with OSU, said he knows of a young commercial cherry orchard that was hit hard and said the borers are a threat to “All those brand new hazelnut trees out there.”

The damage to trees is caused by the beetle larvae, which bore into trees and chew “galleries” or “mines” between the bark and wood. They can “girdle” and kill a young tree by chewing their way all the way around it.

Wiman and others said borers are a difficult pest to work with because there are no traps or pheromones developed to attract them. Spraying for them is problematic because they spend much of their life sheltered under bark. They begin to emerge in late spring, but there doesn’t seem to be a regular schedule for that.

To that end, Wiman is collecting infected wood from damaged trees, the idea being to rear larvae under controlled conditions and learn more about when adult beetles fly. “We want to get an emergence curve,” he said. “We want a predictive model.”

Flatheaded borers are not a new pest. Scientific literature on the borer dates to the 1930s or 1940s, but it hasn’t been studied for decades, said Betsy Beers, a professor and entomologist at Washington State University’s Tree Fruit Research and Extension Center in Wenatchee.

“We’ve seen so little of it here in Washington, I think most entomologists have forgotten about it,” Beers said. “The ones I saw a couple of years ago were the first ones I’d seen in my professional career.”

In that case, damage reports surfaced from tree nurseries in British Columbia. Washington State obtained borer larvae and reared them as a research project.

An OSU Extension publication from 1982 said the boring larvae almost always begin their work on the sunny side of a tree, and may bore 1 to 2 inches deep. If they tunnel all the way around, they can kill the tree or infested branches. Growers should look for darkened areas of bark and fine bits of sawdust low on the tree.

Adult borers are up to a half-inch long, with metallic copper-colored spots on their wings, according to the OSU publication.

The adults fly for three to five weeks and make a buzzing sound when flying, according to the publication. “They are active insects, and will quickly conceal themselves or fly away when approached. Being sunlovers, they are inactive and rarely seen on cloudy days,” it said.

James LaBonte, an entomologist with the Oregon Department of Agriculture, said Flatheaded Borers and similar pests take advantage of trees damaged by equipment or weakened by sunburn, drought or even excess water. The act of planting can stress young trees as roots are disrupted, he said.

“Anything that makes a tree feel less than great is going to set them up for attack,” he said. “All of these can predispose these plants to attack.”

Extreme weather swings, whether brought on by climate change or not, may bring on more insect damage to stressed trees, LaBonte said.

He said Christmas tree growers, for example, are seeing more damage from the Douglas Fir Twig Weevil, which doesn’t kill trees but can reduce value by making them look ugly.

“I anticipate we will see more of this,” he said.

India promoter overcharged apple, pear groups $720,000, auditors say

Capital Press Agriculture News Oregon -

WENATCHEE, Wash. — The Washington Apple Commission and The Pear Bureau Northwest have severed relations with a contract promoter in India after audits found they had apparently been overcharged more than $720,000.

The Apple Commission was overbilled $573,182 for services — including some that had not be performed, a state audit found, and the Pear Bureau is conducting an audit and has found discrepancies of about $150,000, spokeswoman Kathy Stephenson said Tuesday.

As a result of the audits, the Apple Commission, in Wenatchee, and The Pear Bureau, in Portland, broke ties with Keith Sunderlal, owner of SCS Group, New Delhi, India. Sunderlal told The Wenatchee World that doing business in India is complex and that he’s confident his firm will be absolved.

The “potential overbilling” was made public by a special investigation by Washington State Auditor Pat McCarthy. His spokeswoman, Kathleen Cooper, declined to call it fraud, saying that implies criminal conduct and that the auditor is not a criminal investigator. She used the term “questionable costs.”

The auditor’s report called it “significant discrepancies,” but Apple Commission President Todd Fryhover called it “fraud.” He alleged that invoices were falsified and that he was very surprised because Sunderlal has worked for the commission since 2004. Discrepancies spanning five years were uncovered but may go back farther, Fryhover said.

The commission withheld $505,138 in payments to SCS and notified the USDA, which plans to refer the case to the U.S. Office of Inspector General for further review, according to the auditor’s report.

“The Office of the Inspector General can analyze it from a criminal perspective, which we can’t,” Cooper said.

There’s no evidence the Apple Commission did anything wrong, Cooper said. It had controls in place to ensure accountability of public funds and has strengthened those controls at the auditor’s recommendation, she said.

“We will be doing more direct payments to vendors, especially large ones, to prevent this,” the Pear Bureau’s Stephenson said.

The Apple Commission spends $7.8 million annually to promote Washington apples in 30 foreign markets. The money includes $4.8 million from the federal Market Access Program and $3 million from a 3.5-cent per box grower assessment on the annual crop.

In March, an SCS subcontractor told the Apple Commission that its invoices did not match invoices for its work that SCS was submitting to the commission, Fryhover said.

The commission hired an outside accounting firm, which compared invoices the contractor submitted to the commission with a subcontractor’s original invoices from July 1, 2015, to June 30, 2016, and found “many discrepancies, including formatting, letterheads, references to non-existent India service tax numbers, bill numbers and amounts,” the auditor’s report states.

The accounting firm found invoices for promotions not performed and overbilling for promotions that were performed, the report says. The commission reported the information to the USDA, which asked the commission to expand its review to the past five years.

In April, the commission asked the state auditor to perform an expanded review.

The auditor looked at invoices paid by the commission to the contractor from Aug. 3, 2011, to May 3, 2017. During that period, the contractor sent 1,336 invoices totaling $5 million from various subcontractors to the commission.

The state auditor looked at original invoices from two subcontractors who billed at high levels and found $573,182 in “potential” overbilling. A total of 470 invoices for $358,547 from one subcontractor were for services not provided and other bills to the commission contained information not in original subcontractor invoices that increased bills, the audit report states.

The contractor told the state auditor it was easier to submit one summary invoice to the commission and that off-the-books cash payments account for 25 percent of operations and is a partial reason for significant discrepancies, the audit report says.

One subcontractor told the state auditor it keeps two sets of invoices, one for direct billing and one for off-the-books cash payments.

There was no bank statement proof of off-the-books payments and no way to trace them, the audit report says.

“Our investigation indicated all of the subcontractor invoices that were submitted to the commission were not original invoices even though they were supposed to be,” Cooper said.

Fryhover said the commission thought it was receiving original invoices but realized it wasn’t only after being contacted by the subcontractor.

He said the $505,138 in payments to SCS that the commission has withheld is for all invoices from SCS for the second half of the 2016-2017 season.

He said the commission has hired a new India representative.

India was Washington’s third-largest apple export market at 4.8 million, 40-pound boxes in the 2016-17 season. It was behind Mexico and Canada.

Christmas tree prices expected to rise amid shortages

Capital Press Agriculture News Oregon -

SALEM, Ore. (AP) — Americans will pay more for pre-cut Christmas trees this year as shortages deepen from the country’s top two producers, Oregon and North Carolina.

Joe Territo sells Oregon trees in San Jose, California. But he’s becoming increasingly frustrated with rising costs, from the trees to labor. Territo says the only figure going down is profit.

“It seems like every year, it’s harder and harder,” Territo said. He expects to sell 6-foot Noble firs for about $75 a piece this season, up from about $69 last year.

The problem is one of supply. Christmas tree growers are coming up short as their 2017 harvest enters its critical period, with trees being shipped coast-to-coast and abroad.

Around the time of the Great Recession, growers had an oversupply of trees after planting too many in the early 2000s. Subsequent low prices forced many farmers out of the Christmas tree business, leaving other growers to tend to the market.

But now, with only so many trees to go around, remaining farmers can’t keep up with demand — and they might not catch up for years. It can take nine years before some trees are ready to be cut and sold.

Oregon farms harvest the most trees in the United States, exporting them to places like Asia and California. Trees from North Carolina are generally shipped to states east of the Mississippi River, such as Florida.

Casey Grogan is a manager at Silver Bells Tree Farm, a few hundred acres outside Oregon’s capital city, Salem. He reckons the farm has received 20 times its normal number of customer inquiries.

“We just have enough to supply the customers we’ve been supplying, so we’re not able to help them,” Grogan said.

But Grogan is optimistic for fellow Oregonians who should be able to find fresh fir trees. And there are many u-cut tree farms.

“The people that are really gonna suffer from this, I think, are going to be people in Southern California, Arizona, Texas, places like that,” he said.

Tim O’Connor, executive director of the National Christmas Tree Association, denies a shortage, but acknowledges, “Supply is tight.”

“Everyone who wants a tree will be able to get one,” O’Connor said.

Christmas tree farmers aren’t so confident.

“Right now, there’s a tree shortage. It’s been coming down the line for the last eight or 10 years, or so,” said Jason Hupp, who helps manage Hupp Farms near Silver Falls State Park in Oregon.

“So our biggest challenges are having enough trees to supply customers and just getting phone calls after phone calls after phone calls of people desperate for trees that don’t exist,” he said.

One recent morning, a helicopter piloted by Terry Harchenko swooped over Hupp Farms, snatching up bundles of trees after Raul Sosa, a lone worker clad in high-visibility orange, connected them to a hook on the chopper’s dangling line.

It’s dangerous work — the hook could swing and strike Sosa — but worker and pilot worked gracefully in concert.

“It’s like air ballet. It’s crazy,” Hupp said beforehand.

The helicopter dropped the heavy trees in a nearby lot, where other workers pulled away ropes holding them together. Many Hupp Farms trees will head down south to California.

Wholesale growers estimate they’re raising prices at least 10 percent year-over-year. Growers don’t expect normal harvest levels for Christmas trees to return until at least 2021 or 2025.

Like Hupp Farms in Oregon, Barr Evergreens in North Carolina can fulfill wholesale orders for its existing customers but has to turn away new ones, said owner Rusty Barr.

Barr expects to raise prices $2 to $3 for pre-cut Fraser fir trees at his retail outfit. That’s on top of the $60 to $80 they’ve sold for in the past, depending on size.

North Carolina harvested an estimated 3.5 million trees in 2016, according to the Pacific Northwest Christmas Tree Association. The state was followed by Michigan (3 million), Pennsylvania (2.3 million) and Washington (1.5 million).

By contrast, Oregon cut down approximately 5.2 million trees.

For Oregon growers, popular Noble firs are especially lucrative — but they only grow so fast, often spending nine years in the ground to grow to 6 feet in the Pacific Northwest.

“That’s the Cadillac of the industry,” said Bob Schaefer, general manager of Noble Mountain Tree Farm. The Salem, Oregon, area wholesaler is massive, usually harvesting about half a million trees a year from the more than 4,000 acres the company grows on in the Willamette Valley.

One of the factors driving the shortage was a practically nonexistent crop of Noble fir cones for 15 years, with a good crop finally returning in 2016, Schaefer said. Without cones, there’re no seedlings and no trees.

Limited supplies of the Noble fir seedlings led Noble Mountain to fill production holes with Douglas firs, assuming customers would still want a Christmas tree of some sort. But some buyers aren’t eager to branch out.

“There’s a lot of pent-up demand for Noble fir that, you know, probably, to some extent, won’t be met this year,” Schaefer said.

He expects Noble fir harvest levels to return to normal in 2025 or 2026.

California is Noble Mountain’s biggest customer, but the company sends trees elsewhere in the U.S., and even down to Mexico, where the market is hot for its abundance of Douglas firs.

“This year, we’re shipping more to Mexico than we’ve ever shipped before,” Schaefer said.

Even as shortages affect the Pacific Northwest, competitors in North Carolina don’t keep Schaefer up at night.

For starters, cross-country freight prices tend to keep the competition at bay. “I won’t say it’s prohibitive, but it pretty much prices their product out of the realm of reason for the consumer in most cases,” he said.

Barr, the North Carolina wholesaler, agrees. With freight costs, “it’s getting pricey to go to Denver,” he said.

There’s also a rule of thumb among Christmas tree farmers: West Coast trees remain west of the Mississippi, and East Coast trees stay east of the river. Scattered exceptions crop up, such as when wholesalers compete for Lone Star State customers.

“We kind of bash heads in Texas,” Schaefer said.

Shortages and rising prices are fueling concerns among growers that customers will turn to artificial trees, whose shelf lives long outlast those of their natural competitors.

Oregon growers sold 4.7 million real trees in 2015, falling more than a quarter from sales five years earlier, according to the United States Department of Agriculture.

Artificial trees accounted for nearly 81 million of Christmas trees displayed in the U.S. in 2016, while nearly 19 million were real, according to estimates from the nonprofit American Christmas Tree Association.

With a dramatic shortage that’s not expected to reverse for another six or eight years — if not longer — Hupp, in Oregon, is worried customers will buy artificial because they can’t find the real thing.

“Their families will get used to that being the norm,” he said

Ore. wildlife biologists testing deer, elk for fatal disease

Capital Press Agriculture News Oregon -

BEND, Ore. (AP) — The Oregon Department of Fish and Wildlife has established testing stations where hunters can submit deer and elk carcasses to be tested for chronic wasting disease.

No cases have been reported in Oregon, but wildlife biologist Greg Jackle tells The Bulletin newspaper that the department isn’t taking chances. Chronic wasting disease is not treatable, and is always fatal for deer and elk.

Another ODFW wildlife biologist, Corey Heath, says the contagious disease is found in pockets across the continent, from the Mountain West to central Pennsylvania.

Infected animals often travel to lower elevations, bringing them closer to roads and putting them at a greater risk of getting hit by a passing car.

Canadian granola bar maker plans Junction City factory

Capital Press Agriculture News Oregon -

EUGENE, Ore. (AP) — A Canadian firm plans to open a granola bar factory in Oregon.

The Register-Guard reports Northern Gold Foods plans to employ about 75 people in the 300,000-square-foot factory that will be built just south of Junction City.

The privately owned company buys oats and other ingredients from Eugene-based Grain Millers, which owns the property and will lease the structure.

Grain Millers executive vice president Christian Kongsore says the factory could be completed by next fall.

The new manufacturing facility would be another economic boon for Junction City, a community of about 6,000 people north of Eugene. In recent years, it has seen Oregon build a psychiatric hospital, Cosmos Creations build a production facility and Winnebago Industries reopen a recreational vehicle manufacturing plant.

Jury selection to begin for Bundy, 2 sons in standoff case

Capital Press Agriculture News Oregon -

LAS VEGAS (AP) — Jury selection is set to begin in Las Vegas for the long-awaited trial of Nevada cattleman and states’ rights figure Cliven Bundy, two sons and one other co-defendant on charges stemming from an armed standoff with federal agents in April 2014.

The trial starting Monday for the 71-year-old Bundy, sons Ryan and Ammon Bundy, and Ryan Payne of Montana alleges that they led a self-styled militia to prevent the U.S. Bureau of Land Management from enforcing court orders to stop Bundy cattle from grazing in what is now Gold Butte National Monument.

It comes after prosecutors twice fell short in earlier trials to gain full convictions of six other men who were armed with assault-style weapons during the confrontation.

Three co-defendants pleaded guilty in recent weeks to lesser charges.

Simplot loses dispute with farmer over processing company

Capital Press Agriculture News Oregon -

Northwest farmer Frank Tiegs has prevailed against the J.R. Simplot Co. in a legal dispute over the ownership of a Washington food processing company.

The relationship between Tiegs and Simplot, who once held equal ownership of Pasco Processing, turned acrimonious last year over the need to inject money into the company.

Tiegs wanted each owner to contribute $3 million to Pasco Processing to resolve a loan default but Simplot didn’t agree to the cash infusion. The National Frozen Foods Corp. in Albany, Ore., is wholly owned by Pasco Processing.

The conflict prompted Tiegs to invoke a contract provision allowing him to buy the company if the two partners deadlocked on a key decision.

Citing contract terms, Tiegs claimed he wasn’t forced to pay anything for Pasco Processing due to its poor financial performance.

Both partners eventually filed lawsuits against each other, with Tiegs seeking a declaration that he owned the company and Simplot accusing him of deliberately mismanaging the firm.

U.S. District Judge Rosanna Malouf Peterson has now sided with Tiegs, finding that he was allowed to take complete ownership of Pasco Processing due to the deadlock with Simplot.

The judge ruled against Simplot’s argument that she consider additional evidence regarding Tiegs’ credibility, finding it was irrelevant to deciding the contract dispute.

While it’s “uncontested” that Tiegs tried to follow dispute resolution procedures, “Simplot refused to participate,” which resulted in the deadlock, she said.

Simplot’s claims that Tiegs tried to “manufacture” a “sham” deadlock are immaterial in terms of the contract, the judge said.

“The court concludes that in this case if a conflict looks, walks, and talks like a deadlock, it is a deadlock,” Peterson said.

Before Tiegs could buy Pasco Processing, the contract did require him to reach a five-year deal for supplying Simplot with vegetables, the judge said.

However, Simplot effectively waived this requirement when it refused to negotiate the supply agreement with Tiegs, according to the ruling.

Similarly, Simplot disregarded contract terms by refusing to participate in mediation scheduled by Tiegs, Peterson said.

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