In the growing scandal around the scheme that has been dubbed "Cattlegate," Easterday Farms is now tangled up in the bankruptcy of its sister company, Easterday Ranches, a giant ranching and feedlot operation in Washington state that filed for Chapter 11 bankruptcy protection earlier this month. The filing was made after a meatpacker sued Easterday Ranches for defrauding it of $225 million for 200,000 nonexistant cattle.

Cody Easterday, president and CEO of Easterday Ranches, one of the largest agricultural operations in Washington State, is implicated in a complex modern-day cattle rustling operation involving 200,000 "ghost cattle" that apparently existed only on paper. Easterday was contracted to buy and feed the bovines for Tyson Fresh Meats, a division of Tyson Foods, then deliver them to slaughter at Tyson's processing facility, invoicing Tyson for their purchase and upkeep. The problem was that he never bought the cattle, but still invoiced Tyson for them, allegedly intending to use the money to cover losses he'd incurred in the commodities trading market.

An article in the Spokane (WA) Spokesman-Review said that on Monday (2/8), Easterday Farms filed for Chapter 11 bankruptcy seeking protection from its creditors. It said "according to court records made public Tuesday (2/9), Easterday Farms has and continues to sell feed to the ranch side of the business that has been caught up in an alleged scandal of missing cattle owned by Wallula-based Tyson Fresh Meats Inc., a subsidiary Tyson Foods Inc."

In addition to being the president and CEO of Easterday Ranches, Cody Easterday is also the head of Easterday Farms—one of the many sprawling and intertwined holdings of the Easterday family that includes private planes, hangars, giant storage and packing sheds, restaurants and million-dollar homes. On its 18,000 acres in the Columbia Basin, Easterday Farms grows onions, potatoes and other produce, plus feed and grain for the cattle in the family's feedlot operations.

Easterday Farms is also the owner of the former Lost Valley Farm, the 30,000-cow mega-dairy that failed catastrophically in 2018 when the Oregon Department of Agriculture (ODA) shut it down after issuing more than 200 violations of its permit in two years of operation. It cost millions to clean up the "environmental mess"—including 30 million gallons of manure and wastewater—left by the previous owner.

At the time of the sale in 2019, Easterday was required to reapply to the state ODA for a Confined Animal Feeding Operation (CAFO) permit to operate a 28,300-cow mega-dairy on the site, which it did under the name "Easterday Farms Dairy." While the ODA issued a "letter of satisfaction" at the end of 2019 for the cleanup at Lost Valley Farm, according to sources the Easterdays will still need to invest $15 million to bring the facility into full environmental compliance.

Cole Easterday, a co-owner of the new dairy business, said, "Though the situation with Easterday Ranches and Easterday Farms is unfortunate, Easterday Dairy LLC’s commitment to our current CAFO permit and our permit application is unchanged,” according to an article in the Capital Press.

The article quotes Stephanie Page, natural resources program director for the ODA, as saying that the lawsuit and bankruptcy potentially add another layer of complications. "I think we’ve all been on the same page in terms of not wanting to jump to conclusions," Page said. "We’re just continuing to evaluate the info we’ve gotten about the business structures, and how they’re separate but also making sure we understand how they’re interrelated."

In an e-mail, ODA communications director Andrea Cantu-Schomus said that the ODA and the state Environmental Protection Agency (EPA) are "required by Oregon law and EPA CAFO rules to consider all applications and issue permits for facilities that meet all legal requirements."

When asked whether the bankruptcy filings may impact the viability of Easterday's operations at the dairy, she said that the agencies are exploring Oregon Revised Statutes* and federal rules for CAFOs to determine whether they have the authority "to verify the ongoing financial status of an applicant and or operator" in the permit review. She termed the lawsuits and bankruptcy filings "a rapidly evolving situation" and that "the state will proceed with integrity and transparency."

Though this is hardly the ODA's first rodeo when it comes to issuing permits to large industrial facilities that go on to create problems.

“We know from experience that ODA and DEQ are likely to claim they don’t have the authority to deny Easterday’s permit,” said Tarah Heinzen, Food & Water Watch Legal Director. “Recent events underscore that this is just not true. They can deny a permit to any applicant who hasn’t disclosed all relevant facts or who has misrepresented any facts in their application. Easterday Ranches’ and Easterday Farms’ significant financial distress surely qualifies.” 

Cantu-Schomus later clarified in an e-mail when asked about whether the agencies are able to put a permit application on hold while determining its status that "there is no time requirement for ODA or DEQ to complete CAFO Permit development and start the public notice period."

Adding pressure to the ODA's permit process, a coalition called Stand Up to Factory Farms is pushing a bill in the state legislature for a mega-dairy moratorium in order to institute regulations on industrial factory farm dairies to protect Oregon's environment, air and water and the health of its communities.

In light of the Easterday scandal, the coalition issued a press release saying that "denying the [Easterday Farms] permit is not enough. It’s been clear for years now that these facilities housing tens of thousands of cows and producing waste on par with many cities are mega-polluters regardless of the operators. It is time for Oregon legislators to enact a mega-dairy moratorium to protect our state from irresponsible mega-dairy operators and prevent harms from massive industrial dairies until regulations are in place to protect Oregonians."

Amy van Saun, a senior attorney for the Center for Food Safety, responded in an e-mail to a question about the Easterdays' various businesses, "While the intricacies of the various Easterday entities may not yet be clear, including to state regulators, one thing is clear: Cody Easterday and the Easterday family are the principals and the ones accused of massive fraud in Washington.

"It is beyond the pale that ODA and DEQ would still consider permitting the Easterdays to operate such a massive new source of nitrates and methane in Oregon," van Saun wrote.

Read more about the Easterday Ranches scandal.

* ORS 468B.217 and OAR 340-045

Photos from Easterday's public Facebook page.

It has the drama and intrigue of a Hollywood blockbuster—part western, part heist movie—centered on a middle-aged businessman up to his eyeballs in debt desperately trying to dig his way out scheming to rip off a giant national meat conglomerate, contracting to deliver thousands of cattle that only exist on paper.

Thing is? This is no movie, it's real.

Even weirder, it involves the catastrophic Boardman-area mega-dairy known as Lost Valley Farm—infamous for its drug-addled, prostitute-frequenting former owner, Greg te Velde, who racked up more than 200 violations of its operating permit in two years—and the scion of a multi-generational Northwest ranching family who swooped in and bought the failed dairy, proposing to infuse millions of dollars to bring it back to profitability.

The panicky businessman is Cody Easterday, president and CEO of Easterday Ranches, one of the largest agricultural operations in Washington State, who is also the main player in the Lost Valley Farm purchase. A tragic side note: His father, wealthy cattleman Gale Easterday, died in December when the car he was driving ran head-on into an 18-wheeler hauling Easterday potatoes.

Reporter Anna King of the NW News Network broke the story that Cody had lost more than $200 million in the commodities market and had concocted the  scheme in a bid to cover his losses. “As his commodities trading losses escalated, Mr. [Cody] Easterday explained that he began submitting fake feeding invoices as well as the fake cattle invoices,” Jason Wenglarski, vice president of internal governance for Tyson Foods, is quoted as saying.

The story describes Easterday's scheme to contract with Tyson "to buy fake young cattle, then charge Tyson for them. Then Easterday Ranches would fictitiously feed the cattle and bill Tyson for that feed. Next, the cattle operator would deliver some actual cattle—but not all—to Tyson when the on-paper cattle would be market ready."

Interestingly, Tyson didn't discover the discrepancy for several years, according to the Tri-City Herald, which said Easterday had previously worked with Tyson for many years when, in 2017, Easterday signed an agreement to buy young cattle and feed them until they were ready for market, submitting invoices and being reimbursed for his costs.

According to Tyson's lawsuit against Easterday, the scheme came to Tyson's attention in late November of 2020 when it discovered "errors" in its inventory records and met with Easterday. “Its investigation, including the admissions of Defendant’s President Cody Easterday, showed there were over 200,000 head of cattle that Defendant reported to be in inventory, but which did not exist.”

As for Easterday's pending permit application with the Oregon Department of Agriculture (ODA) to operate a 30,000-cow mega-dairy on the former site of Lost Valley Farm? At this point it's unaffected by the recent revelations.

According to ODA communications director Andrea Cantu-Schomus, "the State is continuing the process of reviewing the Easterday Farms Dairy LLC application and drafting a permit." She added that when the draft permit is ready, the ODA and Department of Environmental Quality will release it and any supporting materials to the public prior to holding public hearings. Based on that, the agencies "will review and make possible changes" before making a final decision on the permit.

Stand Up To Factory Farms, the coalition of community, farm, environmental and social justice organizations behind the mega-dairy moratorium before this year's legislature, issued a press release on the Easterday scandal, saying "these serious allegations underscore that Lost Valley Farm’s owner, Greg te Velde, is not the only 'bad actor' among mega-dairies, as the Oregon Department of Agriculture and the dairy lobby would have us believe. It is vital that the Oregon Department of Agriculture immediately deny the Easterday permit application for a new mega-dairy in Eastern Oregon."

Until then—or until the movie comes out—I'll keep you posted on developments and/or shenanigans.

Top photo: File photo of cattle feedlot.