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Testimony casts dairy in poor light

YANKTON -- Testimony from witnesses called Wednesday by defense attorneys for Aurora County portrayed Thompson Farms as a poorly run dairy in financial distress.

Thompson Farms has requested $2.6 million in damages from Aurora County due to a 1998 zoning ordinance that forced the multimillion-dollar dairy to close by limiting the amount of animals allowed at an animal-feeding operation. The Thompsons had already invested a significant amount of money into expanding the dairy before the ordinance was enacted.

The trial, in its fifth day Wednesday, is the latest in a 14-year legal battle between the dairy and the county. It comes after a 2009 court ruling found Aurora County's ordinance was to blame for the failure of Thompson Farms, and a Davison County jury's decision in January making the county, not its insurance provider, liable to pay any damages awarded in the case.

A former veterinarian for Thompson Farms, Jay Heezen, of Keystone, was the first witness called to testify Wednesday. The quality of animal care at Thompson Farms in the years before and immediately after the county's ordinance was put in place was not adequate, even after a new barn was completed in April 1998, he said.

"At the beginning it was nice and clean of course, because it was a new facility," Heezen said. "But as time went on, the sanitation became less and less."

Heezen expressed his concerns about the conditions to the Thompsons at the time, he said.

"They would usually agree verbally with me at the time, but it seemed like nothing actually got changed when I came back for my next visit," he said.

Heezen testified the lack of quality care and poor water quality caused the death rate among cattle at Thompson Farms to be higher than any other dairy he ever worked with.

He used a lesson he learned in college to summarize his assessment of Thompson Farms.

"The first three letters of management spell 'man,' but the first three letters of manure also spell 'man,'" he said. "If you don't have the management, the manure is going to build up, and man is going to be responsible for that build-up of waste."

The next witness was Greg Steele, a dairy lending specialist with AgStar, the Thompsons' Mankato, Minn.-based lender. He testified that because of Thompson Farms' dire financial situation, the dairy was not a candidate for expansion with AgStar.

"We did not have confidence in their ability to succeed," he said. Like Heezen, Steele said the death rate of cattle at Thompson Farms was the highest he had ever seen.

During his time working with Thompson Farms, Steele testified he saw nothing that led him to believe the county's ordinance limiting it to 1,050 head of cattle was responsible for its problems.

When cross-examined by Thompson Farms attorney Clint Sargent, Steele said removing the ordinance was "critical" in gaining favor with a potential investor in the dairy.

Another AgStar representative, Joe Oliver, took the stand Wednesday afternoon. Oliver is the head of the AgStar high-risk loan department.

Limitations enforced by local government like Aurora County's size limitations would only be one of the many factors considered by a potential purchaser of a dairy, he said.

"The size by itself is not a determinant of profitability," he said.

Before the beginning of testimony Wednesday, Judge Bruce Anderson partially granted a motion by the attorneys for Thompson Farms to exclude some evidence and restrict some testimony regarding the farm's finances, including records from after the operation was taken over by AgStar.

"The test is would the expansion plans, if a willing buyer bought it, be successful," Sargent said, arguing in favor of exclusions. "It's not whether the Thompsons could make it."