Clark prefers to see the upside: Periwinkle, he says, is just being overly friendly.
“The biggest thing I worry about is where (the cows) are going to end up,” Clark said in a recent interview, taking a break from the many chores he must do each day as part of his one-man operation in Ira. “I raised all of them from birth to where they are today.”
The 30-year-old dairy farmer wonders what’s going to happen to the animals if this is the day. He goes to work each morning, milking the cows at the Milky Way Farm on Route 133 in this tiny Rutland County town (population 432) hoping that it won’t be that day.
Clark doesn’t know when that day will be. It could be today after he walks into the barn. It may be the next day, or the one after that.
The cows, and the farm’s machinery, could hit the auction block any time now.
Four years of legal action through federal bankruptcy court came to an end last month. That’s when a judge dismissed the farmer’s case, doing away with any protection Clark had against a creditor selling off the cows and the farm’s machinery and equipment to the highest bidders.
Clark and his mother, Mary Saceric-Clark, kept the operation going as his father, who ran the farm, battled cancer. Robert Clark Sr. purchased the land for the Milky Way Farm in 1984, and when Robbie turned 18 he joined his father in the operation.
The father and son worked together for 11 years, until Robbie Clark Sr. died at 69 last year of metastatic prostate cancer, leaving his son to work alone on the small dairy farm for almost a year. The illness and death pushed the family and the farm further into debt.
For Clark, it’s still about the cows, each with a name, a tradition started when his family took over the farm. Playing off the outer space theme that a farm called Milky Way connotes, the animals have had names such as Aurora and Andromeda.
“Some of them, their lives will end when they leave Milky Way, because they won’t make it on other farms,” Clark said. “The new modern parlor operations, those cows won’t have a clue what’s going on so they just won’t make it.”
‘They’re really nice people’
The dairy farm, the last still operating in Ira, milks about 60 cows, from a herd of about 100. The milk from the farm doesn’t end up in gallon containers on shelves in a grocery store’s dairy department. After a company trucks it away, the milk is turned into Cabot cheese, a signature Vermont brand.
Visiting the roughly 125-acre farm is like walking into a postcard scene. There are open fields, a red barn that occasionally has cows peeking out (sometimes batting their big brown eyes), and a green John Deere mud-splattered tractor parked nearby.
Working on the farm is the only job Clark has ever had.
“I don’t know anything else,” said Clark, a wiry man with a dark beard and an easy smile. His pants are worn, his dark blue sweatshirt loose fitting and his rubber boots are high, approaching his knee. “I graduated high school and came right back. It’s scary thinking it could all be gone in the blink of an eye.”
Vermont Agriculture Secretary Anson Tebbetts said he has talked a couple of times with Saceric-Clark, Clark’s mother and bookkeeper, and is looking into what options might be out there to help.
That includes trying to see what other financial services are available, he said, and taking a look at the business plan to see if there is something that could be done on the farm to help supplement the dairy operation.
“It’s certainly on our radar,” Tebbetts said. “There are a lot of difficult issues, and we’re trying to be as supportive as we can.”
The agriculture secretary said he is not aware of an auction date yet. Tebbetts said he has also reached the U.S. Department of Agriculture’s Farm Service Agency, the creditor that would hold the auction.
“The last time we talked to Mary we were hoping to get a meeting between FSA and Mary again, to go over what’s transpired,” Tebbetts said. “I was trying to see if we could get them together to see what the next steps might be.”
Patrick Freeman, FSA loan service director in Vermont, said last week there was little he could say about the specific loan or case due to confidentially and legal provisions. The U.S. attorney’s office in Vermont, which represented the federal farm agency in court, declined to comment, referring questions to Freeman.
“It’s a really nice farm. They’re really nice cows, and they’re really nice people,” Freeman added. “It’s a really challenging situation.”
He said there are options prior to FSA having an auction: The loan could be paid off in full, or the debtor, in this case, Clark, could voluntarily hold a public sale.
Asked if Clark’s loan could be refinanced in any way or the terms extended, Freeman said, “I would never say never, but it would be highly unlikely.”
Freeman did say he was not aware of any scheduled auction, which would be advertised ahead of time.
The best case scenario, Freeman said, is for a debtor to hold the sale.
“In general,” he said, “what we would always recommend is a well-advertised, public sale, professionally conducted by an individual or company that is in the business of having auctions for farms.”
However, in some cases, Freeman said, FSA has to conduct auctions if a debtor doesn’t act voluntarily. He said he couldn’t remember the last time such an auction took place in Vermont.
The FSA provides loans to farmers who can’t get one elsewhere, he said. In Vermont, the agency has a loan portfolio of $68 million with 468 borrowers and a delinquency rate of 2.3 percent.
Jan Sensenich, the bankruptcy trustee appointed by the court to oversee and administer the farm’s reorganization plan, said he would have liked to see the judge approve a last-ditch effort to modify the farm’s plan, which didn’t happen.
“I supported it with every fiber of my being,” Sensenich said.
That plan called for reducing the size of the herd, having Clark try to supplement the operation by taking off-farm employment, and opening up the farmhouse to overnight guests seeking a real Vermont experience as they travel.
Sensenich said he wasn’t going to second-guess the action of the judge or the creditors in the case, saying all parties acted in good faith but represented different interests.
Clark and his family have worked hard to keep the dairy operation up and running through the roughly four years of bankruptcy proceedings.
“They had some real challenges, which they were heroic in trying to meet,” Sensenich said. “We had an enormous drop in milk prices that hurt a lot of farmers. They did everything they could to hang on.”
What was never in question, he added, was the family’s passion for the cows.
“One of the things that is not in dispute in the case at all is that these are farmers who took tremendously good care of their herd, even when they were going through these hard time,” the trustee said. “The quality of their milk was always right at the top.”
Debt, payments and plans
The bankruptcy proceeding started in 2012 when the farm filed for Chapter 12, which allows a small farm to reorganize and restructure debt.
Creditors included the Farm Service Agency, People’s United Bank and the Vermont Agricultural Credit Corp.
Saceric-Clark said it was creditors who first pitched her the idea of filing Chapter 12, telling her it was made for situations just like the one they were in, a small farm dealing with uncertain conditions year to year, from weather to milk prices.
At first her son, whose name would be on the filing as operator of the business, balked at the idea, but he eventually agreed.
A short time later her husband was diagnosed with cancer. His doctor, Saceric-Clark said, told her that keeping him on the farm was among the best prescriptions for his physical health and mental well-being.
“Farming, for my husband, was never his job, farming for him was truly a calling,” she said, stopping to wipe away tears. “If he was going to lose that, we pretty much thought he wouldn’t have any kind of a will to fight the cancer.”
The farm emerged with a reorganization plan, which included restructuring loans and paying off a debt to the FSA of $287,040 over five years, with monthly payments averaging $4,784. That debt was critical because it covered the cows, the machinery and the equipment, she said.
However, her husband’s health was not getting any better. And she was responsible for making the payments and filing monthly reports with the bankruptcy court on the progress of the farm. They fell behind on payments.
“In my mind, it was prioritizing,” she said. “And I certainly thought that his health was more important than these monthly reports.”
In January 2016, the cancer claimed her husband’s life, adding to the stress and despair she felt at a time the farm already had its share of both.
In the summer, the family held a fundraising event through an organization they formed, Our Little Candle, to help other small farms in honor of Clark Sr.
Also around that time, a part-time worker who had been helping at the farm quit.
Both mother and son struggled to keep up the farm and their spirits.
They tried to modify their reorganization plan in November, but People’s United and the FSA argued against it. If the case were dismissed, it would allow for the enforcement of a stipulation in the plan that called for the “liquidation” of assets: the cows, the machinery and the equipment, to cover the debt.
The Clarks’ last attempt to modify their plan called for downsizing the herd to a more manageable operation for one person, around 25 cows, which would allow the son to also work off the farm to earn more money.
Money raised from the sale of the other cows would go to pay down the debt. Also, Saceric-Clark said, by handling the cows’ sale themselves, rather than at auction, they could guarantee the animals were going to good farms.
And, she said, she would turn her home into an Airbnb, renting rooms to guests seeking to take in life on a working farm. The creditors, according to court filings, didn’t find that plan “feasible” and said the financial projections were “speculative.”
‘Best effort’ not enough
Bankruptcy court Judge Colleen Brown ordered an evidentiary hearing, which stretched over two days, one in January and another in February. Shortly after, on Feb. 14, Brown issued her decision, siding with the creditors.
She wrote that she didn’t need to rule on whether the latest plan would work because broken provisions of the current plan were enough to warrant the action the creditors were seeking.
“(T)he debtors operated under Chapter 12 for over four years, and made their best effort to transform their operations into a more financially viable enterprise,” Brown wrote in the 10-page decision.
“The Creditors’ patience, flexibility and support have been crucial to this case and reflect the kind of collaboration that is essential to success under Chapter 12,” the judge added. “Recently, the Creditors made the objective determination to change course, declare defaults, and seek their remedies under Chapter 12, the stipulation and confirmed plan. There is no basis in equity to deny the Creditors that relief.”
The judge wrote that despite the Clarks’ “indefatigable desire, commitment and intent to do all they can to save the family farm,” it did not overcome the legal arguments regarding the “breach” of the reorganization plan.
The judge pointed to benchmarks, or steps that the Clarks had to take over the years to comply with the restructuring plan, that had been missed, including the prompt filing of monthly reports. And, Brown wrote, the Clarks had sold 10 cows without first checking with the creditors.
Saceric-Clark said she didn’t know she needed permission to sell the 10 cows, about one-tenth of the herd, adding that they raised $17,000 from the sale. Of that money, she said, $14,000 was paid to the FSA and $3,000 went to the town of Ira to pay property taxes.
She said the offer to buy the cows came from a man in New York who was starting up an operation. “We knew they were going to a really nice home, they were going to be cared for,” Saceric-Clark said. “No one ever said not to sell them.”
The judge’s decision also talked of loans the farm had received without prior approval from the creditors. Saceric-Clark said that was money from her personal accounts used to fund the operation and deal with cash flow issues.
“Because the plan is dismissed, they can call in all their money,” she added. “If we can’t pay that, then they will start plans for a complete auction.”
Sensenich, the bankruptcy trustee, said the “tragedy” of the case is that the family had paid down about 60 percent of the debt in the initial approved reorganization plan.
The selling of the 10 cows, even though the family believed they had good reason and got a fair price, created a big stumbling block, he said.
“That sort of tripped one of the triggers,” Sensenich said. “That made it really hard to keep the Chapter 12 going.”
Sensenich said, there were many provisions, or benchmarks, that were part of a stipulation both sides agreed to, including the filing of the monthly financial progress reports.
“This case was sort of monitored very closely, for every month through these years,” he said. “The debtors hung in there, they’d fall behind, they’d catch up.”
Asked about the selling of the 10 cows, Freeman, of the FSA, said he couldn’t talk about this specific case.
He added, “With all lenders one of the main covenants is, don’t dispose of collateral without the lender’s consent.”
Sensenich has been a bankruptcy trustee since 1991 and said such cases involving farmers filing Chapter 12 are successful about 75 percent of the time.
Chapter 12 was created, Sensenich said, in the late 1980s, as a response by Congress to a record number of farms going out business.
Sensenich said it’s difficult for a small dairy farm, such as the Milky Way, to survive primarily on wholesale milk sales.
“The conventional market for liquid milk is extremely volatile and will dip well below the cost of product for long periods of time,” he said. “Unless you are really well-heeled, and not very leveraged, surviving the downside is very tough.”
Saving The Milky Way
Clark and his mother, a retired elementary teacher who tracks the finances, have started a page on the online fundraising website gofundme.com.
The goal is to raise $200,000 to stave off the creditors and a possible auction.
“Our ‘Milky Way Ladies’ are a part of our family and we despair in not knowing where they will go and if they will be cared for and treated with kindness and respect,” the introduction to the page reads.
They are asking for $1 donations, telling those who give to spread the word. “The Power of One” they call the campaign.
“If you are able to donate more, we and our ‘brown-eyed girls’ would greatly appreciate it,” the site reads. “Together we can Save the Milky Way Farm.”
In the more than two weeks the page has been up, nearly $5,000 has been raised from 96 donors, including some from faraway places.
“We are a small family farm in CO,” one poster to the site who donated $5 wrote. “I pray that you can keep your MILKY WAY FARM and all those beautiful brown eyed girls!”
Another, who pitched in $100, is much closer than Colorado.
“We always wave hi to your lovely cows whenever we drive by on our way to Rutland,” that donor wrote. “We so want your farm to succeed!”
A $5 donor added, “Wish we could do more! We own a country store and are in similar straits. Best of luck — we love small farms!”
Seven days a week, from 5 a.m. to 8 p.m., with time for a couple of breaks and lunch in between, that’s Clark’s routine. The cows must be milked twice daily. There’s no calling in sick.
“You just have to go out and do it,” Clark said. “There’s nobody else.”
What now?
If the gofundme campaign is successful at raising the $200,000, the Clarks said they will use about $150,000 to pay off the FSA and the remainder to cover other bills. “So we can get them out of here and decide what we can do with the rest of our lives, Saceric-Clark said.
Should the gofundme effort raise only some of the money and an auction is held, she said one option would be to have someone bid on at least 25 of the cows so the farm could continue to operate, but at a smaller size.
Over the course of the four-year bankruptcy case, Saceric-Clark said, she has contacted many elected officials, including members of the congressional delegation, and heard little back.
“I got zero, and I mean zero, response,” she said. “The ones who did call back said, ‘We can’t help you, it’s in litigation, goodbye.’”
Groups and organizations that were supposed to work with farmers to seek out solutions, she said, such as the FSA, instead put up roadblocks.
Freeman, of the FSA, said he believed the agency did try to help as best it could.
“We feel we worked with them and we’ve gone out of our way,” Freeman said. “I don’t think there is any reason for anyone to think we did not work with them.”
Recently, Saceric-Clark reached out to Tebbetts, the newly appointed agriculture secretary. She said Tebbetts, who grew up on a dairy farm in Cabot, has made time for her and has tried to do what he could.
Saceric-Clark said she is continually told the operation is too small and not “viable,” a word she kept hearing about her proposed restructuring plan that was shot down.
“If anything sets me off,” she said, “it’s that, how many times do you hear, ‘We have to save small Vermont farms, they’re the fabric of our being.’”
She then asked, “Why would you want to get rid of this farm? Why wouldn’t you do everything in your power to save it?”
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