Federal court reduces award over tainted feed at Nebraska farm

LINCOLN, Neb. -- A $700,000 verdict against Farmland Industries in a tainted-feed case was reduced Thursday by a federal appeals court

A three-judge panel of the 8th U.S. Circuit Court of Appeals ruled in a case filed by a Mason City dairy farm.

Bob, Debra, Greg and Joyce Racicky run Elk Creek Dairy, an award-winning commercial Holstein dairy farm in central Nebraska's Sherman County.

They sued the Kansas City, Mo.-based company, alleging that their cows suffered a digestive disorder after being fed Farmland rations and feed.

Some of the cows later died and they argued that nearly all the surviving herd was so badly damaged it had to be sold.

The court said that there was insufficient evidence to support the portion of the jury award that said the Racickys suffered more than $500,000 in lost profits.

The appeals court ordered a new trial to determine the amount of the lost profits unless the Racickys agree to accept a reduced award of $200,000.

The case began in 1996 when Greg Sherwood, a sales and marketing manager and a dairy specialist with Cooperative Elevator Co. in Aurora approached the Racickys about providing them Farmland feed rations and advice to increase milk production for their herd.

Feed rations are created for dairy herds to meet their dietary needs. Rations are made up of forage and concentrate. The forage usually consists of alfalfa and hay to provide the necessary fiber. The concentrate is grain and protein derivatives.

A cow's food ferments in its rumen -- the largest of four stomach compartments -- where microbes break down the food.

The Racickys claimed the Farmland rations contained finely ground corn which was "too hot" and fermented too fast in the cow's rumen.

After August 1998, the Racickys suffered a decrease in milk production, from about 23,666 pounds of milk per cow per year to 17,100 pounds of milk per cow per year.

Out of a herd of 219 cows, fifteen died and 151 became ill after eating the new rations. Some of the 151 sick cows were kept as cull cows to produce offspring and the others were sold.

In Thursday's ruling, the court said the evidence submitted by the Racickys did not prove their lost profits.

"We are reminded of the pasta sauce commercial where the actor claims 'It's in there!"' wrote Judge William Riley. "When discussing whether sufficient evidence exists in the record to support a lost profits claim, the Racickys claim 'It's in there, while Farmland claims 'It's not in there.'

"We are frustrated by the failure of the Racickys to cite specifically to the record in support of their lost profits argument," Riley said.

John E. Jackson, III, one of Farmland's lawyers, said he had not read the opinion and declined to immediately comment.

David Domina, who represents the Racickys, did not immediately return a call to his office seeking comment.

Farmland, the nation's largest agricultural cooperative, filed for Chapter 11 bankruptcy protection last year. --------

On the Net:

Farmland Industries: http://www.farmland.com/

8th U.S. Circuit Court of Appeals: http://www.ca8.uscourts.gov