California’s ‘Most Sustainable’ Dairy is Doing What’s Best for Business

KERMAN, Calif.— Steve Shehadey waved at the front desk crew, walked past white walls filled with plaques and awards and settled into his office, piled high with papers: invoices, permits, spreadsheets. On his desk, there’s a milk crate he found in an antiques store and an old butter-churning machine. 

As owner of Bar 20 Dairy Farms, Shehadey oversees all operations at the sprawling family enterprise. The farm covers about 5,000 acres of crop fields in California’s fertile San Joaquin Valley, husbands thousands of dairy cows from infant to milking age, and offers very, very little shade.

This summer, the dairy won a major sustainability award that has attracted plenty of media attention and made Bar 20 the paragon of sustainability in the industry. Shehadey is proud of the distinction. 

He says he’s trying to make Bar 20 as close as possible to having no environmental impact, which in the age of climate change requires him to master the vagaries of agricultural efficiency and become an energy entrepreneur, turning vast quantities of methane captured from cow manure into biogas he can sell or use as fuel. Yet none of it will ever be enough in the eyes of the environmentalists and academic experts who say the only real way to keep dairy farming from warming the planet is to stop the practice altogether. 

For all his climate and environmental consciousness, Shehadey isn’t going there, and thinks about the existential issues of dairy farming like this: “We feed our valley, the Central Valley of California.” 

Between meetings and correspondence—which he’s had to spend much more time on since the dairy was recognized for its sustainability this year—he drives loops of the farm to get out of the office. Sometimes a water pipe breaks, or a cow gets loose. It’s just good to have an eye on things, so he makes his rounds a few times a day.

With less than an hour to spare between calls and meetings, he hurried down the stairs from  his office on a scorching summer day, wearing blue jeans, dark brown work boots and a gray T-shirt with his farm’s logo. He bumped into Jose Contreras, one of his supervisors.

“Jose, how we doin’? How many loads of tomatoes?” Shehadey asked.  

“We’re over 100,” Contreras replied, delivering the good news. Shehadey planted tomatoes for the first time this year to take advantage of high prices.

He could see those fields stretching out before him as he turned down a dusty concrete driveway in his blue Chevy pickup truck. Straight ahead were the faint outlines of the mountains that separate the Pacific Coast from the San Joaquin Valley. Farms like Bar 20 are numerous here; the valley boasts more dairy production than any other region of the U.S. 

Shehadey’s family has been farming this land for over 70 years, since his grandfather, a soap salesman, moved to Fresno County in the 1940s. Shehadey raised his kids in nearby Fresno, and his daughter is an undergraduate at California Polytechnic, where she studies dairy science. For the last couple of years, she has worked at the farm, too, and she’s expected to follow in her father’s footsteps. The family’s roots are deep.

“We care,” Shehadey says. “We give back to the community.” He says he’s donated to local hospitals and universities and tries to follow the advice of his grandfather to always “do the right thing.”

Beyond his farm, he worries about air quality and smoke from forest fires in the nearby mountain ranges. According to an analysis by the California Air Resources Board, which is responsible for regulating air emissions in the state, most of the particulate air pollution in the region results from ammonium nitrate, a chemical that results when nitrogen oxide from trucks and farm equipment combines with ammonia released from dairies and livestock. The San Joaquin Valley has some of the worst air in the country and has consistently failed to meet air pollution standards set by the EPA. 

While Bar 20 is a family farm, it bears little resemblance to bucolic notions of small-scale, rustic agriculture. Today, it is a farm ruled by efficiency—the only way, Shehadey says, that a dairy can survive. In California, milk production per cow has increased more than 50 percent since the 1980s. That’s been made possible by tiny tweaks in cow nutrition and the automation of certain processes, like milking. Such strategies allow Bar 20 to produce almost 100 pounds of milk per cow each day. 

Sustainability, to Shehadey, is as much about sustaining his business as it is about the environmental impacts of the operation. To that end, he’s always looking for the next best investment to make. Some of those investments—LED lighting and high-efficiency fans in his barns, and two solar fields—have happened to conserve resources and cut emissions, too. 

To Jeff Sebo, a professor of environmental studies at New York University, those two goals conflict. “The only way to build a humane, healthful, sustainable food system at scale is to dramatically phase down animal agriculture globally, dramatically phase up plant agriculture globally, and pursue just transition programs for humans who currently rely on animal agriculture for food or income,” he says. 

A small but growing number of livestock farmers have chosen this other option for sustainability—of both the planet and their businesses—by decreasing the number of animals they farm. For example, programs like Transfarmation have helped various livestock farmers abandon animal agriculture entirely and repurpose their equipment for plant-based agriculture.

Matthew Hayek, an environmental scientist and professor at New York University, said dairies still don’t restrict emissions from feed production, including the negative effects of applying fertilizers, transporting feed or clearing land. Methane from cow burps, which accounts for almost half of the methane released by cows, doesn’t get captured, either.

Though he knows this, Shehadey has no plan to abandon dairy farming. “You’re not going to eliminate anything 100 percent,” he says. Eliminating greenhouse gases from the manure lagoons with his prized methane capture operation, he says, is “a good start.” He hopes that future technology advances, too, could help emissions from dairies to fall. 

Across Highway 180 from the farm’s current expanse sits a reminder of how it has changed in recent years: an abandoned barn structure, overgrown with dried-up vegetation. This was Bar 20’s previous dairy headquarters, which produced its last milk in 2016. Shehadey still debates what to do with the defunct dairy; right now, he says, there’s too much manure left in the ground to make planting anything there a good idea. 

Financial restrictions govern the decisions Shehadey makes for the farm; milk prices fluctuate constantly, and energy is getting more expensive in California. In a good year, the farm pays off some of its debt to the bank. In a bad year, the bank borrows it back. The bank helps out with loans, but the state does, too: Bar 20 received $3 million from a program run by the California Department of Food and Agriculture for the farm’s most recent venture, the $13 million manure digester that captures methane emitted from cow manure and then processes it into biogas for use on the farm and sale as fuel. 

The CDFA program has given out nearly $200 million in incentives for dairy farmers like Shehadey, although the program has come under fire from community groups for helping to institutionalize a polluting industry and encouraging farmers to grow their herd size. Though he could, Shehadey says increasing his herd size would be a hassle he doesn’t want to deal with. 

To his left, heading south on a concrete farm road, an array of cream-colored plastic shelters house newborn cows, segregated from one another because they’re most vulnerable to disease at this stage. At any given time, the hutches house 700 to 900 calves that will either become dairy cows themselves or be sold for rearing as beef cattle.

Shehadey peered into the field of calves, then pulled over to let a feed truck pass. His employees almost always wave when they see him, and he waves back. He called them “good people” and says the dairy industry, particularly, attracts friendly, honest personalities and hard workers who don’t mind starting their day before sunrise. They recently held their employee barbecue, with a spread that included tacos, marinated chicken and carne asada. 

A few minutes’ drive away, on the far west side of the farm, cows not yet at milking age tread on acres and acres of dirt. To make them ready to be milked, they’re impregnated. When they’re about to give birth, herd managers move them to a section of the barns reserved for pregnant cows.

Shehadey walked down the middle of that barn, crouching over and peering into the crowd of animals. He was checking to see pairs of legs sticking out of their mothers’ wombs, signaling an imminent birth. Sometimes, there will be 30 births a day here, which means that there’s more and more manure to take care of. Manure emits methane, a powerful greenhouse gas, and methane from dairies and livestock is responsible for about half the state’s emissions. California is hoping to cut methane from dairies to 40 percent of 2013 levels by 2030, primarily by installing manure digesters.

At the east end of the dairy, Shehadey stopped the Chevy, turned the engine off and stepped out into the day’s 90-degree heat. The crown jewel of Bar 20’s sustainability efforts starts here, with a tall, mesh fence. The mesh holds back tons of wet manure, flushed here from the barns. Three small streams of greenish-yellow water spout out of the mesh wall into the drainage system below, as if a water balloon had just been punctured with a pin. This is one of the farm’s four “weeping walls,” which separates the liquid manure from manure solids (which are then dried and used as bedding for the cows). 

The whole farm smells vaguely of manure, but the weeping walls are especially pungent, with an almost chemical odor that’s hard for those unaccustomed to ignore. But Shehadey didn’t seem to notice, and walked the perimeter with an eye trained to pick out any dysfunction. 

After the liquid wastewater exits the weeping wall, it runs into the manure digester: a 25 million-gallon pond, adjacent to the weeping walls, that’s been lined at the bottom and then covered with a tarp. Built with grants from the CDFA, the digester is one of 117 funded by the state. California Bioenergy, one of the two digester companies responsible for the great majority of digester projects in the state, built this one in 2021. 

On this baking summer day, the digester has ballooned: the methane within has expanded in the heat. After 30 days in the digester, the manure wastewater will empty into an open 40 million-gallon storage lagoon. While digester developers and state agencies claim that digesters capture nearly all methane and other air emissions, bubbles of something still emanated from the reddish-purple waters of this particular lagoon. While there’s not much data on the downstream air emissions of digesters, emerging research has suggested that air pollutants like ammonia, nitrogen oxide and trace amounts of methane still enter the air at this stage in the digestion process.

Shehadey turned west, where another 40 million-gallon lagoon seemed to be filled to the brim with mud. But it’s not mud; it’s old manure from before the digester was installed. A yellow excavator is parked in the corner of the lagoon. Shehadey says his employees have been trying to empty it, and use the old manure as fertilizer. He described the farm as something akin to a perpetual-motion machine: The manure fertilizes the crops, which feed the cows, which make more manure. His description made no mention of the many inputs (water, feed, energy) and externalities (methane, nitrates, air emissions) involved in daily operations at Bar 20. 

Those externalities are why some scholars and scientists think that even farms that have adopted sustainability strategies, like Bar 20, will never even get close to having a small environmental footprint. 

The methane the digester does capture will be piped to tall metal cauldrons called skids, which clean the gas of impurities. The skids have given Shehadey the most trouble and, he says, some new gray hairs. Usually, methane from digester projects is sent through a pipeline to a utility. But since building a pipeline all the way out to Bar 20 would be too expensive, Shehadey and California Bioenergy had to find another solution. In 2021, they partnered with Bloom, a fuel cell company, to build a fuel cell system on the property: technology that produces electricity from natural gas with little to no emissions.

Though Bloom operates more than 600 fuel cells globally, this is the first set it has built to run on manure biogas rather than natural gas from the ground, so the company had to engineer the fuel cells slightly differently, says Shehadey. After the 1-megawatt fuel cell system became operational last fall and began to provide the farm power, Bar 20 enjoyed peak operation until the impurities in the manure biogas led to a decrease in production. 

Between December and August, the system operated below its peak while the components were cleaned and fixed one by one. Sarah Dean, Bar 20’s controller, says the fuel cell system returned to peak production on Aug. 26. Now that the maintenance is completed, the farm expects to save over $1 million in energy costs annually. 

Before his blue truck reached dusty Highway 180, Shehadey slowed briefly to take a look at a plot of fenced-in land where two men were working. They were contractors for the hydrogen production company H2B2, which is building a facility here. Shehadey is leasing H2B2 the land for the hydrogen production plant and has plans to sell the company biogas from the digester. Hydrogen is a clean fuel and only emits water when burned, but the process of creating it from biogas emits carbon dioxide. 

These days, Shehdaey says, no dairy can survive with only dairy production. In addition to the credits he is selling to BMW for the methane he’s capturing and the energy savings he gets from the two solar fields, he has supplemented the farm’s income with thousands of acres of additional crops: tomatoes, almonds and pistachios, all of which must be irrigated.

At the corner of each field, three vertical pipes tower more than 10 feet into the sky. All three empty into a large concrete tube that connects to the irrigation system on that field. Out of two streams clear, fresh water. Out of the third flows a brown discharge: digested liquid manure, piped from the storage lagoon. With so much cropland and a herd that needs to be kept hydrated and cool, Shehadey’s farm uses more than two and a half acre-feet of water per day, more than 800,000 gallons. The fresh water comes straight from the San Joaquin River, which has dried up near the farm but still runs into late summer closer to the Sierra Nevada mountains. As Dean, his controller, says, you don’t come to California in the summer looking for water.

Water, Shehdaey thinks, will be the next area of his business he’ll have to overhaul in response to regulations and shortages. While he has installed drip irrigation, a more precise water application method, on 400 acres of his cropland, most of it is managed with flood irrigation, which lets more water evaporate and contaminates groundwater faster. The state regulates the amount of water he uses and the amount of nitrates (a byproduct of manure wastewater) he allows to let seep into the ground. Because the wastewater he uses to irrigate has so much nitrate, it’s often tricky to both control pollution and replenish the water table as the state wants.

Regulations, Shehadey says, make the dairy business harder. He postulates that more stringent regulations on water and emissions, for example, have been behind the exodus of dairy farms from California in recent decades. Consolidation in the dairy industry has outpaced that of other agricultural sectors, making larger farms that can cut costs more easily, like Bar 20, the norm. Those larger farms are also far more attractive to digester companies, as the volume of manure makes the capture and sale of biogas much more economical.

Shehadey’s last stop was the farm’s freshwater storage pond, which he also uses to irrigate. He drove slowly past to check on the birds that like to rest in its waters. He likes to see the wildlife here every once in a while: It’s a point of pride that this small section of the farm has attracted so many species, from ducks, cormorants and geese to pelicans. Bird watchers come from time to time to see the endangered tricolored blackbirds that nest on the farm. Working with the Audubon Society and the USDA’s Natural Resource Conservation Service, Shehadey delays harvest on some crop fields to let the birds lay their eggs. 

“It’s pretty neat,” he says. Watching the birds every year, he gets a sense that they like the fields of wheat he grows for feed. According to the Audubon Society, loss of wild foraging habitat in the Central Valley has forced the birds to become reliant on agricultural wheat fields.

Shehadey turned back east towards the office—he had an interview scheduled with a local TV station in a few minutes. Local reporters, he says, don’t always know what a digester is, but he doesn’t mind explaining. He took the frontage road by the old dairy building instead of the highway to avoid waiting to turn into the long line of semis rumbling down the road. 

While the defunct dairy is a symbol of lost efficiency and looming resource shortages, Shehadey is optimistic about the future of his farm. Now that he’s invested in the energy business, too, fluctuations in milk prices won’t rock the farm’s finances as much. 

He doesn’t think he’d ever abandon dairy farming for good. He’s poured his entire life into the dairy business, and frequently invokes the family mantra—“We make milk for people’s children.” 

Luckily for Shehadey, with the interview coming up, the farm was humming along. “Nothing out of the ordinary,” he said. He threw the truck into park and headed back to his office.