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predict from one day to the next whether a truck would come to
pick up the milk or, if it did, whether he would be paid.
At the time of the default by Knudsen, Wilbur Gomes (Gomes)
had been in the dairy business 29 years. He grew up on a dairy
farm and began his own operation in 1957 with 29 cows. By 1986,
he had 800 cows and 800 calves. Each cow had to be milked twice
a day. The "morning milking" began at 10 p.m. the prior evening
and ended at 6 a.m. The evening milking went from 10 a.m. to 6
p.m. This had to be done 365 days a year. Gomes' operation
required nine full-time farmhands working 7 days per week.
Gomes began selling his milk to Borden Dairy in 1957 and
continued with Knudsen when it acquired Borden in 1978. For 29
years the milk money always came, twice a month. His costs for
feed and overhead were about 95 percent of his revenue. Expense
payments were geared to the milk payments. For instance, his
employees were paid twice a month, on the 1st and 15th. Gomes
paid his grain dealer with the milk check that came the 15th of
each month. His grain bill ran between $30,000 and $40,000 per
month. When the first milk check did not arrive, Gomes used up
all of his life savings to pay the grain bill. Gomes' major fear
was that, because of the $4,000 daily overhead which he could no
longer pay, he would have to start slaughtering his herd of
purebreds, built up over 30 years. He received an appraisal that
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