NORFOLK, Neb. — Michael’s Cantina has been serving Tex-Mex food to the residents here for more than 30 years.
It feels timeless, except for an unwelcome newcomer: the stench.
For the past two years, the restaurant and nearby residents have been bothered by the stink, which owner Heath Henery describes as a “sewer smell with almost a vomit smell.”
He blames the odor on the dairy processing plant across the street, a company long known as Milk Specialties Global that recently rebranded as Actus Nutrition. The company recently expanded its Norfolk plant, growing its daily processing capacity by millions of pounds of milk.
It also started causing outsized problems that have caught the attention of neighbors, local regulators and even Nebraska’s governor.
Strong odors. Dairy spills. And repeated violations of local and state rules.
“I do feel that whatever they’re doing in the last two years, they’re not doing it properly,” Henery said, “and I think the city should be very aggressive at solving the problem.”
The expanded Actus plant has been a blessing for local dairy farmers. But during that time, it has violated its agreement with the city wastewater treatment plant nearly 300 times, according to city staff.
That hurts the city’s ability to treat wastewater, wears down the plant’s staff and, the plant’s leader says, opens up the possibility that Norfolk’s wastewater could harm public health and wildlife.
Despite encouragement from Gov. Jim Pillen and U.S. Rep. Mike Flood to work with Actus, the Norfolk City Council this month passed an amendment that drastically increased the fines Actus must pay if it continues to violate local wastewater rules.
Norfolk City Administrator Scott Cordes detailed the predicament in a July email to a member of Flood’s staff.
“We do not want to fine them, we do not want to shut them down, we want to be good partners, but as of right now, the clear consensus is that we have been placed in a situation where we have no choice but to communicate the seriousness of this matter,” Cordes wrote.
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For milk producers like Mike Guenther, Actus Nutrition’s Norfolk expansion came just in the knick of time. Guenther, a third-generation dairy farmer in Beemer, said that the future of dairy farming in Nebraska had looked bleak for a while. Just a few years ago, his family operation sold about a quarter of their milk cows to be processed for beef — the milk wasn’t bringing in the money the farm needed.
“The dairy farm, with all the buildings and stuff, too, it costs a lot of money to put that in, but it’s worth almost zero dollars,” Guenther said. “Because no one’s going to come and buy a used dairy farm.”
The numbers confirm his account. Only 73 licensed dairy farms remain in Nebraska, says Kris Bousquet, executive director of the Nebraska State Dairy Association, down from 650 in 1999.
One of the reasons for the dairy industry’s struggles, according to Bousquet: A lack of nearby processing plants. When the Norfolk plant expanded, Guenther said his farm’s fortunes started to turn around.
Actus offered a better price for milk. Its proximity lowered transportation costs. Nearby dairy farmers, including Guenther, formed a cooperative so they could jointly provide the volume of milk the processing plant needs each day.
“We would not be dairy farming today if that market did not open,” Guenther said.
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The problems started in earnest in 2023, according to public records and interviews.
When the Actus expansion throttled up, odors and levels of pollutants the dairy plant sent to the city wastewater treatment facility also increased. It got so bad that City Engineer Steven Rames told Actus in December 2023 that its wastewater permit would be terminated in 90 days.
Then, in March 2024, Nebraska’s Department of Water, Energy and Environment (DWEE) responded to a white liquid in a gulch that drains into the Elkhorn River. Actus ultimately accepted responsibility for spilling dairy into the tributary, state records say.
At the end of that month, Rames followed through and suspended the facility’s wastewater permit — effectively shutting down the dairy plant until the company and the city could reach a new agreement.
During that shutdown, he said, he became aware of the plant’s economic impact.
“The pressure was, how do we work with them, to get them where they want to be, without impacting where I have to be?” Rames said.
New plans were agreed upon. Actus resumed operations. And the problems returned almost immediately, state records show.
In May, a spill of skim milk into the gulch. In June, another spill, this one killing hundreds of fish.
In September 2024, state regulators joined an inspector from the U.S. Environmental Protection Agency for a look at the facility.
According to an emergency complaint order, during the inspection the regulators learned that Actus had been transporting “high strength waste” off site by truck to unspecified destinations. The resulting order from DWEE was clear: Dispose of this hazardous waste legally.
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In December, the EPA referred potential violations to the state for follow-up, a spokesperson said.
A spokesperson for DWEE told the Flatwater Free Press that the “matter is being evaluated” by the agency’s legal division.
A representative from Actus Nutrition declined an interview but said in a statement that the company is committed to working with Norfolk to develop a long-term solution.
“The company has made considerable investments to implement wastewater improvements recommended by city officials and will continue to do so,” the statement said. “We look forward to continued collaboration with city leaders.”
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Norfolk’s water treatment staff are used to occasional violations by industrial users.
Actus, said Robert Huntley, the plant’s superintendent, is not the normal company.
“All industries go over from time to time, it’s just a part of it, we understand that,” Huntley said. But: “70%, 71% violation of a permit is crazy.”
According to numbers kept by the wastewater treatment staff, from July 2024 to July 2025, Actus violated its wastewater agreement with the city 284 times.
One of the primary ways that Actus’ wastewater violations have caused problems is through going over their permitted levels of Biochemical Oxygen Demand, or BOD. When loads with higher than expected BOD reach the wastewater treatment plant, they can kill the microorganisms that break down waste.
The problem “just cascades” when it happens repeatedly, Huntley said.
It happened in March 2024.
Then something similar happened again this July.
“When those things happen, if we were to miss it and weren’t able to recover it, it could be bad downstream,” Huntley said. “Bad for fish, bad for public health, definitely bad for odors.”
Huntley said that he has been proud of his team at the plant — overtime hours and stress levels have been high. Huntley is regularly at the plant on weekends, sometimes eating breakfast with his wife in his office between checking up on things at the plant.
“I don’t feel like I can walk away from it,” Huntley said. “It’s just never ending.”
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Earlier this year, when Cordes was considering leaving his job as the state fire marshal to return to Norfolk and become city administrator, he said that Mayor Shane Clausen mentioned the ongoing difficulties with Actus.
After accepting the job, Cordes said that he mentioned Actus to Pillen.
“His comment was, ‘I hope you guys can find solutions to make things work better,'” Cordes said.
Pillen wasn’t the only elected official to take notice of the friction between the company and the city. Cordes said that Flood and State Sen. Robert Dover, both of whom represent Norfolk, contacted him and other city leaders about Actus.
In a statement, Flood said that Nebraska had long worked to add dairy processing capacity, and that the Actus Nutrition plant in Norfolk provided what dairy producers need.
Jeff Jensen, a Norfolk City Council member who represents the area around the Actus processing plant, said that federal and state leaders had given little direction on the best way to move forward.
“It just got to a point where we as the city had to say enough is enough,” Jensen said.
In early August, the City Council considered jolting Actus’ $1,000-per-day penalty to $20,000 a day.
During the council meeting, an Actus representative said fines that high would force the Norfolk plant to shut down.
Further meetings yielded a compromise, including a $5,000 fine paid by Actus to the city for each daily violation and higher penalties for extreme violations.
City staff and elected officials said they are cautiously optimistic that the new, heftier fines will help.
They’ve already had one immediate effect. The week after the council passed the amended permit, Huntley, the wastewater superintendent, took some days off.
It was his first vacation in more than two years.
The Flatwater Free Press is Nebraska’s first independent, nonprofit newsroom focused on investigations and feature stories that matter.
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