According to a complaint filed by Wisconsin state, the butter producer exceeded its permitted BOD (Biochemical Oxygen Demand) level 119 times between 2006 and 2013, but only reported three of those incidents.
Grassland Dairy's permit allows BOD levels of 82.6 pounds per day into the Black River, two miles east of its factory but they were greater than 150% of its daily limits on 38 occasions.
The company has to measure and report its daily levels and inform the state Department of Natural Resources (DNR) of any violations within a 24 hour period.
Van Hollen, Wisconsin Attorney General, ordered the firm to pay $300,000 for environmental violations this week and said the company did not address the pollution problems as part of its $70m expansion in 2010.
"Wastewater permits are an important safeguard to prevent contamination of our valuable natural resources. Such permits must be adhered to, and violations will be enforced," he said.
BOD is a measure of how much oxygen is consumed in the decomposition of organic material associated with wastewater discharges. Dissolved oxygen is critical to the survival of aquatic organisms such as Black River's pan fish, bass, and northern pike.
The case was investigated by the DNR and prosecuted by Assistant Attorney General Mary Batt of the Wisconsin Department of Justice. The judgment and order were approved by Judge Jon Counsell of Clark County Circuit Court.
The company agreed to pay the fine, plus $1,200 for any violations that occur between July 16, 2014 and July 15, 2015.
Grassland operates its business subject to a Wisconsin Pollutant Discharge Elimination System (WPDES) permit, brought into effect in October 2013.
In 2010, it expanded its Greenwood headquarters by 150,281 square feet, allowing for the production of more butter and related products such as condensed milk, milk protein concentrate, buttermilk and non-fat dry milk.
The expansion covered three main areas: the membrane area, where milk is separated into butter fat, protein, other solids and liquid; the dryer/evaporator/packaging area, where the protein component of milk can be dried into a powder; and the warehouse area for storage.
It also created more drying space for its increased milk supply.
DairyReporter has contacted Grassland Dairy Products and is awaiting comment