Foremost Farms to Close Five Facilities
BARABOO, Wis. --Foremost Farms USA plans to shutter four cheese plants and a warehouse facility. David Fuhrmann, president of the co-op, said employees were notified last month of the need to idle the plants as part of a restructuring designed to balance milk supplies, manufacturing capabilities and customers expectations.
"The decision to close these facilities was driven by economics," Fuhrmann said. "As U.S. milk production increased 2.6% last year, we saw a decline in milk volumes in Wisconsin, Minnesota and Iowa causing excess plant capacity. Weak demand has kept product prices at unprofitable levels for the past 20 months. And, Upper Midwest dairy processors are under increased pressure to reduce operating costs."
By the end of 2003, Foremost Farms plans to scale back and subsequently close four manufacturing facilities and consolidate the activities from those plants within its multiple-plant network. A dry products warehouse will close during the first quarter of 2004. In addition to consolidating plant operations, the cooperative will centralize its purchasing and transportation functions at Baraboo.
The five facilities that will be impacted are at Abbotsford, Appleton (both John Street and West Prospect Avenue -- the cheese and whey plant on Spencer Street will continue to operate), Hillsboro, Wis., and Decorah, Iowa. A total of 187 persons will be laid off as a result.
"Foremost Farms has a long history in these communities, so the decision to close these plants was difficult. However, in terms of our strategic direction, our commitment to serving the needs of our member-owners and customers, it's the right decision," said Fuhrmann.
Production and member milk from these facilities will be consolidated at other Foremost Farms plants. All member services will continue to be provided from the remaining locations.