Winsted-Lester Prairie Journal, February 1, 1999

DFA announces 34 layoffs

By Luis Puga

Dairy Farmers of America, Inc. (DFA) announced that 34 layoffs will take effect in March in its Winsted plant.

According to a press release, "DFA (formerly Mid-America Dairymen) has announced it will convert the plant from cheese making to dehydrated dairy food ingredient production."

The ingredient would essentially be a cheese powder and would replace the production of consumer cheese and whey products.

Because the new product will be less labor intensive, DFA estimates 34 layoffs to be necessary at the end of March.

At that point, DFA will switch over to its new production, which, according to Sam McCroskey, chief operating officer of DFA's Formulated Dairy Food Products Group, will require significant time and money in the installation of new equipment.

Winsted Plant Manager Doug Peckham says that some components, such as a dryer, are already in place for the new product line. The target date for starting the new product line will be between April 15 and May 1.

The change in product line is due to its relative success and growth in the company's own division and, according to Peckham, the shrinking supply of milk in the upper midwest.

Milk will still be received and shipped from the Winsted plant, but most cheese production will occur in DFA sister plant in Fergus Falls. Peckham says there is a larger supply of milk in that area.

In the press release, DFA senior vice president of American cheese and whey manufacturing said, "We are convinced that, for the long term, this decision is in the best interest of employees and the dairy farmer members who the plant serves."

Peckham added, "It's an unfortunate situation that we have to let people go, but I feel that the people remaining here will have long, stable jobs due to the increase in demand of the product we're going to be making."

Dave Laxen, principal officer for Teamsters Local 471, said, "I think some of the 471 members at the DFA are frustrated because they found that to be fair employment close to home and now they have to go out looking for a job."

Laxen said the union will be assisting its members in job placement and helping them through the transition.

Peckham said that employees will have an incentive package to stay through March, and, in February, will receive information from the Minnesota Economic Security Offices on their employment benefit options.

Laxen said that there has been persistent rumors, and even jokes, that the plant was either closing or downsizing for the past 20 years. He said that the status of the dairy industry always posed the possibility that some plants, somewhere, might have to downsize or shut down.

Laxen also feels that the company will become more stable due to the product change.

Peckham calls the new line a value-added product and hopes it will "put Winsted on the top" as it once was for cheese production.

As of now, the 34 positions being eliminated are only an estimate. Some of those employees may choose to retire.

While the plant is located in Winsted, many of the employees commute to the plant from the surrounding area and other towns.

DFA is a dairy marketing cooperative that markets milk for 22,000 dairy farmer members in 43 states. Its products are shipped nationally and internationally.

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