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Blaming dairy farm downturn, American Milk Producers shuts down Iowa plant

Iowa, the nation’s 10th-largest milk producer with 1,150 dairy farms, has lost about 80 this year. Zachary Boyden-Holmes, DesMoines

With local dairy farms continuing to disappear, American Milk Producers Inc. has shuttered its dry milk plant in Arlington, Iowa, costing 49 workers their jobs.

The company also closed its cheese plant in Rochester, Minnesota, saying farmers in the area didn’t produce enough milk to keep the factories open.

“With less milk in the region, there has been less milk for processing into nonfat dry milk, which makes operating the plant unsustainable,” AMPI Vice President Sarah Schmidt said in an email.

She declined to comment on what kind of severance package the workers received as a result of the closure Saturday. In a press release Friday, American Milk Producers said it would give the workers “resources, training and opportunities to apply for available jobs at AMPI facilities.” The closest American Milk Producers plants to Arlington are both nearly 150 miles away, in Blair and Portage, Wisconsin.

The company will also keep its milk shipping and receiving stations open in nearby Earlville, Iowa, and Prairie du Chien, Wisconsin.

Fayette County Economic Development & Tourism Director Mallory Henson said the offer to relocate employees would hurt the local workforce.

“This is going to be a blow for the employment base of our county,” she said. “But unfortunately, these things happen.”

The Maquoketa Valley Cooperative opened the factory in 1960, 11 years before American Milk Producers acquired it and renamed the plant. It had been the Arlington Division of AMPI for 48 years.

According to the Iowa Department of Agriculture & Land Stewardship, 347 of the state’s dairy farms have closed since October 2015, representing a 22% drop. Hugo Ramirez, a dairy nutrition professor at Iowa State University, said market conditions drove farmers out of businesses.

Fewer immigrants have worked on farms in Iowa in recent years, he said, driving up the cost of labor. In addition, the dollar has been strong against other currencies, decreasing the value of U.S. dairy sales overseas. Ramirez said there also has been excess supply, keeping the price down.

“We have too much milk in the market and not enough milk buyers,” he said.

Ramirez, however, said he could not think of another Iowa plant that has closed because of the tough environment for milk producers.

Henson said this was the first significant closure in the northeast Iowa county since Art’s Way Manufacturing in West Union, a maker of agricultural equipment, shut down its operation around 2015. Nick McIntyre, the former plant manager and now West Union’s city administrator, said that factory also shut down because of a downturn in the local agricultural economy.

The plant employed about 20 welders and assemblers. It moved all of its operations to the company’s corporate headquarters in Armstrong, Iowa.

McIntyre retired from factory life after the closure. But he said some of the welders moved to a Caterpillar plant about 25 miles southeast in Elkader, Iowa. That plant, in turn, shut down in 2017.

“It was a hit for West Union,” McIntyre said of the Art’s Way closing. “Obviously, jobs, whether it’s one or 20, it affects the community — it was a good-paying job with a good company. And the economy just dictated that they shut this one down.”


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