On May 18, 2020, Foremost Farms USA announced plans to close its cheese manufacturing plant in Chilton, Wisconsin. Built in the 1940s, the facility makes cheese that is sold into the food service market, mostly for sandwiches and pizzas.
The 53 employees can apply for open positions at other company locations, but as of July 2020 they will be out of work. Foremost Farms has 10 additional locations in Wisconsin as well as plants in Michigan and Minnesota. The company will be working on severance package in the coming weeks.
COVID-19 has changed the market and work order volumes from food service clients have decreased in a short period of time, creating product over capacity and a sudden production demand drop.
According to a spokesperson, Foremost’s plants are running at 10% to 15% below capacity, depending on the week.
The company doesn't expect an immediate bounce back in cheese orders from food service clients.
According to Greg Schlafer, president and CEO, the move is a "business decision." He says long-term investments in the plant don’t make “strategic sense.” He says,"We have other plants with upgraded technology and optimized logistics that will drive significant cost efficiencies.”
According to the company spokesperson, manufacturing footprints evolve and change with the market, and Foremost is always reviewing its network, looking for ways to improve operational efficiency and effectiveness. To be competitive, the long-term investments needed to upgrade the equipment and technology in Chilton would have been substantial.