Foremost Farms, one of the largest dairy cooperatives in the US, is planning to shut a major facility amid a fundamental restructuring of American dairy processing.
The business, which represents farmers across seven Midwest states, said it will close a Wisconsin cheese manufacturing site in December.
It will also discontinue production of 40lb block cheese as part of a “strategic realignment of its product portfolio to meet evolving market demands”.
“The decision follows a comprehensive review of changing dairy market dynamics, including increased US cheese production capacity and shifting consumer demand,” it said.
Operations are scheduled to conclude in December. The co-op said it is looking to focus resources on areas that best position the business for future growth and success.
US dairy faces supply chain challenges
Huge growth in US milk production has triggered an unprecedented wave of expenditure in with US firms investing $13bn in boosting dairy capacity over the past year, according to the International Dairy Foods Association.
Gregg Doud, president and CEO of the National Milk Producers Federation (NMPF), has suggested it is one of the largest capacity expansions in the history of global agriculture.
Doud noted, however, that the influx of new manufacturing facilities is creating supply chain challenges and the industry now faces significant long-term questions over its regional milk allocation.
It will mean processors and dairy cooperatives must now re-coordinate raw milk movements to efficiently feed newly-commissioned processing plants without causing localised supply imbalances.
Foremost Farms is not the first co-op to be forced into a response. In June, Dairy Farmers of America (DFA) announced the closure of its St. Albans facility in the state of Vermont with the loss of about 80 jobs.
