Kleinpeter Farms Dairy today announced a 2.5% pay cut affecting all of its 215 employees, effective in two weeks, President Jeff Kleinpeter says. “When the economy tightens a bit, we have to tighten with it,” he says. “We’re just kind of feeling a little pressure right now, and I don’t want to raise our prices at this time.” Gas prices have fallen some in recent weeks, Kleinpeter says, but that is still cutting into the bottom line. Even more costly, he says, is the surging price of raw milk from dairies over the past six months. “The cost of raw milk has never been higher in my 25 years in this business, and that’s accounting for 50% of our total expenditures every month,” he says, adding the company currently is paying about $2.50 per gallon of raw milk.
The dairy is instituting other cost-cutting measures, Kleinpeter says, including the consolidation of routes. “Three or four” layoffs might occur, he adds, and some employees could be asked to take new positions within the company, but those decisions have not been finalized. The pay cuts will affect every employee from the top down, Kleinpeter says, including himself. “We didn’t feel it was right for anyone to be excluded. We’re all going to share in this as a team, just as we’re all going to share in more positive moves as the economy gets better,” he says. “I’m proud of our team for doing this. I’m not embarrassed. I don’t view it as a bad thing. I view this as Kleinpeter looking internally at reducing costs and increasing efficiency instead of raising prices for its customers.”—Steve Sanoski
