Kleinpeter Farms Dairy is closing its 1,500-acre farm in Montpelier, about 50 miles northeast of Baton Rouge, and will procure all of its raw milk from other, mostly in-state Louisiana dairy farmers.
In recent years, Kleinpeter’s farm was supplying its Airline Highway dairy with only about 20% of its raw milk. Still, the closure of the farm marks the end of an era for the family-owned company, which has prided itself on its proprietary herd of cows and built advertising and marketing campaigns around them.
Kleinpeter Vice President Kenny Kleinpeter says the company decided to close the farm because it was posing a competitive threat to other Louisiana dairy farmers, who are struggling to stay afloat in an increasingly challenging industry. He says the dairy has decided to do everything it can to support Louisiana’s dairy farmers and getting out of the farming side of the business is an important step.
“Our farm was really a push-pull for us,” he says. “It wasn’t making money. It wasn’t losing money. But it was hurting our dairy men, so it seemed like the right thing to do.”
Still, economic realities factored into the decision as well. Raw milk is currently selling at between $14 and $15 per 100 pounds, which is between $2 and $3 below what it costs farmers to produce it, according to industry statistics. In other words, dairies can buy milk for less than it costs them to produce it.
Kenny Kleinpeter says his company’s decision was less about saving Kleinpeter money than helping Louisiana farmers, who have dwindled in number since the mid-1980s from 1,500 to fewer than 125.
Louisiana farmers supply Kleinpeter with most of its milk, though during the winter months the dairy will buy as much as 30% from out-of-state producers.
“We are hoping to get to the point where Louisiana farmers supply us with all our milk,” he says. “We want to be the local milk, and we want to support the local producers.”
The farm closure comes two years after quality control problems affecting the taste and shelf life of Kleinpeter’s milk prompted huge losses in revenue and market share for the company. Over the past 18 months, the dairy has invested more than $3 million in new equipment, upgrades and personnel as it works to rebuild its reputation in a community that swore by the quality of Kleinpeter milk. Earlier this year, Kleinpeter CEO Sue Anne Kleinpeter Cox said the dairy had recaptured almost 80% of the business it lost in 2014 and early 2015.
Though the company is closing the farm, Kenny Kleinpeter says it has been able to retain most of the 30 or so employees who worked there. The 600 cows were sold off earlier this month. As for the property, Kleinpeter says several ideas are in the works and that it is not for sale.
“We have plans for it,” he says.
—Stephanie Riegel
