“It is unfortunate to see a Hastings landmark closing its doors for good. My heart goes out to the workers and owners of the creamery and the 45 dairy farmers who will struggle to find …
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“It is unfortunate to see a Hastings landmark closing its doors for good. My heart goes out to the workers and owners of the creamery and the 45 dairy farmers who will struggle to find somewhere else to bring their milk to for processing. It is a sad day for our Hastings community,” State Representative Shane Hudella.
“It's sad for the community after 110 years of that business being here,” Mayor Mary Fasbender.
Two local officials were just as shocked and saddened by the news as it broke that the Hastings Cooperative Creamery has shut their doors on their production plant as of Friday, Aug. 18. An employee meeting was held Thursday, Aug. 17 to alert the staff that the doors would be closed the next day. Some were offered the opportunity to work at a different creamery in the area, and everyone was offered unemployment.
The Journal reached out to several people connected to the creamery operation and only two agreed to speak on the record, former president and part owner Justin Malone and a source who wished to keep their identity and connection to the business confidential.
Back in June, Hudella played a key role in bringing multiple parties together, including representatives of the Met Council and City of Hastings officials to put forth a plan to get the creamery in compliance with the rules set by the Met Council regarding wastewater. The Met Council disconnected the creamery from its sewer system after the leak of thousands of gallons of cream and milk.
The problem is that the plan included a large piece that turned out to be financial suicide. The cost of one aspect of this plan was pumping and transporting the wastewater from Hastings via tanker trucks to St. Paul to be processed would cost roughly $7,000 dollars per day, and Malone expected that to be a short-term solution while the rest of the plan played out. Malone was relieved of his president and management duties in mid-June, shortly after the plan was put in place. Fast forward to Aug. 17, and the temporary solution has been in place for roughly nine weeks. Over the nine-week period, that is $315,000 just for wastewater transportation for five-day work weeks.
Malone explained that nearly $750,000 dollars were spent in total to try to gain compliance with the Met Council’s wishes.
“The Met Council never got us our permits, the City of Hastings never got us our permits, so it cost us another three quarters of a million dollars to stay operating from the time they closed the sewer until now and the creamery closed last Thursday,” said Malone.
“Since June 4 when Met Council closed the sewer, we’ve spent over half a million dollars just in hauling wastewater away, then pumps and frack tanks and all this other stuff, probably another hundred thousand,” Malone added.
The source close to the creamery operation had a question related to the compliance issues.
“The old ownership was not compliant for at least a decade, and nothing was done, why does Met Council care now?”
Malone said he attempted to purchase the creamery operation.
“I tried offering $9 million and they turned it down,” said Malone. “They thought they could make more than that running it and they end up running the thing and not being able to pay any bills… It is just very frustrating… I just… I guess the Met Council and the City of Hastings finally got their way, I guess… It's just pretty disappointing…”
Each long pause, Malone composed himself, sounding more and more saddened and upset.
According to the source close to the situation, once Malone was relieved of his duties, the three other owners (Peter Mursu, Bryce Blickenstaff and Tim Anderson) kept Malone in the dark regarding the day-to-day operations. Mursu attempted to step into the role that Malone had since their ownership group took over the operation two-plus years ago.
The ownership group decided to bring in a consulting firm, which cost approximately $250,000. In that process, the firm decided to hire a CEO for the creamery, Chris Opitz who lives in Pennsylvania. Opitz reportedly was supposed to move to Hastings to run the day-to-day operations.
Despite all the hardships that the creamery has faced and the uphill battle a new owner would have, Malone is still interested in full ownership.
“I'd be willing to still pay a decent price for that facility and get it up and running by the end of the week, but I still wouldn’t have a permit to use the sewer. Even if you pay $4.5 million for the facility, you're throwing money into a black hole if the City of Hastings and Met Council are not going to work with you. It would be the most stupid thing you could do,” said Malone.
In our attempts to reach other owners and the new CEO Opitz, both Mursu and Opitz were contacted, and both refused to comment. Mursu very little and Opitz hung up on a reporter after saying he was declining to speak.
The future of the Hastings Creamery is still unclear. Could it be saved? The odds don’t appear to be good.
That poses a problem for a lot of people. There were roughly 30 people who worked in the plant plus the office staff. As of Friday, most of those folks did not have a job in Hastings. The Hastings Dairy Store is a little less uncertain. As of this writing, the plan is to keep the store open, but they are looking for another dairy to buy their milk products from that is local and not a major reseller like Kemps. Their shelves may be bare for a few weeks while they make their new accounts, but they should still have the ice cream, meat, pizzas and other non-drinking milk products. They are even trying to find a plant that can produce their famous shakes.
Perhaps hit hardest are the farmers, 45 of whom sold their milk to be processed in Hastings. They now need to find a new processor to buy their milk and nearly all the area processors are at capacity now.
