High milk and fuel prices have pushed one of the Capital Region’s most recognizable businesses to cut salaries.
Kleinpeter Farms Dairy announced Friday that its 215 employees will take a 2.5 percent pay cut. The hope is that the pay cut will only last three to four mouths, said Jeff Kleinpeter, president of Kleinpeter Farms, in an email.
“Our team thinks it is a bad time to raise prices, so we are taking the cuts as a team and sticking together,” he said, noting his own salary will be cut as well.
Kleinpeter Farms has not had to resort to scaling back employee benefits such as company matches for retirement plans, Kleinpeter said.
The culprit for the increased production costs, Kleinpetersaid, is fuel and raw milk.
“Raw milk is the highest I have seen it in 24 years,” Kleinpeter said from Texas on Friday. He was on the road for business.
The dairy — which prides itself on its use of high-quality local raw milk — buys about 75 percent of its milk from some 20 local dairy farmers. In only the last eight months, the cost of raw milk has risen 41 percent, Kleinpeter said. The company now pays $2.53 a gallon for the commodity.
Other cutbacks at the dairy include consolidating some delivery routes and “maybe” furloughing four to five employees, Kleinpeter said.
“This is a very positive move for our team,” Kleinpeter said of the decision to cut costs.
Kleinpeter Farms Dairy has been operation for nearly 100 years. Its dairy products can be found on grocery store shelves all across South Louisiana and into southern Mississippi. In 2008, the company expanded its operations when it began producing ice cream.