The Clark County Cheese Makers
Source: Clark Co. Press, June 1946
Note: Many typos corrected by Linda Mertens
Of 85 factories in Clark County engaged three years ago in making natural cheese, 19 have been closed, 40 have undergone change of ownership or control and only 26 remain under the same ownership and control. Most of the 26 remaining factories are in a difficult situation, with the prospect that most of them will be driven into a sale lease or some other method of escape. For some of them, negotiations are now pending.
These changes have come about in part as the natural development of business. A few of the closed factories were so small that it was no longer possible to operate them economically under modem conditions. But many of the changes and practically all of the recent ones have been brought about by the policies followed in government control. Since about January 1, it has been impossible for a factory making natural American cheese to pay the current price of milk, meet its manufacturing costs and sell its product at the OPA ceiling. (OPA was the abbreviation for Office of Pricing Administration.)
With butterfat at 71 to 73 cents a year ago, most factories in Clark County were able to sell American cheese at the ceiling and get along. But when the price of butterfat mounted toward 80 cents, with occasional payments in some localities up even as high as 83 cents, the maker of American cheese was completely out of luck. Those factories, which have continued to operate under the old ownership and control, have been taking a loss throughout 1946. In the case of one family-size factory, the identity of which will not here be revealed, the loss has been $2,000, plus the time of the cheesemaker and his wife. In another instance a factory already sold to a large processor, lost $1,200 in March and this is a factory with about an average run in business.. In still another instance, known specifically to the Clark County Press, the present loss is at the rate of $100 per day. This is one of the larger factories, the owner of which saw the storm coming and made his escape in time to let the big fellow worry about the loss.
Losses at this rate are utterly beyond the reserves and staying power of the owners of small cheese factories, who have been forced to seek relief. Their peril has coincided with a remarkable opportunity on the part of the processors, who have customarily bought their product. For the processors have been in a favored position under the OPA ceiling, with a wider relative margin and with a tremendous demand for their output. As the small cheesemakers were pondering upon their plight and picturing themselves turning the key in the door, the processors were in urgent need of their product, natural cheese. Without the natural cheese, the processors also would be out of luck. So the processors exercised themselves to find a way out.
Except for price control, this situation would have righted itself in a system of free enterprise. The processors would have raised their payments to the cheesemakers sufficiently to keep the cheese coming. But under the conditions of OPA regulation, they could not legally pay beyond the prescribed ceiling.
Under these conditions, four methods of escape have been used. The first, and seemingly least drastic, has been for the cheesemaker to retain ownership of the cheese, to arrange with a processor for its conversion into loaf cheese and then to sell it to the processor in the form of loaf. This method has had some small use in Central Wisconsin.
Another method is an outright sale of the property, including both relay and equipment, made by the cheesemaker to one of the large cheese concerns. In some, if not all of these transactions, there is an option under which the old maker may buy back at the same price and perhaps even with depreciation taken off at a prescribed rate. Meanwhile the old maker works for the new owner on a salary. This plan has been styled a sale of convenience, but is an outright sale, with very considerable sums of money actually passing in recent weeks into the hands of cheesemakers in Clark County. The legal situation in this case has been stated to be unassailable.
The third plan is for the large cheese concern to take a lease on the factory for a prescribed period and to hire the maker on a salary . The fourth plan is to go cooperative, a plan which is being promoted in this area by the Rib Lake Dairy Company Co-operative, represented in their area by J. F. Pinion of Marshfield, who is manager of its cheese marketing division. Under this plan, the margins are automatically spread out, so that the ultimate selling price is significant and not the ceiling on natural cheese.
Deals of the sort described above are in effect right now in the case of many factories in Central Wisconsin. They have the effect of stopping the loss of the small cheesemaker and they provide him the means of livelihood, but he is no longer, in most instances, an independent business man, with his chance to share in the good picking naturally inherent in a tight market for cheese.
Thus the entire business of manufacturing natural cheese in Clark County is undergoing a change which is almost revolutionary in character. While in some instances the old situations will be restored by exercise of options or by the expiration of leases, it is altogether unlikely that the industry will return to anything like its old status. Some of these deals, if not the greater part of them, will stick and the cheese industry, with its vast importance in the marketing of milk in Clark County, will have moved importantly toward centralization and control by the larger interests. Whatever the long-range implications, the present picture is one of urgent competition, with determination to protect sources of supply and with a strong bid for local milk.
It is certain that the recent more important changes have been brought about directly and inevitably by the policies of OPA. That government organization has fixed definite ceilings for cheese and butter, but has not set corresponding controls upon competitive use of milk and cream. It is these uncontrolled competitive uses of milk and cream which have driven up the prices beyond the reach of the small cheesemaker. Thus price control in the dairy industry is forcing the little fellow out of business. In the state of Wisconsin, as of April 24, about 400 cheese factories remained in their old ownership, while 1,000 of them had passed into strong hands. The change is proceeding with great rapidity, for the little fellow cannot stand the gaff. Within a few months the old style cheese factory, as a family operation, will have passed out of the picture in Wisconsin.
The following factories have been closed and are no longer in operation:
East Worden Dairy; six miles south of Thorp, sold to Blue Moon by Rudolph Bachman.
Braun Settlement factory, nine miles northwest of Greenwood, operated by Ted Braun.
Clover Belt factory, two miles south of Thorp, formerly owned by Otto Hiller and now closed.
Edward Huber's plant, 2 miles from Spencer, closed.
Heintown factory, six miles southwest of Loyal sold by Alfred Holt (Albert Holt?) to Herbert Uttech and closed.
Oak Grove factory, five miles southwest of Withee ,owned by Christian Klay is closed.
Woodland View factory, 15 miles southwest of Greenwood, closed by owner, Francis Knops (Knoops?).
Otter Creek factory, 1/2 miles northeast of Stanley, was run by Alfred Laabs, now closed.
Lombard Dairy Co seven miles northeast of Thorp, closed.
Lombard Dairy Co., 3 miles northeast of Thorp, sold to Broeren and Decker.
Junction factory, 5 miles northeast of Thorp closed by Ernst Looser.
White Eagle Dairy, five miles north of Thorp, sold to Blue Moon by Steven Losiewicz.
Sun Shine Valle factory, five miles south of Thorp, formerly owned by Bruno Nurmi, is closed.
Pleasant Ridge Creamery Co., four mile southeast of Neillsville closed.
North Star factory three miles west of Granton, closed-by Waite Reber, but he maintains the business at his nearby East Pleasant Ridge factory.
Beaver factory, five miles northeast of Loyal closed by owner, Jesse J. Spieles.
Clark County factory, five miles northeast of Loyal, closed by Mike, Teclaw.
West Eaton factory four miles southwest of Greenwood, owned by Theodore Wessel, sold to Harry Schlinsog; Schlinsol sold to Dairy Belt, the West Eaton factory is now a tavern.
South Worden Dairy nine miles southeast of Stanley, owned by John Wry who sold to Leo Biel now closed.
Many of the remaining cheese factories have undergone changes in ownership, organization or relation. (Two weeks after the above article about cheese factories of Clark County was published, permission was sought by Congressman Merlin Hull and by Fred F Murray to republish it in the Congressional Record.)
Hull wrote as follows:
"Allow me to congratulate you upon the feature article appearing in the Clark County Press with regard to the cheese situation in Clark County. Your dispassionate analysis of the situation as applied to your county had made your report extremely effective."
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