Minnesota dairy farmer takes Hastings Creamery to court over unpaid milk deliveries

HASTINGS – The demise of a historic creamery that burned down this fall reached the Dakota County courthouse on Friday as an attorney for a Minnesota dairy farmer — allegedly cheated of money by the creamery in its waning days — asked a judge to block a bank from cashing milk checks.

“The creamery was buying milk and not paying my client,” John Giesen, attorney for Valley Acres Dairy, told District Judge Ann Offermann.

The dairy in Lewiston, Minn., filed a lawsuit in September, days after an overnight fire destroyed the 110-year-old Hastings Creamery. The creamery had financially hobbled through the summer after the Metropolitan Council removed it from the city sanitation system for dumping raw milk into the sewer.

Court records filed by Glenwood State Bank, the creamery’s creditor, suggest the operation’s ownership group — four Otter Tail County farmers — had defaulted on millions of dollars in loans. In August, according to affidavits and court testimony Friday from the dairy farmer, the creamery was forced to close after the bank cut off funds used to pay its producers.

“They didn’t shut down with a lot of money in the piggy bank,” Jim Lodoen, attorney for the creamery, told the court.

But the missing payments meant the dairy farmers, who were left without any place to sell their milk, were put in an increasingly strained financial position, Valley Acres said in affidavits.

According to text messages filed with the court, former creamery co-owner Justin Malone contacted Valley Acres owner Carey Tweten to ask about milk delivery payments.

“No I did not,” Tweten replied.

Later that day, Tweten wrote, “Not sure we have anywhere for the milk to go today[.]”

According to court records, Valley Acres Dairy started shipping milk in July to a creamery in nearby Altura in Winona County.

While the plaintiff alleges Hastings Creamery owes the dairy more than $800,000 for missing payments, Friday’s temporary injunction dispute centered around four checks sent to the creamery from buyers of Hastings’ products. Tweten’s attorney asked the judge to freeze those assets. But the bank, creamery and former creamery owners have argued against the injunction, which they call an “extraordinary” measure this early in the process.

Hastings Creamery faces at least one more lawsuit. It was filed by an Altura-based dairy farmer who says the creamery incorrectly deducted $600,000 from his pay for hauling milk. In that lawsuit, as in the Valley Acres suit, Malone argues that a down cycle in the milk market necessitated the shift in hauling fees and payment rates beginning in spring 2023.

Asked on the stand Friday about last year, Tweten said, “It wasn’t a good time to be a dairy farmer.”

Just a couple miles from the courthouse, the creamery’s wreckage has yet to be fully cleaned up. John Hinzman, Hastings’ community development director, said the city has had “very limited conversations” with the business since the September blaze.