NEW ULM — The butter business is bigger and better than ever, five years after a massive fire destroyed the AMPI plant in New Ulm, threatening the jobs of 180 people.

“I sure remember that day. It was a tragic event,” said Ed Welch, president and CEO.

“The day before Christmas we shut the plant down, and we didn’t know what we were going to do with our employees.

“In retrospect, it’s bigger and better than ever.”

Today, the butter plant is producing 130 million pounds of butter annually, nearly double the amount it was when the rebuilt plant opened more than a year after the fire.

A little after 6 p.m., Dec. 1, 2004, something sparked a fire in a room between the warehouse and packing room. An official cause was never found, but Welch said a variety of mechanical and electrical equipment were in the room.

When the fire spread to the warehouse full of butter, several fire departments spent more than 12 hours fighting a massive blaze that destroyed much of the plant and sent melted butter flowing into streets and toward storm drains and the river.

Bulldozers and other equipment were used to scrape and push butter, with just a small amount getting into the nearby Minnesota River.

While AMPI operates 14 milk-related plants, New Ulm was the only butter-making operation.

He said the board of directors of the farmer-owned cooperative was faced with the decision of whether to get out of the butter business or to rebuild, and, if so, where.

The decision was to stay in business, but AMPI looked at moving the operation to a vacant plant it then owned in Glencoe or building somewhere else in New Ulm. Eventually it decided to rebuild on the existing site.

“Even though there was a lot of damage, a lot of (the building) was still standing.”

But trying to hang on to their customers during a long rebuilding was a worry.

“The biggest challenge was keeping our customers and keeping our employees. I’m happy to say we’ve lost very few of either.”

AMPI salvaged enough equipment, moved it to a nearby former dairy, and began limited operations. Many employees were kept on the payroll, helping in cleanup and equipment restoration during the rebuild.

Insurance payments and community support allowed employees to hang on.

“For those employees who couldn’t come back right away, we had a lot of community support to help them with health insurance and things. There were fundraisers. People really rallied,” Welch said.

Using insurance money and additional AMPI capital, a new plant was up and running a year later. “Within 15 months we had everything up and running, which is pretty remarkable.”

Today, the butter plant employs 170 people.

In the past year, the dairy business for AMPI farmer-members has been tough because of low milk prices and high feed costs.

“But the butter business has been great,” Welch said. “Retail sales this fall were the best ever. More people are turning to butter. They found out margarine wasn’t so great — it’s a matter of natural fats versus trans fats. Butter has zero trans fats.

“And, of course, it tastes good.”