America’s largest milk producer files for Chapter 11 bankruptcy

The “accelerated decline in the conventional white milk category” is to blame

Dean Foods is filing for bankruptcy, as reported by CNN Business

The largest producer of milk in the USA has blamed “accelerated decline in the conventional white milk category” for its fundamental problems. It has posted a net loss in seven out of the last eight quarters, announcing a total net debt of about $968 million after the second-quarter earnings in June. 

As part of the bankruptcy process, the company has received $850 million “debtor-in-possession financing” from existing lenders, including the Dutch multinational financial services company, Rabobank, to keep the company running. 

Dan Foods is working with the Dairy Farmers of America cooperative on a potential deal to buy out the company and protect the workers’ pension funds. 

The 94-year-old Dallas based company produces the well-known brands Daily Pure, Organic Valley and Land O’Lakes. It has been hit hard by the changing market and also by having been dropped by Walmart last year when the retailer built its own dairy plant. 

Global dairy market in decline

Americans are drinking less milk and looking to plant-based alternatives for both health concerns and out of a greater awareness of the treatment of animals by the dairy industry.

The global market for traditional cow’s milk still far exceeds the milk alternative market, but the trend is clear. Milk alternatives are expanding and cow’s milk is contracting. CNN reports that milk alternatives grew by 3.5% in the past year to over $18 billion which is still a fraction of he $120 billion milk market. 

In the USA cows milk sales have declined over the past four years, to about $12 billion. The decline is across all different types of cow milk. By sharp contrast, oat milk sales have increased by a staggering 636% to $53 million. 

The decline is a continuation of a trend which has seen milk sales decline since the mid-1970s. 

The decline is well documented in California. Miyoko’s Creamery has just announced a partnership to help a dairy farm transition to plant-based agriculture. Many dairy farmers in California are choosing to change direction to combat the changing financial realities. Recently Giacomazzi Dairy, the 125-year-old and oldest dairy farm in California closed to become an almond farm.

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Richard Williams

Richard Williams, a graduate of the University of Worcester in Entrepreneurship, has experience in promoting cruelty-free products recognised by PETA. He is creating Coworking Locations with vegan-friendly gourmet food in an area suited to yogis and collaborative vegan lifestyle brands. He is also working in the Vegan and Yoga Vacation sector. Contact: Richard@vegansbethechange.com
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