AP

No. 1 milk company declares bankruptcy amid drop in demand

Nov 12, 2019, 1:32 PM
Jugs of McArthur Dairy milk, a Dean Foods brand, are shown at a grocery store, Tuesday, Nov. 12, 20...
Jugs of McArthur Dairy milk, a Dean Foods brand, are shown at a grocery store, Tuesday, Nov. 12, 2019, in Surfside, Fla. Dean Foods, America's biggest milk processor, filed for bankruptcy Tuesday amid a steep, decades-long drop-off in U.S. milk consumption blamed on soda, juices and, more recently, nondairy substitutes. (AP Photo/Wilfredo Lee)
(AP Photo/Wilfredo Lee)

Got milk? Increasingly, Americans don’t, and that led the nation’s biggest milk producer to file for bankruptcy Tuesday.

Dean Foods blamed a decadeslong drop in milk consumption that has seen people turn to alternatives like soda, juice and almond milk.

The Dallas company said it may sell itself to the Dairy Farmers of America, a marketing cooperative owned by thousands of farmers.

“Despite our best efforts to make our business more agile and cost-efficient, we continue to be impacted by a challenging operating environment marked by continuing declines in consumer milk consumption,” CEO Eric Berigause said in a statement.

Since 1975, the amount of liquid milk consumed per capita in the U.S. has tumbled more than 40%. Americans drank around 24 gallons a year in 1996, according to government data. That dropped to 17 gallons in 2018.

An increasing variety of beverages, including teas and sodas, has hurt milk consumption. So have protein bars, yogurts and other on-the-go breakfasts, which take the place of a morning bowl of cereal.

More recently, health and animal-welfare concerns have also contributed, as more shoppers seek out non-dairy alternatives.

Oat milk, for example, saw U.S. sales rise 636% to more than $52 million over the past year, according to Nielsen data. Sales of cow’s milk dropped 2.4% in that same time frame.

Not all dairy products have been affected. U.S. butter and cheese consumption is up since 1996, for example.

“We’re eating our dairy, not drinking it,” said Mark Stephenson, director of dairy policy analysis at the University of Wisconsin-Madison.

The downturn has had an outsize effect on Dean Foods, which derived 67% of its sales from fluid milk last year, according to its annual report. The company has lost money in eight of its last 10 quarters and posted declining sales in seven of the last eight.

Dean employs 16,000 people and operates 60 processing facilities across the country. On any given day, it is running 8,000 refrigerated delivery trucks on U.S. roads.

It supplies milk for its own brands, like Dairy Pure, Meadow Gold and TruMoo, as well as store brands. One big blow came last year, when Walmart opened its own milk processing plant in Indiana.

Dean said it will continue operating normally while it puts its finances in order under Chapter 11 bankruptcy. It has lined up about $850 million in financing from lenders.

The bankruptcy filing comes at a difficult time for dairy farmers, who were already struggling with low prices because of oversupply.

Linda Ceylor and her husband, Gerald, operate an organic farm near Catawba, Wisconsin, where they milk fewer than 50 cows and raise heifers.

Ceylor said Dean Foods’ woes mirror what smaller producers are facing. She said the most hurtful part is watching young people go out of business, including three neighbors in their 30s.

“All they ever wanted to do is milk cows, and all three of them said they can’t do it anymore,” Ceylor said. “That’s like watching your grandchildren go through a massive problem you can’t do anything about. There’s really no other choice for them to make.”

Darin Von Ruden, president of the Wisconsin Farmers Union, said he is concerned about Dean Foods selling itself to Dairy Farmers of America.

“That’s two of the five biggest companies in the country, and when you start looking at that kind of consolidation, is that good for producers? The answer is probably no,” said Von Ruden, who is selling his dairy operation to his son.

Dean is already a product of consolidation. It was bought by Suiza Foods Corp. in 2001. The new, larger company assumed the Dean name and bought several other milk producers.

Stephenson said that left Dean with a large number of aging facilities. At the same time, it sold off some non-dairy brands, like TofuTown, becoming less diversified.
Stephenson said Dean was also slow to innovate. He cited growing sales of Fairlife milk, a Coca-Cola Co. brand that is lower in lactose and higher in protein.
___
Associated Press writer Dave Kolpack in Fargo, N.D., contributed.

Today’s Top Stories

AP

DOHA, QATAR - NOVEMBER 25: A giant flag of IR Iran on the pitch prior to the FIFA World Cup Qatar 2...
ALI ABDUL-HASSAN and ABBY SEWELL Associated Press

US-Iran match reflects a regional rivalry for many Arab fans

The U.S. team’s must-win World Cup match against Iran will be closely watched across the Middle East, where the two nations have been engaged in a cold war for over four decades and where many blame one or both for the region’s woes.
7 days ago
Irene Cara in 'Fame' (Photo courtesy of Mgm/Kobal, Shutterstock)...
MARK KENNEDY, AP Entertainment Writer

‘Fame’ and ‘Flashdance’ singer-actor Irene Cara dies at 63

singer-actress Irene Cara, who starred and sang the title cut from the 1980 hit movie “Fame” and then belted out the era-defining hit “Flashdance ... What a Feeling” from 1983's “Flashdance,” has died. She was 63.
9 days ago
The U.S. Coast Guard ship Bernard C. Webber, leaves the coast guard base, Monday, July 19, 2021, in...
Associated Press

‘Miracle’: Missing cruise ship passenger found OK in water

The U.S. Coast Guard says a passenger who went overboard from a cruise ship in the Gulf of Mexico was rescued on Thanksgiving after likely being in the water for hours.
10 days ago
FILE - A Montana man was sentenced to three years in prison for his role in the Capitol riot. (AP P...
The Associated Press

Montana man gets 3 years in prison for role in Capitol riot

A Montana man will spend three years in federal prison for his role in the Jan. 6, 2021, riot at the U.S Capitol.
11 days ago
Debbie, left, and Chet Barnett place flowers at a memorial outside of the Chesapeake, Va., Walmart ...
The Associated Press

Walmart shooter left ‘death note,’ bought gun day of killing

According to authorities in Virginia, the Walmart shooter bought his gun just hours prior to killing six employees.
11 days ago
Dry lakebed...
Kira Hoffelmeyer

Lawsuit looms over tiny fish in drought-stricken West

RENO, Nev. (AP) — Conservationists have notified U.S. wildlife officials that they will sue over delayed decisions related to protections for two rare fish species that are threatened by groundwater pumping in the drought-stricken West. The Center for Biological Diversity sent a formal notice of intent to sue the Fish and Wildlife Service last week […]
13 days ago

Sponsored Articles

Spicy Homemade Loaded Taters Tots...
Macey's

5 game day snacks for the whole family (with recipes!)

Try these game day snacks to make watching football at home with your family feel like a special occasion. 
Happy joyful smiling casual satisfied woman learning and communicates in sign language online using...
Sorenson

The best tools for Deaf and hard-of-hearing workplace success

Here are some of the best resources to make your workplace work better for Deaf and hard-of-hearing employees.
Team supporters celebrating at a tailgate party...
Macey's

8 Delicious Tailgate Foods That Require Zero Prep Work

In a hurry? These 8 tailgate foods take zero prep work, so you can fuel up and get back to what matters most: getting hyped for your favorite
christmas decorations candles in glass jars with fir on a old wooden table...
Western Nut Company

12 Mason Jar Gift Ideas for the 12 Days of Christmas [with recipes!]

There are so many clever mason jar gift ideas to give something thoughtful to your neighbors or friends. Read our 12 ideas to make your own!
wide shot of Bear Lake with a person on a stand up paddle board...

Pack your bags! Extended stays at Bear Lake await you

Work from here! Read our tips to prepare for your extended stay, whether at Bear Lake or somewhere else nearby.
young boy with hearing aid...
Sorenson

Accommodations for students who are deaf and hard of hearing

These different types of accommodations for students who are deaf and hard of hearing can help them succeed in school.
No. 1 milk company declares bankruptcy amid drop in demand