America’s largest dairy milk producer files for bankruptcy
Dean Foods which is the largest producer of dairy milk in the U.S has filed for Chapter 11 bankruptcy this week. The Dallas-based company plans to use the Chapter 11 proceedings to continue operating and address its debt while they aim to sell the company.
Dean Foods has struggled the past few years as Americans choose to drink less cows milk and instead are choosing dairy-free alternatives. As part of the bankruptcy process, the company also secured a $850 million in financing so that they could keep the company running. In its bankruptcy petition, Dean Foods listed $2.29 billion in assets and $2.18 billion in debts.
Cows milk sales has been declining for the past 4 years (an average of 6% per year) while the sales of oat milk has jumped 636% to $53 million over the past year alone. Over the past half-century, the United States has lost one million dairy farms.
In 2018, Dairy Farmers of America, which represents about 30% of total U.S. milk production, reported a 7.5% decrease in sales to $14.7 billion. The organization said the decline was “primarily” due to lower milk prices. As tastes have changed and consumers have become more conscious about the environment, health and animal welfare, the dairy industry has experienced a decrease in the demand for their product. Milk consumption per capita in the U.S. has tumbled more than 40% since 1975.