Dean Foods Files for Bankruptcy

Dean Foods said it has nearly $850 million secured in debtor-in-possession financing to continue regular operations until the deal is finished.

Source: Dean Foods Files for Bankruptcy, Hopes To Sell to DFA | Farm Journal’s MILK Business

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Dean Foods, one of the largest milk processors in the country, filed for bankruptcy on Tuesday and is in purchasing talks with Dairy Farmers of America, a huge co-op.

This is one of those situations that surprised me but didn’t surprise me, if that makes any sense. I knew Dean has been in financial trouble for some time, and there were rumors going back months already that it was looking around to try to sell itself. But I didn’t think the company’s financial situation was quite this bad.

Dean has been struggling for a long time. It lost a major contract with Walmart not too long ago. Dean had been supplying the retailer with milk under the Walmart house brand, and lost a major part of that market when Walmart opened its own milk processing facility. Dean’s major problem is that it has always been a supplier of liquid (drinking) milk and that market has been shrinking for decades. Dean has never been able to adapt to that. It’s tried various things, tried rebranding, different products, even tried investing in plant based alternatives to milk, but nothing ever really worked very well for the company. It hasn’t made a profit in over two years, and that just couldn’t go on any longer.

I find myself wondering how much longer milk as a beverage is going to hang around as a major factor in our diet. For at least twenty or thirty years now the consumption of beverage milk has been declining, and all the hype and propaganda being pumped out by the various milk marketing boards and the dairy industry hasn’t managed to reverse that trend.

Author: grouchyfarmer

Yes, I'm a former farmer. Sort of. I'm also an amateur radio operator, amateur astronomer, gardener, maker of furniture, photographer.

2 thoughts on “Dean Foods Files for Bankruptcy”

  1. I hate to see good working people lose their jobs, but it seems like many other companies that are no longer with us, Dean’s simply did not keep up with the times. Adding to the dilemma is that consumers are looking for healthier food these days, and dairy products do not run in that lane. Milk itself is not that bad, but all the stuff made from milk that people love the most, like cheese and ice cream, are probably worse than red meat.

    I hope they land on their feet!

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    1. Dean’s been having problems for some time now and was just never able to adapt to the changing markets. The nail in the coffin was, I think, when they lost a huge contract with Walmart. They were producing milk for the store under the “Great Value” house brand. Walmart decided to eliminate the middleman entirely and built its own huge milk processing facility. They tried to diversify, even started to get involved in plant based products, but it was too little too late.

      You have a good point about the health issues from eating dairy products, especially the high fat stuff. But when it comes right down to it, the whole “milk does a body good” hype is just that. There is no actual evidence that eating dairy products improves bone density, prevents bone weakening, etc. Nor is it necessary for any other health reason. All of the nutritional elements in milk can be easily obtained from other sources. Dairy in moderation isn’t going to kill you, but it also isn’t going to do you much good if you’re eating a balanced diet already.

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