The Wall Street Journal: Bankrupt Dean Foods deals assets to dairy-farming cooperative
By Mon, Feb 17, 2020
The biggest U.S. dairy farming cooperative struck a $425 million deal to buy dozens of plants from bankrupt milk processor Dean Foods Co., in a deal executives said would preserve jobs and markets for farmers’ milk.
The deal, which was proposed by Dairy Farmers of America, requires approval of the bankruptcy court and the U.S. Department of Justice.
If consummated, it would see the Kansas City, Kan., agricultural cooperative take over the bulk of Dean’s plants, following the top U.S. milk company’s bankruptcy filing in November.
Read on: Trump agriculture secretary says during Wisconsin visit that family-run dairy farms may not survive
Dean’s DFODQ, +2.29% bankruptcy followed a yearslong decline in sales of fluid milk, the Dallas company’s main business. Bottled water, fruit juices and plant-based milk alternatives have crowded out milk cartons in grocery store beverage cases, pressuring the milk business. Dean also struggled as grocery sellers like Walmart Inc. WMT, +0.38% and Kroger Co. KR, -1.40% opened their own milk-bottling plants, expanding sales of store-brand milk that is often priced far below branded milk from processors like Dean.
Pressures are mounting on the U.S. milk sector beyond Dean. Borden Dairy Co., another Texas dairy company, filed for bankruptcy in January, also blaming falling milk consumption and retailers’ investment in bargain-priced milk. Battling low prices, thousands of dairy farmers have closed their milking parlors in recent years, according to the U.S. Department of Agriculture.
An expanded version of this report appears at WSJ.com.
Trending on WSJ.com:
Just stop paying your loan: Car dealerships offer advice to buyers
American cruise ship passengers sent home — 14 tested positive for COVID-19
About the Author
Trade Stocks was specifically created as a resource that traders and investors can rely on for accurate and timely financial news and insights. Our team of industry experts brings you the into you need when you need it. That’s why hundreds of thousands of traders and investors trust us to provide them with the financial education, support, and resources that they can count on to help them move closer to their financial goals.
