January 7, 2020
Falling milk consumption sends 2nd major US dairy firm filing for bankruptcy
Borden Dairy became the second major dairy firm in the US to file for bankruptcy within the past two months, as more consumers shift toward breakfast options with more protein and less sugar, the Washington Post reported on Jan 7.
The 163-year-old company's chief executive, Tony Sarsam, said Borden Dairy, saddled by debts, had to seek Chapter 11 protection as a "final resort".
From Jan. 1, 2019, through Dec. 7, Borden reported a net loss of $42.4 million, thrice its 2018 losses of $14.6 million.
Earlier in November, Dean Foods, the US' largest dairy company, also filed for bankruptcy protection as it had fallen victim to declining milk consumption, Milk consumption in the US has declined 6% since 2015.
The report said even small milk processors are seeing their margins fall as wholesale milk costs climb and consumers settle for dairy-free options such as almond, soy and oat beverages.
More than 2,700 dairy farms have gone out of business in the past 18 months, Borden said in its filing. Farmer bankruptcies are still rising, with farm debt at record highs, the report said.
As of last year, Borden and Dean Foods have controlled around 13.5% of American milk sales, according to the consulting firm Euromonitor, Washington Post said.
But with Walmart, the country's largest retailer, starting to process some of its own milk, sales of longtime brands like Borden and Dean have been cut down. These companies also had to keep prices low to stay competitive.
Borden, meanwhile, said it will continue to operate while it goes through restructuring.