The news out of Sioux City and across the nation is talking about the Dean Foods disaster â€“ bankruptcy causing it to likely be sold to another farmer based COOP like it was originally. The greed of the management team which took over the Land O’ Lakes cooperative years ago as a private company was the underlying cause of this bankruptcy. Milk market changes were secondary to the greed of the management / investment group. The Sioux Falls WinChill operation was a way for Blue Bunny to escape Minnesota and Iowa personal property (inventory) tax yearly bill.
LE MARS, Iowa — Dean Foods, America’s biggest milk processor and owner of a large plant in Le Mars, Iowa, 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.
The Dallas company said it may sell itself to the Dairy Farmers of America, a marketing cooperative owned by thousands of farmers. It was not immediately clear what such a move might mean for the company’s Northwest Iowa plant, which makes products for retailers and other customers.
“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,” Dean Foods CEO Eric Berigause said in a statement.
Since 1975, the amount of milk consumed per capita in America has tumbled more than 40%, a slide attributed to a number of reasons but mostly the rise of so many other choices, including teas, sodas, juices and almond and soy milk.
That has hit dairy farms and milk sellers hard, leading some smaller family farmers to quit the business.
Another blow to Dean Foods came when Walmart opened its own milk processing plant in Indiana last year.
Dean Foods has lost money in eight of its last 10 quarters and posted declining sales in seven of the last eight.
I do know that WinChill is and has been diversifying their services (in other words they don’t just store ice cream and milk – I guess Smithfield has been using them to). But this will certainly be a big hit for them.