The biggest milk company in the US declares bankruptcy

Dairy Farmers of America Wants to Buy Dean Foods But Others May Too

Dairy Farmers of America Wants to Buy Dean Foods But Others May Too

Dallas-based Dean Foods, the nation's biggest milk processor, plans to keep the business operating normally while it deals with debt and unfunded pension obligations.

Dean Foods, which owns Meadow Gold, filed Tuesday for Chapter 11 bankruptcy after reporting a net loss of $79.4 million in the quarter ending September 30.

The company said it has received $850 million in debtor-in-possession financing from existing lenders and, if approved by the bankruptcy court, plans to use the funds along with cash on hand and operating cash flow "to support its continued operation throughout this process, including payment of employee wages and benefits without interruption and payment to suppliers and vendors in full under normal terms for goods and services provided on or after the filing date".

So on Tuesday, Dean Foods filed for Chapter 11 bankruptcy protection to keep the business operating, reorganize its debt and help fund the pensions while it looks to sell the company.

Dean Foods also announced that it is engaged in advanced discussions with Dairy Farmers of America regarding a potential sale of substantially all assets of the company.

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.

Beringause joined Dean Foods in July, following the resignation of former CEO Ralph Scozzafava.

Milk consumption has declined over the past four years, CNN reported.

As tastes have changed and consumers have become more conscious about the environment, health and animal welfare, the dairy industry has suffered. "We remain dedicated to our mission of making dairy alternative food and beverage products that deliver a plant-based mighty bundle of nutrition", he said. Dean's sales of $7.8 billion previous year were down 38% from a decade earlier, the Wall Street Journal reported. It lost money in eight of the last 10 quarters.

It supplies milk for its own brands, like Dairy Pure, Meadow Gold and TruMoo, as well as store brands.

Dean employs 16,000 people and operates 60 processing facilities across the country. One big blow came past year, when Walmart opened its own milk processing plant in Indiana. The company has produced milk and other products at its downtown Boise plant, at 1301 W. Bannock St., since 1950, according to records from the Ada County Assessors Office.

Dean Foods didn't reveal whether if there would be any layoffs. In 2000, Southern Foods was acquired by Suiza Foods Corp., which bought Dean Foods a year later.

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