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Feb. 17, 2020, 3:11 p.m. EST

Bankrupt Dean Foods deals assets to dairy-farming cooperative

Executives say the sale will preserve jobs and markets for farmers’ milk

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By Jacob Bunge


Getty Images
Dean Foods trucks outside a company facility in suburban Chicago.

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 /zigman2/quotes/205714159/composite DFODQ -25.53% 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. /zigman2/quotes/207374728/composite WMT +1.81% and Kroger Co. /zigman2/quotes/206215053/composite KR +0.83% 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.

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/zigman2/quotes/205714159/composite
US : U.S.: OTC
$ 0.04
-0.01 -25.53%
Volume: 1.60M
Aug. 4, 2020 3:59p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$4.32 million
Rev. per Employee
$517,019
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/zigman2/quotes/207374728/composite
US : U.S.: NYSE
$ 131.64
+2.34 +1.81%
Volume: 6.07M
Aug. 4, 2020 4:00p
P/E Ratio
25.03
Dividend Yield
1.64%
Market Cap
$366.17 billion
Rev. per Employee
$223,654
loading...
/zigman2/quotes/206215053/composite
US : U.S.: NYSE
$ 35.39
+0.29 +0.83%
Volume: 5.35M
Aug. 4, 2020 4:00p
P/E Ratio
13.43
Dividend Yield
2.03%
Market Cap
$27.31 billion
Rev. per Employee
$269,849
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