Dean Foods, the largest domestic milk producer, announced on November 12 that it was filing for bankruptcy.
The company’s organic portfolio is anemic after packaging its former branded products division as WhiteWave Foods in 2013. In 2017, Organic Valley controversially partnered with Dean Foods on a joint bottling venture.
After Dean’s bankruptcy announcement, Organic Valley CEO Bob Kirchoff reassured its suppliers. Kirchoff noted the cooperative had been aware that Dean was struggling, and he stated the bankruptcy will have “no impact on the venture’s customers or vendors.” This sounds like good news for the family-scale dairies that belong to the Organic Valley co-op.
The news is less good for the remaining Dean Foods brand farmers.
“What is saddening is how often family-scale dairies are impacted by price gouging and consolidation from big companies,” said Marie Burcham, Cornucopia’s director of domestic policy. “The dairy crisis has forced many ethical farmers out of business, in part because of unfair competition from industrialized companies including Dean and others.”
Although some claim Dean’s demise is due to the rising popularity of plant-based beverages, others note that milk has been losing out to bottled water as well. There are many factors in their failure to thrive, but Cornucopia notes this bankruptcy comes after spinning off the most lucrative brands in Dean’s portfolio.
Dean reports that it is engaged in discussions to sell most of its assets to Dairy Farmers of America. This proposed merger rings on concerns about anti-trust issues and market monopolization Cornucopia raised in 2016 regarding the proposed merger of Groupe Danone and WhiteWave.
“There is a pattern of consolidation in the dairy industry that rarely, if ever, benefits the farmers themselves,” continued Burcham, “Farmers that provide milk to Dean Foods will undoubtedly be affected by their bankruptcy filing and any future sale of Dean’s assets.”
The Cornucopia Institute encourages consumers to engage with local, organic farmers whenever possible. Farmers supported by their communities, rather than corporations, receive better returns on their products and have more control over their farm management practices.
We believe that when consumers invest in independent farms, rather than in corporate consolidation, we are provided with the best foods and the highest quality care for the planet.
Use our Organic Dairy Scorecard to support the most ethical organic dairies.
America’s biggest dairy co-op may buy Dean Foods. Opponents fear a milk monopoly
The New Food Economy
by Jessica Fu
One of America’s biggest dairy companies, Dean Foods, filed for Chapter 11 bankruptcy on Tuesday, leaving the future uncertain for its milk suppliers, some of whom don’t know whether they can stay in business if their major buyer goes belly up.
It’s no secret that the timing is terrible. Federally established milk prices remain low, dairy exports are down thanks to the trade war, and domestic milk consumption has fallen steadily since 1970. But one of the most pressing issues posed by Dean Foods’s bankruptcy is the possibility that farmers won’t be able to find anywhere else to sell their product.
Companies like Dean Foods buy fluid milk from dairy farms, which they then process and distribute to retailers across the country. Farmers can sell directly to processors, or they can sell to dairy cooperatives, which in turn, negotiate with processors and retailers on members’ behalf. However, rapid consolidation among dairy co-ops limits the number of options for farmers.