News Bankruptcy
American dairy bankrupt due to high milk price
After Dean Foods, another large milk processor in the United States has filed for bankruptcy. This concerns Borden Dairy, a company that has been around for more than 160 years and has annual sales of more than $1 billion.
The bankruptcy was filed on Sunday 5 January. The high milk price, among other things, affects the originally Texas company, according to a press statement.
The American milk price has been on the rise non-stop in 2019 and has climbed to above $21 per CWT (= 45,5 kilos), which translates into almost €42 per 100 kilos. At the same time, the conventional dairy market in the US is quite competitive, partly as a result of the rise of almond and soy milk products, among other things.
High indebtedness
Borden Dairy also struggles with a high debt burden. In consultation with the shareholders, it has been decided that bankruptcy is the best option for now. In 2017, the milk processor was taken over by two American private equity companies. As is often the case with such constructions, companies are then loaded with hefty debts.
Borden Dairy is now being reorganized under the supervision of the judge. In the meantime, the activities will continue as usual. The company has about 3.300 employees and 13 factories, mainly in the Midwest and the South of the US. Plates Dairy is na Dean Foods the second major milk processor to file for bankruptcy in a short period of time.
Wouter Job
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