Got milk? Maybe not. On Sunday, Dallas-based Borden Dairy Company filed Chapter 11 bankruptcy. This comes on the heels of the November 12 bankruptcy filing by Dean Foods, America’s largest dairy producer with 50 brands, including TruMoo and Meadow Gold. The reason given by both companies: the decline in consumer milk consumption.
“Despite our numerous achievements during the past 18 months, the Company continues to be impacted by the rising cost of raw milk and market challenges facing the dairy industry,” Tony Sarsam, Borden Dairy CEO, said in a statement. “These challenges have contributed to making our current level of debt unsustainable.”
Components Behind Milk Producer Troubles
The 1857-founded Borden’s statement said it plans to “continue operating in the ordinary course of business, under the court’s supervision, and remains focused on being the most service-oriented dairy Company that offers delicious and nutritious products consumers love.”
There are several factors behind Borden’s filing, including the inability to carry its current debt load and meet employee pension obligations.
Food and Wine magazine pointed to an additional issue – major retailers like Walmart opening their own facilities, cutting out the need for dairy producers like Borden and Dean.
Per CNN, Borden stated another reason behind the filing is a 6% drop in overall US milk consumption since 2015. “Borden noted that more than 2,700 family dairy farms went out of business last year, and 94,000 have stopped producing milk since 1992,” CNN reported. “With the wholesale cost of milk rising due to fewer suppliers and retail milk prices weaker due to lower consumption, the margins for milk processors like Borden have suffered.”
Contributing to the decrease in cow milk consumption is a move towards plant-based alternatives in the market.
Statistics cited by the Associated Press (AP), “the amount of milk that Americans drink annually has fallen 40 percent since 1975. In 1996, annual milk consumption was roughly 24 gallons per person, a number that dropped to 17 gallons per person in 2018.”
The AP included Nielsen data showing oat milk sales in the US increased by 636% between 2018 and 2019 at $52 million, while milk dropped 2.4% during that time frame.
Enter Milk Alternatives
Elmhurst Dairy is one milk producer that’s taken this kind of information to heart. After closing its Queens, New York facility in 2016, the 80-year-old milk producer reopened months later offering plant- and nut-based “milk” options.
Could plant-based “milk” options be the future for school cafeterias? Forbes has reported, “The global dairy alternative market was estimated at a value of $11.9 billion as of 2017, and its rapid growth has gotten the attention of those in the food industry, as has its profitability – plant-based dairy alternatives are displaying 6% better returns than traditional dairy products. Consumers are driving this trend: In Britain, for example, 25% of people are choosing plant-based milks – with figures being as high as 33% for the young adults market (16-24-year-olds).”
Medical News Today recently compared cow milk to plant- and nut-based alternatives, saying that many children are started on these alternatives due to cow milk allergies. “Doctors estimate the incidence of this allergy is 2 to 5% in children under 3 years old. The incidence is lower in adults.”
The article went on to say consumers moving away from cow’s milk to nondairy, plant-based milk alternatives would face a trade-off when it came to benefits like lower calories and healthful fats. Non-dairy alternative drinkers need to get their protein, calcium, certain vitamins and minerals usually supplied by cow milk from other sources.
The good news for plant-based beverage drinkers — many products add missing elements. Which means? Yes, almond milk could become the chocolate chip cookie’s new best friend.
Milk Producer Bankruptcy: Sources
Borden Dairy Company statement
Food and Wine: America’s Biggest Milk Producers Going Bankrupt
AP News: No. 1 Milk Company Declares Bankruptcy Amid Drop in Demand
Dairy Herd Management: Walmart Opens Indiana Milk Plant
Forbes: Non-Dairy Milk Alternatives are Experiencing a Holy Cow Moment
Medical News Today