The company said it also has been hurt by broader industry trends, including 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. 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, the company said in its filing.
With the loss of so many producers, prices of raw milk have increased. At the same time, American tastes have shifted to dairy alternatives such as soy milk and other such products and non dairy cheeses.
Dean Milk, the largest milk company in the country filed bankruptcy a couple of months ago. Other milk companies will likely be forced to reorganize as well.
This is not a temporary economic situation or caused by a depressed economy. Rather, this is caused by a fundamental and likely permanent shift in consumer preference. While milk will continue to be sold, it will not be the money maker it has been since the Civil War. The milk market will continue to lose ground to milk substitutes.
That is one thing I really truely miss since becoming diabetic. Before I was diagnosed, I would go through two gallons a week just by myself. Unfortunately milk is extremely high in carbohydrates and it’s on my do not eat/drink list. I hate the taste of Almond and coconut milk
On a more serious note, Trump although did reduce e regulations on the coal industry, the decline in US coal usage has increased under Trump compared to Obama. That suggests strongly that we are seeing a fundament market shift (driven by cost) that has little to do with Presidential policy.
Well, we don’t have much in common at all. But I also am a diabetic. I loved milk, or as my son used to call it when he was 6, “murk”. It contains about 18-20 grams of sugar per 12 oz. I had to give it up. And yes, almond milk and coconut milk are disgusting.
I remember the Wisconsin Dairy industry here lobbying HARD for TPP for access to those markets.
Products made from plants and not mammals should never have been allowed to use the term “milk”. The dairy industry is trying to change that but they are way too late. They should have jumped on that immediately.
The valley area I grow up in had hundreds of dairy farms. Now there is only a few or about 10 percent left that’s really large. They bought out other farms. Those that keeps the land are at least getting some royalties from NG.
Ultimately, no President, reckoning back as far as you like, has anything to do with this, or even any politician.
This is entirely the product of a fundamental and permanent shift in consumer preferences.
There were several dairy farms held by members of my extended family during my youth and I spent quite a bit of time working them. One was a Pennsylvania Century Farm that came very close to bicentennial status before it shut down. It was originally founded on a land grant in 1788 and my uncle was a direct line descendant of the founder. It was liquidated in the early 1980’s, just about 4 years shy of bicentennial status.
But they are all gone now, as are the vast majority of family dairy farms in northeast Pennsylvania. Some of the larger operations have managed to hang on, in many cases by consolidating defunct farms.
So you have a shift in consumer preferences, compounded by a tightening of the producer market.
Under those circumstances, it is easy to see why bottlers and distributors are having such difficulties.