No. 1 milk company declares bankruptcy amid drop in demand – Daily News

on Nov13
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Got milk? Increasingly, Americans don’t, and that led the nation’s biggest milk producer to file for bankruptcy Tuesday.

Dean Foods blamed a decadeslong drop in milk consumption that has seen people turn to alternatives like soda, juice and almond milk.

The Dallas company said it may sell itself to the Dairy Farmers of America, a marketing cooperative owned by thousands of farmers.

“Despite our best efforts to make our business more agile and cost-efficient, we continue to be impacted by a challenging operating environment marked by continuing declines in consumer milk consumption,” CEO Eric Berigause said in a statement.

Since 1975, the amount of liquid milk consumed per capita in the U.S. has tumbled more than 40%. Americans drank around 24 gallons a year in 1996, according to government data. That dropped to 17 gallons in 2018.

An increasing variety of beverages, including teas and sodas, has hurt milk consumption. So have protein bars, yogurts and other on-the-go breakfasts, which take the place of a morning bowl of cereal.

More recently, health and animal-welfare concerns have also contributed, as more shoppers seek out non-dairy alternatives.

Oat milk, for example, saw U.S. sales rise 636% to more than $52 million over the past year, according to Nielsen data. Sales of cow’s milk dropped 2.4% in that same time frame.

Not all dairy products have been affected. U.S. butter and cheese consumption is up since 1996, for example.

“We’re eating our dairy, not drinking it,” said Mark Stephenson, director of dairy policy analysis at the University of Wisconsin-Madison.

The downturn has had an outsize effect on Dean Foods, which derived 67% of its sales from fluid milk last year, according to its annual report. The company has lost money in eight of its last 10 quarters and posted declining sales in seven of the last eight.

Dean employs 16,000 people and operates 60 processing facilities across the country. On any given day, it is running 8,000 refrigerated delivery trucks on U.S. roads.

Stock indexes turn mixed after early rally

Stocks on Wall Street closed with modest gains Tuesday after an early rally lost momentum toward the end of the day.

The Nasdaq composite still finished with its second record high in three days, while the Dow Jones Industrial Average ended unchanged from the all-time high it set a day earlier.

The S&P 500 crossed above the 3,100 level for the first time, placing the index on track for its own milestone finish, but the gains didn’t hold. Still, the benchmark index rebounded nearly all the way back from a loss Monday that ended a three-day winning streak.

“There was some excitement on breaking 3,100, that perhaps we could continue higher on the S&P,” said JJ Kinahan, chief market strategist at TD Ameritrade. “But we’ve had such an amazing two weeks that without any blockbuster news it was going to be difficult for us to continue higher.”

President Donald Trump gave an update Tuesday afternoon on trade negotiations with China, saying both sides are close to a “phase-one” deal. The markets didn’t have much of a reaction to the remarks, however.

The S&P 500 rose 4.83 points, or 0.2%, to 3,091.84. The index, which set a record high on Friday, has notched gains the past five weeks in a row. The Dow Jones Industrial Average closed unchanged at 27,691.49. The Nasdaq gained 21.81, or 0.3%, to 8,486.09, a record.

The Russell 2000 index of smaller companies added 0.35 points, or less than 0.1%, to 1,595.12.

Treasury yields fell slightly after trading resumed following Monday’s holiday in observance of Veterans Day. The yield on the 10-year Treasury note slipped to 1.92% from 1.93% late Friday. It was below 1.50% in early September and has been rallying with confidence in the economy’s strength.

Benchmark crude oil fell 6 cents to settle at $56.80 a barrel. Brent crude oil, the international standard, fell 12 cents to $62.06 a barrel. Wholesale gasoline was little changed at $1.61 a gallon.

— Compiled from news service reports.

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