Dean Foods, the country’s largest milk producer, declared bankruptcy on Tuesday after years of difficulties due to falling sales.
The company based in Dallas (Texas) explained in a statement that it expects to use the protection that will facilitate the bankruptcy process to support their current operations and respond to their debts and obligations while working on a sale of their business.
In that sense, he said he is negotiating a possible sale of its assets Dairy Farmers of America, the largest dairy cooperative in the U.S.
“Despite our best efforts to make our business more agile and efficient, we continue to suffer the impact of a difficult operating environment marked by continued declines in milk consumption,” explained Eric Beringause, president and CEO.
Dean Foods, which operates several of the best known U.S. milk brands such as Dairy Pure, Organic Valley and Land O’Lakes, has seen its sales drop by as much as 7% in the first half of this year, while its net profit plummeted by 14%.
Founded 94 years ago, the company operates about 60 plants in 29 states, a network it built over decades by acquiring regional producers.
Over the past few years, however, it has tried to reduce the size of its business in response to a sharp decline in milk sales.
According to U.S. Department of Agriculture data, U.S. consumption is at an all-time low since data became available and has fallen by 39% in the last 40 years.
Meanwhile, the dairy market has continued to grow thanks to increased sales of other products such as yoghurt or cheese.