In November, Dean Foods, the nation’s largest milk processor, filed for bankruptcy protection. Last week, Dairy Farmers of America, the country's biggest milk cooperative, announced a plan to purchase most of Dean’s assets. The deal, if approved, would include buying Boise-based Meadow Gold, owned by Dean Foods.
In the restructuring proposal, Meadow Gold would be one of 44 facilities that Dairy Farmers of America would acquire in a $425 million deal. The merger will need to be approved by a bankruptcy court and the U.S. Department of Justice.
Rick Naerebout of the Idaho Dairymen’s Association said the change in ownership won’t affect Idaho’s dairy farmers, as the plants should continue processing as usual.
“We don’t expect there to be any sort of disruption that would affect our dairymen at the farm level," Naerebout said.
Critics of the deal say it could reduce competition and suppress milk prices for an industry that’s taken a hit from consumers drinking less traditional milk.
To Naerebout, the bankruptcies of large dairy companies like Dean Foods and Borden Dairy Co., another Dallas-based processor that filed for bankruptcy earlier this year, are less signs of a struggling industry and, instead, are indicative of a lack of innovation in the fluid milk sector.
But he said the market is different in Idaho, where only 3% of milk processed ends up in jugs at the supermarket.
“The fact of the matter is we have seen fluid decline over the last couple decades," he said, "but you look at those manufactured products and those dairy ingredients, they’re actually growing greater than the losses in fluid milk.”
Meadow Gold has about 50% of the fluid milk market share in Idaho, but the majority of milk processed in the state goes to products like cheese and milk powder.
Find reporter Rachel Cohen on Twitter @racheld_cohen
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