Borden Dairy shutters another processing facility citing rising milk prices and tumbling demand

USA –  American dairy processor and distributor, Borden Dairy Company has announced plans to cease operations at its Chembung, Illinois plant citing higher milk prices and tumbling milk consumption.

The Dallas, Texas headquartered company also announced that it will be ceasing fluid production at its plant in De Pere, Wisconsin.

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The company noted that this change will impact the production and distribution of various brand-named milk products distributed across the states of Illinois and Wisconsin.

The recent development follows an earlier announcement by the company that it would close its plant in North Charleston, South Carolina at the end of May.

The closure will see the company exit from the South Carolina retail mark, meaning that Borden products will no longer be available on store shelves in the Palmetto State.

Borden Dairy has been struggling to make ends meet and in January 2020, became the second major milk producer to file for bankruptcy in recent times after Dean Foods filed for bankruptcy in November 2019.

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The company employed approximately 3,300 workers at the time of filling. It cited tumbling milk consumption combined with the rising price of milk as factors that pushed it into crippling debt.

In June 2020, it was announced that a new joint venture between New Dairy Opco (New Borden) and Select Milk Producers had won the auction for most of Borden’s assets.

Known as NDSM, the joint venture took over operations of the company’s 14 manufacturing facilities across the Southern and Midwestern United States.

Although the business is backed by an impressive portfolio of investors, it has failed to restore Borden Dairy to its former glory as the US dairy market has been struggling to keep consumer interest.

According to the United States Department of Agriculture (USDA) data, per capita, fluid milk consumption has plummeted 40 percent since 1975.

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It’s true that people are drinking less dairy, but according to Quartz, the industry has also taken a hit from becoming a global industry, tied up in a complicated game of supply-and-demand.

Dino Giacomazzi, of Giacomazzi Dairy, once the oldest dairy farm west of the Rocky Mountains, also attributed the industry’s struggles to the declining U.S. birth rate.

“All you can do is try to produce milk at a lower and lower cost and all you can do is scale-up,” he said. “So the industry has been consolidating very rapidly.”

There were 2,550 fewer licensed dairy operations in 2020 than in 2019 when the number dropped by 3,261.

The overall number of licensed operations in the U.S. has marched steadily downward since data collection began, declining by more than 55%, from 70,375 in 2003 to 31,657 in 2020.

The closure of some of the dairy facilities and the acceleration of the decline in US dairy farms reflects how difficult it is to operate a dairy business in a low milk price environment.

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