The US dairy industry, the largest in the world, is under a lot of pressure because the consumption habits of Americans are changing.
Borden Dairy Co. filed for bankruptcy protection, the country’s second largest dairy company to do so in recent months. Borden produces almost 1,890 million liters (500 million gallons) of milk per year for supermarkets, schools, among others. It employs 3,300 people and operates 12 plants throughout the country.
America’s refrigerators increasingly have more juice, soda and milk substitutes made from soy or almonds. At the same time, protein bars, yogurts and take-out breakfasts have replaced the morning cereal bowl. That has caused effects on traditional milk producers such as Borden, which was founded in 1857.
The amount of liquid milk consumed per capita in the United States has fallen more than 40% since 1975. Americans drank about 90 liters (24 gallons) a year in 1996, according to government data. That amount decreased to 64 liters (17 gallons) in 2018.
As milk consumption has decreased, dairy factories have closed their doors. In documents submitted to the court, Borden said that 2,730 dairy farms have broken in the last 18 months alone.
The remaining dairy farms may demand higher prices, but that affects Borden because it cannot charge consumers more for the pressure it faces from large competitors such as Walmart, which opened its own milk processing plant in the state of Indiana. in 2018.
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