Borden Dairy Co., one of the largest and oldest dairy producers in the U.S., filed for Chapter 11 Bankruptcy after more than 160 years in business.
The company announced the decision Sunday stating it would use the court process for “financial restructuring” to reduce its debt load. ACON Investments, L.L.C., acquired Borden in 2017.
“This reorganization will strengthen our position for future prosperity,” Tony Sarsam, Borden’s CEO, said in a news release.
The Dallas-based company’s decision makes it the second diary producer to file for bankruptcy in recent months. In November, Dean Foods, Inc., announced its voluntary reorganization after struggling to address debt and meet consumer demands. The company also announced its plans to sell the company.
Borden noted company milestones that included the revival of its Elsie brand and the introduction of new diary products, which the company cites outpaced industry growth and increased its year-over-year sales.
However, the rise of raw milk prices and broader market challenges have been difficult for the company. The Dairy Farmers of America, which serves more than 8,500 diary producers, reported a $1.1. billion decline in traditional milk sales in 2018. This follows a surge in popularity of non-diary alternatives such as almond, oat and soy milk.
The U.S. Department of Agriculture also reported that licensed dairy farm numbers in the country declined by 2,731, a total of 6.8%.
“Despite our numerous achievements during the past 18 months, the company continues to be impacted by the rising cost of raw milk and market challenges facing the dairy industry,” said Sarsam. “These challenges have contributed to making our current level of debt unsustainable.”
In the company’s bankruptcy filing, it listed assets and liabilities between $100 and $500 million. The milk producer says it will continue to operate as normal with an employee base of 3,300 workers.
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