February 19, 2020

Dairy Farmers Have Mixed Feelings About the DFA/Dean Acquisition

 |  By: Anna-Lisa Laca

While dairy farmers have been talking about the potential for Dairy Farmers of America (DFA) to purchase Dean Foods assets for months, when news broke earlier this week farmers were not short of opinions. 

The positive reactions centered around school nutrition and processing capacity. Here’s a handful of those comments:

“If Deans files chapter 7 bankruptcy then 1/3 the Nation’s schools go without lunch and breakfast milk the next day. 25% or more of markets shelves will be empty the next day. That may not upset some people’s milk prices but it will have an impact on the limited plant space to process that milk without a home. Sounds like the upper Midwest of last year or two. You really think DFA wants to own bottle plants? Most coops have de-vested that small margin product line. But since DFA is worried about the pay price of dairymen’s milk checks, it’s a necessary move.”

“Because I’m ever the optimist, I’m really excited with the purchase of Dean’s by DFA. Dean’s is the leading supplier of school milk in this country; I’m really hoping DFA can lead the charge in revolutionizing the milk we serve in schools to better reflect the nutritious, delicious product it can be with the right packaging and handling once it leaves the processing facility.”

“I hope this will be a home for a lot of farmers milk. And they get payed a fair price for it. Lots of cows for sale now because no home for their milk.”

Some farmer comments shared on our social platforms were neutral.

“Dean Foods buys a lot of DFA milk, what do those farmers do with their milk if the plants are closed. Dean foods has also been so cash strapped they have not been able to come up with new ways to market fluid milk, this could change under DFA.”

Others were negative.

“This is too bad, I was hoping the courts would break Dean foods up into smaller companies.”

“What a mess.”

As expected, farmers have a lot of questions.

“I read somewhere that Dean’s owns 66 plants currently. Have seen the list of 44 that is being talked about DFA purchasing. My question is what are the 22 that don’t seem to be in this discussion going to do? Will that portion be run by Dean’s then as part of the restructuring or be closed or sold off to others?”

“Since Deans in Sioux Falls is not listed and LeMars, Iowa, is. Does that mean Sioux Falls plant is available for others to buy? Investors this is a great opportunity.”

How do you feel about the deal? Share your thoughts on our poll here.