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The dairy industry is on it’s way out! In the summer of 2017, Dean Foods, the largest dairy company in the United States, closed yet another one of its milk processing plants, PET Dairy, because sales were so bad. Just a few months later, Dean Foods reported that their net income dropped 91 percent.
Now, Dean Foods is ending contracts
with a number of dairy farmers. At least two dozen producers who ship
milk to Dean Foods in Pennsylvania, Indiana, Kentucky, Tennesee, North
Carolina, and Ohio will now have until May 31st, 2018 to find a new
place to sell their milk. This is a similar move
that Grassland Dairy made about a year ago when their producers in
Wisconsin were told they had 30 days to find a new way to sell their
milk.
And this is only the beginning. Dean Foods said
this could be just the first wave of contracts they are severing in
2018. What is their reasoning behind ending these contracts? “[This is
due to] a surplus of raw milk at a time when the public already is
consuming less fluid milk and companies assertively entering or
expanding their presence in the milk processing business, have
exacerbated an already tenuous situation in a highly competitive
market,” said Reace Smith director of corporate communications at Dean Foods.
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