The glass is looking half empty for big milk companies these days, as Borden Dairy Company becomes the second large producer in recent months to file for Chapter 11 bankruptcy protection.
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Blame, among several factors, more Americans drinking dairy alternatives made with soy, rice or nuts, industry experts said.

Founded in 1857, the Texas company known for its mascot “Elie the Cow” cited the rising cost of raw milk and market challenges facing the dairy industry as making Borden’s level of debt unsustainable, according to a company statement.

America’s consumption of cow milk has lagged in recent years amid a surge in popularity of nut-based milks and as retailers offer their own low-cost house brands to bring in more shoppers. Making business even more difficult is the nation’s dwindling supply of dairy farmers. That has dented supply and pushed raw-milk costs up nearly 30% over the past year, court papers filed in the case noted.

Dean Foods. the country’s biggest milk producer, declared bankruptcy in November and entered into advanced talks with Dairy Farmers of America about a possible sale. Dean’s losses also escalated after its No. 1 customer, Walmart, started producing its own milk.

Borden draws a distinction between its situation and Dean’s, telling vendors in a notice on its website that it has “solid earnings” while “Dean Foods is not profitable.” While Dean intends to sell its assets, Borden said it intends to continue its business “once we fix our balance sheet.”

Acquired by private-equity firm Acon Investments in 2017, Borden listed assets and liabilities of between $100 million and $500 million in its Chapter 11 filing. The company has 3,300 people and operates 13 milk processing plants and nearly 100 branches across the U.S., producing nearly 500 million gallons of milk annually.

“This reorganization will strengthen our position for future prosperity,” Borden CEO Tony Sarsam stated late Sunday in announcing the move into federal bankruptcy court. “We will continue serving our customers, employees and other stakeholders and operating business as usual throughout this process.”

As for Dean Foods’ fate, the Dairy Farmers of America said Monday it continues to consider a deal to buy some or all of the company’s assets.

In dairy risk management, one size does not fit all. Throughout recent history, a number of dairy-related risk management programs, some available through private crop insurance providers and others available through the Farm Service Agency (FSA), have been designed to fill gaps in protection against market risk and uncertainty.

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