Two major milk producers have filed for bankruptcy leaving some to wonder what the future holds for the dairy industry and local dairy producers.
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Local dairy confident despite two major milk producers filing for bankrupcty.jpg

Young’s Jersey Dairy has been around for 151 years.

The Yellow Springs staple is known for its ice cream and cheese, but with Borden Dairy Company and Dean Foods filing for bankruptcy, will this local business feel the effects?

“We’re really tiny compared to those folks, we milk our own cows here, we use our own milk to make our cheese and etc., so it really doesn’t affect us a whole lot,” said Dan Young, Young’s CEO.

However, they do buy the dairy for their ice cream from a company that’s a part of Dean Foods.

“So far we’ve been in contact with them and everything is fine, and so we’re hopeful they will have a good outcome,” said Young.

Still, they’re looking at other options.

“We’ve chatted with a couple of other smaller more local producers, and we have some backup plans in case it’s needed, ” Young said. “Right now we’re just in a wait and see mode.”

Young adds he has some concerns though because, at the end of the day, this is the industry he’s a part of.

“I hate to see it under strain, but that’s how things usually operate, things change,” said Young.

Thomas Traynor, the Dean of Wright State University’s College of Business, said, in this case, the change is milk costs going up and demand going down.

“Consumers are buying far fewer dairy products as they choose substitutes like soy milk or almond milk, and so the industry is naturally contracting because of that and can’t support as many firms as it used to,” said Traynor.

Traynor said those sales have dropped about 40-percent over the last ten years or so.

“Industries have their ups and downs,” said Traynor. “This is sort of a natural process of a constantly changing economy, so it isn’t something we should be terribly surprised about.”

He believes it’s too early to tell what kind of impact this can have on dairy farmers, but said there could be fewer producing dairy in the future.

“The industry isn’t necessarily going to be harmed overall in terms of the agriculture industry, they’ll just be changing what farmers are producing,” said Traynor. “Those who can contract or change to a different raw agricultural product will survive, and those who might have some debt and can’t make that change fast enough might not survive.”

With the United States-Mexico-Canada Agreement moving forward in the Senate, Canada could be opening up its market and allowing American farmers to sell more milk, cheese and other dairy products north of the border.

Traynor said this will only have a small impact.

“It’s going to make somewhat of a difference but not enough to say reverse the big decline in consumer preferences for dairy,” said Traynor.

Traynor said it’s also too early to tell if more milk producers will file for bankruptcy and added some could even recover from this.

Borden’s filing only says it plans to stay in business during the bankruptcy process, Dean Foods is doing the same.

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