A Giant Milk Industry merger is moving closer with $ 5 425 million

A Giant Milk Industry merger is moving closer with $ 5 425 million

Now is the difficult time to be a dairy farmer in America: The nationwide decline in milk consumption and the spread of trade war with China have put thousands of farms out of business.

Now the industry is close to one step in a major consolidation that some struggling farmers fear may make them more crippled.

Dairy Farmers, the country’s largest milk cooperative, is expected to receive scrutiny from American antitrust regulators on Monday that the bankruptcy milk company reached an agreement to buy “substantial portions” of Dean Foods.

Dairy envoys have argued that a combination will reduce competition and suppress raw milk prices. But the co-op says the deal will help farmers guarantee that there will be a buyer for milk at a time when nationwide milk consumption is declining.

Under the deal, American Dairy Farmers, a farmer-owned co-op, will pay $ 425 million to acquire Dean Food’s 44 facilities, as well as real estate, inventory and equipment to manage them. To proceed, the agreement must be approved by the bankruptcy court, in addition to supervising Dean Foods, who has been investigating potential affiliations for months.

Until now, much of the antitrust investigation has focused on the co-op’s evolving role in the American milk business. American Dairy Farmers was founded two decades ago to help small farmers market their raw milk to dairy processing companies like Dean Foods, which prepares milk for retailers to distribute.

But over the years, Co-Opt, which now has more than 5,8 members, has also invested heavily in processing, which means it buys some raw milk that sells its own marketing branch. These investments have created conflicts of interest, some dairy yeasts argue, because processors benefit from lower milk prices, and farmers benefit from higher ones.

Dean Foods, the largest milk processor in the United States with less than 60 manufacturing facilities and a portfolio of well-known brands such as the Trumau and Lehigh Valley, Filing for bankruptcy protection in November, plagued by consumer habits and a growing market for milk alternatives.

Dean Farmers ‘plans to acquire a larger share of Dean Foods’ wealth in the United States will significantly expand its processing activities, further aggravating the conflict of interest, Merger’s critics say.

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