Dean Foods Earnings Call FY 2018: Background. Context. Future?

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In an entire food sector which is facing challenges at the moment from several different fronts, Dean Foods held their FY 2018 Year-end and 4th Quarter Earnings Call on Wednesday morning, February 27, 2019.  Dean Foods sources milk from independent contract farms and co-op members all across the nation, the Southeast included.
A summary of the context surrounding the event:
  • Most of food sector is off in recent financial reports
  • Sales of Dean Foods dairy products are still good  – Sales of $1.93 Billion for the Quarter actually beat a $1.91 Billion Estimate
  • Future: unknown; don’t give up hope – engage in a productive discussion
  • Initial Stock Prices and reaction after call: Dean Foods stock has traded in the $4 to $4.50 range for a couple of months (early 2019).  It was near $4.50 early Tuesday, Nov. 26 (the day before the earnings call), then dived under $3.90 for a bit of time on Wed. Nov. 27 (day of the call) and closed at $3.92.  On Thursday, Feb. 28, 2019, (day after earnings call), the stock closed at back over $4 at $4.01.   These highs and lows are par for the course after an earnings report.
 
The news from that call, and additional reports, is no real surprise to anyone who has been following Dean Foods for the past couple of years, but it has once again laid out the factors which will continue to affect the farm sector in the near future.  There is not a farm, nor a food company, anywhere, who is not affected by a changing food environment. Many big food companies, KraftHeinz included, are not having good earnings results of late, and there has been a ripple effect on Wall Street though all food business.  More closely related to dairy economics,  ‘‘Natural Cheese” was cited as one of the categories which led to Kraft’s difficult report. 
 
In many ways, we can feel a bit fortunate. Why?  Because Dean Foods is a publicly traded company, it is required by the SEC to issue reports and filings available to the general public and shareholders. Therefore, we do have a bit more knowledge about the true state of affairs.  We know (at least mostly) what we’re dealing with. 
 
Before providing the links to various reports (and not all of them are doom and gloom), I would offer this advice:  just take these reports as just that – reports. Dean Foods and its products still enjoy a lot of sales, a lot of income, and a lot of shelf space – it is the nation’s third largest dairy company.  That is a positive, and let’s be grateful for every hour we have that.
 
Remember the situation that led to this week’s report:
 
Also keep in mind that so much of this began over three years ago when Walmart announced they would be building their own milk plant.  Since then, the entire industry has been questioning how they would reckon with the Walmart monstrosity and their brutal tactics in the distribution and product acquisition sectors.  
Our area (Ky and TN, for the purposes of this post) felt that most intensely last spring when a living hell was catalyzed by the (at that time) expected June 2018 opening of the Walmart plant in Fort Wayne, Indiana, and over 100 farms in 8 states lost their Dean contracts.
Dean was not the only one affected or involved nationwide, but Dean, because they are publicly traded, took the great brunt of the fall and bad publicity. Dean was not the only party involved in farms losing contracts, and it could be even said, they were a victim as well of the Walmart entry into milk processing.
Since the Walmart plant opened in the summer of 2018, it is no secret they have experienced difficulty after difficulty, and still yet do not have all the bugs worked out of operations – neither at the plant, or distribution to stores from that plant.  
 
It is most sickening to think that some farms went forever-out-of-business because of fear of that new Walmart plant, which has had issue after issue, is not yet dependable, and  it is not known if it will ever be.
These million and billion dollar bad decisions by a big-box company have forever affected small communities in the east and southeast United States.  The fear and rumors related to Walmart and an assumed expansion after the first plant came on line have also been factors in the current industry state-of-affairs, although those rumors have quietened down as of late. 
 
Additional contributing factors affecting this Dean Foods earnings report: 
Sales of Milk: Generally, fluid sales of real milk (cow’s milk) are down, with the exceptions being whole milk and specialty dairy milks and dairy beverages. Let’s look at that as lessons and opportunities, and not despair, but get to work!   It is time we as farmers quit depending on hired employees as the only people who should ‘sell’ our products – we should also be full time milk salesmen ourselves!
 
Misinformation on the internet and in other places:  Don’t ever deny the impact that misinformation about milk and its health benefits, as well as our farming practices, has had on milk consumption, and milk consumption is the real reason for a dairy farm’s existence.  We, individually as farmer and industry agvocates, have got to step up our game, or the misinformation will win. Even popular sports figures are now being touted as ‘dairy free.’   (check the Dodgers!) 
 
Enormous expenses ran more than estimated related to Dean Foods plant closures – but that is largely past:  Only time will tell if it was a long-term wise move for Dean Foods main executives to decide to close 7 milk plants around the country.  However, in the short term, those costs were reflected in the two most recent quarters of financial reporting, and should be minimized going forward. 
 
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So, now back to the current Dean Foods situation, here are some links to current information, generally believed to be credible, and mostly in chronological order.  If you will pay attention to the events of Feb 27 and the timing, you can see how quickly information (of all kinds) is dispensed, so please keep in mind this is a fast-moving story, similar to that which other companies experience on the day of Earnings Reports. Any news should be considered “current” at that moment it is reported, events can change quickly, and perspectives are those of individual articles:
Mid-February, 2019:  The Milkweed reported about a “Notice of Covenant Waiver”   filed by Dean Foods, which could have had implications if not corrected by March 1st, however, it appears that situation got resolved in recent days, at least for the time being. (anecdotal, still trying to verify). 

Feb. 14, 2019: Dean Foods’ Great Brands Are on Track for a Profitable 2019

  source: by Faloh Investment – touts Dean’s recognizable brands as a positive
Feb. 26, 2019: Dean Foods Explores Strategic Alternatives to Accelerate Business Transformation;  source – Seeking Alpha, notes company is evaluating different strategies which may (but not certain) include sale of certain assets, joint ventures, more;  Stock jumped 10% with this news on the Tuesday evening before the full earnings call on Wednesday morning.  Other similar reports available with google searches, mostly different takes from the original news release.
Feb. 26, 2019: Local report about potential sale from Maria Halkas, Dallas News.com – largely uses information from the company news release above

Feb. 27, 2019 – 6:45 am:  News Release of Fourth Quarter and FY 18 Results

 

Feb. 27, 2019 – 6:57 am:  Dean Foods posts unexpected Q4 loss, suspends guidance(in layman’s terms, guidance is financial projections)
Feb. 27, 2019 – 8:10 am: Official Filing of 8-K with the SEC
This is a document required by law to be filed with the SEC.  There are some actions noted in the first few pages which may be of interest.
Feb. 27 – 9:00 am:  The Earnings Call / Webcast took place,  and a transcript was posted by 2:54 pm.  Listen for yourself to the audio of the call, or read the transcript, which are both available. The audio will take 50 minutes. .
Feb. 27 – 10:29 am: report on Benzinga titled:  Morgan Stanley: Pressures on Dean Foods Could Weigh on Company through 2019:   Report notes that $ales for QY 2019 actually beat the estimates:  Sales of $1.93 Billion beat a $1.91 Billion estimate
Feb. 27 – 12:47 pm: JPMorgan sees Dean Foods Sale as Unlikely    Ken Goldman, a seasoned financial analyst who is a frequent participant on the Dean Foods Earnin gs Calls, doesn’t think a sale is imminent for the reasons summarized at the link.
Feb. 27 – 2:02 pm:  Land-O-Lakes, a member-owned cooperative with a significant market presence in dairy products, animal nutrition, and an agronomy and crop-input division, released its 2018 Financial Statements.  Land-O-Lakes showed increased net sales, yet lowered net earnings, in 2018 when compared to 2017 numbers.  (See the first paragraphs).
  • Relationship between Dean and Land-O-Lakes:  Dean Foods (publicly traded) and Land-O-Lakes (a co-op) are separate companies, and neither owns the other, but there is a business relationship.  Land-O-Lakes sold its Fluid Milk division to Dean Foods in 2000. The Land-O-Lakes brand, presumingly through an ongoing license agreement, appears on milk cartons in the upper midwest.  And with Land-O-Lakes owning Purina and Winfield Crops, Land-O-Lakes still serves farms across the country shipping milk to Dean Foods plants.
Feb. 27 – 3:19 pm:  Slides posted from Dean Foods Earnings call:  These will provide a quick look-summary of the information discussed in the Earnings call, but should be viewed with caution without the context of the call.
Feb. 27th – 4:15 pm:  “Dean Foods: How Bad Is it?” – perspective from Value Analyst – notes company’s debt of $887 Million, compares significant financial numbers in relation to other food companies, more.
Feb. 27th – 6:22 pm:  “Here’s How Dairy Giant Dean Foods Curdled Its Own Milk” :  Karen Robinson Jacobs,  writing for Forbes, believes  that Dean’s current troubles began when Dean Foods sold the Whitewave Division, which included plant-based beverages and Horizon Organics. Consider this a review of past activity, and one writer’s opinion, but it adds to the mix of “how did Dean find itself here?”

Follow-Up Reports:

Feb. 28th – early morning: Market Watch notes some positives and challenges, yet questions, in addition to JP Morgan, if the company can find a buyer
Feb. 28th – early morning: Food Navigator, particularly, notes the quarterly and yearly losses were not due to a significant loss in sales, but due to enormously increased expenses.
March 1st – late morning:  James Brumley, Feature Writer for InvestorPlace, notes that the ability of food retailers such as Kroger, Walmart, and others to process their own private labels, enhanced by the ability to use milk as a loss-leader, has contributed to Dean Foods current stock price challenges.  His perspective is titled: “Dean Foods Stock has passed its Expiration Date.”
March 4th  – afternoon: from Seeking Alpha: summary of a perspective from Wells Fargo’s John Baumgartner  titled: Well-Fargo dissects M&A potential at Dean Foods. Perspective notes ‘DF sells $550MM+ of excess cream annually.’  (cream = dairy fat, rising in market demand) may be attractive to some potential buyers.  On this afternoon, 4 business days after earnings call, stock closed at $3.56.  On Thursday, Feb. 28 (1 day after call, stock was in the $4.00 range)
March 7th (Thursday):  Stock Price closed at $2.88/share, and came back to $2.91 after hours
March 9th – (morning):  Dean Foods Bonds Drop 2.2% During Trading:  reported by Lisa Matthews of Fairfield Current, a digital newspaper focusing on tech, health, science, and global events:  Article contains information on recent stock trades, and notes that on Friday, March 8th, stock traded down 17 cents / share, with a trade volume 2.5x that on a normal day: (4.34 million shares vs. avg. of 1.876 million shares per day.)  A lot of the trading volume in recent days and months has been due to institutional investors and hedge funds.
March 11th:   Two Stocks to Tuck Away: The Mosaic Company (MOS) and Dean Foods (DF): the lower half of this article notes recent volume trades of note of Dean Foods stock. Article contains lots of financial market lingo.  Article by Andrew Francis of Financial Mercury.
March 11th: Historical Performances Are Key to Consider:: Dean Foods Company (NYSE: DF) – an explanation of financial terms such as EPS, and looks back at some events coming up to the current weeks and days.  From Top Stock News.
March 12th: Analysts Anticipate Dean Foods (DF) Will Post Earnings of 15 cents/share (by Lisa Matthews for Fairfield Current):  Explanations of recent trades, even some purchased by some retirement funds.
March 12th:  Implied Volatility Surging for Dean Foods Stock Options (from Zacks) – an explanation of investors taking positions in anticipation of future stock price moves.
March 14th:  Bernstein drops Dean Foods (from Dairy Reporter) – suggests (suggests!) sale may come by division, but interesting that company itself is downsizing and in the process of restructuring.  Alexia Howard, a Bernstein representative who is a regular on the Dean Foods earnings calls, was noticeably absent from the Feb. 27th, 2019 call.
March 14th: Sentiment Still Supports the Bullish Case: Dean Foods (DF) Company:  Article by Kevin Freeman for the MonReport explains some financial terms and how they work, such as Relative Strength Index (RSI).  In this case, at the time of this post on the morning of Mar. 14th, with an RSI of 22.13, Dean Foods stock is considered to be oversold.
March 29th: Bear of the Day: Dean Foods:  Article by Benjamin Rains for Zack’s.  Notes that Dean, along with DFA and other ‘real dairy’-focused entities, are facing challenges and possible crossroads “due to the rise of alternative ‘milk’ offerings such as oat, nut, and soy, along with other non-dairy options for ice cream and more.”   Perspective goes on to note that that the “global dairy alternatives market is projected to soar  from $11.9 billion in 2017 to $34 Billion in 2024.” 
April 11th: Dean Foods Company (DF)’s Mixed Signals Lead to Crossed Wires: Article by Abby Carey for The Mon Report
April 12th: Dean Foods Attracts Takeover Interest from SaputoGlobe and Mail: reported by Seeking Alpha, with a link to a Globe and Mail story
April 15th: Saputo eyes US Dairy M&A – summary from Seeking Alpha; notes Dean shares were up 5.61% early in the morning on Monday, Apr. 15th after possibilities first announced late on Friday afternoon, April 12th.
April 15th: Saputo interested in Acquiring Dean Foods, report says:  a summary published at Food Dive.  Notes Saputo, a Canadian-owned company, owns 62 plants in 40 countries around the world, and reported an 18.4% increase in revenues at it’s last earnings report.
April 15th: Saputo to be disciplined with M&A:reported at Seeking Alpha.  Quotes Lino Saputo, “The level of discipline will be even more enhanced.” Notes Dean Foods closed up 7.48% (price $2.30/share) for the day.
April 18th: Can it sustain the pressure built by the Analysts: Dean Foods Company (DF) – article by Christopher Black for West News Now.
April 18th: Implied Volatility Surging for Dean Foods (DF) Stock Options – credited to Zack’s Equity Research, published on Zacks.com:  Article explains that “implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or another.”  Notes that a “Jun 21 $3.00 Call had some of the highest implied volatility of all equity options today,” [April 18th].
April 29, 2019: (posted mid-morning): Dean Foods Company Stock is 2.39% Higher Today, What Just Happened? – by Melanie Gerald, for FindANews.com;  article details the volumes of current and historical trades, and what they could potentially mean
April 29, 2019: (posted morning)  If You Had Bought Dean Foods (NYSE: DF) Stock Three Years Ago, You Would be Sitting on An 89% Loss, Today – From Simply Wall Street.
Timelines and charts have ‘minute captures’ of events: Access those here.
Stock closed at $1.81/share.
This Ed Bosworth article for Find A News notes to look beyond share price and consider fundamentals and future growth potential.
April 30, 2019: Analysts Estimate Dean Foods (DF) to Report a Decline in Earnings: Here’s What to Look For – (post at Zack’s Equity Research).  States there’s a Year-End Earnings report expected on May 7th, and expectations are it may be worse than expected.
At the end of the day, April 30, the stock price had dropped to $1.70/share.
May 1, 2019: How Far Dean Foods Company Will Fall Today:  (post at Find A News, authored by Peggy Goldman)
May 1, 2019:  One Stock with Low Beta Value: Dean Foods;  by Aston Bradley for Investor Place
Stock Closed at $1.61/share on this day.
May 2, 2019:  Rounding UP the figures: Dean Foods Company (DF), McDonald’s Corporation – written by Sarah Watson for FIN Bulletin.     From the article: “One metric that indicates how volatile a stock’s price is compared to the wider market is the Beta. The Beta value for Dean Foods Company (NYSE: DF) is 0.24 indicating less volatile than the rest of the market.”   Yet no predictions on what the company is going to do going forward.

 

May 2, 2019:  “Dean Foods Company (DF) Stock May Not Offer Adequate Shelter”, written by Rob Hiassen, and posted at FinBulletin. com

Directly from the article:  Institutional investors currently hold around $140 million or 92.2% in DF stock. Look at its top three institutional owners: Blackrock Inc. owns $24.27 million in Dean Foods Company, which represents roughly 18.24% of the company’s market cap and approximately 17.34% of the institutional ownership. Similar statistics are true for the second largest owner, Vanguard Group Inc, which owns 9,845,854 shares of the stock are valued at $16.74 million. The third largest holder is Dimensional Fund Advisors Lp, which currently holds $12.95 million north of this stock and that ownership represents nearly 9.74% of its market capitalization.
On May 2, 2019, Dean Foods Stock closed at  $1.54 / share.
COMPARE all of the above to this:  ABOUT A YEAR AGO:  On April 19, 2018 – the stock was $8.95, and this article was written, April 17th:  Is Dean Foods Company (NYSE: DF) Cheap for a Reason?  from Simply Wall Street
May 3, 2019: “Norges Bank Invests $6.97 Million in Dean Foods Company” – this Finance Daily post, authored by Andrew Sebastian, examines several of the volume trades which have occurred in recent weeks.  Various companies still have several differing ratings on the Dean Foods stock.
Stock closed at $1.52 on May 3rd.
May 5, 2019:  “Dean Foods Falters in More Concentrated Milk Market” – Heather Haddon, who covers food and retail policy for the Wall Street Journal, analyzes several recent trends which have affected the dairy business in general, and Dean Foods in particular across the country.

Where Do We Go from Here?

That, literally, is a Billion $$$ question, with the implications that our farms, processing jobs, related agribusiness, and extended rural communities are all at stake.
We in the Southeast, as well as other regions of the country, have seen many other episodes of dilemmas that occurred when decisions that affected our communities were made far, far away in corporate boardrooms by people that didn’t know ‘us.’
We are grateful we still enjoy cordial community relationships with our processing plants, and the folks who are employed there. Those folks have a great deal to lose as well as our farming communities – there are jobs which could be affected, and a resulting effect on the municipal economies in those regions.
At this point, I have no answers, but only questions to provoke thought:
  • How can we help the Dean Foods situation and the Dean Foods brand in our own communities?
  • What, generally, do you see as an answer to Dean Foods future?
  • If a sale occurs, do you have any idea who are the buyers you would be OK with, and buyers you would definitely not want to control our futures?
  • What are you yourself willing to do to promote the sale of milk (and specific milk brands which we can trace to our farms) to keep sales alive, and perhaps even recapture from plant-based beverages?  (Note: I am not suggesting criticizing checkoff efforts with this question.)
  • What are you willing to do yourself –  or invest in time wise or monetarily wise – to protect your future?
The truth is, there are many answers to the question about Dean Foods future, and it will take several efforts to chart a course for a brighter future.
One thing is for sure – we can’t take anything for granted!  We ourselves – as individuals and as farms – are going to have to become more active in convincing consumers that real milk is a great product! 
There will be more to come as this story evolves and as we pursue our farming futures.
(Note: some updates have been added after initial posting on March 1, 2019)

The Faith of Billy Graham: Sowing Seeds in Fertile Soil for Everlasting Life

William Franklin (Billy) Graham. Son of a Dairy Farmer.

Man of God. Seeds of Life.

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This past week, the world learned of the HomeGoing of the much beloved Reverend Billy Graham. His impact on humanity is much lauded, yet he, the man, remained humble, with all credit to his Heavenly Father for any of his success.

The impactful evangelist has proclaimed for several decades that faith and the Grace of God would lead him, and anyone who accepted Jesus Christ as their Savior, to a Heavenly home. He himself explained it this way:

“Someday you will read or hear that Billy Graham is dead. Don’t you believe a word of it. I shall be more alive than I am now. I will just have changed my address. I will have gone into the presence of God.”

Graham, oft-described as the most influential religious leader of the 20th century, illustrated that while devout and fiercely true to his own faith, he could treat people of all religions with respect and kindness and sow seeds of peace and hope.

The Reverend Graham began life as the son of dairy farmer near Charlotte, NC.  And from the minute one steps on the grounds, The Billy Graham Library, only a few miles from the original Graham Brothers Farm, honors those agrarian roots.

An engaging display with animatronic cows immediately captures the attention of any visitor.   The ‘boss cow’ tells us that a young Billy Graham perfected his oratory skills by preaching to the cows while they were in the milk barn!  From that point on the Library is a walk through modern history, with exhibits devoted to how “America’s Pastor” was witness and influencer on world events of the 20th Century.

Favorite verses and parables, such as Phillipians 2:3, are on display throughout the Library on walls, and in exhibits.

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The Parable of the Sower – Luke 8, NIV

The Parable of the Sower, one of the most often quoted of the Parables of Jesus Christ, inspired a breathtaking bronze statue which is the centerpiece of the main exhibit hall at the Library.  As the Library was being completed, Franklin Graham believed this parable illustrated his father’s ministry better than any other.  The design was brought to life by sculptor Tom White.

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The Parable itself was considered so important to the Christian faith, it is found in three different Gospels:  Matthew 13: 1-23, Mark 4: 1-20, and Luke’s version, found in the NIV Bible, Chapter 8: verses 1-15 (also shared below:),

“After this, Jesus traveled about from one town and village to another, proclaiming the good news of the kingdom of God. The Twelve were with him,and also some women who had been cured of evil spirits and diseases: Mary (called Magdalene) from whom seven demons had come out; Joanna the wife of Chuza, the manager of Herod’s household; Susanna; and many others. These women were helping to support them out of their own means.

While a large crowd was gathering and people were coming to Jesus from town after town, he told this parable:

“A farmer went out to sow his seed. As he was scattering the seed, some fell along the path; it was trampled on, and the birds ate it up. Some fell on rocky ground, and when it came up, the plants withered because they had no moisture. Other seed fell among thorns, which grew up with it and choked the plants.

Still other seed fell on good soil. It came up and yielded a crop, a hundred times more than was sown.”

When he said this, he called out, “Whoever has ears to hear, let them hear.”

His disciples asked him what this parable meant. 10 He said, “The knowledge of the secrets of the kingdom of God has been given to you, but to others I speak in parables, so that,

“‘though seeing, they may not see;
    though hearing, they may not understand.’

11 “This is the meaning of the parable: The seed is the word of God. 

12 Those along the path are the ones who hear, and then the devil comes and takes away the word from their hearts, so that they may not believe and be saved. 13 Those on the rocky ground are the ones who receive the word with joy when they hear it, but they have no root. They believe for a while, but in the time of testing they fall away. 14 The seed that fell among thorns stands for those who hear, but as they go on their way they are choked by life’s worries, riches and pleasures, and they do not mature.

15 But the seed on good soil stands for those with a noble and good heart, who hear the word, retain it, and by persevering produce a crop.

How will WE live the Parable of the Sower?

It is up to us to determine the seeds we will sow as our legacies, and it is up to us to help cultivate fertile soil which will receive those seeds.  James 2: 14-17 is summed up with the last verse, “Thus also faith by itself, if it does not have works, is dead.”  

Therefore, these thoughts to contemplate:

If your own life, or your farm, or even your business or means of earning income is the place seeds are to grow, will it be a dirt path, rocky ground, thorns, or the good soil?

It takes both wonderful seeds and productive, fertile soil for a bountiful crop to grow – a healthy crop which nurtures mankind.

Will this year’s seeds be seeds of hope, or seeds which lead to destruction? In times of trouble, will your seeds be ones that still grow the Kingdom of Christ, and let your faith shine through?

Will this year’s seeds be seeds that lift others up, help others through hard times, or seeds that beat others down?

If they are good seeds, will they fall on fertile soil, or on unproductive dirt along the path, among thorns, or on rocky ground?

And if the word of God isn’t the foundation of actions by your conduct, or your farm, are you building a long-lasting foundation or one that will crumble?

Will your farm,  and your life, be a farm which hears the Word, understands it, and practices its teachings by example?

Will your farm, and your life, be an example that sows the milk of human kindness, and places your faith in an everlasting God, even in times of trials?

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In this springtime of 2018, many seeds will be planted.  In this world of agriculture, there are many uncertainties, and in fact, much fear about “whose farm will be next to get heart breaking news?”   The agriculture consensus is that many farming operations may not make it through the year, and there is a dark undercurrent of  ‘who will survive?’

However, the Bible is the Book of Hope, and tells us in John 24 that even when something dies, a seed remains whose destiny is to grow  and create new hope, new fruit, new beginnings, and new life:

Truly, truly, I say to you, unless a grain of wheat falls into the earth and dies, it remains alone; but if it dies, it bears much fruit.

We in agriculture on farms of all sizes are going to have to dig deep in our faith, and in our actions, if we are to survive the rough waters ahead.

Billy Graham, the son of a humble dairy farmer, went on to be one of the Greatest Faith Leaders in recent centuries, with some even comparing him to the Apostle Paul.  In order to become that incredulous leader, he had to leave his dairy farm beginnings, and he had to trust and follow the call of God to do that.  The Bible, in Joshua 1:9,  tells us we too, can ‘be strong and courageous,’ and do that, even in the darkest of times.

Billy Graham’s faith roots began growth on a dairy farm. However, his seeds flourished only when they reached out to a faith-starved world.  May we see the Word he spoke of, and may we Hear the Word he proclaimed!

My prayers are that the world of agriculture, and indeed, the entire world, finds fortitude, hope, grace, and comfort in a Boundless Faith taught by Billy Graham. Son of a Dairy Farmer. A Giant Man of God, who sowed Seeds for an Everlasting Life.

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Postscript: The author of this blog, a former dairy farmer, was blessed beyond measure to experience a profound visit to the Billy Graham Library a few summers ago.  She was accompanied by a wonderful friend, the wife of a current dairy farmer.   A visit to the Billy Graham Library is highly recommended to anyone who loves history, is of an agricultural background, or who is on their own faith journey.  Billy Graham was Christian, but his life’s message can be a bridge to all in search of deeper meaning of any faith.  

The Dougherty Dispersal: The Cows Come First in a Tornado’s Aftermath

 

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UPDATE – Dec. 13th:  Catalog (DHIA pages) now postedlink here . . 

At 1:30 am on Nov. 30, an EF-2 Tornado wreaked horrific damage to Polk and McMinn Counties, in Tennessee’s most southeast corner.

In Polk County, TN, a couple lost their lives and an estimated 50 structures or houses were either totally destroyed or severely damaged.

Among the areas receiving the worst property damage was a roadway that’s long been known as one of Tennessee’s most beautiful farming corridors, TN Hwy 307.  At one end, the roadway is anchored by the Mayfield Dairy Farms Dairy Processing plant in the town of Athens, TN, and then runs for several miles up to Hwy. 68 in Monroe County.  In one very nice modular home subdivision on that highway, 30 structures were either totally destroyed or severely damaged.

Blan & Kathy Dougherty, long respected as being one of the best teams in Tennessee as both a dairy farming couple and agricultural and community leaders, owned the dairy operation which received by far the worst structural damage. In just a matter of a couple of minutes or less, their milking parlor was destroyed,  barns which sheltered their excellently-cared for cows were decimated, and the feedways where the cows ate were obliterated.

An article in the Athens, TN newspaper, the Daily Post-Athenian, relays more details.

Approximately 11 hours or less after the storm, and thanks to a great crew of family members, friends from area farms and agribusiness, and the generosity of a fellow farmer, 130 milking cows were relocated to a neighboring dairy farm, just over the GA state line, and only 45 miles away from the home farm.

Due to the devastating damage to their milk barn and animal housing facilities in that tornado, and the time it will take to repair them, Blan and Kathy concluded that it’s in the best interest of the cows to help them find new homes via an auction. This is one of Tennessee’s best herds. The milking herd and bred heifer dispersal will take place on Friday, December 16, at Noon, at the Athens Stockyard in Athens, TN.

The cows are receiving great care and extra attention at this temporary home, from caretakers who believe in animal welfare and have years of experience in taking care of high-producing dairy cows, and have really done exceptionally well. The Doughertys will keep some of their heifers while they make decisions about their future. This is an extremely difficult decision for any farmer to make, and we ask for folks to keep them in their thoughts and prayers during the transition. More information pertaining to the sale and individual cows will be posted before the sale.

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Final Payments to Farmer / Class Members in Southeast Milk Litigation Authorized by the Court

“The Checks Will Soon Be in the Mail,” may be a better headline.

An historic and record-setting food industry  class action that began in July of 2007 is now approaching completion nine and one-half years later. Final Settlement payments to farmer/class members in the Southeast Milk Litigation have been authorized by Judge Ronnie Greer, US District Court, Eastern District of Tennessee, Greeneville Division. Judge Greer issued his Orders on December 6, 2016.

A total Settlement Fund of over $280 Million was reached in three different settlements: one with Dean Foods, the second with Southern Marketing Agency and related entities, and the third with Dairy Farmers of America and Related Entities.  Payments began in January of 2013, and completed via annual payments.

In short, the final payments to farmer/class members in the Southeast Milk Litigation will shortly be in mailboxes, and should be received before or shortly after Christmas, 2016.

Farmers / Class members should be watching their mailboxes. Since previous payments have come in rather ordinary envelopes, recipients are advised to pay detailed attention to each envelope in their mailboxes, being careful to not lose Settlement payments with heavy mail volume common at this time of year. These are not electronic payments.

The class action began in July of 2007, when two original complaints were filed in US District Court, Middle District of Tennessee.  One complaint was filed on behalf of co-op member farmers, and one on behalf of independent farmers (those not belonging to a co-op).  The two complaints were consolidated in July of 2008 and redirected to the Eastern District of Tennessee, Greeneville Division, presided over by The Honorable Judge Ronnie Greer.

Farmer/Plaintiffs were represented by a team of antitrust attorneys from Baker-Hostetler, Washington, DC.  Led by Robert Abrams, the team included Greg Commins, and Danyll Foix, and a host of others during the course of the litigation.  Local plaintiff counsels in the District court included Thomas Jessee of Johnson City, and Steve Terry and Gary Brewer, Brewer & Terry of Morristown, TN.  When the complaints were filed, the same attorneys were with Howrey LLP, a law firm which dissolved during the course of the litigation.

The amended complaint is a great summary and timeline of the activities which eventually led to the Dean Foods Settlement in January of 2012, (first payments took place in January of 2013) and the DFA/Related Entities Settlement in January of 2013.  It should be noted that all defendants have fulfilled the terms of their settlement agreements, and that many (but not all) of the individuals named in the actions are no longer active in the named organizations.

During the course of the litigation, nearly 2 Million pages of legal documents were generated, many of which can be found at the litigation website.

With a 4-page Order of December 6, 2016, Judge Ronnie Greer, presiding Judge, authorized the fifth and final distribution of Dean Settlement funds.  In a separate but parallel action, he authorized the distribution of the Residual DFA Funds in a 3-page Order.  With these Orders entered on the Court’s record, Rust Consulting, Claims Administrator, will quickly begin writing and mailing checks to over 6,000 class members.

The ORDERS THEMSELVES FOLLOW:

First, The Order Authorizing Distribution of the Final Dean Foods Settlement Payment:

Order Fifth Dean Distribution.pdf

PAGE 2 _ ORDER, DEAN FOODS SETTLEMENT DISTRIBUTION

Order Fifth Dean Distribution.pdf

PAGE 3 -ORDER, DEAN FOODS SETTLEMENT DISTRIBUTION

Order Fifth Dean Distribution.pdf

PAGE 4 -ORDER, DEAN FOODS SETTLEMENT DISTRIBUTION

(The Judge’s signature, and then keep scrolling down for the DFA Payment Order.)

Order Fifth Dean Distribution.pdf

Second: ORDER Authorizing Distribution of the RESIDUAL DFA SETTLEMENT Funds:

Order DFA Residual Distribution.pdf

PAGE 2: ORDER Authorizing Distribution of the Residual DFA SETTLEMENT Funds

Order DFA Residual Distribution.pdf

Page 3: ORDER Authorizing Distribution of the RESIDUAL DFA SETTLEMENT Funds:

Order DFA Residual Distribution.pdf

From having done extensive review of documents related to this class-action case, along with attending most of the courtroom hearings and then reporting on various matters related to this litigation,  it is my fervent hope that all farmers make every effort to more fully understand the BIG BUSINESS of what happens to affect their milk checks.

If one wants to begin, they will read the 7-pages of legal documents above, then read the 60-page amended complaint , and  then re-read them, and re-read them, and then re-read them again.  Although these events described in these documents are now a part of dairy industry history, they will provide a foundation for understanding milk marketing. If a person does begin to read them, they need to remember that today’s markets will have changed, due to time, and the evolution of milk markets themselves.

Happy Reading!  Be Watching for those checks!

Sun Photo by Phil Gentry
Federal Court House