(NOTE: This is an evolving story affecting Dean Plants across the country. Sources are a variety of public information and anonymous sources. Updates will be made as warranted).
Dean Foods will be closing 7 processing plants in seven states in the next months, with the plants located in Kentucky, Georgia, Pennsylvania, Massachusetts, Illinois, Michigan and Minnesota.
News of the plant closings began to emerge through local news outlets in some of the cities involved through the day Tuesday, May 22nd, yet, at this posting, there are yet no official statements from Dean Foods corporate officials.
This announcement follows the jolting announcement in early March that over 100 farmers in 8 states, marketing milk as Dean Dairy Direct (independent producers, meaning not members of a co-op or marketing agency) producers, would have their contracts terminated as of May 31, 2018. At this point, many of those farmers have found new markets, several elected to disperse their herds, with several still struggling to find a market and income source for their farm’s milk.
The navigation of stormy, wind-tossed oceans of milk in the overflowing worldwide dairy milkshed has led to the announcement that these processing plants will be shutting their doors during the late summer and fall. Intense competition to find a processing market/plant for milk, exacerbated by declining milk consumption the world over, has converged in a perfect storm of farmers getting caught in the crosshairs with no markets for their milk, along with employees in processing plants losing their jobs as well.
Competition for the prime retail real estate of grocery store shelf space is also a factor in these events.
In the southeast, the two Dean Foods plant closures at Braselton, GA and Louisville, KY follow the early May announcement of the closure of a Fulton, Ky plant, owned by Prairie Farms. In that event, processing operations will cease, but the facility will remain a distribution center, with 12 of 52 employees remaining.
An anonymous Dean Foods source says that “no more farmer/producer contract terminations via letters from Dean Foods are expected in the near future.” However, we all know that increasing consumption of fluid milk is the quickest way to stabilize the future of all dairy farms across America.
The Dean plants said to be closed are:
- (News report: not initially confirmed by Deans)
- (News report: Member of founding family not bitter)
- News report: (Processes gallons & half-gallons, 120 employees)
- Braselton, GA [Mayfield brand] (2015 Dean’s CEO Quality Award Recipient) (Visitors Center closed in 2014, reopened, Over 1 million folks a year to learn) (Reports from anonymous employees who received notices)
- Louisville, KY [Dean’s brand] News report link to WKYT) “That loss will cut production at the company’s Louisville plant, which will shut down.”
This announcement is only one in a series of cost-cutting measures Dean Foods has taken over the past several years. A PET milk plant in Richmond, VA was closed in the fall of 2017. In a Food Business News report of March 1, 2018, phrases such as “increasing competition,’ ‘6% decline in volume,’ and ‘reset cost structure,’ were signals more changes are to come.
The Louisville plant closure comes as no surprise, due to its distribution overlap into Indiana of retail centers to be served from the new Walmart milk processing plant opening in Fort Wayne, IN. However, the opening of that Walmart plant has now been pushed to late summer, for a variety of reasons. A recent report by Sherry Bunting, which appeared in the Farmers Exchange, features an interview with a Walmart spokesperson on that project’s status.
The closure of the Braselton, GA, Mayfield plant, may have come as a bit of surprise to some folks. In 2016, this display in the Visitor’s Center relayed some stats which were current at that time, however, today’s employee count is closer to 150. It is not known if this includes distribution networks.
Dean Foods, as of an annual Dairy Foods (magazine) report, last published in the August 2017 edition, is the United States second largest milk processor, with Nestle being #1.
As is common with any company treading in difficult waters, reports of a sale of the company, or of a merger and acquisition, are commonplace. Sometimes they prove to be nothing, sometimes they prove to be true, and only time will tell which is the case with Dean’s. It truly will be in the best interest of the United States dairy industry for the company to stabilize, due to the number of farms for which it provides a market, and for the number of employees in plants across the country.
The hardest truth of all of this is that ultimately, farmers in local regions, the rural economies that depend on a viable market for those farmers, and employees at plants, are the ones suffering the most from battles at all levels of the worldwide milkshed.
Updates, and corrections if needed, will occur as more news becomes available.