Borden Dairy, Inc. has confirmed that it will be closing two of its milk plants in the southeast, one located at Charleston, SC, and the other in Miami, FL.
Closures are anticipated to be complete by May, 2022.
Borden Dairy Company has provided the following statement:
One plant is located at Charleston, SC, and is often referred to as “the Coburg Dairy,” still referencing and going back to the plant’s founding as Coburg Dairy in 1920. The Coburg Cow is a popular regional landmark, and even has her own Facebook page.
The second plant is located at Miami, FL, and the South Florida Business Journal is reporting the property may have already been sold for $21.75 million, almost double what New Dairy Opco paid for the property it purchased through the Borden bankruptcy proceedings of 2020. Approximately 154 employees will be affected by the closure.
These closures will have a ripple effect across the southeast and beyond, as farms will likely incur additional transport costs for getting milk to other markets, and milk haulers (those who haul milk from dairy farms to processing plants) will have to adjust delivery routes.
The Borden company is known to source milk from both independently contracted farms and from milk co-ops, although it is not known how that mix was proportioned at either Charleston or Miami.
School systems and food retailers served by these plants, largely on the southeast coast and in coastal states, will have to find other sources for fresh milk on their shelves.
In the extended circle of the milk supply chain, school systems who are sourced by the Charleston plant are in the process of being notified; farmers and co-ops who supplied milk to these plants, as well as milk haulers who conveyed milk into these delivery destinations have been notified.
Borden Dairy, Inc. is headquartered at Dallas, TX. The company is led by Chairman and Chief Executive Officer Gregg Engles, a former owner of Dean Foods. Pat Boyle is the company’s President.
Borden Dairy operations nationally involve over 3000 employees, 12 milk plants, and over 90 branches in the processing and distribution of milk and dairy products. Borden’s Dutch Chocolate Whole Milk is deemed to be one of the best commercially processed chocolate milks on the market.
This is an evolving story; additional information will be posted as it becomes available.
Dean Foods Chapter 11: Quickly Evolving Events weeks of Nov. 23rd through December 4th, 2020 – a Year after filing
“WHAT SHOULD A PRODUCER DO ABOUT THE REQUESTS FROM ASK SUGGESTING FARMERS SHOULD PAYBACK MONEY?” is the question first and foremost on farmers’ minds. Most are electing to wait until more information is gathered before sending any money to this law firm, realizing some of the deadlines are pending. This situation has been and continues to be QUICKLY EVOLVING, with information changing by the minute.
NOTICE: This post contains and refers to information and reports about legal events, with some attorneys quoted and official legal notices included, but should not be considered legal advice. I am not an attorney, so any information should be considered as public information, and not taken as advice on a course of action for any individual.
LEGAL REFERENCE: Case #19-36313, US Bankruptcy Court, Southern District of Texas-Houston; Presiding Judge: David R. Jones
SUMMARY – some good news:
The good news is that producers do have recourse and options per many industry reports, although the exact course of action has yet to be determined, and it may differ for individual producers.
ADDITIONAL COURT ACTIVITY this week: On Nov. 30, Southern Foods Group, LLC / Dean Foods et.al. filed several documents outlining a “Plan of Liquidation” in the above-referenced Bankruptcy Action. (See graphic below). Some producers have received emails, or may receive letters in the mail, regarding a hearing related to this process, scheduled for Jan 11 at 2:30 pm. (Doc. 3234 at the Epiq Southern Foods Court Docket) Producers can participate in this January proceeding via audio/video if they wish.
Past Week: As many already know, there has been a lot of activity since the last week of November, 2020, concerning an attempt from ASK, LLP to reclaim a portion of funds paid to producers, and other entities doing business with Dean Foods, in the 90 days prior to the Dean Foods/Southern Foods Group Chapter 11 Bankruptcy filing on Nov. 12 of 2019.
Who all got the notices? It has been confirmed through several sources that farmers were not the only parties who got such notices: a few co-ops and other business entities, such as milk check assignees, consultants, and milk haulers, also received similar letters, and have challenged the requests in a variety of ways. The resolution of these challenges is not yet known.
Since producers began receiving letters on or about Wednesday, Nov. 25, there has been a flurry of phone calls, text messages, communication to and among agricultural advocacy organizations and dairy producer groups, and others trying to gather and assemble all pertinent information.
The main goal was to establish a producer’s rights and potential courses of action in regards to these solicitation letters from ASK, LLP, and to determine if a producer would eventually be required to pay the requested amounts at all. Just because ASK asked, does not necessarily mean they will receive.
In communications with many, most farmers have elected to wait until more information was forthcoming before they paid anything to this third party, some have engaged individual attorneys, and some have elected to wait to see if their is a ‘blanket’ recourse on a collective group of farmers.
The Beginning: How ASK, LLP got involved:
ASK, LLP is working based on contingency fees ranging from 15-27.5%, stated in a ‘letter of engagement’ on the Bankruptcy Court’s Docket. This ‘letter of engagement’ is dated July 18, 2020, and was sent to Gary Rahlfs, Chief Financial Officer, Southern Foods Group/Dean Foods. That engagement was approved by via a Court Order of Sept. 1, 2020. That Order, Document #2898, was publicly posted at the Bankruptcy website on Sept. 1, 2020, and it can be downloaded.
On Social Media? Be careful!!! By this time, social media is full of posts of dismay, indignation, and asking what to do. While these posts generally may be interesting to read, they should not be considered as valid sources of legal information or advice.
SUMMARY ARTICLES (the most complete, most accurate, and most in-context with the entire situation – all contain pertinent information):
Quote from article: “We find it extremely disappointing that hardworking dairy farm families are now put in the position of having to incur costs, either in paying the amounts demanded, or obtaining legal counsel to defend themselves against these farfetched claims.”
Document 3230: JOINT CHAPTER PLAN OF LIQUIDATION of SOUTHERN FOODS GROUP, LLC, DEAN FOODS COMPANY, and THEIR DEBTOR AFFILIATES (75 pages) with the US Bankruptcy Court for the Southern District of Texas – Houston Division, and
Document 3229 (143 pages), which is captioned: MOTION OF DEBTORS FOR ENTRY OF AN ORDER (I) APPROVING THEDISCLOSURE STATEMENT, (II) ESTABLISHING PROCEDURES FOR THESOLICITATION AND TABULATION OF VOTES TO ACCEPT OR REJECT THEPLAN, (III)APPROVING THE FORMS OF BALLOTS AND SOLICITATIONMATERIALS, (IV) ESTABLISHING THE VOTING RECORD DATE, (V) FIXINGTHE DATE, TIME, AND PLACE FOR THE CONFIRMATION HEARING ANDTHE DEADLINE FOR FILING OBJECTIONS THERETO, (VI) APPROVINGRELATED NOTICE PROCEDURES, AND (VII) GRANTING RELATED RELIEF
CONFERENCE CALL NEXT THURSDAY – via PA Center for Dairy Excellence
The PA Center for Dairy Excellence is graciously inviting those affected by this Dean Foods event to participate in a Conference Call on Thursday, Dec. 10, 2010. The Dean situation is only one to be discussed – Rob Barley and Doug Eberly, Counsel for the PA Milk Marketing Board, will address the letters and how they affect farmers.
QUICKLY MOVING, EVOLVING SITUATION – Stay Tuned
It is expected there are other significant actions and news to be shared in the next few days, since this is a quickly moving event with pending response deadlines as early as Dec. 19th. Rest assured that many individuals, information networks, and advocacy organizations are trying to get answers and information to folks as quickly as they can.
Via an email announcement from Glen Easter, the President of The Dairy Alliance, the southeast dairy organization has named Geri Berdak, as their new CEO.
She has previously worked with the St Louis Dairy Council, and was with the Dairy Innovation Center at DMI from 2012-15.
Following is the complete announcement:
“We are pleased to announce that after a nationwide search by Fred Pabst with the search firm Herd Freed Hartz, The Dairy Alliance board has selected a new CEO, Geri Berdak, who will be starting September 1, 2020.
“Geri is an executive known for delivering strategic growth for non-profit organizations, CPG and ingredient companies in the wellness marketplace. She holds unique combination of nutrition, marketing and business aptitude and a genuine passion improving people’s lives. Her professional experience in the dairy industry started with her position as a nutritionist and educator for the St. Louis Dairy Council.
She has extensive knowledge in the food and beverage industry holding positions with PepsiCo, Kerry’s, Isagenix, and served as Senior VP, Nutrition Strategy and Business Development with the U.S. Dairy Innovation Center at DMI from 2012-2015. Most recently she created the Cloverquest Group LLC, a marketing consulting group in Chandler, AZ.
Geri has an Master’s of Business Administration from New York Institute of Technology and a Bachelor of Science in Food & Nutrition from Missouri State University.
Our interim CEO, Molly Szymanski, will work closely with Geri to ensure a smooth transition.”
The Dairy Alliance is a dairy promotion organization based in Atlanta, Georgia. The organization is funded by checkoff monies which are deducted from the milk checks of dairy farmers.
Ms. Berdak can be found on Twitter with the handle of @nutriagirl.
Attorneys representing Dean Foods in their Chapter 11 proceedings have filed two highly anticipated notices of bids and bid results with the US Bankruptcy Court for the Southern District of Texas, Houston Division.
The notices are Document 1270, Notice of Bid Results, and Document 1271, Notice of Bids.
The Court has a hearing scheduled for April 3, 2010, for the purpose of hearing any objections and furthering the sale process. Any objections to a Sale Order or a Sale Transaction must be filed by April 1, 2020 at 12:00 pm, CST.
Dairy Farmers of America, Inc. has been announced by Dean Foods as the successful bidder for the great majority of Dean Assets. This includes 8 facilities situated in the following southeast locations:
Athens, TN (Mayfield)
Birmingham, AL (Ice Cream)
Nashville, TN (2 plants – Purity and Country Delite)
High Point, NC
Spartanburg, SC (Pet)
Orlando and Orange City, FL (TG Lee)
Prairie Farms Dairy, Inc. has filed bids which were successful for the Birmingham Fluid Plant (Barber’s), the Hammond Louisiana plant, and the Customer list related to Louisville, KY facility. Prairie Farms also successfully bid on several plants throughout the Midwest.
The McArthur Dairy assets have a successful bid from Mana Saves McArthur, LLC.
Alternative bids were stated in Document 1270. MD-VA Milk Producers was the Alternate for High Point, NC. OP Church Street Property, LLC, is listed as an alternate for the Country Delite property in Nashville.
Details of various Bid offers for plants across the country can be found in a number of documents at the Epiq Southern Foodswebsite.
The “Notice of Bid Results” – 6 pages long – is posted below:
Did anyone ever ask the Shelf Stocker? When it comes to milk cartons, that is.
It’s been a busy past few months for dairy farmers and dairy industry associates all over the United States. Whether it’s called conference or summit or convention, dairy folks across the United States have been in session after session in the months from November to March, sometimes (often!) referred to as “Meetin’ Season.”
I can’t remember a session for the past few years where the term ‘innovation’ hasn’t been used. Sometimes, the term refers to new dairy products, but it is used equally as much in reference in packaging and handling for milk and other dairy products.
Balancing the costs associated with bringing milk and milk products to market along with visual elements which attract consumer purchases is like walking a high-wire across the Grand Canyon. With dependable fluid milk sales losing market share to the ‘newest and shiny’ dairy toy, every level of the supply chain is in perpetual review.
On the way back to the ‘home office’ after one of those winter dairy meetings, I stopped by a grocery store to grab some milk. (Whole milk, if you must know, and a brand in a yellow jug which I know comes from many farms in my area).
As I often do, I just stood there evaluating the dairy case – fluid milk. There were private label commodity milks from far away (over the ‘within 400 miles “Local” definition’ in the 2008 Farm Bill), a branded local milk, high-margin blended milks, and fake milks which are trying to convince consumers they are better than real, whole, milk. Additionally, all of the ‘fakes’ (aka plant-based beverages) do nothing for farms and the farm economy in our southeast area of the US; the crops or products used in them cannot be traced to a farm in the southeast.
While I was looking at the case, a very pleasant young man, the stocker clerk for the evening, brought out several cases of the yellow jug to place in the shelves. Those yellow jugs are delivered in the plastic, open top milk crates which are as popular for home decor as for milk deliveries.
He then brought out some of the far-away jugs shipped in brown cardboard cases. In many dairy discussions with farmers, industry folks indicate that the brown cardboard is preferable to the traditional crates. Notice I said ‘industry folks.’
So, I just asked the clerk, a young man on the front line of consumer connections and milk sales, if he would answer a question for me, and he politely said “Sure, if I can, ma’am.”
My question to the stocker: From your perspective, do you prefer the cardboard carton, or the plastic milk crate?
The stocker clerk’s response was this: “I prefer the plastic crates. For one thing, they are sturdier than the cardboard. And also, their open top saves me time – I don’t have to cut open and fold cardboard boxes for bundling. I just reach in and get cartons and put them on the shelf.”
He went on to tell me of several times the cardboard cartons had weak spots in them, and extra care was required in handling. He even had a cardboard carton break open one time, and jugs of milk fell out, crashed open, and milk went everywhere – including all over him. (Anyone who’s had milk spill on them can identify with the dilemma, why you want to get it cleaned up quickly, and the extra time it takes to make sure you get all of it!)
His response made sense to me – lots of sense, actually. And anyone who has ever figured ‘time as money’ is likely to think it makes sense, too. Those plastic milk crates actually still have some positives, and we need to remember that. They are appreciated by some folks, and their reasons make common sense. (Not to mention the physical benefits, since you get a bit of a workout while moving those cartons!)
In a society where we far too often see those on the frontlines of any type of ‘work’ never asked what they think about a situation, it is all too believable, too.
Has anyone ever considered the perspective of stocker clerks everywhere who do the actual work of getting milk on shelves, or has anyone ever done a ‘study’ or survey about what they would recommend? Should their thoughts count on what is best for fluid milk and helping it re-gain traction?
The concept of moving more fluid milk is on smart dairy people’s minds, because it is generally the product which can be brought to market most quickly and at the least cost. For years, it has been the predominant product and ‘cash cow’ of the dairy processing industry – and it is being left behind in promotion and other aspects of cost of bringing milk to market.
If comsumer pocketbooks are stretched by a recession, which category of milk sales will decline the fastest? Will it be those higher priced milks, or even the fake milks / alternative beverages? Or would such an event drive consumers back to basic milks, which are nutritional powerhouses in their own right?
There are many thoughts and opinions on how to best move more or recapture fluid milk, and there are many thoughts on which of the many attributes of whole milk are the best and should be promoted the most. (That is another discussion for another post, or yet another convention to attend!)
But for now the question is: How often do we really consider the opinion of those who are actually doing the ‘physical work’ on getting milk to consumers? If the “Learn by Doing” motto of 4-H is true, then there is much wisdom in all of the clerks who have ever placed milk on a shelf! And I’m betting they’ve spoken with many consumers along the way, too.
I, like many have more questions than answers, and there are others who will say that other means of milk movement have their own merits.
I’m not suggesting companies which use the cardboard cartons change their way of doing things – that obviously works for them, and any company which sells fluid milk is a benefit to dairy farmers everywhere! One of those in particular, another which serves a lot of southeast dairy farms, is about an hour from my location.
But I will say that a simple question asked of a pleasant young man sure gave me a new perspective. I learned a lesson, and the conversation made me think about things a bit differently. I hope it’s made you think, too.
And ‘thinking differently’ – on all levels of people along the supply chain – is the first step to a brighter milk tomorrow. The dairy industry is desperately searching for that brighter tomorrow.
UPDATE – posted 6:35 pm Tues, Nov. 12: “Emergency Relief Has Been Requested. A Hearing will be Conducted on this Matter on November 13, 2019 at 2:30 pm [CST] in Houston Tex.” This information per court documents, TXSB.
Dean Foods, the nation’s largest processor of fluid milk, has filed Chapter 11 Bankruptcy in the Southern District of Texas. According to a company news release, Dean Foods states the company is working toward an ‘orderly and efficient sale of the Company.”
In the same release, Dean Foods also states it is “engaged in advanced discussions with Dairy Farmers of America, Inc. (“DFA) regarding a potential sale of substantially all assets of the Company. If the parties ultimately reach agreement on the terms of a sale, such transaction would be subject to regulatory approval and would be subject to higher or otherwise better offers in the bankruptcy.”
Related to the announcement, Dean Foods cancelled its regular Quarterly Earnings Call, which was scheduled to occur at 9:00 am on the morning of Nov. 12.
The major concern for dairy farm communities – especially the farmers, and related agribusinesses and community small businesses across the country who serve those farmers – will be how independent dairy farms, who ship directly to Dean Foods plants, will be affected, treated, and compensated during the Bankruptcy proceedings. Those detailed answers are not available at the time of this initial posting (11:50 am, EST, Nov. 12).
At this time, there are more unanswered questions than answers, and no doubt there will be many anxious farmers and co-ops around the country who depend on milk checks from Dean Foods. It will take time for accurate answers and solutions to be found as this process works through the reorganizational Bankruptcy process.
Eric Beringause is the new CEO and President of Dean Foods, the nation’s largest processor and distributor of fresh fluid milk and dairy case products. He replaces Ralph Scozzafava, who has stepped down. Beringause’s tenure began on July 29, 2019.
Mr. Beringause brings over 30 years of experience in the dairy, consumer products, and food processing industries to his new position. Most recently, he was the CEO of Gehl Foods, the nation’s largest processor of nacho cheese. Through his career, he has worked for a variety of companies such as Nestle, ConAgra, Alcoa, and Pillsbury. His work portfolio includes private-label and branded products.
As the nation’s largest processor of fluid milk, the performance of Dean Foods in turns affects the fortunes of tens of thousands of dairy farms and regional farm economies across the United States.
It is no secret that the dairy industry itself, as well as Dean Foods, has seen its fair share of difficulties in the past two years; Mr. Beringause faces daunting challenges in turning the company around. Jim Turner, non-executive chairman of the Dean Foods Board, expresses confidence Beringause is the person for the job in a news release: “He has a long track record of creating value in dairy and consumer products companies, as well as a unique combination of turnaround and operational expertise.”
Upon the news of the CEO change late on Friday afternoon, July 26, Dean Foods stock rose in off-market trading over the weekend, rolled a bit during the day on Monday, July 29, and at the close of business, closed up 2 cents/share from Friday afternoon’s closing value of $1.25. On Tuesday, July 30th, the stock had climbed again to $1.36 at closing.
Following is the original news release, along with some additional public information about Mr. Beringause:
The original news release from PR Newswire:
DALLAS, July 26, 2019 /PRNewswire/ — Dean Foods Company (DF) today announced that Eric Beringause has been appointed President and Chief Executive Officer and a member of the Dean Foods Board of Directors, effective July 29, 2019. Beringause succeeds Ralph Scozzafava, who has stepped down as CEO and resigned from his position on the Board.
Beringause brings to Dean Foods more than 30 years of transformational leadership and operational experience at a broad range of blue-chip brands in the food, beverage and consumer products industries, including expertise in food processing and branded and contract manufacturing. Most recently, he served as CEO of Gehl Foods, LLC, a market-leading producer of dairy-based beverages and food products. Prior to that, he served as CEO of Advanced Refreshment LLC, one of the largest U.S. producers of private-label bottled water and water-based beverages, and as CEO of Sturm Foods, Inc., a leader in private-label food products, specialty food brands and contract manufacturing. Earlier in his career, Beringause held various business development, finance, and sales and marketing roles at Alcoa Consumer Products, Gerber Infant & Baby Products, ConAgra, Inc./Grist Mill, Nestle, Inc., Nabisco Brands and The Pillsbury Company.
“We believe Eric is the right leader to drive the transformation of the business as the Company continues to execute on its enterprise-wide cost productivity plan and its previously announced exploration of strategic alternatives,” said Jim Turner, Non-Executive Chairman of the Dean Foods Board. “He has a long track record of creating value in dairy and consumer products companies, as well as a unique combination of turnaround and operational expertise.”
“I am honored to join Dean Foods at this important juncture,” said Beringause. “Dean Foods is the nation’s largest dairy processor and a leader in the industry, and I am excited to work with the Board and management team to leverage our scale and substantial assets to realize the significant opportunities available to transform our company. My top priority will be to ensure we have the right footprint and strategies in place to drive sustainable growth and profitability for the benefit of our shareholders, employees, customers and other stakeholders.”
Turner continued, “On behalf of the entire Board, I want to thank Ralph for his service and contributions to Dean Foods over the past five years. We appreciate his dedication to the Company and we wish him all the best in the future.”
Upcoming Webcast of Second Quarter 2019 Earnings Conference Call The Company will host a live webcast of its second quarter 2019 earnings conference call on Tuesday, August 6 at 9:00 a.m. Eastern Time. The webcast is expected to last approximately one hour and will be accessible by visiting http://www.deanfoods.com/our-company/investor-relations/ and by clicking “Webcasts.”
The webcast will be accessible on most operating systems and browsers. A webcast replay will be available for approximately 45 days following the event within the Investor Relations section of the Company’s website.
About Dean Foods: Dean Foods is a leading food and beverage company and the largest processor and direct-to-store distributor of fresh fluid milk and other dairy and dairy case products in the United States. Headquartered in Dallas, Texas, the Dean Foods portfolio includes DairyPure®, the country’s first and largest fresh, national white milk brand, and TruMoo®, the leading national flavored milk brand, along with well-known regional dairy brands such as Alta Dena®, Berkeley Farms®, Country Fresh®, Dean’s®, Friendly’s®, Garelick Farms®, LAND O LAKES®* milk and cultured products, Lehigh Valley Dairy Farms®, Mayfield®, McArthur®, Meadow Gold®, Oak Farms®, PET®**, T.G. Lee®, Tuscan® and more. Dean Foods also has a joint venture with Organic Valley®, distributing fresh organic products to local retailers. In all, Dean Foods has more than 50 national, regional and local dairy brands as well as private labels. Dean Foods also makes and distributes ice cream, cultured products, juices, teas, and bottled water. Approximately 15,000 employees across the country work every day to make Dean Foods the most admired and trusted provider of wholesome, great-tasting dairy products at every occasion. For more information about Dean Foods and its brands, visit www.deanfoods.com.
*The LAND O LAKES brand is owned by Land O’Lakes, Inc. and is used by license. **PET is a trademark of Eagle Family Foods Group LLC, under license.
CONTACT: Investor Relations/External Communications, Suzanne Rosenberg, +1 214-303-3438. Media please contact +1 214-721-7766 or firstname.lastname@example.org
Additional Background Information about Mr. Beringause:
Vassar: Mr. Beringause serves on the Board of Trustees of Vassar College, from whom he received his undergraduate degree. A biography can be read on Vassar’s website, or is posted here:
Giving Back: Related to experiences and friendships which began with a summer job while at Vassar, Mr. Beringause has been a huge supporter of an effort which builds up the Navajo nation, assists the Student Conservation Association, and involves telecommunications – all at the same time. And he believes that teaching the ‘why’ is important. Learn more in “That Vassar Serendipity – Three Alums Find a Common Cause,” a part of the Vassar “Stories” series.
Management Board of CP Kelco / a Division of Huber: Mr. Beringause is a member of the Management Board of CP Kelco, a consumer products division of Huber, which processes .nature-based’ ingredients for the food industry.
From FoodDive – a perspective on the circumstances which led to this change:
In recent years, opinions about Dean Foods and its future have been offered by every level of the dairy supply chain from dairy farmers to financial outlets to board rooms across the nation. A change has occurred. The entire dairy economy will benefit from a healthy and vibrant Dean Foods. We are hoping that Mr. Beringause is indeed, the leader with the skills to build a positive future – many dairy communities will be counting on it.
The Dean Foods Earnings Call, a webcast relaying financial news of Dean Foods, a publicly traded company, was held on the morning of Tuesday, May 7th, 2019.
The timeframe immediately before and after these publicly available Earnings Calls, for any company generally provide a wealth of information concerning the financial health and status of that company, along with various industry perspectives.
According to company information, Dean Foods is the “nation’s [US] largest processor and direct-to-store distributor of fluid milk.” As such, any decisions made by the company will have a direct impact on local/regional dairy communities across the country, affecting many dairy farms and jobs within and related to the processing plants.
It can be said that Dean Foods is perhaps the company which is most supportive of the local and regional farm communities within a fairly close radius of each of its 58 plants. Additionally, there are 19,000 local jobs in processing and distribution and related company functions at the plants.
Here are general takeaways from the Earnings Call – a grassroots perspective:
First: No really horrible news for farms or local business, or even Dean’s resulted from the Q1 call, which I consider a positive, given the company’s downward trending stock prices of late.
Second: Stock value was generally up for the day, with market share price at $1.75 at the time of close of business on May 7th.
Third: No immediate transitions or sales of the company were announced (as of that day), even though it is no secret the company is exploring options. Whatever the company’s eventual decisions, there is no doubt that local communities and farm economies across the country will be impacted – but no one knows if that will be in a harmful or helpful manner at this writing.
Fourth: The world of food in general – and dairy companies in particular – is fast-changing, so any news today may be very different a week from now.
Stockholders Meeting: The Dean Foods Stockholder Meeting occurred Wed, May 9th at 9 am, CDT. The meeting is archived here if readers would like to listen in. There is a delay at the front of the meeting in the recording.
Prior to and following the May 7th Earnings Call: These Posts (chronological)
May 7, 6:58 am, by Seeking Alpha: Dean Foods Misses Q1 Estimates – notes that sales declined in 9% in Q1 2019, and to this blogger’s understanding, the comparison point is Q1 in 2018 (will verify). Remember, in 2018, the company still had branded shelf space in Walmarts in several states in the projected distribution radius of the new Walmart plant at Fort Wayne, Indiana.
A Transcript of the Entire Call – posted by Seeking Alpha – access at this link(21 pages if you print, follow a link to an audio recording): includes the opening statement by Dean Foods officials, including CEO Ralph Scozzafava, and a Q&A Session with Financial Analysts from well-known companies
Slides – played in conjunction with the Dean Foods officials portions of the call, includes graphs and charts further explaining the verbal points – access at this link
An article by Dom Difurio, a breaking news business writer for the Dallas Morning News, included these three statements of note:
“On a call with analysts frustrated with a lack of details around when the company could turn a financial corner, Dean Foods also reiterated that it’s looking at strategic alternatives to accelerate its business transformation and enhance its value.”
“When asked whether the company was in talks with any potential buyers for the company, Scozzafava said it’s possible the company could do nothing.
“We’ve been in conversations with some folks, and we’ll leave it at that . . . we are very open minded and exploring some things,” Scozzafava said.
“Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Food-Dairy Products is currently in the bottom 8% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.”
Posted at Seeking Alpha, authored by Holmes Osborne, of Osborne Global Investments
This is a blunt, tell-it-like-it-is perspective from a financial analyst’s viewpoint, who describes the company’s real estate and transportation assets as interesting. He also suggests some action items for the company to take in order to cause company value to rise.
With most of this blog’s readers in agriculture, it should be noted he suggests the company needs to widen its portfolio to include more plant-based or alternative beverages, or expand whey-protein production.
Parts of this article are a bit hard to read, but may be necessary to absorb in order to take action.
Also – take note, some of the $$$ referring to milk sales are not as impactful as he suggests due to market conditions of two different time frames, and some of his other statements related to agriculture show a bit of a lack of knowledge about grass-roots agriculture.
CEO Ralph Scozzafava notes that a cost productivity plan and improvements in free cash flow provide optimistic things about the quarter
Scozzafava: “We believe we have passed the inflection point in our transformation, as many of the initiatives we implemented over the past 12 months are now beginning to take hold.”
Scozzafava (when asked about a potential sale): “It’s very possible that we won’t do anything, and we’ll continue to execute the plant that we have, which we’re very happy with, and we’ll continue to make progress on it. “So look, we’ve been in conversations with some folks, and we’ll leave it at that.”
Notes this from Wells-Fargo Analyst John Baumgartner: “The outlook features some positives (seq. EBIT improvement, positive FCF, new business wins), but we think weak volumes, expansive price gaps, and inflationary price basis to dairy costs maintain DF in a vulnerable position.”
“Wells-Fargo has a Market Perform rating and a target price of $2 on Dean Foods.”
June 7th, 2019, 8:44 am:“Saputo takes a pass at Dean Foods”: Seeking Alpha news alert breaks news Saputo will not be acquiring Dean Foods, after earlier announcements Saputo was considering that acquisition.
As those in the dairy industry know too well, this is an evolving story with lots of moving parts. Look for additional updates as they become available.
And please keep in mind, this is mostly a chronicle or digest of information which has been published by other sources. This blog in no way suggests advice on taking actions either in the stock market or in a related business due to information published here.
Source: News Release from KDDC, written by Eunice Schlappi
H H Barlow III, a life-long dairy farmer from Barren County, has been selected to lead the Kentucky Dairy Development Council (KDDC) as the new Executive Director as of May 1. He follows Maury Cox, who retired at the end of February after holding the position for the past 10 years.
H and his wife, Kathy own and operate Barlu Dairy in Cave City and are currently milk 120 Jerseys. They have four adult children – Gini Lin, Brad, JP and Josh. They also have 14 grandchildren. They are members of the Immanuel Baptist Church in Glasgow.
Mr. Barlow graduated from the University of Kentucky and has worked for 34 years in feeds sales in addition to his dairy farm. He is a past board member for the KY Agricultural Development Board; he served on the KY Agricultural Council; he was chosen to serve on the U.S. Board for International Food & Agricultural Development; he was the chair of the founding committee for the KDDC and served on the KDDC board six years; he served on the Lone Star Milk Cooperative board of directors for 11 years; and he served on the ADA of KY/SUDIA board for 11 years.
When asked why he wanted to become the KDDC Executive Director, H stated that he is very passionate about the dairy industry, always has been. He plans to work with the four KDDC dairy consultants to help improve the profitability and sustainability of Kentucky’s dairy farm families. He fully understands the challenges that dairy farmers are facing but is very hopeful for future improved conditions within the industry. He plans to working closely with Kentucky’s dairy farmers, Governor’s Office of Ag Policy, KY Dept of Agriculture and all allied industry relating to dairy. He feels that teamwork and networking will be a key part of the job as he moves forward in this new position and is looking forward to working with all of Kentucky’s dairy industry.
“It’s the people that make the difference, and there’s no better people than dairy farmers and their families.”
This is how Maury Cox summarizes his perception of the people he’s served – mostly in Kentucky, but extended to the Eastern United States – during his tenure as Executive Director of the Kentucky Dairy Development Council, a position he’s held since May 31, 2009.
Cox was honored by his peers and colleagues for his service to the Dairy during the Awards Banquet of the Kentucky Dairy Partners Annual Meeting in Bowling Green, KY on February 26, 2019.
Cox had announced a retirement date of March 1st, but since the position has not been filled as of press time, he will be available for additional duties until the time a new Executive Director is named.
Maury Cox was honored at the KY Dairy Partners to recognize his service as Executive Director of the Kentucky Dairy Development Council. He was presented with a signatory crock, and was delighted to receive a new fishing pole, presented by Tom Hastings. In case you didn’t know, Maury is almost as passionate about fishing as he is dairy cows and dairy people!
His leadership at KDDC culminates a life-long career in the dairy industry. He began as a dairy farmer, and later worked for Kentucky Artificial Breeders Association / Select Sires. He was a founding member of KDDC in 2005, and became the Dairy Consultant Director in 2007.
As Executive Director, Cox worked closely with and relied on the efforts of his current team of Area Dairy Consultants, who serve four regions across the state. From left to right (above), they are Meredith Scales, Jennifer Hickerson, Maury Cox, Beth Jones Cox, and Dave Roberts.
On any one day, Maury could be speaking to a committee at the KY Legislature in the morning, visiting a farm in in the afternoon with his barn boots on, and ending the day by promoting milk at a ballpark.
Without a doubt, Maury led his state during the most challenging time of all in 2018 as 19 dairy producers lost their milk contracts and markets. With grace, poise, and an almost 24-hour effort, Maury led the way to 11 producers eventually finding a home for their milk with either Scioto Milk Producers Cooperative of Ohio, and some with DFA. As an eiplogue, some of those 11 survivors have since gone out of business as well.
Maury has collaborated with many affiliated organizations to advance the dairy industry in Kentucky, in the Southeast, and across the country. For a number of years, he, working with others, such as the Kentucky Department of Agriculture, organized bus tours and educational trips on a regular basis.
Maury has always appreciated the role an ‘outside perspective’ and exposure to new ideas can play in enhancing a dairy farm when new ideas are applied. The Kentucky Department of Agriculture has been one of his most valuable working partners through the years on these outside trips. Additionally, he is considered a “Senior Statesman” of the southeast dairy industry.
He has made a point to build bridges with other state producer groups, respecting that there are differences from region to region which affect farmers in every area across the country. When he learned something that made a difference to Kentucky, he tried every way he could to make that a reality in his home state.
A prime example is the implementation of the Market Industry Leader of Kentucky (MILK) program. With KDDC organizing a collaborative effort of co-ops and processors, the effort was designed to make strong improvements in Kentucky milk quality in order to remain competitive in today’s milk marketplace.
Over the years, this program has supported milk quality improvements, putting $8 Million dollars back into the Kentucky farm economy. A longer term result is that the collective Kentucky dairy industry is generally more sustainable.
Communications of the KDDC also went to the ‘next level’ under Maury’s leadership. The Kentucky Milk Matters newsletter is read across the southeast, and is considered an accurate source of current information.
As a regional policy leader, Maury played an instrumental role in the Southeast Dairy Coalition, an informal working group of grass-roots dairymen from several states who worked together to navigate the challenges of the 2009-11 Dairy Crisis, as well as influence the 2012 Farm Bill.
Sometimes as a leader, and sometimes in collaboration with others, he has been a part of many meetings concerning milk pricing and Federal Milk Market Order function, and has worked to effect change in that sector as much as possible. Getting timely information to his producers has always been a priority.
As parting words, Maury offers this perspective on the future:
“As long as supply outpaces demand, over-order premiums in most markets will be non-existent. Premiums are where the profit is. Until dairy farmers come together and decide they want something different, fewer and fewer will continue in business.”
Maury’s plans includes more time to recreate and travel with his wife, Sue, and their family, to devote more care to his mother, and of course, spending more time at any favorite fishing spot or watching a Kentucky Ballgame (basketball might be his favorite!) It’s safe to say he’s as passionate about those things as dairy!
Maury is also a man of deep faith, and applies faith and prayer to every situation. He shows Christian grace in his everyday and his professional life, and his approach to some very difficult situations is a testament to faith in action.
Maury reminisces with some folks he’s worked with through the years: Bob Klingenfus, a former President of KDDC, Warren Beeler, Executive Director of Governor’s Office of Agriculture Policy, KY Dept.of Agriculture, and Eunice Schlappi, Office of Ag Marketing, KY Dept. of Agriculture.
Robert Klingenfus, a former President of KDDC, says: “The Kentucky Dairy Community has benefited greatly from Maury’s leadership. His dedication to serve producers was unparalleled, and he has navigated challenging events with a calm, steady hand. We can never thank him enough for his efforts.”
Bob continues: “Maury has been a help to countless dairy farmers. On the surface we see Maury helping with Milk quality problems, division of water issues. But what he is really good at is what he calls facilitating. He is a good listener and when you are done venting, he will give a few suggestions and the names of people that can help you with your problem. He is careful not to tell you what to do, but facilitates you with the ability to achieve what you are seeking. Maury has become the go-to man if you need something; he seems to know everyone. If you need a barn, Maury knows who has built one recently, or sell or buy cows same thing, he put people together to solve problems.
“It has been an honor and privilege to serve you. I am a lucky and blessed guy,” were Maury’s closing words on the evening of the KY Dairy Partners banquet.
Here’s to you, Maury! Those sentiments are a thousand times reciprocated! We know we’ll be seeing you around!