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Dean Foods declares bankruptcy amid drop in demand

DALLAS — Dean Foods, America’s biggest milk processor whose brands include the Marquette-based Jilbert Dairy, filed for bankruptcy Tuesday amid a steep, decades-long drop-off in U.S. milk consumption blamed on soda, juices, and more recently, nondairy substitutes.

The Dallas company said it may sell itself to the Dairy Farmers of America, a marketing cooperative owned by thousands of farmers.

“Despite our best efforts to make our business more agile and cost-efficient, we continue to be impacted by a challenging operating environment marked by continuing declines in consumer milk consumption,” CEO Eric Berigause said in a statement.

Since 1975, the amount of milk consumed per capita in America has tumbled more than 40%, a slide attributed to a number of reasons but mostly the rise of so many other choices, including teas, sodas, juices and almond and soy milk.

That has hit dairy farms and milk sellers hard, leading some smaller family farmers to quit the business.

Another blow to Dean Foods came when Walmart opened its own milk processing plant in Indiana last year.

Dean Foods has lost money in eight of its last 10 quarters and posted declining sales in seven of the last eight.

The company said it will continue operating normally while it puts its finances in order under Chapter 11 bankruptcy. It has lined up about $850 million in financing from lenders.

Jilbert Dairy, located at 200 Meeske Ave. in Marquette, is a Dean Foods brand. Dean Foods acquired Jilbert Dairy in 2006.

According to deanfoods.com, Jilbert opened in 1937 and was processing 10,000 pounds of milk monthly. It now processes over 4 million pounds per month.

“Right now it is business as usual for us,” said Anne Divjak, vice president of government relations and external communications for Dean Foods, in an email. “We are continuing to provide customers with an uninterrupted supply of high-quality dairy products and are relying on our dedicated employees and valued milk suppliers to help us do this.

“Products from the Dean Foods family of brands, including Jilbert’s, will continue to be available across upper Michigan where consumers usually shop. Any future decisions regarding our plants will be based on market conditions and the needs of the business.”

Christie Bleck can be reached at 906-228-2500, ext. 250.