America’s biggest farmer-owned dairy cooperative has agreed to buy the bankrupt parent company of Mayfield Dairy for $425 million, but the giant dairy business merger still must be approved by anti-trust regulators in Washington, D.C.
Dairy Farmers of America (DFA) is proposing to acquire 44 of the facilities and assets of Dean Food Co.’s fluid and frozen dairy operations, including the 330-employee operations of Mayfield Dairy in Athens, Tennessee.
While the merger would bring Dean Foods out of bankruptcy and provide more economies of scale and purchasing power for the combined dairy business, dairy farmers already reeling from low milk prices and higher operating expenses could be hurt by the proposed merger.
A typical American today drinks about 40% less milk than in the 1970s. The nationwide decline in milk consumption and the rippling effects of the trade war with China have pushed thousands of dairy farms out of business.
Dairy farmers have argued that a merger of DFA and Dean Foods would reduce competition and suppress the price of raw milk. But DFA says its deal will help farmers by guaranteeing that there will be buyers for their milk at a time when milk consumption is declining nationwide.