The parent company of one of Idaho’s largest milk producers has filed for bankruptcy protection.
Dean Foods, which owns Meadow Gold, filed Tuesday for Chapter 11 bankruptcy after reporting a net loss of $79.4 million in the quarter ending Sept. 30.
Chapter 11 will allow the company, based in Dallas, to keep operating while it seeks a buyer. In a statement, Dean Foods said it was in talks with Dairy Farmers of America on a deal that would allow the cooperative to buy nearly the entire company.
Dean Foods said it has obtained $850 million in financing from its existing lenders, including Rabobank. The company said it would use the money to pay employee wages and benefits and to pay vendors.
“The actions we are announcing today are designed to enable us to continue serving our customers and operating as normal as we work toward the sale of our business,” Eric Beringause, who recently joined Dean Foods as president and CEO, said in the statement.
The Boise plant is “operating as normal” and will continue to provide customers with an uninterrupted supply of products, Dean Foods vice president Anne Divjak wrote in an email to the Idaho Statesman.
“That means products from the Dean Foods family of brands, including Meadow Gold, will continue to be available across Idaho,” she said.
Meadow Gold operates under Southern Foods Group, a Dean Foods subsidiary. The company has produced milk and other products at its downtown Boise plant, at 1301 W. Bannock St., since 1950, according to records from the Ada County Assessors Office.
The Boise plant is one of 58 operated by Dean Foods throughout the nation, according to its bankruptcy petition.
Albertsons sold its former ice cream plant at 2700 W. Regan Ave. to Dean Foods in 2003. The company closed the plant three years later and moved ice cream production to Salt Lake City.
Beatrice Foods Co. created Meadow Gold and owned the company until selling to Borden Inc. in 1986. Southern Foods bought the company in 1997. In 2000, Southern Foods was acquired by Suiza Foods Corp., which bought Dean Foods a year later. The merger created the nation’s largest milk producer.
Milk consumption has declined over the past four years, CNN reported. Sales through the 52 weeks ending Oct. 26 was around $12 billion, $3 billion less than during a similar period in 2015.
Dean Foods also took a hit when Walmart opened its own dairy plants a couple of years ago. Dean’s sales of $7.8 billion last year were down 38% from a decade earlier, the Wall Street Journal reported.