American dairy giant Borden Dairy Co. filed for bankruptcy this week.
The company is the second major U.S. milk seller to go bankrupt in the last two months. Dean Foods Co announced bankruptcy in November.
The milk company better known for its advertising mascot Elsie the Cow was founded 160 years ago in Dallas and is one the oldest and largest dairy producers in America. In recent years, it has been dealing with tumbling consumption caused by the popularity of vegan alternatives. Additionally, competitive pressures, declining sales and falling profits made its debt load unsustainable.
The dairy processor cannot afford its debt load and its pension obligations. The company listed assets and liabilities of between $100 million and $500 million.
The court papers show the boom in plant-based dairy alternatives along with rising prices for raw milk and dropping margins were the main reason for Borden problems. The company also suffered pressure coming from retailers investing in their own low-cost dairy products.
CFO Jason Monaco said: “While milk remains a household item in the United States, people are simply drinking less of it.”
“In parallel, since the turn of the century, the number of U.S. dairy farms has rapidly declined.”, he added.
Vegan trend helped drive Borden’s larger rival, Dean Foods Co., to file for bankruptcy on Nov. 12.