Dozens of local school districts quickly switched to a new milk supplier for school lunches this week as Borden Dairy Co. filed for bankruptcy protection and stopped production at their Cincinnati plant.
Many schools buy milk and other lunch products through a purchasing cooperative to get lower prices. Ken Swink, director of the Southwestern Ohio Educational Purchasing Council, said 25-30 school districts in southwest Ohio, including several in the Dayton area, have used Borden milk through his agency.
2018 STORY: Low milk prices forcing dairy farms to close
“We found out Monday morning of the Chapter 11 filing for Borden,” Swink said. “We brought about 40 districts together Tuesday afternoon for an emergency meeting to discuss alternatives.”
Swink said a deal has been reached for another company, Prairie Farms, to supply milk for those 25-30 districts that had gotten Borden milk through the EPC.
“We believe all of our member EPC school districts will have milk service in 2020 through the end of the school year,” Swink said.
Several other school districts, including Kettering, Springboro and Miamisburg, use Reiter Dairy as their milk supplier for school lunches. Reiter’s parent company, Dean Foods, also filed for bankruptcy protection in November, but has continued to operate at its normal levels.
Swink said several Reiter-contracted schools also attended Tuesday’s meeting, and they’re hopeful the company will continue operations all school year despite the bankruptcy filing.
Borden spokeswoman Adrienne Chance said local school districts could have stayed with Borden, as that company also plans to continue operations during the bankruptcy process. With production halted in Cincinnati, the closest plant is in Cleveland.
Troy schools Director of Food Service Clint Hufford said the Borden news had some immediate impact, as the district’s Thursday delivery did not include any chocolate milk, which is the No. 1 seller.
Chance said Borden notified schools that it might have a shortage of chocolate milk for a couple of weeks and would substitute white milk, saying that happens occasionally to many suppliers. She expressed surprise that the school group decided to immediately switch to a new company.
Hufford said Prairie Farms will start deliveries to Troy next week, but he added “there are still a lot of moving pieces.” Those include getting accounts set up, delivery days scheduled, possible new drivers hired, plus getting keys and fobs returned from Borden and sent to Prairie Farms.
“The first day of deliveries from Prairie Farms to our schools will certainly bring some uneasiness, but once they have keys/fobs and know how to access the buildings, we’ll be running business as usual,” Hufford said.
Northmont Superintendent Tony Thomas said his district has enough milk to last until the first Prairie Farms delivery without interruption of service. But there are still some odd details.
“Borden owns the coolers that the milk is stored and cooled in, but we have worked out an agreement to continue to use the milk coolers since Prairie Farms does not offer that service,” Thomas said.
Northwestern schools in Springfield told families in a Facebook post Wednesday that their supply for next week was in question. On Friday, district officials updated that they do expect a milk shipment Monday, but they’re not sure if it will arrive in time for lunches. Schools will have water and other drinks available.
Centerville, Franklin, Northmont and New Lebanon schools are among the others switching to a new supplier next week.
Chance said schools need to make decision that’s right for them, but added that despite the bankruptcy filing, Borden is ready if they decide to come back.
“We have a letter that we’re sending to all of our customers updating them,” Chance said. “It is, for the most part business as usual — we’ve been able to maintain our 99% service level.”
The amount of liquid milk consumed per capita in the U.S. has tumbled more than 40% since 1975. Americans drank around 24 gallons a year in 1996, according to government data. That dropped to 17 gallons in 2018.
As milk consumption has fallen, dairy farms have closed their doors. In court filings, Borden says 2,730 U.S. dairy farms have gone out of business in the last 18 months alone. The remaining farms can command higher prices, but that pinches Borden, which can’t charge consumers more because of pressure from big competitors like Walmart. Walmart opened its own milk processing plant in Indiana in 2018.
Staff writer Jenna Lawson and the Associated Press contributed to this story.
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