Elsie the Cow is bellowing a sad moo today as Borden Dairy Co., founded before the Civil War has filed for bankruptcy due to tumbling milk consumption and the rising price of milk which has crippled the dairy industry with debt.
Borden is one of America’s oldest and largest dairy companies and the second company to file for bankruptcy since November 12, 2019 when Dean Foods which has been the nation’s largest milk producer filed for bankruptcy.
Borden says it cannot sustain its debt load and its employee pension obligations. Twenty-two percent of its 3,300 employees are unionized and under a collective bargaining agreement.
Broader industry trends such as a 6 percent drop in the overall milk consumption in the US since 2015 has also hurt the company. Family farms going out of business as well as thousands which have stopped producing milk have added to the problem of the wholesale cost of milk rising, combining that with lower retail prices due to lower consumption has caused milk processors like Borden to suffer, the company explains in its bankruptcy filing.
According to the filing, the company plans to stay in business during the bankruptcy process but does not state if it plans to stay in business or liquidate.
The company was started when founder, Gail Borden, developed a way to condense milk and then went on to successfully produce it commercially in 1856. Five years later in 1861, Borden and his partner opened the first plant in upstate New York and at that time supplied condensed milk to the Union Army during the Civil War which helped the company to prosper.
By the 1930s, Borden had bought 200 other dairy companies in the US and became the largest producer of fluid milk. In 1936, ‘Elsie the Cow’ became Borden’s mascot and the center of the company’s marketing for several decades and was even named one of the top 10 advertising icons of the 20th century in the year 2000 by AdAge, which is an online magazine that produces the Leading National Advertisers Report.
Borden eventually branded off into other businesses and in 1987 bought 23 companies spending $442.6 million. However, the company began to run into financial difficulties in the early 1990s and was sold for $2 billion to a private equity firm, Kohlberg Kravis Roberts & Co. Many of the other businesses were sold off eventually leaving just the dairy business.