Snow days cause drop in milk sales
Due to the cold temperatures, Dean Foods has experienced higher distribution costs and school milk volume losses.
DALLAS—Dean Foods (DF), which describes itself as the country’s largest milk processor, noted an unusual effect of the recent spate of bad winter weather on the dairy business. “Given the extremely cold weather across a large part of the U.S., we have experienced temporary school milk volume losses and increased distribution costs,” said Chief Executive Gregg Tanner during an earnings call this week. Fewer school days, fewer kids chugging milk in the cafeteria.
Schools buy a lot of milk. In fiscal 2012, American schools served 403 million gallons of milk, worth about $1.35 billion, as part of the USDA School Meal Programs, which includes breakfast, lunch, a special milk program, and a summer food-service program, according to the National Dairy Council. A spokesperson for the dairy group held out hope that the impact of the recent school closures on milk sales might not amount to much if schools ultimately make up the snow days.