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America's Biggest Milk Producers Are Going Bankrupt
- lalos 7y agoThe invisible hand at play, specially if it is true that plant based milk are taking away market share from the milk industry. Hope the government doesn't bail out or protect the industry against what the free market demands.
- pkaye 7y agoWhat I've heard is people drink less milk but eat more cheese. I think the plant milk substitutes for cheese are not quite there.
- onlyrealcuzzo 7y agoNot for hard cheeses, and they're not doing a good job mimicking the flavors, but there's some really good soft cashew cheeses these days -- and it's not very processed either.
- bestnameever 7y agoThe best mac and cheese I have ever had was vegan although that was from a vegan restaurant so I don't even know how they made it.
- toomuchtodo 7y agoCashew sauce serves as a cheese substitute.
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- JumpCrisscross 7y ago> Cashew sauce serves as a cheese substitute Recently went to a plant-based pizza place. (Unknowingly.) Pizza comes out. It's a white pizza. Cashew cheese all over it. Biting into what you think is cheese and getting cashew is disgusting. Biting into a cashew, sage and roasted pepper flatbread is quite nice. The language around substitutes likely needs to evolve for mass adoption. (That or make it literally unrecognisably similar, e.g. what Impossible and Beyond Meat are trying to do, at which point one likely surrenders many health benefits.)
- toomuchtodo 7y agoJust had mac and cheese (with cashew sauce as the cheese) at a vegan diner in Indianapolis a few days ago, couldn't tell the difference between it and the real deal. It's unlikely you're going to get away with calling cashew sauce "cheese" at scale, but when properly made it gets close.
- JumpCrisscross 7y ago> Just had mac and cheese at a vegan diner in Indianapolis a few days ago Mind sharing the name? I'm out there in a few weeks.
- toomuchtodo 7y ago10th Street Diner. Also highly recommend their take on a BLT. Enjoy! https://www.yelp.com/biz/10th-street-diner-indianapolis https://www.yelp.com/biz/10th-street-diner-indianapolis
- md2be 7y agoVegan Mac Cheese sauce is perhaps the simplistic thing to make - soak cashews overnight in fridge, drain water, add fresh water, blends, add nutritional yeast, salt, pepper, garlic, and a lemon. Heat and serve.
- logfromblammo 7y agoI agree completely. Saying "vegan X" for a complex vegan recipe intended to approach the experience of eating X seems like a naming failure when considering the sometimes heroic effort that went into researching the recipe. Calling it "vegan cheese" is thus doubly unsuitable, as it disappoints everyone expecting something like real cheese, and denies the vegan innovator a distinctive, intrinsically vegan name for the creation. Veganism should really be appealing for vegans first, and then the masses will appropriate from that culture whatever foods they like best from it. A "mac and vegan cheese" will never be able to outcompete mac and genuine cheese among the people who don't really care all that much if dairy cows are exploited or unhappy. But a "macaroni and cashew-butter sauce" might be fine if I'm not really in the mood for real cheese, or want to try something different. I'm perfectly willing to try original vegan foods, but when they go head-to-head with vegan imitation against non-vegan genuine, I will choose the genuine food most of the time.
- dpatru 7y agohttps://m.youtube.com/watch?v=7q2Ry-pC6Rw https://m.youtube.com/watch?v=7q2Ry-pC6Rw Here are my kids making vegan mac and cheese.
- shhshahassa 7y agono one asked for this lol
- klipt 7y agoWhole milk is still recommended by pediatricians for toddlers, I imagine plant based milk is not nutritionally equivalent.
- toomuchtodo 7y agoWe use pea milk with our kids because they're lactose intolerant. Pediatrician recommended as long as they're getting more protein and fat elsewhere in their diet (which they do). It doesn't hurt that peas don't care how they're raised and treated to produce milk. Dairy milk is not nutritionally necessary in any age cohort. If you enjoy it, that's fine of course, but it isn't required if you don't.
- pg_is_a_butt 7y agoWhat cow told you that? Peas care.
- jononomo 7y agoI just think you're damaging your kids by not giving them milk, which is the most nutritious thing you can feed a kid. Also, your kids may be lactose intolerant due to other stuff in their diet, like gluten or other toxins in plant-based foods that lead to a leaky gut.
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- justinator 7y agoIf milk is so good, keep them on Mother's milk.
- mijkal 7y agoBitty! Lol :-) (Ref: 'Little Britain') https://youtu.be/FmD2Y6WxpIw?t=61 https://youtu.be/FmD2Y6WxpIw?t=61
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- m463 7y agoThere's lots of evidence milk isn't as good for you as the dairy industry advertises.
- jononomo 7y agoWhere did you get that idea? Milk is one of the 2-3 most nutritious foods on Earth. In fact, milk has been designed by evolution over millions of years to be precisely what a mammal needs to thrive.
- toomuchtodo 7y agoSome humans have the necessary genes to digest milk, some do not. Can't lump all mammals together. > Milk contains a type of sugar called lactose, which is distinct from the sugars found in fruit and other sweet foods. When we are babies, our bodies make a special enzyme called lactase that allows us to digest the lactose in our mother’s milk. But after we are weaned in early childhood, for many people this stops. Without lactase, we cannot properly digest the lactose in milk. As a result, if an adult drinks a lot of milk they may experience flatulence, painful cramps and even diarrhoea. (It’s worth noting that in other mammals, there aren’t any lactase-persistent adults – adult cows don’t have active lactase, and neither do cats or dogs, for example). https://www.bbc.com/future/article/20190218-when-did-humans-start-drinking-cows-milk https://www.bbc.com/future/article/20190218-when-did-humans-...
- soperj 7y agoThen how do cats digest it?
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- InvaderFizz 7y agoPoorly. Adult cats are generally lactose intolerant[0]. 0: https://www.prestigeanimalhospital.com/services/cats/blog/why-cats-and-cows-milk-dont-mix https://www.prestigeanimalhospital.com/services/cats/blog/wh...
- sp332 7y agoA counterpoint: these companies were recently bought by private equity firm KKR Co, the same company that loaded up Toys 'R Us with debt and then liquidated it. https://mobile.twitter.com/rhinosoros/status/1214246027127119872 https://mobile.twitter.com/rhinosoros/status/121424602712711... This bankruptcy filling might just be negotiation in the courts to reduce pension obligations.
- RobLach 7y agoGiven that milk consumption has only gone down 1% / year over the last 5 years, which isn't dire, I believe it.
- bluntfang 7y agothe direness of a 5% consumption loss over 5 years really depends on margins.
- RobLach 7y agoThat's definitely true if you've bet on consumption increases and preempted meeting that demand, but milk prices are pretty volatile, jumping +/- $4/cwt throughout the year, which makes me think that COGs are padded enough to give you plenty of time to react. Gut feelings though. For comparison, red meat consumption in the US has fallen 15% in the last 10 years and Tyson stock$ is near it's 5 year high.
- satya71 7y agoYep. PE loot on solid business.
- turk73 7y agoNow we get the truth.
- _bxg1 7y agoI don't understand how bigger waves haven't yet been made about these locusts. Where's the New York Times expose? Proposals by Congress on how to make this vampirism illegal? Literally anything?
- cowpig 7y agoThe title of the article states that milk producers are "going bankrupt," but then cites the rising costs of raw milk, which seems like a good thing for a milk producer. So I look up the company on wikipedia and Borden Dairy is a processor & distributor, not a producer. Furthermore, "employee pension obligations" being cited as a primary cause of bankruptcy without any more details raises a red flag for me. This article sounds more like they're reporting on the press release of some kind of corporate raiders than journalism.
- koboll 7y agoIf you can't discharge student loans in bankruptcy, you damn well shouldn't be able to discharge pensions you've promised your employees for decades.
- specialist 7y agoPensions are just deferred compensation, part of the total benefits package (salary, health insurance, etc). They're not entitlements, giveaways, lottery tickets, whatever. Maybe the most insidious side effect of transition to 401k was tricking people without pensions that somehow pensioners are unfairly compensated.
- KKRCo 7y agoWould you be willing to elaborate more on this comment?
- gimmeThaBeet 7y agoI disagree with a lot of that. Defined benefit plans make all the sense in the world sort of empirically or like maybe narratively(?), but the problem is that risk isn't handled equitably. 'Unfair' feels like it has more connotations than my liking, but the main source of that feeling imo is that pensions have frequently made implied rates of return that had little to no chance of realization. It's easy to thumb your nose and say "well that's the company's problem", but what it does illustrate in a more general sense is that counterparty risk is very real, especially in underfunded pensions. While pension plans have a large amount of money saved, the reality of the situation is that part of a pensions mechanics look like a claim on a company's future earnings. That's what grinds my gears about pensions, there's a lot more risk than people think, and it's foolhardy to assume the employer assumes all the risk in theory or practice. The best thing about the transition to 401ks imo was that it made it abundantly clear that there is a large amount of risk in funding retirement. The downside is yes, companies made it clear they were no longer willing to assume any of that risk themselves.
- burundi_coffee 7y agoTime for government cheese again I guess?
- criddell 7y agoI have relatives who run dairy farms in Ontario and they have a quota system. It stabilizes the market tremendously and as a result, they can make pretty big investments on their family farm. The downside, of course, is that consumers pay more.
- specialist 7y ago"... consumers pay more." I wonder about that. Has anyone studied this? In general, I mean. Sure, the retail sticker price is higher. But in my tax payer role, I also pay. If the government impairs the Freedom Markets™ with quotas and price supports, is society paying more or less over the long term? Factoring in bankruptcies, asset bubbles, crashes, unemployment, and so forth. (Asked as someone who despises how the USA does ag subsidies.) It's a tough thing arguing the overall a system is cheaper when my apparent cost is going up. Like the single payer debate in the USA. It seems like a no brainer to prefer a tax burden which is lower than my (and my employer's) health insurance premium. But the optics suck, right? People will go out of their way to avoid taxes.
- mywittyname 7y agoThese are win-win situations. Poor people get access to high quality products and businesses get a stable supply of customers and get the next generation hooked. Unfortunately, our current leadership are idiots and prefer to hand over blank checks to companies to keep them going. https://www.npr.org/2018/08/28/642525831/agriculture-dept-will-pay-4-7-billion-to-farmers-hit-in-trade-war https://www.npr.org/2018/08/28/642525831/agriculture-dept-wi...
- matheweis 7y agoThere are a handful of local milk producers and distributors in multiple states that by most appearances are doing well, for example: AZ: https://www.danzeisendairy.com/ https://www.danzeisendairy.com/ WA: https://www.twinbrookcreamery.com/ https://www.twinbrookcreamery.com/ To me, this (the unwinding of the large consolidated food companies) is largely a good thing.
- md2be 7y agoYep - Walmart the largest buyer of milk now owns their own farms and uses milk as a loss leader. Dean Foods former CEO was an alleged crook. Their packaging and advertising looks like it came out of the 1970s. Here we are in the Keto / Intermittent fasting era - and they failed to provide a cream. These folks gave up long ago. Expect a nice bounce back.
- dreen 7y agoTheir mistake was not buying milk.com
- seamyb88 7y agoDairy companies are notorious for skimming...
- t0ddbonzalez 7y ago> "Despite our numerous achievements during the past 18 months, the Company continues to be impacted by the rising cost of raw milk..." Out of curiosity, how much is a US dairy farmer paid for a gallon of milk?
- t0ddbonzalez 7y agoNever mind, found this Guardian article from 2018: https://www.theguardian.com/world/commentisfree/2018/jun/09/milk-canada-us-trade-war https://www.theguardian.com/world/commentisfree/2018/jun/09/... > "In 2016, Canadian farmers received an average price of C$0.79 a litre for milk, compared with C$0.49 on average for US farmers." So it appears that US farmers are paid roughly the same or slightly more than their European counterparts.
- code4tee 7y agoMilk as a beverage is in decline, but milk as a product has been steadily growing as a raw material (cheese, yoghurt, etc.) The companies in trouble are those that were too concentrated in beverage milk and failed to diversify their business models to stay relevant. Some of these companies troubles also smell badly of PE shenanigans with over leveraged debt deals and other PE card tricks.
- asdf21 7y ago100% this. All that being said, it's also the market working as it should in a way... poorly (in this case, borderline sociopathically) managed companies going out of business. As someone else said, the unwinding of large consolidated food companies is largely a good thing.
- gwbas1c 7y agoAt least with my personal dietary changes over the last few years, I've started eating more cheese but putting less "milk" in my coffee. Now that I telecommute, it's very hard for me to keep milk around for just coffee. Non-dairy milk keeps better in the refrigerator. (But, when I'm at a coffee shop or in an office, I use real milk. It moves fast enough that it won't go bad.)
- JohnJamesRambo 7y agoI’m constantly amazed at how cheap milk is in the grocery store. A gallon of Great Value 1% milk is $2.77 now. That seems low for what you are getting (a gallon of protein rich fluid milked from a cow and transported to you). How much profit could be left? I’ve heard that grocery stores sell milk for less than they buy it for just to get you into the store, because they know you will buy other things. I haven’t checked the truthfulness of that statement though. http://www.fmpc.uconn.edu/research/milk/conference/Criner.pdf http://www.fmpc.uconn.edu/research/milk/conference/Criner.pd... A link about the margins implies that may be technically untrue but I don’t know enough about the grocery business to say.
- Zelphyr 7y ago> I’ve heard that grocery stores sell milk for less than they buy it for just to get you into the store, because they know you will buy other things. I wonder if this is why they always put it in the back of the store? That way you have to walk through a vast array of higher margin things that you might suddenly decide you need on the way to and from picking up a gallon of milk.
- TacticalTable 7y agoYes. Same deal with Eggs, and why they have all the candy at the registers. And why they rearrange the store occasionally.
- Zelphyr 7y agoOMG that rearranging of the store makes me so angry. Just when I get a system down for getting in, getting what I need to get off my list, and getting out and they throw that monkey wrench in. That and using stacks of items as road blocks in the aisles to slow me down in front of higher-margin items. They don't need roadblocks with my pokey-shopping neighbors who stand in the middle of the aisle and stare at the two boxes of white-label pasta in each hand, attempting to calculate in their heads which one is the cheapest per noodle (my dad and grandmother being chief offenders here) all the while completely oblivious to my nasty glares because I just want to get past them so I can get to the sauce and move on.
- fmakunbound 7y agoI always thought it was weird to be drinking the breast milk of another species.
- JTon 7y agoMore or less weird than eating the flesh of another species?
- fmakunbound 7y agoDefinately more weird. Apart from humans, do any other species drink milk from another species?
- JTon 7y agoA house cat has no qualms drinking cows milk when given the opportunity. I think the answer to your question reveals more about capabilities than it does about specific tastes.
- oh_sigh 7y agoCows have udders, not breasts. There is no breast milk besides for human that is frequently drank in the world.
- logfromblammo 7y agoIndeed. Far more reasonable to lick platypus mammary "sweat". If you think too hard about any kind of food, it can start to get weird. Like coffee. You're taking the fruit of some tropical plant, ripping off the berry-flesh part that it wants mammals to eat, taking the seed that it wants those mammals to poop out somewhere else, killing it with heat to produce different flavor molecules, crushing it to powder, then passing hot water or steam through the powder to leach out those flavor molecules, including the molecules that the plant uses as a defense against improper eating. On top of that, adding things like the fat skimmed off the mammary secretions of other species, highly processed molecules from a temperate grass modified to produce gigantic seeds full of starch, and crystals from the juice of pulverized stems of tropical grass. This is poured into a vessel formed from huge trees pulverized down to loose cellulose fibers and molecules created using organic reactions from crude petroleum, or maybe just those organic polymers, puffed up with air. It could be all that insane-sounding stuff, or it could just be a cup of coffee. It is sort of cool that humans can't digest grass, but they grow grass anyway, so they can feed it to animals that can digest grass and then turn it into proteins and nutrients that humans can harvest from the animal without killing it, and which is tastier and more nutritious than raw grass juice.
- poulsbohemian 7y agoThe concept of perverse incentives pops up regularly on HN, and the dairy industry is a great example. You get paid by the gallon, but Bessy produces a limited number of gallons. So what do you do, you breed Bessy to the point that her milk is little more than white water, unrecognizable to previous generations of milk drinkers, and in doing so your supply outpaces demand. The point is, the struggles of the dairy industry are entirely their own making. They ignored the potential for diversification, with loads of family farms going out of business because they wouldn't move beyond fluid milk -- same concepts of value-add and vertical integration exist in dairy just like in other businesses. Before Chobani, good luck finding "greek" yogurt. After Chobani, good luck finding anything not "greek" yogurt. But where's the Quark? Where's the Creme Fraiche? Where's the "real" greek yogurt made with sheep milk? Dairies thought they could keep producing sub-standard Holstein water and didn't need to actually think like competitive businesses.
- lmaophp 7y agoLmaoooooooooooooo