America's Biggest Milk Producers Are Going Bankrupt • Hacker News Board

Re: America's Biggest Milk Producers Are Going Bankrupt

#91

Post by epc » Tue, Jan 07, 2020, 2:19 PM UTC

mcv wrote: post #61

cowpig wrote: post #10

The 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 arti…

I keep reading weird stuff from the US about employee pension obligations being a burden on companies, and those savings getting eaten or stolen in all sorts of corporate shenanigans. Are these things really not handled by life insurance companies and subject to all sorts of regulation? That sounds woefully irresponsible.

Traditional “defined benefit” employee pensions in the US were treated as a balance sheet line item. There wasn't a separate, fenced off, account where funds were secured. In the 1980s it became popular for “corporate raiders” (today’s “private equity”) to target companies with mediocre corporate results but well funded pensions. Because the pension obligations weren't sequestered, you could legitimately take over a company, pay yourself a dividend using the pension fund, strip the company of assets and then run it into the ground.

Through it all, the MBAs, the corporate raiders, the bankers would say (and still say) they're just improving the efficiency of these companies.

Re: America's Biggest Milk Producers Are Going Bankrupt

#92

Post by t0ddbonzalez » Tue, Jan 07, 2020, 2:21 PM UTC

m463 wrote: post #14

lalos wrote: post #2

The 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.

There's lots of evidence milk isn't as good for you as the dairy industry advertises.

> " There's lots of evidence milk isn't as good for you as the dairy industry advertises."

lol at this ridiculous comment. Present the evidence please.

How many millions of years do you think mammals have been drinking milk for?

Re: America's Biggest Milk Producers Are Going Bankrupt

#93

Post by specialist » Tue, Jan 07, 2020, 2:22 PM UTC

criddell wrote: post #81

burundi_coffee wrote: post #29

Time for government cheese again I guess?

I 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.

"... 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.

Re: America's Biggest Milk Producers Are Going Bankrupt

#94

Post by mywittyname » Tue, Jan 07, 2020, 2:22 PM UTC

burundi_coffee wrote: post #29

Time for government cheese again I guess?

These 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-wi...

Re: America's Biggest Milk Producers Are Going Bankrupt

#95

Post by sct202 » Tue, Jan 07, 2020, 2:23 PM UTC

mcv wrote: post #61

cowpig wrote: post #10

The 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 arti…

I keep reading weird stuff from the US about employee pension obligations being a burden on companies, and those savings getting eaten or stolen in all sorts of corporate shenanigans. Are these things really not handled by life insurance companies and subject to all sorts of regulation? That sounds woefully irresponsible.

There are regulations and insurance policies for pensions (PBGC), but they still operate independently and can do very badly if the projections of the costs that were made in 1980s when all these people were promised benefits never grew fast enough or had a few bad investments. The PBGC also only insures a limited portion of the promised benefit, so pensioners benefits usually will get cut either to prevent the fund from failing or it will get cut if it fails and gets taken over by the PBGC.

Re: America's Biggest Milk Producers Are Going Bankrupt

#96

Post by LatteLazy » Tue, Jan 07, 2020, 2:28 PM UTC

_bxg1 wrote: post #28

sp332 wrote: post #3

A 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/121424602712711... This bankruptcy filling might just be negotiation in the courts to reduce pension obligations.

I 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?

Some of them are vampires, sucking blood from healthy individuals. But some are just maggots: recycling resources that would otherwise be wasted and cause wider infections.

Which is which (and when since they switch roles sometimes) is a matter of opinion not fact. You can't really regulate that any more than you can arrest people for being "bad"...

Re: America's Biggest Milk Producers Are Going Bankrupt

#97

Post by asdf21 » Tue, Jan 07, 2020, 2:28 PM UTC

wmeredith wrote: post #66

_bxg1 wrote: post #28

Earlier quoted context omitted.

I 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?

It has been extremely well-covered in the media. The oligarchs in Congress don’t care.

Why should they care? I'm not sure anyone has made a case as far as exactly what should be regulated here.

Should businesses not be allowed to take on too much debt?

Re: America's Biggest Milk Producers Are Going Bankrupt

#98

Post by [deleted] » Tue, Jan 07, 2020, 2:29 PM UTC

sp332 wrote: post #3

A 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/121424602712711... This bankruptcy filling might just be negotiation in the courts to reduce pension obligations.

[deleted]

Re: America's Biggest Milk Producers Are Going Bankrupt

#99

Post by [deleted] » Tue, Jan 07, 2020, 2:30 PM UTC

mcv wrote: post #62

toomuchtodo wrote: post #18

Earlier quoted context omitted.

Some 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. Wi…

> "Some humans have the necessary genes to digest milk, some do not. Can't lump all mammals together." Note, adult mammals. Drinking milk as a baby is literally the definition of mammal. Even the platypus, which lays eggs and lacks teats, counts as mammal because they still produce milk to feed their children.

[deleted]

Re: America's Biggest Milk Producers Are Going Bankrupt

#100

Post by asdf21 » Tue, Jan 07, 2020, 2:31 PM UTC

mcv wrote: post #90

ldoughty wrote: post #82

Earlier quoted context omitted.

Most of the time it's seen by management as an expense with no positive business value (they pay out to people that are no longer useful to the company)... Therefore it's a major target for elimination if possible. Bankruptcy is a great way to do this. If you remember that the "best" leaders from a stock investor (or greedy owner) perspective are psychopaths (lack empathy), and these people actually look really great…

That's exactly why it shouldn't even be on the company's budget. They should pay for it to an insurance company while the employee works there, and once the employee doesn't, the insurance takes care of it. Take the employer out of the equation once they're no longer relevant.

>Take the employer out of the equation once they're no longer relevant.

Not exactly, if the company is willing to go so far as bankruptcy / reincorporation... how will any previous contracts with whatever insurance company last through that?