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America's Biggest Milk Producers Are Going Bankrupt

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Re: America's Biggest Milk Producers Are Going Bankrupt

#181

Post by Retric »

philwelch wrote: post #161
Retric wrote: post #105

Earlier quoted context omitted.

The idea is an employee’s pension must be fully funded before they leave and then handled by a 3rd party. At that point the company could dissolve without impacting retired workers.

Yes, that's how 401(k)s work and why most employers have switched to them.

I am specifically referring to pensions.

It’s true that 401(k)s also have this feature, however many employees prefer the defined benefit a pension provides over managing their own returns and the temptations associated with managing money. The core issue is really poor US regulation over any specific issue with pensions.

PS: The swap to 401k’s in the US is mostly about cost savings. Companies can simply reduce their contributions without much if any backlash. Meanwhile, third parties profit from managing 401k’s and therefore market them heavily.

Re: America's Biggest Milk Producers Are Going Bankrupt

#182

Post by bluGill »

Zelphyr wrote: post #151
JohnJamesRambo wrote: post #135

I’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 check…

> 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.

That is a factor. As others have pointed out, having a fridge at the back is a useful logistic factor.

~20 year ago I heard about stores putting milk up front for those who just wanted milk quick. If you looked though the milk in front was more expensive (different bar code) than the milk in back. This hints that getting people to the back is part of the reason. I haven't seen milk near the front of a grocery store in a long time though (I don't know why).

Re: America's Biggest Milk Producers Are Going Bankrupt

#183

Post by fennecfoxen »

ghaff wrote: post #108
fennecfoxen wrote: post #74

Earlier quoted context omitted.

If you want to fix this going forward, make all new defined-benefit pensions plans illegal, as we have amply demonstrated that they can't be trusted over the course of a lifetime. Putting your future in the hands of an automaker was bad enough; why do we expect someone to put their future in the hands of a dairy? A defined-contribution pension plan, where you end up actually owning the assets in question, is the only…

>A defined-contribution pension plan, where you end up actually owning the assets in question Assuming of course that you have actually saved over time and have picked appropriate assets to invest in. Defined benefit plans have their problems--both the funding and the fact that they were historically designed around long-term employment at a single organization. But they do have the virtue of being a retirement incom…

The difference is that a typical asset allocation strategy in a target-date fund isn't going to suddenly fall 85% and leave you with 15% of any promised benefits, whereas the 1963 Studebaker bankruptcy did exactly that to its employees. (If you're about to retire, it will have at least half of its assets in bonds.)

This risk is why Congress passed ERISA and created the PBGC, which nevertheless is at risk of failure itself, with its own projection for its insolvency being about 5 years out.

Re: America's Biggest Milk Producers Are Going Bankrupt

#185

Post by bluGill »

eldavido wrote: post #137
alistairSH wrote: post #131

Earlier quoted context omitted.

The insurance company is effectively acting as a giant escrow account on behalf of the employees/retirees. The employer pays into the account at whatever rate is required to fully fund retirements. The insurance company manages those funds. If the employer goes bankrupt, the funds are not accessible by raiders/PE firms.

This already exists. It's called a 401(k).

Not really. A pension you get your money until you die - there is no possibility of running out. A 401k you can live longer than expected and run out of money.

Re: America's Biggest Milk Producers Are Going Bankrupt

#186

Post by elliekelly »

dmix wrote: post #146
achow wrote: post #122

Earlier quoted context omitted.

>..these companies were recently bought by private equity firm KKR Co Not KKR. In 1995, Borden was acquired for $2 billion by Kohlberg Kravis Roberts & Co. (KKR), which proceeded to sell off pieces of the company to various buyers. Washington, D.C.-based ACON Dairy Investors, LLC purchased the company in 2017. https://www.bevnet.com/news/2020/borden-dairy-co-files-for-b... [Edit] Not sure whether the twitt narrative…

There have been studies showing private equity does more good for dying businesses than bad. Congress attacked them heavily during the 2008 crisis and they were the first companies called in to congress to answer "tough questions". But it turns out they didn't cause the crisis and that more companies are better off after PE acquisition (ie, they got turned around for the better and created greater economic production…

The company might be better off when a PE firm is done with the "turn around" but the employees, specifically their retirement funds, are consistently and demonstrably worse.

Re: America's Biggest Milk Producers Are Going Bankrupt

#187

Post by bluGill »

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…

Rising cost of milk isn't everything. The cost of production is important. I once met a farmer with ~3000 cows - in 2014 he was selling milk for $25 (hundred weight I think is the unit) and losing $100,000 a month, when I met him a couple years latter he was selling mild for $17 and making money hand over fist. The difference is in 2014 corn was $7/bushel, and it dropped to $4, and other such input costs.

Re: America's Biggest Milk Producers Are Going Bankrupt

#188

Post by bluGill »

nerevarthelame wrote: post #178
t0ddbonzalez wrote: post #92

Earlier quoted context omitted.

> " 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?

You're right that they should present the evidence, but "How many millions of years" isn't an especially convincing counterargument either. For most of those millions of years, mammals have been drinking strictly the milk from their species only during their infancy.

About 1/3rd of adult humans have genetic mutations to make drinking milk safe. (by coincidence most of those adults speak English). Because of that adaptation the other species argument is invalid.

Re: America's Biggest Milk Producers Are Going Bankrupt

#189

Post by bluGill »

melq wrote: post #168
uhtred wrote: post #139

Earlier quoted context omitted.

Their mother's milk, during infancy. No mammals other than humans drink milk after infancy, and humans have only been doing that for a few thousand years. I'm sure there's links to evidence I can find but I'm not going to waste my time as it's common sense.

If its healthy during infancy why would it be unhealthy during adulthood?

Because for species other than humans the ability to digest milk is lost when they become an adult. This genetic adaptation changing everything.

Re: America's Biggest Milk Producers Are Going Bankrupt

#190

Post by thorwasdfasdf »

t0ddbonzalez wrote: post #92
m463 wrote: post #14

Earlier quoted context omitted.

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?

dairy consumption is very strongly linked to prostate cancer: Dr. Miller gave a huge talk about this. You can find it on Youtube. Also, there's the China study, one of the largest ever studies in china showing that dairy and meat consumption are strongly linked to cancers and diseases even within a genetically homogenous population. some portions of the population had cancer rates of 400 times higher than other areas: guess what they ate? dairy/meat. they looked at over 30 factors and found the biggest factors were what people ate. there's numerous other studies as well.

drinking your own species milk is very different from drinking another mammals milk. humans didn't start drinking /eating dairy until very recently in the last couple 100K years.

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