Farmland Dairies, a dairy production and processing plant in the Northern suburbs of New Jersey, is being auctioned off piece by piece. The plant, which had operated for decades, was shut down just before Christmas 2013, leaving behind a huge amount of machinery and equipment and taking more than 300 jobs along with it. The auction, which is occurring Tuesday and Wednesday of this week, has seen bids from both private citizens and other dairy or beverage production companies looking to purchase equipment at a considerable markdown.
Farmland Dairies history
Farmland Dairies had been producing milk and other dairy products in Wallington, New Jersey for over a century at the time of its closing. Though the announcement of the plant closing came several days before Christmas 2013, the plant did continue production until mid February 2014. Farmland Dairies is owned by the larger, Dallas-based Borden Dairy, which intends to continue production of Farmland skim-plus milk (a proprietary product that offers the creamy taste of whole milk with the nutritional value of skim) and Farmland cream products at their other locations. Borden Dairy has indicated, though, that they will entirely stop production of normal Farmland branded milk. Farmland Dairies won a high-profile legal case in the 1980's that allowed the company to become the first out-of-state dairy to sell milk in New York State in over 70 years.
Reasons for closing
Believe it or not, Americans are simply drinking less and less milk. The last four decades have shown a dramatic decrease in demand for the product, with current American consumption at 25 percent less per capita than it was in 1975. Studies indicate that the decrease in consumption has nothing to do with price, as the cost of milk has actually reduced by 20 percent since 1975, when accounting for inflation. This leaves most experts assuming that the lowered demand for milk is a byproduct of a changing consumer landscape in which there has been a dramatic expansion in the amount of beverage options available.
The auction
The auction, which is expected to generate between $5 and $10 million in sales, features 1300 separate, single-item lots. The lots for sale are almost entirely manufacturing equipment, and they drew over 150 people in person and over 200 online bidders in the auctions first day. Taking the form of a collectibles auction for businesses, the sale has attracted numerous companies looking to cash in on cheap equipment. Silos have been among the most coveted items, given their remarkably durable nature and high potential for repurposing. Mayer Brothers, a group outside of Buffalo, New York that produces cider, placed a winning bid of $55,000 for a 60,000 gallon silo.
