DALLAS, TX
Dean Foods Co. (NYSE:DF) stock shares fell more than 7% Tuesday, to its lowest price in over a year, due to a 4th quarter earnings report. However, earnings were not below estimates. The report warned that the there is a "very challenging environment" in the milk industry right now and for the rest of the first half of 2014, according to Market Watch.
Dean Foods is the largest dairy processor and distributor in the US. Its brands include WhiteWave, Berkeley Farms, Dean's and Tuscan.
In the report, Dean said it had expected prices of raw milk from dairies to fall during the early part of 2014, but instead the price actually went up. Although dairy production is growing, supplies are not keeping up with the increasing global demand.
Asia's milk imports have increased due to a rising in demand for dairy-based protein and a decrease in China's milk production, said Chief Executive Gregg Tanner, according to Reuters.
“We now expect Class I dairy commodity prices to climb throughout the majority of the first half, before flattening and declining moderately in the second half of 2014,” CEO Gregg Tanner said in the report.
Additionally, western states are facing a serious drought, which is affecting Class III milk futures.
"We expect our first quarter will be our most difficult quarter of this year..." Tanner said in a statement.
Stay tuned to DeliMarket TV as we continue any future updates regarding Dean Foods' fiscal year.
Dean Foods
Market Watch
Reuters
