At least in the near-term IMHO for the dairy industry. I was stunned and dismayed by the comment below from an ag lender:
Your comments about dairy hit home way too hard. As an ag lender with some 150 dairy accounts in our portfolio. We have the 800 numbers for all suicide hotlines in the counties we serve next to EVERY phone, and on every corkboard. We have taken calls from borrowers who are standing on top of the 80' silos and asking why they should not jump. A husband went to the barn recently to milk the cows and when he came back to the house the wife had removed all her clothing from the house and all the children and their pillows were gone. Can you say STRESS! As loan officers were are not trained in these areas of expertiese, but that is our calling at the moment. Trying to get on the learning fast track.Now I read this morning about collateral damage farther up the value chain.
Companies disappear all the time. Sure, it may be news when large corporations with well-known brands go belly-up. But think about it: Businesses like Circuit City, Northwest Airlines and Countrywide are gone now.
24/7 Wall St. recently looked at a number of large American companies, some of which are owned by foreign companies, to see which will disappear in 2011. A vanishing firm may go bankrupt and its assets sold off, it may be closed after being bought by another company or it may cease to exist due to a merger.
The website looked at a variety of companies: those that are in deep trouble, the merger and acquisitions targets, firms in industries that have too many competitors for any to become highly profitable or corporations that Wall Street believes are worth more in parts than as a whole. The 19 companies below were picked from this universe, because odds they are they won't exist a year from now:
The maker of dairy products like Land O'Lakes and Silk has struggled as much as any other large public company this year. The costs of raw milk, butterfat, soybeans and sugar have risen sharply. Dean Foods has also been crippled by debt. The firm's shares were down as much as 60% at one point during the last 12 months.
Despite all the bad news, hedge fund investor David Tepper bought a 7.35% stake in the company. Dean Foods shares rose 9% after the announcement. Dean has already sold its yogurt business to Schreiber Foods. And Tepper, one of the cleverest investors on Wall Street, has probably bet the balance of Dean Foods will be sold off in parts. Probably the Fresh Dairy Direct-Morningstar and WhiteWave/Alpro business units would draw the most bidders. Watch for Dean to be broken up, to satisfy debtholders and large investors.[More]