When Schools Take Snow Days, Who Gets Hurt? Milk Companies

There are effects of snow days that are obvious, like parents scrambling for childcare and the need to make up days later in the year. One effect that isn’t so obvious is the effect that schools shutting down might have on dairy companies. Yes, those little milk cartons add up.

This came to the attention of reporters as Dean Foods reported its quarterly earnings. Recent wintery weather nationwide has affected the company’s sales, since schools and other institutions are a large part of the company’s sales. Americans are consuming less cow’s milk overall, and not putting little cartons in kids’ hands at lunchtime for a few days in different regions has a real effect on the company’s bottom line.

Dean Foods is crying over all of that spilled business, since they lost a big client last year: Walmart. Their sales should straighten back out if schools have to make up their snow days.

When Snow Closes Schools, Milk Sales Take a Spill [Bloomberg Businessweek]

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  1. CommonC3nts says:

    What about summer break?

    If each day they lose 1,000,000 sales due to school closings that would be $500,000 in revenue @ 50 cents a milk. With a 20% profit margin then they lose $100,000 in profits a day per 1 million customers.
    Or they lose 10 cents per lost customer in profits.
    But if they cant resell that milk later they then lose 40 cents per milk thrown away.
    So their loses are actually between 100,000 to $400,000 per day of closure per every $1 million in lost sales.

    It would more likely that they serve maybe 200,000 students a day for each plant, so each plant could be losing $20,000 in profit per day and lose between $20,000 to $80,000 per day.

    For 200,000 if they are closed for 5 days out of the year then its $400,000 lost per year on their balance sheet per each plant.

  2. SingleMaltGeek says:

    When my daughter’s home all day she will drink a half a gallon of milk a day if we let her. I’d think that their milk consumption would be the same whether they’re in school or not.