An Idaho trucking company that specializes in hauling farm goods has filed for Chapter 11 bankruptcy protection, which protects it against foreclosure while restructuring debt.
Anderson Farms of Burley, Idaho, operates 41 trucks that transport feed to dairies and distribute other agricultural products in the Northwest.
The company owes between $1 million and $10 million to fewer than 50 creditors and owns assets of less than $50,000, according to its bankruptcy filing. It’s also a “substantial shareholder” in the Anderson Cattle Co., a feedlot and cattle operation.
Under Chapter 11 bankruptcy, companies can stay operational while developing reorganization plans to pay back creditors.
The company referred questions to its attorney, Steven Taggart, who was unavailable for comment as of press time.
According to court documents, Anderson Farms has asked a bankruptcy judge for permission to use about $1 million in cash that serves as collateral for creditors. Without that money, which the company expects to collect over the next month, “the debtor will be unable to operate or reorganize,” according to a court motion.
A hearing on the matter was scheduled for May 9 in Boise.
The trucking company’s bankruptcy filing comes at a time of stress for the dairy industry, which is coping with low milk prices.
“There’s just no money in it right now,” said Steve Hines, a University of Idaho Extension educator.
While some dairies are eking out a profit, others are living off the equity in their business or selling cattle, Hines said.
Those reducing their herds would need less feed but others also aren’t stockpiling more feed than necessary, he said. “They don’t have the cash with the milk price to store hundreds of thousands of dollars in feed.”
Suppliers to dairies with large unpaid accounts receivable can face financial distress, but many have grown careful of finding themselves in this position, said Joel Packham, another University of Idaho Extension educator.
Some dairies own trucks for hauling cattle and may use them for hauling feed as well, potentially creating competition for trucking companies, he said.
Ultimately, though, the dairy industry is still reliant on transportation, Packham said. “They still need feed and they need someone to haul it for them.”