Dean Foods has reported a second-quarter loss – and warned of another loss in the third quarter in 2014 – as the US milk supplier battles “volatile” commodity costs.

The company booked a net loss of US$1m for the three months to the end of June, which was an improvement on the net loss of US$57m it filed in the second quarter of 2013.

However, excluding factors like gains on the disposal of assets and the cost of closing facilities, Dean Foods posted a net loss of US$12.7m for the quarter, against a profit of US$24m a year earlier. Raw milk costs rose 31% during the quarter, Dean Foods said.

Dean Foods, which has withdrawn its guidance for the whole of 2014, forecast it would also make a loss in the third quarter. It predicted an adjusted diluted loss of US$0.05 to US$0.15 a share.

In the second quarter, the group made an adjusted operating loss of US$6m, compared to operating income of US$65m in last year’s second quarter.

Net sales totalled US$2.4bn, compared to US$2.2bn of net sales a year earlier. Industry volumes have come under pressure due to the increase in raw milk costs. Dean Foods’ underlying fluid milk volumes dipped 0.3%, which it said was “significantly better than the overall category’s volume decline”.

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By GlobalData

CEO Gregg Tanner said: “This is by far the most difficult operating environment in the history of the company, reinforcing the importance of the initiatives we have underway.”

Dean Foods said it was making “solid progress” in efforts to reduce costs.

Shares in Dean Foods closed down 3.86% at US$15.20 in New York yesterday, recovering from earlier in the day when the stock tumbled 10%.