Land O'Lakes Reports on Solid Financial Results at Annual Meeting

Cooperative Celebrates 90th Anniversary; Leaders Discuss Key Issues for the Future of Agriculture

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Mar 02, 2011, 12:05 ET

MINNEAPOLIS, March 2, 2011 /PRNewswire/ -- Land O'Lakes, Inc., achieved solid financial results in 2010, including the second-highest net sales and earnings in its 90-year history, despite challenging economic conditions, according to leaders of the national food and agricultural cooperative. This message was delivered to more than 1,000 cooperative members and visitors gathered in Minneapolis for 90th Land O'Lakes Annual Meeting.

Highlights of 2010 performance included:

A record-high $125 million in cash returned to members;
Net sales of $11.1 billion and net earnings of $178 million –both the second-highest in the company's history;
A notable reduction (11 percent) in debt, supporting the cooperative's strong, stable balance sheet;
Strengthening Land O'Lakes' market presence in nearly all key business segments; and
Strategic positioning for future performance and growth.

(Note: For details on Land O'Lakes financial results and business performance, see the "News and Publications" link on the corporate web site at www.landolakesinc.com or the March 1, 2010, financial news release.)

In addition to providing financial and operating results, Land O'Lakes leaders also discussed several agricultural, food industry and cooperative issues.

Growing Food Demand and Public Perceptions

Land O'Lakes President and CEO Chris Policinski said the projected increase in the global population (from 6.8 billion people today to 9 billion by 2050) will increase the need for a safe, plentiful, economical food supply by approximately 70 percent – and U.S. producers will play a major role in meeting this growing global demand.

"When you consider the increasing need for food, along with the reality of finite land and water resources, public support for advanced production technologies and management practices would seem to be a logical conclusion. But, in fact, the public discourse over agriculture and food production is becoming more complex and complicated," Policinski said.

"There is a growing public perception that there is 'good' food and 'bad' food based on the method of production – organic, conventional or biotech. The truth is, there is not 'good' food and 'bad' food, there's just food. And there's not only room for various production methods, there is a growing need to use all the tools at our disposal to feed a growing world population and give consumers choices in the food products they buy," he added.

Policinski noted that less than 2 percent of the U.S. population is directly involved in production agriculture. "As a result, few people have a first-hand understanding or knowledge of agriculture, as compared with previous generations. That means it's up to us – those of us who are directly involved with agriculture and food production – to both educate and advocate."

Policinski said the goals should be to:

Promote a fact-based public understanding of agriculture and food production;
Listen and respond to "messages from the marketplace" – especially public concern about environmental sustainability, animal care and food safety; and
Support co-existence and choice in both agricultural methods and food options.

Presenting the Facts

In presenting the facts about agricultural production, Policinski reported U.S. production has increased 250 percent over the past 60 years –driven by advanced agricultural management practices and technologies. In the future, to feed a growing global population, the United Nation's Food and Agriculture Organization projects that 77 percent of the needed gains in crop production will have to come from advances in production techniques and technologies.

Messages From the Marketplace

	With regard to the public’s concern over environmental sustainability, Policinski noted: “Nobody has a greater stake in environmental sustainability than the American farmer. Producers take a multi-generational view of their operations because they want to pass their farms on to the next generation. So they are good stewards of the land, and increasingly are generating more output with fewer resources.” For example, since 1930 corn production has increased 650 percent, with 13 percent less land in corn production.
	Another important public concern is animal care. Policinski noted that the vast majority of producers are “absolutely committed to high-quality animal care, recognizing that healthy, well-cared-for animals are essential to the success of livestock and dairy operations.”
	To address public concerns, the industry must set and enforce high standards. The National Milk Producers Federation’s animal welfare initiative Farmers Assuring Responsible Management (FARM) is just one example of a major, industry-wide effort to set measurable standards for the entire industry – and Land O’Lakes members are implementing those standards throughout the cooperative system.
	On the topic of food quality and safety, he called for “robust food safety and quality policies and processes” for producers of all types and sizes throughout the food system. “When I talk about more robust policies and processes, I’m not talking just about improving our ability to identify and respond to problems … although that is part of it. I’m talking about improving our ability to prevent problems.”
	He noted that Land O’Lakes has a companywide Product Safety and Quality Policy, has committed substantial resources to food safety and quality assurance, and maintains a rigorous milk quality program. “When it comes to food safety and quality, we must earn the public’s trust each and every day,” he added.

Co-existence and Choice

Policinski concluded his remarks by voicing support for co-existence and choice across agriculture. "Too often we see dueling visions of agriculture. One vision is of large-scale agriculture, driven by sound science and technology, and connected to consumers through global supply chains. The other vision is of small-scale agriculture connected to consumers through local food networks.

"Both types of agriculture can and should co-exist. With a diverse food system, we can enable producers to increase productivity and feed a hungry world, while at the same time giving consumers the food choices they want for their families."

Cooperative Commitments

During the Land O'Lakes Annual Meeting, members also heard from Board Chairman Pete Kappelman, who focused his comments on "cooperative commitments," noting that Land O'Lakes supports member interests in the economic, political and social arenas.

"I'm very proud of the accomplishments during 2010," Kappelman noted. "Solid operating and financial performance enables the cooperative to deliver value to its members." He cited the nearly half a billion dollars in cash that has been returned to Land O'Lakes members over the past five years. He also noted other ways member interests are supported:

	On the Dairy side of the business, the cooperative provides market access for member milk; adds value to that milk; and captures value for members from the marketplace. At the same time, Land O'Lakes provides programs and services that contribute to on-farm quality, productivity and profitability.
	On the Ag Services side of the business, Land O'Lakes helps producers gain competitive edge by delivering industry-leading products, brands and insights. For member- cooperatives, Land O'Lakes is providing a growing array of Business Development Services that help co-ops better manage and grow their business.
	For all members, Land O'Lakes serves as a strong voice in the political and social arenas. Land O'Lakes pursues member interests through its own government affairs activities, involvement with and leadership in key industry organizations, and encouraging grassroots involvement by members.
	In the social arena, Land O'Lakes links members to communities, in part through the Land O'Lakes Foundation, which provides grants and in-kind giving totaling $3.5 million annually, including delivering $700,000 to hunger relief programs in hundreds of rural communities throughout the country.

"Each year the Annual Meeting gives members the opportunity to conduct the governance activities of the cooperative, as well as marking its achievements," Kappelman noted. "Celebrating 90 years of success and growth is a milestone for any organization, and I'm very proud that Land O'Lakes has such a proud heritage … and a powerful future."

Land O'Lakes, Inc. (www.landolakesinc.com) is a national, farmer-owned food and agricultural cooperative with 2010 sales of more than $11 billion. Land O'Lakes does business in all 50 states and more than 50 countries. It is a leading marketer of a full line of dairy-based consumer, foodservice and food ingredient products across the United States; serves its international customers with a variety of food and animal feed ingredients; and provides farmers and ranchers with an extensive line of agricultural supplies (feed, seed, and crop protection products) and services. Land O'Lakes also provides agricultural assistance and technical training in more than 25 developing nations.

SOURCE Land O'Lakes, Inc.