Land O'Lakes combined solid financial performance, positive market momentum and strategic growth in 2000, according to the Financial and Operations Reports presented at the national food and agricultural cooperative's 80th Annual Meeting.

Land O'Lakes sales were up 3 percent, to $5.8 billion, and year 2000 net earnings of $103 million were up more than $80 million from 1999, Dan Knutson, Land O'Lakes Senior Vice President and Chief Financial Officer (CFO), today told more than 2,000 delegates and visitors gathered at the Minneapolis Convention Center.

"This earnings increase was driven by enhanced operational efficiency, volume increases in major product lines, a rebound in the swine markets and first-year contributions from acquisitions and joint ventures," Knutson said, adding that the year also saw Land O'Lakes dealing with depressed butter and cheese prices and a continued downcycle in the crop nutrients industry.

Also contributing to the earnings increase was a gain on the sale of Land O'Lakes fluid dairy assets, partially offset by restructuring charges related to newly formed joint ventures, Knutson said.

The cooperative CFO added that Land O'Lakes returned $54.3 million in cash to members, up $5.6 million from 1999. Over the past five years, Land O'Lakes has returned approximately $255 million in cash to members.

                      Land O'Lakes Financial Performance
                                          2000             1999
     Sales                            $5.76 billion    $5.61 billion
     Net Earnings                    $102.9 million    $21.4 million
     Cash returned to members         $54.3 million    $48.7 million

During Operations Reports, Land O'Lakes business unit leaders reported volume increases across nearly all major product lines for 2000, including a second consecutive record year in branded butter volume; strong increases in feed ingredient and vitamin volumes; and significant increases in soybean, corn, wheat and alfalfa seed volumes.

Land O'Lakes also accomplished significant strategic growth over the past year, primarily through joint ventures and acquisitions, Knutson said. Among the specific achievements cited by the cooperative CFO were:

  • The formation of Agriliance ... a joint venture combining the agronomy business of Land O'Lakes, Cenex Harvest States Cooperatives and Farmland Industries.
  • The establishment of Land O'Lakes Farmland Feed ... a joint venture combining the feed assets of Land O'Lakes and Farmland Industries.
  • The acquisition of Madison Dairy Produce ... a leading private label butter manufacturer.
  • Key seed industry acquisitions from WILFARM, Advanta and AgriBioTech, Inc.
  • A joint venture with MoArk ... giving Land O'Lakes a position in the layer/egg industry.

Knutson said these transactions were aimed at "ensuring our farmer-owned system is in a position to achieve our cooperative mission of optimizing the value of our members' dairy, crop and livestock production. In today's economic environment, size and scale will be important factors in our ability to sustain the necessary level of performance to achieve that goal."

Land O'Lakes (http://www.landolakesinc.com) is a national, farmer-owned food and agricultural cooperative, with sales approaching $6 billion. Land O'Lakes does business in all fifty states and more than fifty countries. It is a leading marketer of a full line of dairy-based consumer, foodservice and food ingredient products across the U.S.; services its international customers with a variety of food and animal feed ingredients; and provides farmers and local cooperatives with an extensive line of agricultural supplies (feed, seed, crop nutrients and crop protection products) and services.