While Alto Dairy Cooperative and Land O'Lakes, Inc. are encouraged by the preliminary results of a feasibility study focusing on the construction of a jointly owned, world-scale cheese plant in Wisconsin, officials of the two cooperatives today said many questions about the project remain to be answered.

"The feasibility study is on track and the initial results look positive," Larry Lemmenes, President and General Manager of Alto, said today. "This progress is encouraging. However, this project would require a major financial commitment, and there are a significant number of questions still to be answered before a final decision is made."

Among the issues cited were determining an exact location (based on such issues as sustainable milk supply, transportation infrastructure, natural resources and available work force); environmental conditions and requirements; overall construction costs; financing options; and available economic support.

"The decision to move forward, on perhaps the largest cheese and whey manufacturing facility east of the Rockies, would represent a significant initial investment and substantial long-term commitment for both our organizations," Land O'Lakes President and Chief Executive Officer Jack Gherty added. "To succeed, everything must be done right every step of the way. To make this work, we must put together the best package in terms of everything from location to design to financing and construction."

"Three things are very clear," Lemmenes said. "This project has the potential to strengthen our Upper Midwest dairy infrastructure, better position the region for future dairy success and, most importantly, create significant value for the members and customers of both Alto and Land O'Lakes."

The feasibility study indicates Upper Midwest dairy producers enjoy a positive advantage in terms of resources (particularly water and crop production); experience and expertise in dairying; a long-established production and processing infrastructure; a reputation for quality; and an established market presence, the two cooperative leaders said.

"It is clear that the Upper Midwest, with the proper infrastructure, can compete in the dairy marketplace," Lemmenes said.

The two cooperative leaders said the project would also generate significant economic benefit for the region. They noted that the proposed facility would ultimately handle more than 1.7 billion pounds of milk annually, generate over 100 employment opportunities, add to the area's tax base and include an annual payroll of approximately $6 million. Accepted income multipliers indicate the plant would ultimately generate $20 million in annual economic activity in the surrounding communities.

The study also indicated that Alto and Land O'Lakes are well-suited to work together on this joint venture project, Lemmenes and Gherty agreed.

"Our consideration of this project reflects the deep roots our two cooperatives have in the Upper Midwest," Gherty said. "It also reflects our shared, long-standing and continuing commitment to the success of our Upper Midwest dairy producer-members. Just as important, we found that Alto and Land O'Lakes share a culture that is focused on creating optimal value for members and customers."

Officials of Alto and Land O'Lakes are continuing their analysis of key issues and are working with all parties involved. Resolution of critical issues in such areas as financing, construction costs and economic support is imperative to moving this project forward. No timetable for a final decision has been set.

Alto Dairy Cooperative is a 100-year-old, member-owned cooperative serving dairy producers throughout Wisconsin and Michigan's Upper Peninsula. It manufactures an extensive line of cheese and value-added dairy products at two state-of-the-art facilities and is a national marketer of milk replacers for the veal calf industry.

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, plant food and crop protection products) and services.