February 21, 2008

Land O'Lakes posts 26-percent rise in annual sales

Minnesota-based Land O'Lakes reported on February 19 significant increases in both annual sales and annual net earnings, with net sales up 26 percent and net earnings up 83 percent.

The company reports full-year sales to reach US$8.9 billion with net earnings of US$162.1 million, against net sales of US$7.1 billion and net earnings of US$88.7 million in 2006.

Land O' Lakes said feed sales for 2007 were US$3.1 billion, up 15 percent from US$2.7 billion on-year.

Feed is reporting pretax earnings of US$30.9 million, compared to $36.7 million for 2006.

For the fourth quarter, feed generated US$886 million in sales and pretax earnings of US$28.3 million, compared to US$744 million in sales and US$28.2 million in pretax earnings on-year.

Company officials said that high grain prices adversely affected both volumes and margins, with reduced feed purchases and a shift toward a lower-cost product mix.

Volumes for 2007 were down 10 percent in livestock feed, 4 percent in lifestyle feed and 8 percent in milk replacers.

However, feed ingredient was up 6 percent which feed additive volumes were up 5 percent year-on-year.

Land O'Lakes is an agricultural marketing cooperative focusing on the dairy industry. It is owned by 7,000 producers and 1,300 local cooperatives, who are all members. The company had annual sales over US$6 billion in 2003 and directly employs over 6,000 workers. It is one of the largest producers of butter and cheese in the country.