July 26, 2006

Land O'Lakes' feed business reports loss of US$1.1 million for Q2

US food and agricultural company Land O'Lakes, Inc's feed business lost US$1.1 million despite an increase of almost US$9 million in net earnings for the company.

Land O'Lakes reported sales of US$1.7 billion and net earnings of US$34.8 million for the second quarter, as compared to US$1.8 billion and US$25.8 million for the second quarter of 2005 on Tuesday (July 25).

Net earnings for the year-to-date rose to US$60.9 million from US$50.1 million compared to a year ago as sales remained at about US$3.8 billion.

However, the company's feed division suffered a loss of US$1.1 million ( with US$646 million in sales) for the second quarter this year, compared to a US$9.2 million in pretax earnings ( with US$627 million in sales) for the second quarter last year.

Pretax earnings fell sharply from US$18 million in the first two quarters of 2005 to just US$2.2 million the first two quarters this year despite similar year-to-date sales of US$1.3 billion. 

Land O'Lakes Lifestyle Feeds segment continues to grow, where volumes were up 4 percent through June. Livestock feed volume, however, was down 4 percent as the company faced difficulties in the restructuring of the poultry and swine industries.

Land O'Lakes is a farmer owned cooperative. Besides animal nutrition and feeds, its business spans from seed genetics to food ingredients and dairy products.