Land O'Lakes today reported first-quarter financial results, with net sales of $3.9 billion and $85 million in net earnings.
Net sales were up 12 per cent from one year ago ($3.5 billion) for the US-based farmer-owned food and agricultural cooperative. Although net earnings were down from the record high of $101 million in the first quarter of 2011, this year's $85 million represents the second-best first quarter performance for the company.
Company officials called first quarter performance "solid, but mixed," noting the impact of declining dairy markets and high input costs in the Egg business, which were offset by stronger than expected performance in the Crop Inputs business. Across the company's core businesses (Dairy Foods, Crop Inputs, Layers/Eggs and Animal Feed), premium, branded products and new innovative products and technologies performed well.
Net sales for the quarter increased 12 percent to $3.87 billion, compared with $3.47 billion for the first quarter of 2011. Net sales were up in all the company's businesses.
First quarter net earnings of $84.6 million were down from $101.0 million for the first quarter of 2011. Earnings results were mixed, with reduced earnings in Dairy Foods and Layers/Eggs partially offset by improved results in Crop Inputs and Feed.
Land O'Lakes President and CEO Chris Policinski said: "Our first-quarter results reflect the level of volatility and uncertainty we continue to see across our industry. One year ago, for example, dairy prices were strong and rising, while this year dairy prices were lower and dropping throughout the quarter.
"On the positive side, an early spring contributed to stronger demand and increased opportunity in the Crop Inputs business. Ultimately, the depth and breadth of our business portfolio, as well as our strong brands, market positions and innovative products contributed to our solid performance and enabled us to manage through the volatility."
Mr Policinski added that with a strong balance sheet and promising opportunities both domestically and globally, the company is continuing to pursue strategic, profitable growth.
Commented Mr Policinski: "The growth we're pursuing will enable Land O'Lakes to continue building competitive advantage and better serve our customers and member-owners. When we look at economic conditions in general, we see tremendous opportunities in agriculture and food production, as the global demand for food continues to increase. Land O'Lakes and our members are well-positioned to play a major role in meeting that demand, continuing our growth momentum."
The cooperative's board of directors has also affirmed its support for the US Department of Agriculture (USDA) in recognition of the 150th anniversary of the agency's creation.
To show its support for the agency's efforts, the directors passed a resolution commending USDA for its leadership on a wide variety of policies, issues and programs that benefit American farmers and the food and agricultural industry throughout the country and internationally.
The resolution states: "The Board of Directors of Land O'Lakes congratulates and commends the Department on reaching its 150th anniversary and pledges to continue and expand our cooperative participation in USDA programs and activities for the benefit of American farmers and the food and agricultural industry."
Land O'Lakes, the nation's second-largest cooperative and number 210 on the Fortune 500, does business in all 50 states and more than 60 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.