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Company update: Land O'Lakes

Land O'Lakes, Inc. reported net sales of $5.8 billion and net earnings of $164.1 million for the first six months of 2009.

While net sales were down from $6.6 billion for the first-half of last year, the $164.1 million in net earnings matched the same period one year ago, despite 2009's difficult economy.
 
The company reported net sales of $2.8 billion and net earnings of $81.5 million for the second quarter, versus $3.3 billion in net sales and $102.8 million in net earnings for the same period one year ago.
 
Land O'Lakes President and Chief Executive Officer Chris Policinski said the company's first-half financial results indicated that: "While Land O'Lakes is not immune to the stresses and challenges of a difficult economy, we are solidly positioned to deal with the challenges ahead."
 
Company officials indicated business unit results were mixed:
  • Dairy Foods and Layers/Eggs particularly affected by declining commodity markets and the impact of economic conditions on consumer purchasing decisions;
  • Strong performance in Seed and Crop Protection Products; and
  • Feed realizing a volume decline in the livestock segment (due to financial stress among beef cattle and dairy producers), but seeing increased volume in the lifestyle feed and ingredients segments.
 
Feed
The Feed division reported $851 million in sales and $19.8 million in pretax earnings for the second quarter, versus $926 million in sales and $21.0 million in pretax earnings for the second quarter of 2008.
 
Feed reported $1.74 billion in sales year to date, and $25.1 million in pretax earnings, down from $1.87 billion in sales and $30.4 million in pretax earnings through the first two quarters of 2008.
 
Factors affecting Feed performance, particularly in the livestock sector, were reduced volumes and a shift away from fully formulated feeds, attributable largely to market declines and financial stress in the beef cattle and dairy industries.
 
Year to date, livestock feed volumes were down 13% versus the first half of 2008, while lifestyle feed volumes were up 2% and feed ingredients volumes were up 1%.
 
Feed's 2009 earnings were also partly supported by unrealized hedging gains.
 

Dick Ziggers

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