Company update: Land O’Lakes

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:

 

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.