Page 1

20 18 LAND O’LAKES, INC.


ALL TOGETHER BETTER In a disrupted environment, Land O’Lakes, Inc. is uniquely positioned to strengthen our businesses and our network of farmer- and retail-owners while transforming consumer perceptions and meeting the evolving needs of customers. We are charting our own course by leveraging our farmer-to-fork business model and doubling down on data- and marketplacebacked insights and technologies. We also realize that a key differentiator is our cooperative model. It’s the foundation on which we were built, continually made stronger by our people: the talented, innovative and dedicated entrepreneurs that make up our system. We are All Together Better, collectively bringing soul, soil and science together for the purpose of Feeding Human Progress.

LAND O'LAKES, INC. : :

1


FARMING IS A PRIVILEGE AND IT’S OUR RESPONSIBILITY TO SHARE THE STORY WITH THOSE WHO DON’T DO IT EVERY DAY. Pete Kappelman | Board Chairman

2 : : 2018

A N N U A L R E P O RT


MY AMBITION FOR LAND O’LAKES IS TO DEEPEN AND ACCELERATE GROWTH IN THE AREAS THAT MOST ADVANTAGE OUR MEMBER-OWNERS, FROM FARMER TO FORK TO THE FUTURE. Beth Ford | President and CEO

LAND O'LAKES, INC. : :

3


FINDING OPPORTUNITY IN A TIME OF DISRUPTION.

Land O’Lakes is working to deliver for our members and tell the story of rural America.

4 : : 2018

A N N U A L R E P O RT


Dear Stakeholders, For agriculture and for Land O’Lakes, Inc., 2018

offset a milk powders market that reflected

was a year marked by change, challenge and

compressed margins. The business delivered

transition. Just like most industries, food and

competitive patronage of 26 cents per hun-

agriculture were disrupted by many factors, from

dredweight for members with equity balances

increasing consumer demands for transparency

below the $2.75 per hundredweight target, and

and choice to changing marketplace dynamics

29 cents for those with equity balances of $2.75

and their effects on rural America. As these

per hundredweight or more.

factors converged, opportunity has emerged.

In Animal Nutrition, our insights and breadth

In evaluating these opportunities, Land

of our product offering, from nutritional additives to multiple species categories, helped mitigate a

tell the story of the rural American way of life

challenging livestock environment, in which pro-

and bring attention to its value. The future will

ducers were sometimes trading down, helping

be built on technology and differentiated service,

deliver in strong results. In fact, 2018 was one of

branded products and innovation in unique and

our most profitable years to-date.

unexpected areas. 2018 has given us the foundation for this work. Taken together, in 2018, Land O’Lakes delivered $313 million in pre-tax earnings with record-setting sales of $15 billion. These earnings exclude

For Crop Inputs and Insights, the business results reflected a shift in product mix attributed to lower commodity markets and the general decline of farm income. Our Land O’Lakes SUSTAIN business, which

the impact of a one-time charge of $72 million

we created to help the grower mitigate envi-

related to the Company’s participation in a

ronmental impact while increasing profitability,

multi-employer pension plan, unrealized hedging

welcomed new customers this year and new

gains and losses and vendor rebate adjustments.

partnerships with organizations like Environ-

During this challenging time in the agriculture

mental Defense Fund.

industry, we are also very proud to have returned

As we adjust to the challenging and chang-

a record $194 million in cash to members in 2018.

ing agricultural operating environment, we are

Dairy Foods capitalized on its focus on growth

proud to advocate for, serve and represent the

areas in the sector. Marketplace-back, on-trend

extraordinary people who feed the world. Solid

convenience foods, snack, desserts and food

performance in a disrupted environment would

service delivered strong performance, helping

not be possible without your support.

— A MESSAGE FROM OUR CEO + CHAIRMAN —

O’Lakes is working to deliver for our members,

Thank you,

Beth Ford, President and CEO

Pete Kappelman, Chairman of the Board

LAND O'LAKES, INC. : :

5


2018 By the numbers //

$15 billion

$194 million A N N U A L R E P O RT

RETURN ON EQUITY

NET SALES

$255 million 6 : : 2018

9%

NET EARNINGS

CASH RETURNED TO MEMBERS


Business Unit Pretax Earnings* *Pretax Earnings exclude the impact of the one-time charge for an estimated withdrawal liability for our participation in a multi-employer pension plan.

$59 million DAIRY FOODS

$91 million ANIMAL NUTRITION

$165 million CROP INPUTS + INSIGHTS

Membership

1,851 749 1,067

DAIRY PRODUCERS

AG PRODUCERS

RETAIL-OWNERS

LLAAN ND D OO''LLAAKKEESS,, IIN NCC.. :: ::

7


FARMER-TO-FORK JOURNEY We unlock our system's greatest potential by leveraging a unique farmer-to-fork view, combining our global perspective and direct access to the source to create practical, new solutions to meet agriculture’s toughest challenges.

8 : : 2018

A N N U A L R E P O RT


FARMER-T O-FORK : LA ND O ’LA K ES LAND O'LAKES, INC. : :

9


FAR ME R

TRUTERRA: A SUITE OF ON-FARM TOOLS SUPPORTING FARMERLED STEWARDSHIP The launch of Truterra™ in fall 2018 was a major step forward in our work to drive on-farm conservation solutions at scale, working together with farmers and their ag retailers to help them make a tangible impact on the long-term sustainability of our food system. Alongside this new brand from Land O’Lakes SUSTAIN, we debuted its core tool, the Truterra Insights Engine. This first-of-its-kind interactive digital platform allows farmers, ag retailers and food companies to measure their sustainability progress in real time, farm-by-farm and acre-by-acre.

ADVANCING BARN-TOBIOGAS IN CALIFORNIA A new collaboration with California Bioenergy (CalBio) is leading the way to help innovative California dairy farmer-members of Land O’Lakes expand the use of on-farm digesters to create clean, renewable fuel for use in vehicles. CalBio’s expertise

CELEBRATING 20 YEARS OF ANSWER PLOT INSIGHTS This year, we celebrated 20 years of crop insights, agronomic research and helping farmers improve yields, profit potential, and efficiency with the Answer Plot® program. WinField United’s Answer Plot® sites are science-backed “living laboratories” where crops, seeds and technologies are tested and observed by agronomists and farmers. Through the Answer Plot® model, farmers take some of the guessing out of the decision-making process with an objective look at which products will perform better on their individual operations.

10 : : 2018

A N N U A L R E P O RT

can help farmer-members overcome barriers to adoption of digesters by providing support to install, maintain and operate the technology. By bringing new expertise to the table, Land O’Lakes SUSTAIN is helping dairy farmers advance on-farm digesters that could unlock new revenue streams, generate renewable energy from farm waste, and help proactively meet new state standards in California to reduce manure-related emissions.


SEEING IS BELIEVING A DECADE OF ALIGNMENT Over the past 10 years, WinField United Crop Nutrients has grown its sales volume from 700,000 to 4.2 million tons. The team was able to achieve these results in part through the Alignment Series® program built around forming relationships with owners who move beyond commodity transactions and instead focus on being the retailer’s trusted market advisor. Regardless of the commodity environment, this approach allows the busi-

WinField United is bringing its unmatched collection of data, insights and technology to our retail-owners and the farmers they serve to show product results—in real-time and in real life. Our clinics program takes all the data and insights extracted from our vast seed testing and spray analysis system testing and puts it into an easily digestible and visual demonstration. The demonstrations show how specific products work in the field and reveal insights to owners that lead to best recommendations for their growers.

ness to provide value to customers through industry leading global market intelligence, purchase and risk management recommendations and supply chain solutions.

MORE THAN JUST AN ONLINE SHOPPING CART Helping our retail-owners remain the trusted resource for their growers, and helping those growers make profitable decisions, is at the core of WinField United’s approach to e-business. Our solution offers growers agronomic insights and a personalized online experience, including product

INCREASING OUR HORSE POWER

purchasing, all through our retail-owners

Purina continued to strengthen its innovation power

websites, while also offering supply chain

through horse product lines such as OUTLAST®, a

integration that connects the retailer with

gastric support supplement, and IMPACT®, a line of

WinField United and manufacturers.

performance feed. The business also successfully relaunched its STRATEGY® line of feed with reformulation and refreshed packaging. Horse maintains its stronghold in the Animal Nutrition business through its robust line of research-backed and hyper-targeted segmentation products.

LAND O'LAKES, INC. : :

11


CELEBRATING PURINA’S 125TH ANNIVERSARY Innovation has been a key pillar of Purina’s identity for the past 125 years. With a pedigree like that, we never have to start at square one. In fact, when it comes to creating advanced solutions to problems that keep animals from reaching their full potential, we’re always challenging the

WIND TUNNELS, ROBOT ARMS AND LASERS At the WinField United Innovation Center in River Falls, Wis., world-class researchers

status quo. In celebration, we’re launching Square 125, an innovation lab that will allow us to challenge conventions that go beyond the day-to-day to imagine the impossible and showcase our trailblazing spirit.

use a massive indoor wind tunnel to study spray dynamics, measuring exactly how and where tiny droplets of crop protection products are dispersed. The goal? To optimize pesticide effectiveness and on-target application and, ultimately, allow farmers to be more efficient as they spray their crops. Cutting-edge products and tools developed in the lab by WinField United scientists and researchers go on to be tested in fields—first on-site in Wisconsin, then on farms across the country.

CROP NUTRIENTS & NIK COMBINE TO IMPROVE SERVICE & GAIN SYNERGIES This year, we celebrated our one-year anniversary of the WinField United Crop Nutrients and NIK Marketing merger. The new partnership brought with it an experienced new team and 19 new customers, and helped grow the WinField United fertilizer footprint by 30 percent. The new team worked to make the transition as seamless as possible. We look forward to capturing additional value for the business and our system long into the future.

12 : : 2018

A N N U A L R E P O RT


INTERNATIONAL BUSINESS EXPLORES GROWTH OPPORTUNITIES IN EMERGING MARKETS Our team continues to focus on high potential global markets through partnerships with local, trusted Crop Inputs and Animal Nutrition partners. In Kenya, Bidco Land O’Lakes is completing construction of an upgraded feed manufacturing facility to be commissioned later in 2019, enabling higher quality and new to market value-added animal nutrition products. In South

INVESTING FOR FUTURE FEED GROWTH Large-scale projects are underway at the state-of-the-art feed plant in St. Joseph, Mo. The investments we are making will allow for greater capabilities and pro-

Africa, Mexico and Canada, our international Crop Inputs partners are leveraging Winfield United’s worldclass capabilities and portfolio of proprietary products. And in China, we continue to partner with Nestle at the Dairy Farming Institute to work with the largest commercial dairies on feed and forage while exploring Joint Venture options.

duction capacity for our Animal Nutrition business, which will ultimately assist in future growth.

LAND O’LAKES NAMED DAIRY FOODS PROCESSOR OF THE YEAR We were named by Dairy Foods Magazine as the 2018 Dairy Foods Processor of the Year. Our collaborative approach to procurement and processes, among other things, was highlighted in the magazine’s cover story, "2018 Processor of the Year: Land O'Lakes is a cooperative powerhouse."

LAND O'LAKES, INC. : :

13


F ORK

VERMONT CREAMERY WINS IN WALMART, KROGER We scaled up our Vermont Creamery business in 2018, which helped us land in Kroger's branded Fresh Goat category in more than 2,000 stores nationwide (making it the No. 1 seller of goat cheese in the U.S.); and we launched Mascarpone cheese in 400 Walmart stores. In addition to new packaging, the business also rolled out four new flavored goat logs and earned a slew of prestigious cheese

O’Lakes as we seek to enter new markets with

CONVENIENCE & FLAVOR DRIVING BUTTER INNOVATION

new customers.

As the branded category leader, our focus is on continuing to

awards. This specialty cheese business will continue to be especially important to Land

drive innovation to meet the changing needs of customers. Our newly launched Land O Lakes Soft Squeeze® spread added a level of convenience to the category for which we’ve heard and seen positive consumer feedback. Our reputation

HERSHEY’S SUPPLIER OF THE YEAR Land O'Lakes received Hershey's Supplier of the Year award for our sustainability, customer service, cost savings and a deep focus on innovation. Our shared culture of food safety, quality and focus on innovation are among the many reasons why our relationship continues to grow, even after more than 30 years of our companies doing business together. We’re proud to contribute fresh fluid milk from our members to help create that delicious milk chocolate flavor.

14 : : 2018

A N N U A L R E P O RT

as the brand to use when performance and flavor matter— and consumers’ desire for super premium butter—was reflected in substantial growth of our 82 percent butterfat Extra Creamy Unsalted Butter.


LAND O'LAKES, INC. : :

15


— T ECH + INNOVAT ION — 16 : : 2018

Everyone seems to be jumping on the technology bandwagon. How is Land O’Lakes different? A N N U A L R E P O RT


TECH + INNOVATION

Our markets move at a rapid pace, disrupted and challenged at every level. It’s our responsibility to think and work differently, to provide an unmatched suite of technology-focused, innovative, marketplace-backed products and services that help drive increased profitability, sustainability and efficiency throughout our system. By maximizing the strengths of our model and decades of research and data, we are able to determine exactly what our owners and customers need when it comes to innovative products and the latest technologies.

LAND O'LAKES, INC. : :

17


Expanding retail-owners’ digital knowledge The digital world is fast-paced and ever-evolving.

Network (formerly known as the Brand Council), to help

Finding your fit in that space can be a difficult task,

the communications teams at member-retailer locations

especially for marketers at growing ag retail loca-

learn and grow in the digital marketing world. The Digital

tions. When you don’t spend your entire week devoting

Influencers Network is about extending services such as

yourself to learning the latest trends in digital network-

the ATLAS® website platform to retail-owners, helping

ing, analytics and marketing strategies, many find

them be as successful as possible through marketing

themselves learning on-the-fly and spending time and

their own brands and growing their business. “Digital marketing is changing every day—if you want

resources in the wrong places. “A lot of these communications and marketing teams

to be seen, you need to keep doing better. By meeting

for these ag retailers are on an island,” explains Dan

with this group, we can all work together to continue

Moran, senior director of livestock marketing for Purina.

improving our marketing tactics and keep our cooper-

“They are looking for help and direction on what strat-

atives going strong,” says Jennifer Kuffel from Country

egies to implement so that they can succeed, and we

Visions Cooperative. “We are very limited on marketing

are here to help them do that. We can invest time and

staff in the cooperative but, since the ATLAS team has

resources so that we can all win.”

been involved, it feels like a weight has been lifted off

This is the reason why Land O’Lakes decided to start a program five years ago called the Digital Influencers

PLOTTING THE ANSWERS WITH REAL-TIME, UNMATCHED DATA

our shoulders. Our co-op continues to see more value in digital presence thanks to the help of Land O’Lakes.”

Farmer John Chester likes to compare keeping tabs on his crops to caring for his children. Chester, who manages Fowler Farms in Martin, Tenn., says realtime ag technology data through WinField United’s R7® Field Forecasting Tool helps keep him on top of the needs for the corn, soybeans and wheat grown on the farm’s 5,800 acres. “Everything we do on our farm is becoming contingent on the data that we can collect, and being able to see that data quickly,” he says. The tool helps farmers better predict the outcomes when it comes to in-season water, nitrogen and potassium management decisions. WinField United is continually strengthening its ag tech capabilities, as part of a comprehensive e-business strategy, to provide a research-based approach to help farmers with field-level insights and data-backed solutions. WinField United is setting itself apart from other companies backed by the strength of in-market optimization, a database that can’t be matched and a team that brings value to reality every day.

18 : : 2018

A N N U A L R E P O RT


Supporting farmer-led stewardship with the Truterra Insights Engine One of the biggest challenges in enhancing the sustain-

OPTIMIZING CALF MILK REPLACERS TO SUPPORT GUT HEALTH Search "gut health" and you'll be bombarded with studies, diet plans and scholarly articles that explain the benefits of having a healthy gut microbiome. The gut, sometimes referred to as the gut microbiome, is home to trillions of microorganisms, aka "bugs," including fungi, viruses and bacteria. A properly balanced gut microbiome supports the body's immune and digestive systems. It turns out that a healthy gut microbiome isn’t just important for humans; it can be helpful for dairy calves as well.  Land O’Lakes created the calf milk replacer category in 1951 and, since then, has continually brought innovative calf milk solutions to market.  In late 2018, the Land O’Lakes Animal Milk Products division enhanced its Cow’s Match® and Amplifier® Max calf milk replacers to include an exclusive active microbial. The decision to add this active microbial came after three years of research at the Land O’Lakes Calf Milk Research Center in Gray Summit, Mo. The research suggests that the combination of the active microbial with the existing feed technologies already in these calf milk replacers help optimize the calf’s microbiome. A properly balanced gut microbiome helps calves address health challenges, break down nutrients for energy and support

ability of our food system is the ability to benchmark and quantify the economic and environmental benefits of on-farm stewardship practices. That’s why Land O’Lakes SUSTAIN launched the Truterra™ suite of tools to drive on-farm conservation solutions at scale and quantify results. Its core tool is the Truterra Insights Engine, a first-of-its-kind interactive digital platform allowing farmers, ag retailers and food companies to measure their sustainability progress in real time, farm-by-farm and acre-by-acre. For farmers and ag retailers, the Truterra Insights Engine provides customized scenario planning, forecasting both potential environmental impact and potential profitability of practices. For food retailers, it helps quantify the results of sustainability efforts across their supply chain, helping ensure commitments are actionable and practical. The tool is already being put to good use in farmerto-fork collaborations on sustainability. In Maryland, Land O'Lakes SUSTAIN is working with Campbell Soup Company, Environmental Defense Fund and local ag retailer The Mill to benchmark sustainability on wheat acres used in the production of Pepperidge Farm Goldfish Crackers. It’s one example of how Truterra can help bolster stewardship from farmer-to-fork. “The Truterra Insights Engine is a game-changer, allowing farmers and food companies to establish and report clear metrics and create customized, meaningful stewardship strategies,” says Matt Carstens, senior vice president of Land O’Lakes SUSTAIN. “It’s a new way for farmers to focus on both stewardship and profitability, using data-driven insights to help them make the best decisions for every acre.”

immune responses. Beyond the benefit to the calf, these products can simplify the feeding process for producers. “We found that many producers were adding probiotics into their milk replacer separately. With our enhanced Cow’s Match® and Amplifier® Max milk replacers, we’re eliminating a step in the feeding process,” says Jenny Djupedal, associate marketing manager for Land O’Lakes Animal Milk Products. “The active microbial will already be in the milk replacer.”

LLAAN ND D OO''LLAAKKEESS,, IIN NCC.. :: ::

19


— CO-OP SOUL — 20 : : 2018

Why does the co-op system matter? A N N U A L R E P O RT


As a farmer- and retailer-owned cooperative, we were founded on the concept of community. Working together as a cooperative allows us to build strong communities, create enduring livelihoods and be effective stewards of our natural resources. We’re supporting communities across the United States and around the globe to grow more food with less, foster new ideas and talent, and preserve our communities and the planet for future generations.

LLAAN ND D OO''LLAAKKEESS,, IIN NCC.. :: ::

21


THE IMMENSE IMPACT OF SHE-I-O AND BEING ALL TOGETHER BETTER Amanda Condo, Candice White and Lori Butler are not performers or actors. They are farmers who work on their family farm day in and day out. But that’s not stopping people from thinking otherwise when seeing our famous She-I-O video. "There was one comment on social media where some woman said, ‘Great for those actors playing farmers.’ Something along those lines," Amanda says about the video. It didn’t take long to set the record straight. "My older sister commented back, ‘No, those are actual farmers. Those are my sisters and my cousin. Those are real farming women,’” says Amanda. The idea to recreate the iconic farm anthem "Old MacDonald Had A Farm" came about in May 2018 and was shot onsite at Dotterer Dairy in July. And after listening to the song for the first time, everyone involved in the shoot knew they were a part of something special. "It kind of brought tears to my eyes," Candice says. "I thought, ‘She is singing about us.’ We were all very honored that Land O'Lakes thought we would be good representatives for the business and women in farming."

58 million

video views

47 million

social media impressions

420 million+

media outlet impressions

It’s no surprise to many that our members

Reducing rural hunger with Full Circle Ag

above and beyond by first seeing the need

things that makes the Land O'Lakes system

for a program and then creating one from

special. We are a community of doers and

scratch. And each step of the way, they make

dreamers working to make a great impact.

sure Land O’Lakes Member Matches stretch

Through the Land O’Lakes Foundation, we

their dollars even further.

help our members make their impact go even

“Supporting the backpack program has

further through our Direct and Member Co-op

been one of the most worthwhile donations

Match programs.

we make in our community,” says Tammy

One of the growing ways for community

A N N U A L R E P O RT

Satrang, CFO and credit manager of Full

organizations to support hunger relief is

Circle Ag. “It’s very helpful to those kids.

through a backpack program. These programs

We are very grateful to Land O’Lakes for the

provide steady weekend meals to kids in need

benefits our local communities receive through

by having school administrators discreetly

the matching funds program. By working

insert items into participating students’ back-

together, we can make a huge difference.”

packs on Fridays during recess.

22 : : 2018

In South Dakota, Full Circle Ag has gone

are involved in their communities. It's one of


IMPROVEMENT THROUGH ADVERSITY Larry Dufek will be the first one to tell you what a challenge farming can be, especially since losing his leg in a farm accident in 2001. But since the accident, Larry has found new ways to grow and modernize his business. This includes having his wife, Patty, and employees take a more active role on the farm and working more closely with Land O'Lakes. Larry’s collaboration with Land O’Lakes actually began in the 1990s. "Land O'Lakes had a program back then that helped me with financials, balance sheets and laying out a plan on where I wanted to be in the future. It helped me focus on the business," he says. Today, Land O’Lakes still offers a similar program through Dairy Enterprise Services that helps members discover what’s next for their business. Since the injury, Larry has taken various steps to save money and safeguard natural resources. For instance, Larry operates a methane digester and bacterial scrubber, which allow him to convert manure into energy. That cost savings, in part, helped Larry purchase new energy-saving LED lighting for each of his roughly 6,000 square foot barns, taking advantage of a program that provides discounts on low-maintenance LED lighting systems for Land O’Lakes members. "It is unbelievable the cost savings we're seeing,” Larry says, adding that the lighting transition has reduced his energy usage by about 30-40 percent. "You know, we're all in this together. There's no secret sauce to the business. It's persistence, hard work and staying positive about whatever comes your way."

Exclusive health insurance options rolled out to members Since 2012, Land O’Lakes has been working to help members struggling to obtain quality, affordable health insurance. This began with the Member Cooperative Health plan that is offered to certain member cooperatives to provide coverage to their employees, which now covers nearly 12,000 individuals in 13 states. Over the years, this has expanded to include offerings for direct farmer members and, in 2018, Land O’Lakes introduced a group plan to a pilot group of co-ops in Minnesota allowing them to offer coverage to their members. For 2019 coverage, we expanded this group plan option, now known as the Land O’Lakes Cooperative Farmer Member Health Plan, into Nebraska. These options provide an opportunity to develop a group health plan for our direct members and individual farmers within our ag retail network in Minnesota and Nebraska. “For years, Land O’Lakes has recognized the need for affordable, comprehensive health care options for our producers and farmers. Now we have an option for those in Minnesota and Nebraska,” says Pamela Grove, senior director of Benefits. Whether it’s for ag retailers looking for coverage for their employees or members, or a farmer looking to cover their family and business, Land O’Lakes has been proactive in fighting to create more simple and affordable options.

LLAAN ND D OO''LLAAKKEESS,, IIN NCC.. :: ::

23


— TALENT + CULT URE — 2018 24 :: :: 2018

Why can’t we just do what we’ve always done?

AAN NN NU UAALL RREEPPOORT RT


Less than 2 percent of the United States population is involved in agriculture, so it is our job to showcase the opportunities for talented individuals to innovate and grow in this dynamic industry. What got us to where we are today won’t necessarily work moving forward, so the success of our system is dependent on a combination of diverse, new perspectives and deep, well-earned industry experience. We are committed to supporting the long-term success of our industry by developing the next generation of ag talent and sharing the story of modern agriculture with all audiences. LLAAN ND D OO''LLAAKKEESS,, IIN NCC.. :: ::

25


BRIDGING THE GENERATIONAL DIVIDE When first joining the cooperative in 1992, Brad Vold was looking for ways to get involved with Land O’Lakes. So, he decided to participate in the Leader Development programs offered to members at the time. Since then, he has seen dramatic changes in the programs, many in direct response to members requesting new and updated opportunities. “The programs are continually changing, and we’re really encouraging internal development for members,” Brad says. The most recent of these changes is the addition of the Mentorship Program that connects members across generations, fostering a relationship and mutual learning. Kendall Heiniger saw a wide disconnect between rural America and the rest of the world when she moved to her husband’s family farm outside of Kansas City, which is why she decided to become a mentee in the program. “My mentor has been so encouraging, informative and willing to answer all of my questions,” says Kendall. “I feel that a lot of thought was put into our pairing because she’s providing excellent direction for my future goals and aspirations.” In fact, Land O’Lakes is very deliberate in the mentor-mentee pairings, matching members based on specific interests and strengths. And through these pairings, along with other Leader Development programs offered by Land O’Lakes, members are offered a glimpse of where they can make their mark in the cooperative system and agriculture industry.

ELEVATING THE DAIRY INDUSTRY In a disrupted environment, it’s

market products that meet consumer

dairy industry,” says Chris Roberts,

important to be innovative, agile and

needs and deliver great returns to our

president, Dairy Foods, and executive

continually think about what’s next.

retail partners and our member-own-

vice president, Land O’Lakes.

One way our Dairy Foods business

ers. Beyond helping Land O’Lakes

is doing that is through our Dairy

identify new and innovative products,

many items recognized when Land

Accelerator program that was

the Dairy Accelerator can also help

O’Lakes was named by Dairy Foods

launched in 2017 to support and

create new markets and new custom-

Magazine as the 2018 Dairy Foods

mentor entrepreneurs in dairy.

ers for the entire dairy category.

Processor of the Year. The recognition

Six dairy companies were selected

26 : : 2018

“We created the program to help

The Dairy Accelerator was one of

was a celebration of our collaborative

to participate in the 2018 program.

dairy entrepreneurs identify ways

approach to procurement and process-

These start-ups touch several dairy

to strengthen their operations and

ing, our sustainability efforts and also

categories, demonstrating the vitality

realize meaningful growth. We also

spotlighted our new products and All

and versatility of the sector. The Dairy

hope this opportunity will be a way for

Together Better messaging campaign.

Accelerator is part of an innovation

the entrepreneurs to gain exposure to

strategy meant to help us bring to

Land O’Lakes and leaders across the

A N N U A L R E P O RT


Closing the gap between farm fields and family tables Each year, South by Southwest (SXSW) offers a provocative

climate change. Visitors didn't just pick up a phone on a

and eye-opening convergence of creativity and discovery.

wall out of curiosity; they listened to heart-wrenching,

This year, we decided to enter the conversation in a big way

personal stories about how food insecurity in America is

and, in doing so, grabbed the attention of more than 8,000

one of the most profound and complicated problems our

attendees and helped initiate an important discussion.

society faces.

The Food Effect was an interactive experience aimed at

One farmer who took the stage was Jim Hedges, who

sparking a healthy dialogue around food, agriculture and

took over his family’s 3,000-acre grain farm in Illinois over

technology—to bridge the gap between farm fields and

20 years ago. He told his own story of farming—how he

family tables. The event attracted a diverse audience that

has seen firsthand how digital technology has given him

learned more about what the agricultural community is

the ability to produce more with less inputs, make better

doing to help feed the world.

decisions in-season, reduce costs and protect his most

We didn't just grab front-page attention with a giant

valuable asset: his land.

head of interactive lettuce; we showed how technology

As a leader in agriculture, Land O’Lakes can and must

is revolutionizing the farming landscape. People didn't

help push our industry forward by driving innovation and

just stop in their tracks when they saw half a car covered

engaging consumers in a conversation that identifies

in dirt; they learned how soil could be the key to fighting

challenges and finds the most effective solutions.

LLAAN ND D OO''LLAAKKEESS,, IIN NCC.. :: ::

27


Feeding the future through ag internships In modern agriculture, we need talented individuals with a wide range of skills in all areas—from those in the fields, barns and production facilities to those behind-the-scenes in science, tech, marketing and countless other areas. The Purina Feed Sales Internship Program matches our retail-owners with new talent and offers interns a one-of-a-kind experience. Since the Purina Feed Sales Internship Program relaunched in 2013, it has grown from a small group of 15 interns to 66 in 2018. “The internship program brings the retail owner a fresh outlook on the great new talent that is out there,” says Joe Fuller, national farm production consultant leader for Purina. “Interns are able to come in with a fresh set of eyes, which provides the retailer with some neat perspectives that maybe they haven’t seen before.” All American Co-op was positioning itself to transition from a time of maintenance to a time of growth when it started utilizing the Purina Feed Sales Internship Program. And as top-level nutritionists rarely relocate in the Midwest, the co-op saw a need to begin training new talent and the intern program seemed like a logical place to start. "As we were growing it became really relevant to find talented people,” says Brent Vorpagel, Feed Department manager at All American. “[The intern program] was a training ground for us to develop and add to our team.” All American has since hired two of their interns full-time and Brent says there are several others who he would welcome back to the organization if their paths crossed again.

28 : : 2018

A N N U A L R E P O RT


SENIOR LEADERSHIP Back Row (L to R)

Front Row (L to R)

Barry Wolfish SVP, Joint Ventures & Fuel for Growth

Brett Bruggeman President, WinField United & EVP, Land O’Lakes, Inc.

Loren Heeringa SVP & Chief Human Resources Officer Dave Hoogmoed President, Purina Animal Nutrition & EVP, Land O’Lakes, Inc. Jerry Kaminski EVP & Chief Operating Officer John Ellenberger SVP, International Development Matt Carstens SVP, Land O’Lakes SUSTAIN Lisa Deverell SVP, Feed B2B Teddy Bekele SVP & Chief Technology Officer Thea Keamy SVP, Corporate Strategy & Business Development

Su Rankin SVP, Operations Chris Roberts President, Dairy Foods & EVP, Land O’Lakes, Inc. Beth Ford President & Chief Executive Officer Yone Dewberry SVP & Chief Supply Chain Officer Sheilah Stewart SVP & General Counsel Bill Pieper SVP & Chief Financial Officer Not Pictured Tim Scott SVP & Chief Marketing Officer

LAND O'LAKES, INC. : :

29


BOARD OF DIRECTORS ● Ag member

● Dairy member

David Andresen

Joey Fernandes

Xavier Avila

John Habedank

Tom Benoit

Duane Hershey

Mark Berning

Scot Janssen

Lynn Boadwine

Jeff Johnson

Rick Brand

Pete Kappelman

Rick Brubaker

Cornell Kasbergen

Paul Coppin

Jeff Lakner

Britton, SD ●

Laton, CA ●

Hays, KS ●

St. Michael, MN ●

Baltic, SD ●

Ames, IA ●

Crawfordsville, IN ●

Reynolds, ND ●

30 : : 2018

A N N U A L R E P O RT

● Advisory member

Tulare, CA ●

Ulen, MN ●

Cochranville, PA ●

Stacyville, IA ●

Buffalo, MN ●

Two Rivers, WI ●

Tulare, CA ●

Aberdeen, SD ●


Dale Locken

Stan Stark

Mountainridge, KS ●

Haviland, KS ●

Joe Machado

Jeff Troike

Dan Mains

Bruce Vernon

Stephen Mancebo

Joyce Cacho

John McClelland

Howard Liszt

Garden City, KS ●

Rancho Mirage, CA ●

Levi Ransom

Doyle Pearl

Crawfordsville, IN ●

Hanford, CA ●

Effingham, IL ●

Newville, PA ●

Washington, DC ●

Tulare, CA ●

St. Marys, KS ●

Nicholson, PA ●

Galen Vetter

Doug Reimer

Edwards, CO ●

Monticello, IA ●

Nic Schoenberger Kiel, WI ●

Paul Schweiger Beaver Dam, WI ●

Thank you, Pete! 15 years as board chair | 23 years of board service LAND O'LAKES, INC. : :

31


GIVING BACK At the heart of our identity is the idea of working together for the common good— today and for future generations.

Alleviating rural hunger by the truckload The First Run program has donated more than 4.6 million pounds of product since it was established in 2010. Part of the Land O’Lakes Foundation, the First Run program donates truckloads of fresh dairy products made specifically for rural food banks to help alleviate hunger across the United States.

A champion of foreign aid investment Supporting the next generation of ag professionals Entering its third year, the Direct Member Scholarship gives financial support to students pursuing innovative careers and advocating for agriculture. Three $5,000 scholarships will be awarded in 2019. Your membership is important to us, and we want to support the next generation as they explore careers in the food and agriculture industries.

From the Farm Bill to the McGovern-Dole Food for Education program, Land O’Lakes, Inc. leaders and member-owners have been instrumental in advocating for U.S. government investment in foreign aid. This ongoing advocacy work has boosted the reputation of both Land O’Lakes, Inc. and the nonprofit Land O’Lakes International Development, while championing critical funding that helps alleviate poverty, strengthen global markets and build a more secure world.

A shared purpose Since 1981, the affiliated non-profit Land O'Lakes International Development has fielded over 165 Land O’Lakes, Inc. employees and cooperative members as technical experts around the globe. Former board member Albert Wanous spent almost 12 years in Poland, helping rebuild the dairy industry with Land O’Lakes International Development. Board Chairman Pete Kappelman has also been around the world trumpeting the power of cooperatives. The list goes on, but it’s easy to see that Land O’Lakes International Development’s history is a shared history with the member-owners of Land O’Lakes, Inc.

YELLOW RIBBON RECOGNITION The Land O’Lakes Foundation gives support to our Employee Resource Groups (ERGs) each year for their work in community engagement. One of our newest ERGs is the VETS (Veterans Enablement and Troop Support) group, and this year Land O’Lakes was recognized by the Minnesota Department of Military Affairs’ Beyond the Yellow Ribbon program. The program, initiated in 2007, recognizes companies and communities that proactively create a workplace culture that supports and meets the needs of service members, veterans and military families.

32 : : 2018

A N N U A L R E P O RT


Š 2019 Land O’Lakes, Inc. | landolakesinc.com


LCC3350AR18

Profile for landolakesinc

2018 Land O'Lakes, Inc. Annual Report  

In a disrupted environment, Land O’Lakes, Inc. is uniquely positioned to strengthen our businesses and our network of farmer- and retail-own...

2018 Land O'Lakes, Inc. Annual Report  

In a disrupted environment, Land O’Lakes, Inc. is uniquely positioned to strengthen our businesses and our network of farmer- and retail-own...

Advertisement