growing together magazine | 2015 | issue 1

2015 ISSUE 1®

MAGAZINE

ST E WA R D S H I P STO RY / Y E A R - E N D F I N A N C I A L S / A G R O W I N G T R E N D

LEVERAGING OUR STRENGTHS

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Editoral

Jennifer Hyman

Jackie Koppe

Rebecca Lentz

Larry Meadows

Jon Miller

Nadine Miller

Abigail Shilling

Katie Zenk

Art Direction

Adam Craven, Professional Litho, Inc.

Copyright © 2015 Land O’Lakes, Inc. All rights reserved. Vol. 7, No. 1.

®Table of Contents3 ON THE WEB

4 PERSPECTIVES President’s Column

6 Chairman’s Column

7 FINANCIALS Land O’Lakes Year-end Results

8 PROFILES A Culture of Giving Back

9 Landmark Cooperative

10 FEATURE 2015 Annual Meeting

12 FEATURE Sustainability Starts with Economics

14 FEATURE Sharing Our Stewardship Story

16 FEATURE An Investment in Our Future

18 GLOBAL FOCUS International Development

20 SUCCESS IN THE MARKETPLACE Legislative News

22 Economic News

23 FROM OUR TEST KITCHENS

2015 ISSUE 1

Cover photo: Land O’Lakes member-owner Dino Giacomazzi sees three interconnected aspects of sustainability: social, environmental and economic. All three of which protect his family farm’s legacy for the next generation.

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STORIES FROM: Member Business Link

ON THE WEB

Policinski Promotes Voluntary Labeling on Capitol Hill

The ultimate irony of the great pro-ductivity story of modern agriculture is that fewer and fewer people are aware of where their food comes from. But, through a united voice, the industry is hoping to increase understanding and dialogue around these issues.

The Grocery Manufacturers Associa-tion (GMA) recently hosted a Washing-ton, D.C., fly-in that brought together the CEOs of major branded goods and biotech companies – including Land O’Lakes, Inc. President and CEO Chris Policinski – to educate Members of Congress on the importance of a common-sense approach to issues facing the industry and the challenges of state-by-state GMO-labeling initia-tives, and to offer a solution through a voluntary federal labeling standard.

Land O’Lakes Chairman Promotes Trade Expansion

With global expansion a major driver of Land O’Lakes, Inc.’s long-term growth strategy, having fair trade deals in place between the United States and interna-tional markets is increasingly important to our cooperative and the food and ag industries. Land O’Lakes Board Chair-man Pete Kappelman – a dairy farmer from Two Rivers, Wisconsin – provided

Land O’Lakes, Feeding America® Launch Third Annual Pin A Meal, Give A Meal Campaign

With one in six Americans struggling with hunger, Land O’Lakes’ Pin A Meal, Give A Meal campaign, which runs through April 30, creates hope – and a way to help. In partnership with Feeding America® – the nation's largest domestic hunger-relief organization – the Land O’Lakes Dairy Foods team and the Land O’Lakes Foundation are delivering easy recipe ideas and hunger relief, all in one.

For every Land O’Lakes recipe (or other recipe of the users’ choosing), pinned on Pinterest, the Land O’Lakes Foundation will donate $1 for a guaranteed maximum of $350,000 to Feeding America®. This commitment equals a donation of 3.5 million meals for families struggling with hunger in the United States, with $1 helping to provide 10 meals through Feeding America®.

Read more about these stories and many others at Member Business Link. Not signed up for Member Business Link?

• Go to www.landolakesinc.com• Click the “Register” link at the bottom

of the login page to create an account• Select the category that best de-

scribes your membership• Fill out personal and company informa-

tion and create a security question

testimony Wednesday, March 18, to the U.S. House Committee on Agriculture on the importance of trade to the U.S. dairy industry.

During the testimony, Kappelman explained the economic benefits of the dairy industry’s continued global growth – from the farm to production facilities,marketing organizations and surround-ing communities – and urged Congress to advance trade negotiations through a Trade Promotion Authority (TPA).

Engaging Future LeadersInvesting in members is one of

the best things we can do to ensure our federated cooperative remains competitive and succeeds into the future. Co-op 101 – held last month in conjunction with the Annual Meeting – is one way Land O’Lakes, Inc. is helping members become more involved and, for many, is the first step in a journey that could one day result in them lead-ing the cooperative.

2016 Host CoupleEach year, Co-op 101 participants

select a couple to represent the class and serve as the next year's host couple. This year's couple was Neal and Erika Keppy of Farm River Valley Co-op in Iowa. Neal and Erika will have the oppor-tunity to join Young Cooperators (YCs) from other cooperatives in industry-wide development opportunities such as NCFC events and D.C. fly-ins.


Nearly a century ago, Land O’Lakes, Inc. was formed to aggregate dairy members’ supply and to gain bar-gaining power for the value-add-

ed branded products being produced from members’ milk. A few years later, members asked their cooperative to ag-gregate their demand for agricultural inputs and to add value to their opera-tions. A lot has changed over the past 94 years and yet the principles on which Land O’Lakes was formed remain the same. Fundamental cooperative princi-ples of working together to ensure that producers, farmers and strong, indepen-dent local cooperatives continue to thrive and succeed. We all have our roles to play in this federated cooperative system and I believe, now more than ever, if we work together and fully leverage the strength of the federated system, we will continue to grow into our next 94 years.

Building on Performance2014 was another strong year for

Land O’Lakes, Inc., continuing nearly a decade of strong performance and growth. We hit another record in annual revenues, with sales reaching $15 billion, net earn-ings of $266 million and a record $184

million in cash returned to members, driv-en by growth in key areas of our three core business units. Earnings in Crop Inputs and Feed exceeded the previous year while Dairy Foods performed better than most in the industry in a tough market.

This good year and our recent series of good years are the result of sound strategies well executed by a talented workforce and the strength of our co-op system. When we work together, we can’t be beaten.

Strong performance enables the enter-prise to compete in a growing market-place, to bargain on your behalf and le-

verage our end-to-end view to provide enhanced insights to drive innovation. We aren’t growing simply for the sake of growth. We want to have the scale so that we can compete on your behalf, just as our founders envisioned. We know we have to

be bigger to compete with bigger competi-tors, customers and vendors. Those are the stakes in a great growth industry.

Consistent Strategy in a Changing Environment

Our strategic imperatives have been a constant in our approach to doing busi-ness to drive value for our members. We have remained grounded in four stra-tegic imperatives that you have likely heard before:

Total margin management: every year, we target stripping millions in cost so we can invest in growth. It’s not just about managing cost, it’s about managing mar-gin. Our Supply Chain saved $20 million in 2014. Dairy Foods, through revenue management, saved $6 million. We also utilize our scale to bargain for items that help us operate each and every day, indi-rect purchases such as motors or com-puter systems. We also work hard to share savings with our members. Looking for a more cost effective way to purchase a va-riety of products including tractors, fa-cility supplies, office supplies and tires, Producers Cooperative Association in Bryan, Texas, began partnering with Land O’Lakes’ BuyPoint service in 2014.

PERSPECTIVES

PRESIDENT’S COLUMN by Chris Policinski

Strong Year. Stronger Future, Together.


This good year and our recent series of good years are the result of sound strategies

well executed by a talented workforce and the strength

of our co-op system.



Producers has been happy with the results, citing the benefit of taking advantage of Land O’Lakes’ size and scale for savings in their business with minimal investment. Effective margin management will lead to future growth of our companies.

Best talent: our success depends upon an engaged and dedicated workforce, committed to a high-performance culture. We strive to recruit, develop and retain the best talent. 63 percent of employees are new to Land O’Lakes since 2005, and we’ve completed nearly 3,000 employee job rotations and promotions in the past five years. We’re also working to build the next generation of talent, building our in-tern program over 110 percent in the last five years and hiring many of those tal-ented interns into our workforce. In ad-dition, we are working with our member co-ops to place top-tier interns in their or-ganizations for growth and development. Trupointe Cooperative in Piqua, Ohio, has worked with Land O’Lakes to place in-terns in varying roles, from feed to agron-omy sales and more.

Best member and customer relation-ships: we want to leverage our size and scale to build a competitive advantage for our members, and for our customers. Our services around branding, technol-ogy and talent have become increasingly important for the growth of our members and member co-ops. We’re also work-ing to build strong relationships with

fewer, bigger customers that we work with through multiple channels. We are pleased to partner with one of our biggest customers, Nestlé, to provide feed and forage training, nutrition services and laboratory services at the Nestlé Dairy Farming Institute in China, with a goal of helping them improve on-farm productiv-ity and profitability.

Growth: In order to drive greater value year over year, we must grow in this in-

creasingly competitive food and agricul-tural industry. That’s why, over the next three years, we will invest over a billion dollars in growth. We will continue to in-vest in product innovation from our in-sights in all of our business units, from ag-ronomic output to new formulas in Feed to new consumer products in Dairy Foods. This growth plan will also take us to in-ternational markets where we can lever-age our expertise to participate in rapidly

growing markets and reinvest those profits back in our core markets.

These strategies will help drive us through challenge and opportunity, in an ever-changing business environment. Competition and consolidation will con-tinue. Great industries attract great com-petitors. Some competitors we know well; some competitors will be new. Regulation and volatile commodity prices will contin-ue to challenge us.

But let me end where I started this col-umn; despite all of these challenges, I have never been more optimistic about the strength of the federated cooperative sys-tem. We all need to continue to evolve and change if we are going to continue to suc-ceed. Land O’Lakes is committed to aggre-gating your supply and demand, providing insights to help members’ operations suc-ceed, advocating on behalf of its members, and assisting its members with talent, tech-nology and brands that will be needed to successfully compete in the future.

Thank you for your business, your engage-ment and your leadership in 2014. I look forward to another great year in 2015.

Chris is the president and CEO of Land O’Lakes, Inc. He has more than 30 years of experience in the food industry and has been with the cooperative since 1997. He has been president since 2005. Chris is based in Arden Hills, Minnesota.

We strive to recruit, develop and retain the best talent. 63 percent

of employees are new to Land O’Lakes since 2005,

and we’ve completed nearly 3,000 employee job

rotations and promotions in the past five years.


From the business office to the boardroom – even around kitchen tables at the farm – business risk is the topic du jour. You cannot pick

up a business publication today without finding at least one article that discusses business risk in some shape or form.

While the categories that fall under the term “risk management” seem endless, there are a few types of risk we deal with every day in agriculture. With Disaster Risk we face extreme weather or the risk of disease. Under Financial Risk we have commodity price volatility, interest rates and cash flow. In Human Resource Risk – can we attract and retain the right peo-ple with the right skills? And finally, there’s Strategic Risk – are we in the right busi-nesses or enterprises, and are we growing too fast or too slow?

You should know that our management team and board of directors acknowledge these risks and are fully engaged in contin-uous monitoring and assessment, and then reacting appropriately. Among the respon-sibilities of the board of directors is approv-ing the strategic direction for the enterprise and protecting and growing member equity. During the past several years, we have seen consistent returns on equity, which is an im-portant measure of the effectiveness of the strategic plan and our management of risk.

In our business climate, some people might want to crawl into bed and pull the

sheets over their head. I would argue that because of who we are and what we are – as a part of the collective Land O’Lakes, Inc. system – we are extraordinarily positioned to thrive in this environment.

People eat every day. The growing demand for high quality food puts us squarely in the front of the greatest growth industry in modern times. The products, services, technology and re-lationships that Land O’Lakes brings to

members allow us to effectively respond to the uncertainties of agriculture and food production while continuing to drive productivity and financial gains.

I fear that the greatest risk to Land O’Lakes and our members going forward is that of missed opportunity. Our parents and grandparents put together local coopera-tives in hopes of improved marketplace clout and buying power. Never in their wildest dreams could they have imagined that their efforts would pave the way for the Land O’Lakes that we own today.

Our strong federated system has been a key contributor to our tremendous growth over the last several years. Growth that, since 2006, has included the doubling of sales and more than tripling of net earn-ings, which has delivered member returns of more than $1 billion. We’ve built a busi-ness that has the scale, brands and skill set to compete and win in a very tough and competitive global business environment.

No doubt that the potential success for a cooperative lies in the ability of its manage-ment team. But the limits to its success lie in the strength and support of its member-ship. The mission of Land O’Lakes is to be a market- and customer-driven cooperative committed to optimizing the value of our members’ dairy, crop and livestock pro-duction. Quite frankly, we can achieve our mission while mitigating risk for our future success, but we must have your support.

My father taught me that a business that attempts to avoid risk may escape disaster and in the process evade success, where-as a business that identifies and quantifies risk segregates itself from extreme events and positions itself to achieve its strategic goals. With your support we can continue to be the latter.

CHAIRMAN’S COLUMN by Pete Kappelman

The Risk Worth TakingLand O’Lakes is positioned to seize opportunities and thrive

Pete is the chairman of the Land O’Lakes Board of Directors. He milks 420 Holsteins and farms 1,200 acres of crops in Two Rivers, Wisconsin.

PERSPECTIVES

You should know that our management team and board

of directors acknowledge these risks and are fully engaged

in continuous monitoring and assessment, and then

reacting appropriately.


FINANCIALS

FINANCIAL NEWS

Land O’Lakes, Inc. announced 2014 business results that included net earnings of $266 million, on record sales of $15 billion and a record $184

million in cash returned to members. These results were driven by continued growth in key areas of the company’s core business units: Crop Inputs, Dairy Foods and Feed.

“Our 2014 results reflect record an-nual revenues, continuing nearly a de-cade of consistent growth and increasing returns for our member-owners,” said Chris Policinski, president and CEO of Land O’Lakes, Inc. “Our continuing strong performance, together with our value-add-ed, branded focus in businesses that extend from the farm to market positions us to suc-cessfully compete in a growing food and ag-riculture marketplace.”

Year-End Details

Net earnings were $266 million, down from $306 million the previous year. These results reflect $18 million in pretax restruc-ture and impairment charges related to a fa-cility closure in Denmark, Wisconsin, and other organizational restructuring. Pretax earnings on continuing operations before unrealized hedging and rebate adjustments, which are used to determine member pa-tronage, were up 11.6 percent to a record $308 million compared to the previous year.

Cash returned to members of $184 million represents a 25 percent increase compared

to the previous year. This is the sixth consec-utive year cash returned to members has ex-ceeded $100 million, bringing the nine-year total to more than $1 billion.

Business Segments

• Crop Inputs reported sales of $4.9 bil-lion, up from the previous year. Pretax earn-ings totaled $220 million, up $2 million com-pared to the previous year. These results continue a multi-year trend of growth, driven by the market strength of the WinField brand and successful pursuit of new opportunities in rapidly growing agribusiness segments.

• Dairy Foods reported sales of $5.1 bil-lion, a 13.3 percent increase year-over-year. Pretax earnings for Dairy Foods to-taled $40 million, down from $75 million in 2013. Dairy Foods earnings reflect a one-time charge associated with the closure of the Denmark, Wisconsin, dairy facility and a sharp devaluation in global dairy powder markets. This was partially offset by strong volumes, particularly in the butter, refriger-ated desserts and food service categories.

• Feed reported sales of $4.7 billion, down slightly from $4.8 billion in 2013. Pretax earnings of $27.8 million increased 58 per-cent compared to the previous year. These results were driven by increased demand for products in the core livestock and life-style segments and the successful market-ing of the Purina Animal Nutrition Center in Gray Summit, Missouri.

During 2014, Land O’Lakes contin-ued to implement previously announced plans to divest of its commodity egg busi-ness, operated through Moark, LLC. In 2014, the company sold substantially all of the Western and Midwestern assets of this business for $166 million, a profit of $6 million. Land O’Lakes continues to evaluate options with respect the remain-ing commodity egg assets in the Eastern United States.

Land O’Lakes, Inc. Reports Year-end Financial Results for 2014 Full-year revenue of $15 billion, net earnings of $266 million, cash returned to members of $184 million

Land O’Lakes Financials Fourth Quarter 2014 ($ in Millions)

YEAR TO DATE 2014 2013Net Sales 14,965.5 14,236.4 Pretax Earnings

Feed 27.8 17.6 Crop Inputs 219.7 217.7 Dairy Foods 39.7 75.3 Other (17.8) (22.1)Total Pretax 269.4 288.5

Less: Income Tax Expense (15.3) 9.6

Less: Net earnings attributable to noncontrolling interests

(0.2) 0.3

Plus: Net earnings of discontinued operations 12.6 7.6

Net earning attributable to Land O’Lakes Inc. 266.5 306.0

For More InformationThe complete 2014 Land O’Lakes, Inc.

Annual Report and related financial information is available at the “Investors” tab on www.landolakesinc.com.




PROFILES

The holidays bring wonder and joy to many children. But for those in the hospital, the holidays aren’t as magical. To help these

children find their holiday joy, a num-ber of Land O’Lakes, Inc. board mem-bers visited Gillette Children’s Specialty Healthcare in St. Paul, Minnesota. For the fifth consecutive year, board members helped bring the holidays to children and their families who were staying at the hos-pital for an extended period of time.

“As board members we’re just a bunch of farm boys who like giving back. We real-ize how fortunate we are and working with the Land O’Lakes Foundation provides an opportunity to make a difference,” said Doug Reimer, corporate board director from Guttenberg, Iowa. “These volunteer projects also give us a chance to spread the word about Land O’Lakes. Show that we’re more than just a collection of busi-nesses but a cooperative with a heart.”

During the event, a favorite among board members, 25 gingerbread houses were built and more than 70 presents were g i v e n t o c h i l d r e n . Santa even found time to visit those who were room-bound and, in the process, created a lifelong memory.

“I’ve played Santa for years and, this year, after visiting with the kids downstairs we started going room to room to hand out gifts. I ran into a little girl who I had just met downstairs and she had already drawn two pictures for me to say

thank you,” said Reimer. “They are both framed on my wall now.”

Maximizing Our ImpactThe relationship between Land O’Lakes

and Gillette extends beyond these valu-able volunteer projects. Over the last five years, Land O’Lakes has donated about $200,000 in support of research, treat-ment and rural community outreach.

“Land O’Lakes is one of Gillette Children’s Specialty Healthcare’s most meaningful corporate relationships,” said Gillette’s President and CEO Barbara Joers. “They show their dedication to being a responsible community leader through supporting groundbreaking research to im-prove care for children with special health-care needs, increasing our reach to rural clinics and supporting our outreach efforts. On behalf of the more than 25,500 patients served by Gillette each year, we thank you.”

This is just one of many organizations supported by Land O’Lakes and the Land O’Lakes Foundation. Since 2012, more than $18 million in cash and product have been donated to nonprofit organiza-tions and educational institutions in the local communities of members and em-ployees across the country. Learn more by visiting landolakesinc.com and download-ing the Corporate Responsibility Report in the “Reports” section.

A Culture of Giving BackBoard members bring holiday joy to children’s hospital

Dave Andresen, corporate board director from Lake City, South Dakota, builds a gingerbread house with a patient at Gillette Children’s Specialty Healthcare in St. Paul, Minnesota.




“To m e e t o u r o b l i g a t i o n t o m e m b e r s a n d k e e p Landmark Cooperative suc-cessful in the future, we need

partners who also have the future in mind. Land O’Lakes is that organization,” said Landmark Services Cooperative CEO Robert Carlson.

Landmark chose Business Development S e r v i c e s’ ( B D S ) S t r a t e g i c A s s e t Management consulting advisory practice to help them with the development of a new grain shuttle loading elevator. The project was prompted following a 2010 bumper corn harvest in their territory of southern Wisconsin and Northern Illinois where growers were waiting in line more than two hours to unload grain. “Our producers were expanding acres, buying larger equip-ment and dramatically increasing yields, so we needed to catch up,” Carlson said.

Landmark’s mantra became speed, space and markets. Carlson explained that they needed speed to reduce time waiting to un-load grain, more space for proper storage and market access to garner good prices for producers. The co-op hired a professor with expertise in logistics to find the best sites in Wisconsin for a grain shuttle based on crop production and transportation. Carlson said they wanted to confirm the re-sults with another expert, so they turned to BDS’ Richard Bentley.

The Land O’Lakes team’s broad expertise, from business case as-sessment to facility de-sign and construction was invaluable, Carlson s a i d . L a n d m a r k ’ s board decided to make a capital investment in the grain shuttle proj-ect based on the anal-ysis presented by the Land O’Lakes team. “They gave us confidence we weren’t just looking in a crystal ball, but that we were making a smart business decision for Landmark and our members,” Carlson said. “It was the right investment with the right partner.”

Once Landmark decided that the grain shuttle project was the right thing to do, they decided that their greatest risk was the steep learning curve to build a proj-ect of this magnitude. “We again turned to Land O’Lakes to roll up their sleeves and help us understand the building process,” Carlson said.

Bentley had been involved in building several similar facilities across the country and the Land O’Lakes team understood the unique relationship between a coopera-tive and the community. “In a coopera-tive, many of the neighbors own us, and

they’re also accountable to their neigh-bors,” Carlson said. “It was important that we be respectful regarding issues like traffic, dust and noise.”

Landmark’s grain shuttle more than doubles the unloading speed of their old facility, dumping up to 40,000 bushels per hour. In addition to get-ting farmers back to their fields faster, the new shuttle will reduce Landmark’s cost of touch, due to the project’s scale and technology.

Landmark plans to apply what Carlson calls “right-to-left thinking” to their oth-er core businesses. “We need to think of what agriculture will look like in 10 to 15 years,” he said. “Then we need to employ our assets from a strategic perspective to make that happen. We have to start now to ensure we stay relevant.”

A Partner in GrowthLandmark Cooperative taps Land O’Lakes BDS for Strategic Asset Management

Landmark Services Cooperative’s new grain shuttle more than doubles the unloading speed of their old facility.



A Growing TrendA decade of success and the strength of the co-op model has the entire federated system ready to compete and win

The food and agriculture industries are rapidly growing, increasingly competitive and as volatile as ever. But Land O’Lakes, Inc.’s federat-

ed co-op model, farm-to-market scope and nearly a decade of consistent growth have the co-op and its member-owners posi-tioned to thrive well into the future.

This was the overriding message President and CEO Chris Policinski, Board Chairman Pete Kappelman and members of the Executive Leadership Team delivered to members in attendance at the cooperative’s 94th Annual Meeting, Feb. 25, in Minneapolis.

Meeting at a GlanceDuring his keynote presentation, Policinski

shared with the nearly 600 attendees the co-operative’s strategy for 2015 and beyond. As Land O’Lakes looks to continue to capital-ize on the opportunities presented by the food and ag industries, he reinforced the

strategic imperatives that have helped the co-op get to where it is today.

By continuing to drive efficiencies, re-cruiting and retaining the best talent, fos-tering strong member and customer rela-tionships and pursuing strategic growth opportunities, Policinski was confident the company could maintain the growth trajectory that resulted in more than dou-bling sales and earnings over the last 10 years.

“We’re halfway to our end point of a journey where we double again. And guess what? When we get there we’re not done yet,” he said.

In order to realize this ambitious goal, Policinski stressed the importance of fully leveraging the federated coop-erative model as the industry faces in-creased competition from players known and those new to the industry from Wall Street, Silicon Valley and more. By focus-ing on talent development, technology

and branding throughout our federated system, Policinski stated we will not only compete but continue to lead in the food and ag industries.

“We’re proud of our snapshot and mo-tion picture but what got us here won’t keep us here,” he said. “We must grow and evolve together because, when we work to-gether, I do not believe this federated sys-tem can be beaten.”

Earlier in the day, attendees received a rundown of the cooperative’s 2014

Members of the Land O’Lakes Executive Leadership Team provide detailed business updates during the Annual Meeting General Session.



performance in a detailed business up-date that showcased the continued suc-cess of Land O’Lakes’ value-added, branded strategy, which has delivered consistent growth and increasing returns for member-owners. The 2014 results were a continuation of this success-ful journey as Land O’Lakes announced 2014 business results that included re-cord sales of $15 billion, a record $184 million in cash returned to members and net earnings of $266 million. The strong member returns are a 25 percent increase compared to the previous year and rep-resent the sixth consecutive year cash re-turned to members has exceeded $100 million, bringing the nine-year total to more than $1 billion.

The General Session concluded with a special guest panel featuring the CEOs of three of the industry’s leading as-sociations. The panel, which included

National Council of Farmer Cooperatives President Chuck Conner, National Milk Producers Association President and Chief Executive Officer Jim Mulhern and Dairy Management Inc. Chief Executive Officer Tom Gallagher, provided an inside look at a host of issues including immigra-tion reform, Farm Bill implementation and sustainability.

For members who were unable to at-tend the meeting or watch live online, you can view the General Session on-demand. Watch the full guest panel, get more detailed business updates from the Executive Leadership Team and hear Pete Kappelman’s Chairman’s Report about the evolution of our industry and

the need to keep pace and adapt. Simply visit the Member Business Link homep-age and click the “Annual Meeting On-Demand” image in the upper left corner.

With the convenient chapter formatting you can select the specific section you’d like to watch, stop then come back later for more.

Members Make an ImpactMaking productive use of the closing reception, this year’s Annual Meeting included

about 100 member-owners participating in a volunteer event hosted by the Land O’Lakes Foundation. There were three stations aligned with the Foundation's three areas of focus, each with a goal of packing 2,000 bags for donation.

Education: School supply bags filled with notebooks, scissors, pencils, crayons, erasers and more. Bags were sent to:

• Bayard Taylor School, Philadelphia, Pennsylvania

• Goshen Elementary School, Visalia, California

• Raising Readers in Story County, Ames, Iowa

• United Way, Allegheny County, Pennsylvania

Hunger: Snack bags stuffed with goodies such as juice boxes, cheese cups, apple sauce, crackers and granola bars. Bags were sent to:

• Channel One Regional Food Bank and Food Shelf, Rochester, Minnesota

• The Boys & Girls Clubs of the Twin Cities, St. Paul, Minnesota

Community: Laundry detergent bags, each with enough detergent for two loads of laundry. Bags were sent to:

• Family Services of Tulare County, Tulare, California

• Central Pennsylvania Food Bank, Harrisburg, Pennsylvania

• Salvation Army, Ames, Iowa

• Campaign for Working Families, Philadelphia, Pennsylvania

• Greater Pittsburgh Community Food Bank, Duquesne, Pennsylvania.

Thank you to those who participated!

“We must grow and evolve together because, when we

work together, I do not believe this federated system

can be beaten.”– Chris Policinski

Attendees at this year’s Annual Meeting pack snack and supply bags for donation during the event’s closing reception.


http://www.landolakesinc.com/utility/login/default.aspx

A systems thinker, California dairy

member-owner Dino Giacomazzi sees

three interconnected aspects of sus-

tainability: social, environmental and

economic. To him, social sustainability means pre-

serving the family farm legacy, offering the oppor-

tunity to both of his young sons to join the family

business near Hanford, California.

“Sustainability is about finding a profitable

way to do the right thing,” said Giacomazzi. “If

you don’t start with economic sustainability, you

can’t be environmentally sustainable.” He added,

“I’m lucky to be sitting in my family’s 120-year-old

farm office. I think 120 years is the definition of

sustainability.”

Considering the importance he places on pre-

serving his family’s legacy, it is interesting to note

that Giacomazzi didn’t want to be a dairy produc-

er when he was growing up. “My dad always said,

‘Work with your brain, not your back.’ He taught

us to be independent thinkers so I wanted to do

things my own way.”

Sustainability starts with ECONOMICS


California dairy member-owner Dino Giacomazzi’s participation in conservation tillage projects has received industry recognition and, more importantly, helped him run a more profitable business.


After 13 years working as a rock concert producer, tour manager and a software developer in San Francisco, Giacomazzi returned to the farm with the desire to make a difference. “The dairy industry provides incredibly important nutrients and products,” he said. “If our modern society were to come unglued, people will give up computers long before food.”

As he transitioned back to the farm, it was a skill acquired as a software devel-oper – being a forward thinker – that led him to pursue more environmentally sus-tainable practices. “Silicon Valley taught me the importance of looking ahead to an-ticipate change. When I returned home I saw a boatload of regulations coming to California agriculture.”

Conservation program Giacomazzi’s dad Don drew him into

his first conservation tillage project in 2003 by participating in one of the U.S. Department of Agriculture’s Natural Resources Conservation Service pro-grams. “We got $30 per acre to decrease the number of passes over a 20-acre field to reduce dust. That project led me to an eight-year study of the different tech-nologies and practices of conservation tillage.” Since then, Giacomazzi has re-ceived two prestigious awards for his

part in conservation tillage although he is quick to credit the many farmer, gov-ernment and educational partners he’s collaborated with on these projects. The awards include:• The Environmental Protection Agency’s

Sustainable Agriculture Champion award in 2010 and

• The Leopold Conservation Award in 2012, presented annually in eight states to private landowners who practice exempla-ry land stewardship and management. He was the first dairy producer in California to receive the award.Giacomazzi has expanded his defini-

tion of conservation tillage to “biologi-cal farming.” To be successful at con-servation agriculture, farmers must go beyond new tillage practices and de-velop a system of biological farming, he said. “For example, more bugs make healthier soil. Since conventional tillage exposes soil to sunlight that sterilizes it, we’re changing our tillage practices to minimize exposed soil.”

R e c o g n i z i n g e c o n o m i c r e a l i t i e s , Giacomazzi acknowledges any new sys-tem in farming has to be more profit-able than the old one. “I care about the

environment,” he said. “But it has to make money to keep us in business. I have three criteria: I want to reduce cost, increase yield and quality, and lower my environmental impact.”

Land O’Lakes, Inc. recognizes this real-ity, too, and offers member-owners the op-portunity to identify similar energy-reduc-ing and cost-saving opportunity through the Innovation Center’s Farm Smart™ tool. The tool helps dairy producers better understand their farm’s environment pro-files, including greenhouse gas emissions, water and energy use. Based on the results of the program’s pilot, many members are moving forward with an energy audit to help identify additional cost-saving oppor-tunities and develop implementation strat-egies. Learn more about the tool and what it can do for your farm on pages 14-15.

By incorporating environmentally friend-ly farming practices with a keen eye on the bottom line, Giacomazzi’s been able to keep the business economically viable and provide a solid foundation for the fifth generation of Giacomazzi brothers to someday work the land their great-great grandfather bought from the Southern Pacific Railroad in 1893.

“Silicon Valley taught me the importance of looking ahead to anticipate change.”

For Giacomazzi, sustainability means preserving the family farm legacy and offering the opportunity for his young sons to join the family business.




“What are your sustainability practices?” It’s a question often asked by custom-ers and is increasingly becoming a

critical condition of maintaining market access. But what does sustainability mean? And how does an operation implement sustainability practices while continuing to operate a profitable business?

Sustainability means more than being “green.” It’s implementing management practices that allow

farmers to continue feeding a growing global pop-ulation in an environmentally and economically responsible manner.

While farmers have done this for centuries, the average consumer is unaware of the steps mod-ern agricultural producers take to protect the en-vironment and provide exceptional animal care. To help spread the word, Land O’Lakes, Inc. has worked with member-owners and industry organizations

How the FARM® and on-farm sustainability programs demonstrate member-owners’ commitment to stewardship

Stewardship Story

S H A R I N G O U R

Research

M anage m ent Practice Improvements

SOIL, C

LIM

ATE, CROP & WATER INFO

FORE

CAST

ING & MODELING TOOL

DECISION MAKING

MEASURABLE RESULTS

CONS

UMER COMMUNICATION

• Cost savings • Conservation• Compliance • New revenue



to help develop and deliver high-im-pact programs such as the National Milk Producers Federation’s Farmers Assuring Responsible Management (FARM®) pro-gram and the Innovation Center for U.S. Dairy’s Farm Smart™ tool.

With customers and consumers increas-ingly considering sustainability metrics in their purchasing decisions, Land O’Lakes has made the decision to deliver these pro-grams to members. By participating in these animal care and sustainability pro-grams, member-owners can quantify and share their stewardship story in a way that’s practical yet meaningful to customers, while identifying best practices and cost savings opportunities.

Animal CareDeveloped by a team of farmers, veteri-

narians and other industry personnel, the FARM® program delivers consistent best practices in animal care and quality assur-ance while offering insights to enhance on-farm efficiency, productivity and prof-itability. Introduced in 2007, the FARM® program helps demonstrate the dairy in-dustry’s commitment to animal well-being while providing a single, nationwide stan-dard for animal care.

The program also allows Land O’Lakes and member-owners to showcase the co-operative’s farm-to-market capabilities, helping to protect market access with stra-tegic customers who are considering ani-mal care in their purchasing decisions. Participation in the FARM® program helps Land O’Lakes and its member-owners avoid the need to comply with multiple guidelines from individual customers or regulatory agencies.

Thanks to the early, voluntary adop-tion of the FARM® program by nearly all member-owners, more than 99 per-cent of member milk supply is already FARM®-verified. In the Spring of 2014 the corporate Board of Directors voted to make FARM® program participation a

mandatory condition of Land O’Lakes, Inc. dairy membership, further position-ing the cooperative as an industry leader with a membership clearly committed to the highest level of animal care.

SustainabilityFollowing a similar path as the FARM® pro-

gram, Farm Smart™ is an outcome-based online assessment tool that helps dairy pro-ducers better understand their farm’s envi-ronment profile, including greenhouse gas emissions, water and energy usage. The tool was developed by the Innovation Center for U.S. Dairy and dairy producers to quantify stewardship practices, identify opportuni-ties to drive efficiencies and generate cost savings, and help maintain and increase do-mestic and international market share.

To date, Land O’Lakes has piloted Farm Smart™ in all three milk sheds, covering 18 percent of the co-op’s milk supply. Nearly half of the program participants realized the potential for cost and energy savings and de-cided to move forward with an energy audit to improve energy efficiency on their farm.

To help offset the costs associated with energy efficiency projects, the U.S.

Department of Agriculture offers grants and loans to small businesses and ag pro-ducers in rural areas. One such grant is the $12.3 million available through the department’s Rural Energy for America Program (REAP) “to help farmers boost energy efficiency and spur greater use of renewable energy.”

The Next ChapterLand O’Lakes is proud to be on the fore-

front of sustainability practices. Member-owners are strongly encouraged to make use of the programs available through their cooperative. Participation not only helps maintain market access with strategic cus-tomers but can also deliver cost savings and reinforce the longstanding stewardship sto-ry of production agriculture.

Tai Ullmann: Sustainability Project SpecialistCharged with

helping Land O’Lakes, Inc. and its member-owners meet emerg-ing and sometimes evolving customer trends, Sustainability Project Specialist

Tai Ullmann is responsible for developing and implementing Land O’Lakes’ on-farm sustainability program on Land O’Lakes member dairy farms.

Part of the Member Relations team, Ullmann has been involved in all 90 Farm Smart™ evaluations conducted as part of the pilot. Ullmann said the evaluations take about an hour, with most of the required data being easily accessible through farm records and utility bills.

Farm Smart™ evaluations calculate your environmental profile, which is compared to national and regional averages.

To date, 50 percent of members who have participated in the Farm Smart™ evaluation have realized the potential for cost and energy savings and decided to move for-ward with an energy audit. In these cases, Ullmann is available to help producers find ways to offset the associated costs by identifying government grants and loans available to small businesses and ag pro-ducers in rural areas. Land O’Lakes also has financing options available to membership.

If you would like to participate in Land O’Lakes’ on-farm sustainability program or simply want more information, contact your local field staff representative or Ullmann at [email protected].

Land O’Lakes staff works directly with member-owners and industry organizations to deliver high-impact sustainability programs.



As Land O’Lakes continues to accelerate its expansion in the great growth industries of agriculture and food production in or-der to meet the needs of a growing global population, developing relationships with top universities provides greater access to stu-dents like Turner who are critical to the continued success of the entire cooperative system. With this in mind, Land O’Lakes com-mitted to a $25 million contribution, distributed over 10 years, to

drive educational excellence and student development programs across the university.

“This announcement underscores our commitment to educa-tional excellence and further strengthens our investment in the pipeline of talent that comes from the University of Minnesota,” said Chris Policinski, president and CEO of Land O’Lakes, Inc. “Together with the university, we are helping create a holistic

AN INVESTMENT IN OUR FUTURE Land O’Lakes, Inc. makes a historic contribution to the University of MinnesotaWhen Land O’Lakes, Inc. entered into a strategic partnership with the University of Minnesota earlier this year, students like Kelly Turner were top of mind. “Everyone on campus is super excited about the opportunities it brings to students at the U of M, and it reminds me how much Land O’Lakes has invested in my own education and future career over this past summer – and I couldn't be more grateful,” said Turner, who is a former Land O’Lakes intern and current University of Minnesota student.



experience that not only builds a more competitive student, but also delivers the type of well-rounded talent we need to meet the challenge of feeding a growing global population. We look forward to con-tinuing our long-standing relationship and building a strategic partnership with this great institution.”

The broad-ranging investment, funded by the Land O’Lakes Foundation and com-pany, underscores Land O’Lakes’ commit-ment to education and is an investment in best talent and recruitment. The coopera-tive has long benefited from its relationship with the University of Minnesota – with more than 20 percent of headquarters em-ployees having an undergraduate or gradu-ate-level degree from the institution.

The contribution will fund initiatives including the leadership development of student-athletes and programs within the College of Food, Agricultural and Natural Resource Sciences, the Carlson School of Management and the College of Science and Engineering. These strategic targets regularly produce talented students who drive innovation in agriculture, market-ing, supply chain, research and develop-ment and many other areas.

“I commend Land O’Lakes for being a terrific industry partner and making this milestone investment in our institution and the leaders we’re preparing for the fu-ture,” said Brian Buhr, dean of the College of Food, Agricultural and Natural Resource Sciences. “These funds will enrich our col-lective programs and initiatives and help further position the U of M as a leader in addressing society’s pressing challenges.”

Top Talent Needed With the rapid growth and increasingly

complex and global nature of agribusi-ness and food production, there is a soar-ing demand for top talent throughout the industry and growing up on a farm is no longer the leading prerequisite. In fact, there are 54,400 annual job openings in the U.S. agribusiness and food industries that require a bachelor’s degree or higher:

74 percent are in business and science, 15 percent are in agriculture and production, and 11 percent are in education, communi-cation and governmental services.

As the agriculture industry continues to attract new players, competition for top students only increases. Developing

strong relationships with universities en-hances Land O’Lakes’ presence on cam-pus that can offer a competitive advantage in recruiting talent.

One of Many Investments in Our Future

The land grant university in Land O’Lakes’ headquarters community, partnering with the University of Minnesota builds on a decades-long relationship. As the industry continues to evolve and grow, supporting education to develop the next generation of talent in agriculture is a top priority and Land O’Lakes contributes to a number of universities through scholarship pro-grams, gift-matching and direct donations. Over the last few years, Land O’Lakes

has formed strategic part-nerships with Purdue, W i s c o n s i n , I o w a S t a t e , South Dakota State and oth-ers while also delivering the annual John Brandt Scholarship to graduate students pursuing dairy-related degrees at leading agricultural universities.

Land O’Lakes also works closely with the National FFA to provide programs and financial contributions that help devel-op the agricultural skills of the next gen-eration of farmers. Through the Answer Plot® Community Gardens program, the Foundation, FFA chapters and WinField agronomists partner with co-ops across the country to help students grow and harvest fresh produce to donate to food banks in ru-ral communities. This is in addition to the more than $200,000 donated to the local FFA Chapters in 2013.

This commitment to education and devel-oping strategic relationships with key uni-versities has helped develop, attract and retain the next generation of talent. Since the 2008-2009 school year, the number of on-campus events Land O’Lakes has at-tended increased from 38 to 185 during the 2013-2014 school year, which has co-incided with a rapidly expanding summer internship program that has grown from 45 students in 2009 to 229 students this past summer.

Land O’Lakes President and CEO Chris Policinski and University of Minnesota President Eric Kaler celebrate the strategic partnership at an on-campus rally.

“I commend Land O’Lakes for being a terrific industry

partner and making this milestone investment in our institution and the leaders

we’re preparing for the future.” – Brian Buhr, dean of the College of Food,

Agricultural and Natural Resource Sciences



INTERNATIONAL DEVELOPMENT

Wo r k i n g a s a c o m m u n i t y health volunteer (CHV) in Madagascar since 1998, Jeannie Razafinadramanana

never imagined her passion and commit-ment to volunteerism would allow her to play an important role in transforming the dynamics within her hamlet of Tataho.

But after joining forces with the Strengthening and Accessing Livelihood Opportunities for Household Impact (SALOHI) program, she significantly bol-stered her knowledge base beyond her traditional focus on maternal and child

health. Not only did she learn how to pro-vide more substantive health and nutri-tional support to a wider segment of the community, but she also became engaged in the promotion of Village Savings and Loan (VSL) programs that sparked com-munity cohesion and newfound trust.

Led by Catholic Relief Services (CRS), the program was implemented by a con-sortium of international partners in-cluding Land O’Lakes International Development, Adventist Development and Relief Agency (ADRA) and CARE. Since 2009 the United States Agency for

International Development (USAID) funded SALOHI program has been tack-ling food insecurity in 100,000 house-holds — for nearly 650,000 people — across 110 rural communes in eastern and southern Madagascar.

In collaboration with Malagasy commu-nity leaders, the five-year SALOHI pro-gram has been addressing a range of devel-opment issues including health, nutrition, agriculture, emergency preparedness and resource management. Through this multi-

faceted approach, SALOHI has helped communities become more resilient to di-sasters and economic shocks while improv-ing food security and decreasing dependen-cy on external assistance.

“Before the training, I did things like distribute medicine to women, adminis-ter vaccines and hand out mosquito nets,” Razafinadramanana explained. “But most

Giving Birth to a Community’s Health, Wealth and TrustSALOHI program helps transform communities in rural Madagascar

GLOBAL FOCUS

In collaboration with Malagasy community leaders, the five-

year SALOHI program has been addressing a range of

development issues including health, nutrition, agriculture, emergency preparedness and

resource management.

Jeannie Razafinadramanana looks at her granddaughter while explaining how SALOHI enabled her to become a more effective community health volunteer.



mothers gave birth traditionally. They nev-er saw a doctor for pre- or post-natal care. They didn’t weigh their children to find out whether or not they were malnourished nor did they pay much attention to what constituted a healthy diet.”

Those who were sick were typically only provided with traditional natural com-pounds, she said, rather than any type of western medicine, and children were rare-ly vaccinated. Now, she said, 100 percent of the children in her hamlet are vaccinat-ed for a variety of potentially detrimental illnesses, including Hepatitis A, B and C, Rubella and Polio.

Through SALOHI and the Land O’Lakes team working in her community of Tataho, Razafinadramanana learned how to teach pregnant mothers to prepare healthy, nour-ishing foods. She has also shared her new-found knowledge on the seasonality of crops to give villagers a better understand-ing of the best times to plant peanuts, cas-sava or rice. She counsels women on the

importance of exclusively breastfeeding for the first six months of life, too.

“At first, the community didn’t fully em-brace the new ideas I was trying to spread. But later on, mothers were able to see for themselves the difference in their chil-dren’s health and mortality when they sought medical care for their families,” she said. “This helped convince them of its importance.”

Even though Razafinadramanana is a CHV focused on health and nutritional support, she promotes the group bank-ing model known as Village Savings and Loans through her regular household visits. Borrowers must pay back the principal plus a 10 percent interest rate; savers earn 10 percent interest on their assets at the end of the year. The people in Tataho not only had no concept of VSLs before but also rarely engage in any sort of banking or savings.

“The VSL helped give birth to love in our community. People really started to like each other more, to care about each

other more,” she said of the VSL’s im-pact. “During hard times, people don’t have to go far for help anymore. It not only changed our access to finance, but it changed how we relate to one another.”

Another new focus for Razafinadramanana as a result of SALOHI has been educating the community on the importance of hy-giene and basic sanitation. “I’m teaching people that they should only drink potable

water, that they should wash their hands af-ter using the bathroom and to use latrines when they need to relieve themselves. Honestly, these are things our community never regularly did before, but we’re chang-ing our practices collectively.”

Even though the SALOHI program is drawing to a close, Razafinadramanana is emphatic that her CHV and VSL work will continue. In fact, she and several other CHVs in her community are already plan-ning for their next collective effort: literacy training for women. She says that 75 per-cent of the women in Tataho are illiterate as they tend to start school as late as 10 or 15 years old and are often encouraged by parents who see them as a financial bur-den to drop out of school early and marry.

“I want to ensure that more women can read and have greater agency on their own futures and also invest positively in the VSL. It would help empower them to get out of poverty.”

“During hard times, people don’t have to go far for help

anymore. It not only changed our access to finance, but it

changed how we relate to one another.”

– Jeannie Razafinadramanana

Razafinadramanana’s husband and daughters take pride in how she’s helping to improve the health, nutrition and financial well-being of the entire community.



LEGISLATIVE NEWS

The 2014 Midterm Elections fea-tured a number of races and is-sues that had the potential to impact Land O’Lakes, Inc. and

member businesses including ag-friend-ly candidates facing difficult re-election campaigns and questions about who would control the Senate. The Land O’Lakes PAC was very active during the 2014 elec-tion cycle, making contributions totaling more than $364,000 to support 109 dif-ferent Republican and Democratic in-cumbents in the House and Senate, as well as nine open seats. Candidates were evaluated on a variety of factors includ-ing committee assignments, districts rep-resented, and overall support for policy issues in alignment with Land O’Lakes priorities. The average contribution was typically $2,500.

Looking at the new legislative session, here are 10 things you need to know:

1. Republicans won big on elec-tion night, taking control of the U.S. Senate and expanding their major-ity in the House of Representatives. Republicans hold 53 of 100 seats in the

U.S. Senate and 244 of 435 in the House of Representatives. This is the largest number of seats the Republicans have held in the U.S. House since 1928.

2. Midterm elections are tough for the sitting president’s party. Presidents in-cluding Ronald Regan, Bill Clinton, and George W. Bush were in office while their parties lost control of one or both cham-bers of Congress. The president’s party has lost Senate seats in all but two midterm elections since 1938. Combining this fact with a low presidential approval rating of 40 percent, Republicans had momentum moving into Election Day.

3. Voter turnout slumps during mid-terms. Only 36 percent of eligible voters cast ballots this year compared to 58 per-cent in 2012. This trend is especially true for young and minority voters, groups who typically vote more Democratic, giving Republicans another edge.

4 . T h e e l e c t i o n m a p f a v o r e d Republicans. With approximately one third of the Senate up for reelection, Democrats had 20 seats to defend while Republicans only had 13. Long-serving Democratic

Senators Tom Harkin (D-IA), Tim Johnson (D-SD), Max Baucus (D-MT), Carl Levin (D-MI) and Jay Rockefeller (D-WV) all decided to retire, leaving Democrats to defend seats in increasingly conserva-

tive states. Three other incumbents, Kay Hagan (D-NC), Mark Pryor (D-AR) and Mark Begich (D-AK) represent states that are decidedly more conservative than six years ago. Only two Republican seats were ever thought to be in danger: Kentucky and Georgia. Republicans won every race but Michigan.

5. Ag-friendly Members did well in House elections. Despite many expected close races, only two House Agriculture Committee members lost their seats:

Situation Assessment 10 things to know about the 114th Congress

Republicans hold 53 of 100 seats in the U.S. Senate and 244 of 435 in the House of Representatives. This is the largest number of seats the

Republicans have held in the U.S. House since 1928.

SUCCESS IN THE MARKETPLACE



Reps. Bil l Enyart (D-IL) and Pete Gallego (D-TX). Noteworthy Agriculture Committee winners include: Reps. Collin Peterson (D-MN), Rick Nolan (D-MN), Cheri Bustos (D-IL), Rodney Davis (R-IL) and Jim Costa (D-CA), after mail-in bal-lots were counted. Land O’Lakes mem-ber Rep. David Valadao (R-CA) also easily won reelection.

6 . B o t h t h e H o u s e a n d S e n a t e Agriculture Committees will have new Chairmen. Sen. Pat Roberts (R-KS) will be the new Chairman of the Senate Agriculture, Nutrition, and Forestry Committee. Sen. Debbie Stabenow (D-MI) moves from Chairperson of the commit-tee to its Ranking Democrat. Rep. Mike Conaway (R-TX) will be the Chairman of the House Agriculture Committee after cur-rent Chairman Rep. Frank Lucas (R-OK) was term limited by Republican Caucus rules. Rep. Collin Peterson (D-MN) will return as Ranking Member.

7. State GMO labeling initiatives were defeated. Oregon and Colorado voters both rejected ballot measures that would mandate the labeling of genetically modi-fied ingredients. Land O’Lakes worked to defeat both measures with financial resources allocated to the “vote no” campaigns.

8. Ag issues will be on the Congressional schedule for 2015. Issues including the Western states drought, immigration, trade, tax reform, child nutrition reau-thorization and transportation will be on Land O’Lakes’ priority list as they come before Congress in the next year.

9. Expect more executive and regula-tory actions. Since Republicans control both chambers of Congress and these will be the last two years of this President’s administration, the White House and the federal agencies will likely push out more policy through executive and reg-ulatory actions. These actions may be

large scale like the recent immigration announcement or relatively quiet like the Waters of the U.S. definition proposal.

Land O’Lakes will continue to monitor these issues at all levels.

10. The tables may be turned in two years. 2016 has Republicans defending 24 seats, several in states that also elected the President, and Democrats defending only 10. It’s possible that Senate control may flip again.

Issues including the Western states drought, immigration,

trade, tax reform, child nutrition reauthorization and transportation will be

on Land O’Lakes’ priority list as they come before Congress

in the next year.

ASSO

CIAT

ED P

RESS



SUCCESS IN THE MARKETPLACE

ECONOMIC NEWS by Nelson Neale

As part of the 2014 Farm Bill, the new Dairy Title includes a Dairy Producer Margin Protection Program (MPP) designed to

protect dairy farmers from catastrophical-ly low margins. The program represents a sweeping change to our industry that pro-vides a more effective safety net by focus-ing on margins instead of offering support based on milk price alone, and gives dairy farmers the opportunity to incorporate a new management tool to limit risk expo-sure in their business.

The Margin Protection Program (MPP) behaves similar to insurance in which pro-ducers can elect different levels of margin coverage in exchange for a pre-determined premium rate. The coverage levels and triggers for payment are based on a mar-gin formula that includes milk price and the cost of feed through a standard ration that includes corn, soybean meal and alfal-fa hay. It’s important to note the formula is based on national milk and input values so it may not be fully reflective of margins on your farm.

Producers may elect to cover anywhere from 25 to 90 percent of their production history, which is defined as the highest an-nual production of milk for the years 2011, 2012 and 2013. Producers may also select a margin coverage level ranging from $4 to

$8 per hundredweight, with an escalating premium structure that is free for $4 cov-erage and increases at a varying rate up to the $8 coverage level.

Program TrainingLand O’Lakes, Inc. was among the

first in our industry to get information out to producers about the program and provide in-depth training opportu-nities throughout the country. We held regional webinars and on-site training meetings in Minnesota, Pennsylvania, Wisconsin and California.

We also brought individualized train-ing right to member farms. Our Technical Service Specialist (TSS) and Risk Management teams held one-on-one meet-ings with a number of producers to review historical MPP outcomes at different levels of coverage using our margin analyzer tool. We leveraged the tool to incorporate actu-al member farm data and margins to better understand local basis price risks and iden-tify an optimal coverage level.

In the end, more than 75 percent of Land O’Lakes dairy members enrolled in the program.

Staff AssistanceYour TSS representative has been

trained and is available to assist you as

you develop your strategy and deter-mine which coverage level is best for your 2016 coverage.

The Land O’Lakes Risk Management team is also available to assist you. Please contact Steve Watrin ([email protected] or 651-375-2921) or myself ([email protected] or 651-375-5199) to set up a consultation or to discuss other risk management options available to you.

The new Farm Bill and Margin Protection Program is the result of years of grass-roots advocacy and legislative effort, and is the most significant rewrite of dairy policy in more than a generation. As we all know, dairy markets are volatile and prices can change very quickly. You need to be vigilant in looking for oppor-tunities and tools to protect yourself from these swings – the Margin Protection Program represents the latest tool to help you alleviate some of the risk exposure in your business.

Protect Your MarginsIn-depth training results in strong first-year enrollment

Nelson is the director of Member Products and Services for Land O’Lakes, Inc. He has been with the company since 2012 and previously held positions with Tyson Foods and UBS Investment Bank. Nelson is based in Arden Hills, Minnesota.


mailto: [email protected]

mailto: sdwatrin@ landolakes.com

mailto: sdwatrin@ landolakes.com


FROM OUR TEST KITCHENS

APPLE CINNAMON SPOON CAKE A rich, homey apple cinnamon-nut

dessert topped with a delectable

buttery rum-flavored sauce.

Preparation time: 25 minutesBaking time: 30 minutes

Topping¼ cup firmly packed brown sugar

1/3 cup quick-cooking oats

1/3 cup all-purpose flour

¼ cup cold LAND O LAKES® Butter

Cake 1 cup all-purpose flour

½ cup sugar¼ cup quick-cooking oats

2 teaspoon baking powder

1 teaspoon ground cinnamon

½ teaspoon salt

½ cup LAND O LAKES® Butter, softened

¾ cup milk½ teaspoon vanilla

4 cup (4 to 6 medium) peeled

and sliced (1/8-inch) apples

½ cup broken walnuts or pecans

Sauce ½ cup sugar

½ cup firmly packed brown sugar

1 tablespoon cornstarch

½ cup half-and-half or light cream

¼ cup LAND O LAKES® Butter

½ teaspoon rum flavoring

Preheat oven to 400°. Combine topping

ingredients in 1-quart mixer bowl. Beat

on medium speed, scraping sides of bowl

often, just until crumbly. Set aside.

Combine remaining ingredients, except

apples and nuts in 3-quart mixer bowl.

Beat on medium speed, scraping sides

of bowl often, until well blended (2 to 3

minutes). Stir in apples and nuts.

Pour into ungreased 9-inch square

baking pan. Crumble topping evenly

over apple mixture.

Bake near center of oven for 30 to 40

minutes or until top is golden brown or

toothpick inserted in center comes out clean.

Meanwhile, combine ½ cup sugar, ½ cup

firmly packed brown sugar and 1 tablespoon

cornstarch in heavy 1-quart saucepan. Stir

in ½ cup half-and-half or light cream until

smooth. Add ¼ cup butter and ½ to 1 tea-

spoon rum flavoring. Cook over medium heat,

stirring occasionally, until mixture comes

to a boil. Boil 1 minute, stirring constantly.

Spoon cake into dish while still hot, top

with sauce. Best served warm from the oven.

Makes 9 servingsNutrition Facts (1 serving)

©1993 Land O’Lakes, Inc.

560CALORIES

76gCARBOHYDRATE

27gFAT

3gDIETARY

FIBER

60mgCHOLESTEROL

5gPROTEIN

420mgSODIUM


SLOW COOKER KOREAN BBQ BEEF TACOSCrisp fresh slaw is the perfect topper on these tasty Korean BBQ tacos.

Preparation time: 45 minutesTotal time: 5 hours 45 minutes

Beef 3-3½ pounds boneless beef short

or country-style ribs* 4 Land O Lakes® Teriyaki

Sauté Express® squares, cut into small pieces

1/3 cup chopped green onions 1 cup apple juice ¼ cup mirin 1/3 cup firmly packed brown sugar*Substitute bone-in short ribs or boneless chuck pot roast.

Asian Slaw ¼ cup rice vinegar 1 tablespoon soy sauce 1 tablespoon firmly packed brown sugar 1 teaspoon sesame oil 1/8 teaspoon garlic chile sauce 4 cups coleslaw tri-color mix 2 tablespoons finely chopped

cilantro leaves 12 (7- to 8-inch) flour tortillas

Place beef into 5- to 6-quart slow cooker. Top beef with pieces of Sauté Express® squares and green onions.

Combine apple juice, mirin and 1/3 cup brown sugar; stir until sugar is dissolved. Pour juice mixture over beef. Cover; cook on Low heat setting 5-7 hours, or High heat setting 4-6 hours or until beef pulls apart easily with a fork.

Remove beef from slow cooker. Pull beef into shreds using 2 forks.

Combine rice vinegar, soy sauce, 1 tablespoon brown sugar, sesame oil and garlic chile sauce in bowl; stir until sugar is dissolved. Add coleslaw mix and cilantro; toss to coat coleslaw with dressing.

Place about ½ cup shredded meat into each tortilla. Top with about ¼ cup coleslaw mixture.

Makes 12 servingsNutrition Facts (1 serving)

©2014 Land O’Lakes, Inc.

650CALORIES

35gCARBOHYDRATE

46gFAT

2gDIETARY

FIBER

95mgCHOLESTEROL

23gPROTEIN

520mgSODIUM

Get more recipes, tips and techniques from the Land O’Lakes Test Kitchens at www.landolakes.com and on Facebook at www.facebook.com/LandOLakes.


Land O’Lakes Political Action Committee (PAC)

Working for you by supporting allied candidates

Voluntarily funded by our members and employeesRaise approximately $200,000 annually

Support more than 200 candidates per election cycleContributions generally range from $500 to $5,000

Land O’Lakes, Inc.PO Box 64101MS 2020St. Paul, MN [email protected](800) 328-1341 www.landolakesinc.com

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growing together magazine | 2015 | issue 1

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