Carol Kitchen SVP and General Manager,

Global Ingredients

Linking Commercial and Development Opportunities in the

Global Marketplace

Land O’Lakes • #210 on the Fortune 500

• 2nd Largest U.S. Ag Cooperative • 9,500 Employees at 300+ facilities

• 3,000 Producer-members & 1,00 member co-ops • Serving 300,000 producers

Leader in Livestock and Lifestyle feed

Leading CPP and Seed wholesaler Leading market

positions in butter, deli cheese, branded dairy Foodservice, Ingredients

VALUE ADDED BRANDED BUSINESSES

Challenge: Long Term, Global Food

Demand

Population growth

• From 7 billion people

today to 9.2 billion by

2050

• 70% increase in food

production needed

• 30%+ increase from economic growth in low income countries

1 On a per-day basis, global food consumption is ~17 trillion Kcal in 2000,

~18 trillion Kcal in 2005, and ~28 trillion Kcal in 2050

2 From ~475 to ~892 million tons of dairy, ~1 to ~1.44 billion tons of

cereals, ~227 to ~464 million tons of meat, over the period of 2000 to 2050

~1.5 X more cereals

~2 X as much meat

~2 X as much dairy

Challenge: Limited Resources

• At most, only 12% more arable land is

available globally

• Only 5% more land is projected to be

cultivated by 2050

• Demand to outstrip water supply by 40% by

2030

We must produce more food, with fewer

resources and less environmental impact! Source: OECD-FAO, global water supply/demand model; agricultural production based on IFPRI computed general equilibrium model base case; A Daunting Task, Prof. Robert Thompson (2010)

Challenge: Efficiency and Effectiveness

2.6 billion people currently live on less than $2.00 per

day

– 1 billion are unable to afford 1,800 calories per day

– As incomes rise from $2 to $10 per day, demand

increases for agricultural commodities: meat, dairy,

eggs, oils, fruits & vegetables

The number of people lifted out of poverty is the

most important uncertainty regarding future global

demand

Land O’Lakes

Positioned To Participate In Global Growth Opportunity Of Agribusiness and

Food Production

Expertise In…

• Increasing Productivity

• Agricultural Insights

• Research and Development

• Innovation • Food Systems

Land O’Lakes’ International Objectives

Commercial: To build a sustainable international business

leveraging Land O’Lakes’ value-added products and

proprietary knowledge through local investment and export

Development: To generate economic growth, improve

health and nutrition, and alleviate poverty by facilitating

market-driven business solutions.

Increasing Intersection

Commercial China Initiatives: Dairy Nutrition and Swine Feed

• JV with Great Wall Group, a leading ag & food company in Asia

• Relationship with Nestle on Dairy Farming Institute

• Bringing total nutrition (feed and forage) to dairy producers

• Future: – Expand feed footprint

– Increase sharing of expertise, technology

Commercial China Initiatives: Winfield Solutions

• Ag Chem active ingredients

• Developing market for alfalfa hay & seed – 3 alfalfa demo plots

• Demonstrating variety selection

• Future: – Alfalfa seed exports

– Promote GMO adoption

Land O’Lakes Legacy in China Contaminated Milk

• 2008 Melamine Scare

• 2011 Aflatoxin

Disease

• Swine mortality: 25MM/year

• 2011 Foot & Mouth: Swine, Cattle, Goats, Sheep

Productivity

• 40% fewer pigs/sow than US

• China milk/cow = 1/3 of US

Quality Feed

– Enhanced testing

– Supply chain scrutiny

Animal Health

– Confinement hog production expertise

Agriculture Expertise

– Ruminant nutrition

– Forage production

International Development Overview

• Established in 1981 as a not-for-profit division of Land O’Lakes,

Inc.

• Leverages our corporate and global technical expertise to assist

farmers in emerging markets

• Funded primarily by grants from USAID and USDA

• To date, IDD’s 260+ projects have improved the quality of life

for millions of people in 76 nations

International Development Impact Areas

• Agricultural Productivity & Competitiveness: – Adding value to staple products in the Republic of Congo

• Enterprise & Cooperative Development: – Improved incomes & access to credit for 20,000+ farmers in Kenya

• Food Systems & Safety: – Improved food quality standards and testing facilities in

Macedonia

• Nutrition & Health: – Helped develop food products formulated to meet nutritional

needs for Ethiopians & Rwandans living with HIV

• Food Security & Livelihoods: – Raised 2,700 farmers out of poverty & food insecurity in Zambia

Development Key Initiative: Kenya JibuPlots™

• Based on Winfield Solutions AnswerPlots ™

• Winfield Solutions staff donated time to pilot 3 JibuPlots™, now managed by field-based agronomists

• Inputs donated by partners Monsanto, Syngenta, Kenya Seed Company, MEA Ltd. and Farmchem

• Traditional vs. modern farming practices demonstrated

• Local farmers attend Farmer

Field Days to learn how to

increase productivity

Land O’Lakes Legacy in Kenya Increased Productivity

• Significant improvement in crop yields and cost effectiveness

Livelihood

• Training mostly female farmers; women bear primary

responsibility for farming & care of livestock

• Poorest households are headed by women, elderly or children

• Future

• Winfield funding with potential

from dollars from USAID

• Intend to scale to 30 locations

• Key factor: linking commercial

input suppliers to producers

Enterprise Wide Leverage and Legacy

Ag Productivity

Expertise

Technology

Dairy Powder Sales

Feed Sales/Jibu

Plots

Smallholder Value Chain

Development

Customer Producer

Development

Customer Local Mfg’ing

Customer Dairy

Imports • Connecting smallholder

output to commercial-scale

food producers

• Utilization of corporate

expertise in emerging

markets

• IDD = market scout for

future opportunities

Foundational Themes:

Expertise, Productivity, Technology

Integral Part of Growth Strategy

• Significant growth goals in place

– Earnings x 2

– Bottom Line x 2+

• International is a critical component

– Today only 2% of sales is from international business

– Target is 10 – 15% to achieve growth goals

– Domestic markets are mature so these markets are

key drivers to the future

Africa represents an unprecedented opportunity.

We are uniquely positioned.

Adding Lasting Member Value

• Leverage our R&D investment in

new markets; longer lifecycle for

older research

• Develop new markets for products

produced here

• Provide the infrastructure for

members to participate in global

growth opportunities

• IDD’s Washington DC exposure

increases our voice in domestic

and international farm policy

THANK YOU!!

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