2011 March/April Issue - Land O'Lakes Inc.

TMMARCH/APRIL 2011THE FUTURE OFTHE FARMMEMBERS MAKEUP OUR PROUDHERITAGE ANDPOWERFULFUTUREREPORT ON ROUNDUP READY ® ALFALFA p. 14 | ANNUAL MEETING RECAP p. 26

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Table of ContentsMARCH/APRIL 2011TMCOVER PHOTO AND PHOTO TO RIGHT BY KELLY PETERSEN, WWW.KP-PHOTO.COM4 PERSPECTIVES17 Economic OutlookPresident’s Column6 Chairman’s Column18 FEATUREThe Future of the Farm8 2010 FINANCIALS20 FEATURE2010 Sales and EarningsLand O’Lakes Weathers the Storm10 PROFILESKeith Newhouse, Sustainability22 GLOBAL FOCUSInternational Development11 Land O’Lakes Executive AgribusinessProgram (LEAP)24 International Business13 Sara Mortimore, Quality Assurance 26 CO-OP NEWS14 SUCCESS IN THE MARKETPLACENews HeadlinesIssues Update30 FROM OUR TEST KITCHENS16 Legislative NewsSpring TreatsCover Photo: Josh Zonneveld (front) and his dad, John, at Zonneveld Dairies in Hanford, Calif.Magazine also available online at www.landolakesinc.comSee story on pages 18-19.growingtogether TM magazine is printedbimonthly by Land O’Lakes, Inc. for thecooperative’s members and employees.Find us on Facebook &Search for Land O’Lakes, Inc.And on YouTubeSearch for LandOLakes2010EditorAngie ButterbrodtWritersJeanne ForbisJennifer HymanDavid KarpinskiJon MillerNadine MillerTrish ScorpioTara TierneyArt DirectionAdam Craven, Professional Litho, Inc.Editorial BoardMartha Atkins-Sakry, Land O’Lakes FoundationMelissa Alphin, Dairy FoodsBart Wolkerstorfer, Animal MilkBrant Gilbert, FeedLoren Heeringa, Human ResourcesLisa Hertel, Business Development ServicesJennifer Hyman, International DevelopmentKatie Segall, Dairy FoodsSteve Krikava, Government RelationsMatthew Horovitz, Dairy FoodsKevin Schluender, LegalSuzanne Petersen, FeedGary Weber, MembershipWendy Osborn, Dairy FoodsJodi Moore, MarketingWe welcome reader commentsandfeedback. Please send questions,comments or story ideas to:TMMagazineLand O’Lakes, Inc.PO Box 64101MS 2020St. Paul, MN 55164-0101(800) 328-1341growingtogether@landolakes.comwww.landolakesinc.comPaper fromresponsible sourcesCopyright © 2011 Land O’Lakes, Inc.All rights reserved. Vol. 4, No. 2.www.landolakesinc.com MARCH/APRIL 2011 3

PERSPECTIVESPRESIDENT’S COLUMN by Chris PolicinskiBridging a Growing DivideBringing facts to the discourse on agriculture and food productionEach year at the Land O’LakesAnnual Meeting, along with reportingon the state of the cooperative,I have the opportunity todiscuss issues affecting Land O’Lakes andthe agriculture industry.This year, I addressed what is really acontinuing story – how producers canfeed a growing world population, whilethe public discourse about agriculture andfood production becomes more complicatedand contentious.A shift in focusIn today’s world, America’s farmers arefacing a challenge. They are continuallybeing called on to deliver increased productivitywith fewer resources and less impacton the environment.Given the importance of a safe, economicaland plentiful food supply, you mightexpect widespread public support for thetechnologies and management practicesthat have driven productivity and environmentalstewardship over the decades.But, ironically, we are nowhere near aconsensus of opinion. In fact, the publicdiscourse about agriculture and food productionhas moved from a discussion to adebate, and now to a growing divide.During the Annual Meeting, I discussedthree steps we can take to bridgethat divide and address the issuesand assumptions that are affecting ourindustry.1. We must continue telling the great productivitystory of agriculture – creatinga fact-based understanding among thepublic and policymakers.2. We need to do a better job of listeningand responding to messages from themarketplace.3. We need to make the case for co-existenceand choice in agriculture and foodproduction.Presenting the factsBecause only 2 percent of Americans aredirectly involved with agriculture, manypeople have no idea of the complex systemthat puts food on their table.One important message is that the 250percent increase in agricultural productivityover the past 60 years didn’t happenby chance. It was achieved through innovativetechnologies and advanced on-farmmanagement practices.The global population is expected toincrease from 6.8 billion people today tomore than 9 billion by 2050 – requiring an80 percent increase in food production.Although certain factions oppose the useof technology in agriculture, the realityis that we need even better technologyand production techniques to meet thegrowing demand.Why is this so important? Today, evenwith the strides we’ve made, 1 billionpeople worldwide are undernourished– a 19 percent increase since the 1990s.Because only 2 percentof Americans are directlyinvolved with agriculture,many people have no idea ofthe complex system that putsfood on their table.In the U.S., 50 million people – or onein every seven households – live withfood insecurity.Those are startling statistics, and hungercould become more prevalent as the populationgrows. We need to use safe, beneficialtechnologies to end the cycle of hungerand poverty that affects real people, and cancreate economic and political turmoil thatthreatens peace and stability in the world.Marketplace messagesWhen we hear misperceptions about ourindustry, it’s easy to dismiss those concerns.But the marketplace is sending ussome important messages, and we need tolisten and respond.4 growingtogether www.landolakesinc.com

One of those messages is that in theU.S. and other countries, consumers are“going green.” They care not only aboutwhat we produce, but how we produceit, and the impact agriculture has onthe environment.When it comes to environmental stewardshipand agricultural sustainability,America’s farmers have made tremendousprogress. In the dairy industry, forexample, producers are using far lessland and water resources, and are producingless waste, for each gallon of milkproduced. And we’ve seen this kind ofprogress across agriculture. A remarkableexample is the 650 percent increasein corn production since 1930, whileutilizing 13 percent less land. That’sauthentic sustainability!Animal care is another issue that hasthe public’s attention. We know the vastmajority of producers are committed tohigh-quality animal care. But this is anemotional issue, and one publicized incidentof an animal being mistreated cancast doubt on an entire industry.As responsible operators, we need todo more to promote high standards andassure the public. That’s why FarmersAssuring Responsible Management(FARM) in the dairy industry, and otherefforts like it, are so important. Theydemonstrate our commitment to animalwell-being and protect the reputation ofmembers and Land O’Lakes. Our goal isto have FARM implemented throughoutour system by year-end 2012. That’s anachievable objective, and an essential one.Food quality and safety are also areas ofconcern for consumers.Although organic food makes up a smallpart of the overall market, as consumerslook for nutritious, high-quality products,More than 50 studies wereexamined, and they showedlittle or no difference in thenutritional value of foodsproduced organically andconventionally.there seems to be a prevailing view that organicallygrown food is “better” than conventionalor biotech production.To bring some clarity to this issue,Land O’Lakes had a leading consultingfirm review the research on the nutritionalcontent of organic and conventionally producedfood. More than 50 studies were examined,and they showed little or no differencein the nutritional value of foodsproduced organically and conventionally.Regarding food safety, America has thesafest food system in the world. Yet someconsumers have a different view. In today’shighly connected world – with instantcommunication and 24-hour newscycles – when a quality problem does occur,news travels fast.As an industry and as individual organizations,we all must adhere to robustsafety and quality policies and processesthat not only identify potential issues,but also prevent problems from happening.At Land O’Lakes, we have a company-wideProduct Safety and QualityPolicy, and continue to enhance the expertiseand resources devoted to safetyand quality assurance.Co-existence and choiceLand O’Lakes members operate in agrowing industry that is at a pivotal pointas we consider what agriculture and foodproduction should become.Too often, the focus is not on how wecan feed a hungry world, but on how wedefine “good” agriculture versus “bad”agriculture, or “good” food versus“bad” food. We seem to be taking sides– it’s either large, technology-drivenfarms versus smaller farms driven byniche production practices … or organicversus conventional.We need to change the direction ofthe discussion, and make the case thatthere’s not good food or bad food basedon production techniques – there’s justfood. Very simply, the best solution to thechallenges we face is a food productionsystem built on the principles of co-existenceand choice.There is a compelling need for largefarms and advanced technologies andmanagement practices. These operationsare capable of producing the large quantitiesof safe, economical food necessaryto feed a growing global population. At thesame time, there also is an important rolefor smaller farming operations with sustainablebusiness models. They help keeprural communities vibrant and ensure customerand consumer choice.As we look to the future, our objectiveis to ensure that producers can choosethe production model that meets theirneeds, while giving consumers choices inthe products they buy. As we work to feedmore people, this commitment to co-existenceand choice is good for producersand good for the public we serve. ■Chris is the president and CEO ofLand O’Lakes, Inc. He has 30 years ofexperience in the food industry and hasbeen with the cooperative since 1997.He has been president since 2005.Chris is based in Arden Hills, Minn.www.landolakesinc.com MARCH/APRIL 2011 5

PERSPECTIVESCHAIRMAN’S COLUMN by Pete KappelmanCelebrating 90 Yearsof CooperationAnniversary marks “Proud Heritage” and “Powerful Future”This year’s Annual Meeting wasspecial because it gave membersthe opportunity to come togetherand celebrate the cooperative’s90th anniversary. That’s a milestonefor any organization, and it speaks to thestrength of our cooperative structure andmembers’ commitment to be active and involvedparticipants.When we look at what makesLand O’Lakes such an extraordinary organization,it starts with our OperatingPrinciples, which state:“Land O’Lakes is a business organizationfocused on creating value for member-ownersthrough superior financialperformance.”At first glance, this statement may notseem very different than the missionsof non-cooperative organizations. Likethose companies, Land O’Lakes is abusiness … in our case a producerownedbusiness, but a business firstand foremost.At the same time, our OperatingPrinciples acknowledge that, as a cooperative,Land O’Lakes is different, withunique responsibilities to its members. Inmy remarks at the Annual Meeting, I talkedabout some of the ways Land O’Lakesserves members – doing things for us thatwe couldn’t do on our own.Direct benefits, marketplace accessand business supportI believe the most basic expectationmembers should have of their co-op is thatit will add value for them. Members shouldbe able to see the difference between operatingalone and operating as a part of alarger organization that spans the farm-tomarketspectrum.One big difference is the record $125million in cash Land O’Lakes returnedto members in 2010, and the nearly half abillion dollars it has returned to membersMembers should be ableto see the differencebetween operating alone andoperating as a part of a largerorganization that spans thefarm-to-market spectrum.over the past five years. We all operate ina changing, volatile marketplace. And thestrong, consistent return Land O’Lakeshas delivered has been especially welcomeduring these troubled economic times.There are also the benefits that we sometimestake for granted – like access to themarketplace. Not long ago, when the valueof cooperatives was being examined in listeningsessions conducted by the USDAand the Department of Justice, one of thestrongest data points was that without cooperativemembership, producer-ownerswould participate in only about 5 percent ofthe industry value chain. As Land O’Lakesmembers, we are connected to and capturevalue from a much broader portion of thatvalue chain.On the Dairy side of the business,Land O’Lakes provides a reliable homefor member milk and adds value to thatmilk through product innovation. The cooperativealso provides expertise and servicesthat help members manage risk andimprove on-farm quality, productivity andprofitability.On the Ag Services side of the business,Land O’Lakes helps member cooperativesbuild competitive advantage. The BusinessDevelopment Services (BDS) team, whichwas formed about two years ago, is workingclosely with co-op members to determinehow BDS can best serve their needs.Navigating the political landscapeWhen I speak as a dairy producer, myvoice is one of many. But when I representLand O’Lakes members, my voicecarries the weight of 3,000 dairy producers,1,000 member-co-ops and the300,000 members they represent. So, it’seasy to see that when I knock on the door6 growingtogether www.landolakesinc.com

of a legislator in Washington or the statehouse,I have much more influence withthe weight of Land O’Lakes behind me.As politics and legislation increasinglyaffect our businesses, Land O’Lakesis ramping up its activity in the politicalarena. We have a full-time governmentrelations staff representing members’interests; we play leadership roles in keyindustry associations; and – very importantly– Land O’Lakes promotes memberinvolvement in advocacy. Having participatedin a number of visits to CapitolHill, I’ve seen first-hand that when producersspeak, legislators listen. We bringreal-world experience and credibility tothe conversation about agriculture issues,and this grassroots advocacy can bevery effective.Last year, for example, the BDS teambrought more than 100 local cooperativemanagers and board members toWashington, D.C., for issues briefings anddiscussions with key elected officials andstaff. A spring Board meeting was held inthe nation’s capital, where we had the opportunityto advocate for members and thecooperative system. And our Policies andResolutions Committee took a proactiveapproach to advocacy, particularly duringits summer meeting in Washington. Theissues discussed included food safety, environmentalregulation, trade policy, childnutrition, energy, transportation and farmincome security, to name a few.Our involvement with industry associationsgives Land O’Lakes an even strongervoice on a broad range of industryissues. For example, this past yearLand O’Lakes worked with NationalMilk Producers Federation onFoundation for the Future, a comprehensiveset of policy proposals that areintended to provide greater stabilityin the dairy industry (see related storyon page 28). We also played a key rolein developing the Farmers AssuringPresident and CEO Chris Policinski catches up with Board member Rich Ritchey of Columbus, Ne., andformer Land O’Lakes Board chairman Stan Zylstra.Responsible Management (FARM) animalcare initiative, which is now beingimplemented throughout Land O’Lakes.Contributing to societyThe final area I’ll mention is the abilityof our cooperative to contribute tothe communities in which we live andwork, mainly through the Land O’LakesFoundation, as well as the broader globalcommunity through our internationaldevelopment efforts.In the U.S., over the past 10 years,Land O’Lakes has given $22 million inOur involvement withindustry associations givesLand O’Lakes an even strongervoice on a broad range ofindustry issues.cash and $7 million in “in-kind” contributionsto worthy organizations. In 2010,grants, contributions and in-kind givingtotaled $3.5 million. Hundreds of ruralcommunities have benefited from thesecontributions, including the Meals onWheels program in Somerset, Pa.; fundingfor fire-fighting equipment for Arcadia,Iowa; and Hanford, California’s CountyFair 4-H Dairy Barn.Our International DevelopmentDivision (IDD) has provided economicdevelopment and humanitarian assistancein developing nations for 30 years.IDD has facilitated 260 developmentprojects in 76 countries – feeding millionsof people, and enabling millionsmore to feed themselves by buildingagricultural infrastructure, know-howand capability.In all these ways, Land O’Lakes createsvalue for members. As I said at the AnnualMeeting, most organizations don’t endurefor 90 years – and fewer still continue togrow in size, scale and relevance. So as wecelebrate our 90th anniversary, we can beproud of our heritage and confident aboutour powerful future. ■Pete is the chairman of the Land O’LakesBoard of Directors. He milks 420 Holsteinsand farms 1,200 acres of crops inTwo Rivers, Wis.www.landolakesinc.com MARCH/APRIL 2011 7

2010FINANCIALSFINANCIAL NEWSContinuing to Deliver for MembersLand O’Lakes reports 2010 financial results, record cash payouts to membersLand O’Lakes 2010 financial resultsincluded the company’s secondhighestnet earnings and sales, aswell as record-high cash returnedto members.The company reported net earningsof $178 million, down from 2009’s$209 million, but the second-highest inLand O’Lakes history. Net sales were upfrom 2009 at $11.1 billion, and the companyreturned a record-high $125 millionin cash to members.“The economy created a challengingenvironment for all of our businesses,”commented Land O’Lakes President andCEO Chris Policinski. “We took actionto strengthen our capabilities and competitiveness,which helped Land O'Lakesmanage through these difficult marketplaceconditions. As a result of our intensifiedfocus – and the contributions of our9,000 employees – we delivered strong financialresults for our members.”Policinski said 2010’s financial resultsreflected the strength of Land O’Lakesbrands; solid performance by new, innovativeproducts; a continued focus on operatingefficiency and risk management;and the disciplined pursuit of strategicgrowth initiatives.He highlighted the record-high cash returnedto members in 2010. “The economicdownturn has created financialWe took action tostrengthen our capabilitiesand competitiveness, whichhelped Land O’Lakes managethrough these difficultmarketplace conditions.– Chris Policinskistress for many of our members. It’s particularlyimportant that we maintainedstrong performance and delivered record-highreturns. This reflects our commitmentto serving our members by deliveringsubstantial value.”In 2010, the cooperative improved itsmarket position in key segments, includingbranded butter, deli cheese, seed,crop protection products, young animalmilk replacers, premium lifestyle feedand value-added livestock feed.Earnings for 2010 benefited from $6million in unrealized hedging gains (asof Dec. 31, 2010), while 2009’s net earningswere impacted by $37 million in unrealizedhedging gains (as of year-end2009). Unrealized hedging is more anindicator of market conditions at a giventime than of performance.Total balance sheet debt, including capitalleases, was $618 million at year-end, a$76 million (11 percent) reduction versusDec. 31, 2009. The company also improvedits long-term debt-to-capital ratio, whichwas 32.5 percent as of Dec. 31, 2010, comparedto 33.7 percent as of Dec. 31, 2009.Business UnitsDairy FoodsLand O’Lakes Dairy Foods business reportedpretax earnings of $50.3 million forthe year, compared to $61.0 million in pretaxearnings for 2009. Dairy Foods 2010results include a $4.2 million unrealizedhedging gain position as of Dec. 31, 2010,while 2009’s results included $13.0 millionin unrealized hedging gains.While Dairy Foods volumes weremixed, margins were strong nearlyacross the board. Dairy Foods sales forthe year totaled $3.7 billion, comparedto $3.2 billion in 2009.Notably, volume was up in the company’sflagship branded butter despite a veryprice-conscious market, a reflection of thestrength of the LAND O LAKES brand.Innovative products like LAND O LAKES®Butter with Olive Oil also performed well,and Land O’Lakes Foodservice businessoutperformed the industry (led by a significantincrease in school segment volume).While volumes were down in the ConsumerCheese category, Land O’Lakes built on itsleading position in Deli Cheese.8 growingtogether www.landolakesinc.com

FeedThe company’s Feed business reported$22.1 million in 2010 pretax earnings,compared to $29.8 million in 2009. Feedresults for 2010 include a $2.6 millionunrealized hedging gain, compared to an$18.4 million unrealized hedging gain asof Dec. 31, 2009. Earnings for 2010 alsoinclude a $14 million asset-sale gain.Earnings were impacted by an uncertaineconomy and continued stress in dairy andlivestock agriculture, which led to reducedvolumes and a lower-priced product mix.Feed sales for 2010 were $3.3 billion, downslightly from $3.4 billion in 2009. Volumewas down significantly in the Livestock segment,while relatively flat in Lifestyle, MilkReplacers and Feed Ingredients.Premium Lifestyle feeds, value-addedLivestock feeds and the company’s industry-leadingyoung animal Milk Replacers allThe company reported 2010 sales of$510 million in the shell eggs business,compared to $523 million in 2009. Whileoverall volume was down, volume was up inhigher-value branded and specialty eggs,led by LAND O LAKES branded eggs.Crop Inputs (Seed, Crop Protection Products,Retail Agronomy Solutions)In 2010, the company’s Crop Inputsbusiness – Winfield Solutions, LLC – reported$144.8 million in pretax earnings,versus $138.8 million in pretax earningsfor 2009. Results for Crop Inputs in2010 include a $1.9 million unrealizedHIGHLIGHTS OF 2010hedging loss, while 2009 results includeunrealized hedging gain of $11.1 million.Crop Input sales for 2010 were $3.7 billion,versus sales of $3.3 billion in 2009,despite overall devaluation in the category.Volumes were strong across the board, withan increase in Crop Protection Products, aswell as nearly all Seed categories.The company also continued to deliverindustry-leading crop production insightsand information, with more than 20,000growers and 6,000 sellers participatingin crop production knowledge-sharingevents at Winfield Solutions more than150 Answer Plot® locations. ■2010 2009Earnings were impacted byan uncertain economy andcontinued stress in dairy andlivestock agriculture, whichled to reduced volumes anda lower-priced product mix.performed well, reflecting Land O’LakesPurina Feed’s continued commitment toanimal nutrition research and development.Layers/EggsThe company’s Layers/Eggs business,MoArk, LLC, reported a $27.2 millionpretax loss for 2010, compared to a $2.8million pretax loss one year ago. Earningsfor 2010 include the impact of a $27 millionlitigation-related charge, while 2009earnings include a $12 million asset-salegain. Without those one-time events, 2010operating results would be improved over2009. Unrealized hedging impacts in thisbusiness were not significant.For the Year: ($ in thousands)Net sales $11,146,375 $10,408,509Net earnings 178,139 209,100Allocated patronage equities 137,798 151,913Cash returned to members 124,620 108,266At Year End: ($ in thousands)Total assets $4,884,664 $4,923,575Working capital 584,673 527,615Long-term debt 528,781 530,472Equities 1,097,680 1,041,927Financial Measures:Return on equity 17.2% 21.4%Return on invested capital 11.9% 12.1%Long-term debt-to-capital 32.5% 33.7%Current ratio 1.20 1.18Membership:Member associations 945 980Individual members 4,460 4,638www.landolakesinc.com MARCH/APRIL 2011 9

PROFILESKEITH NEWHOUSE, Director of Sustainability, Land O’Lakes, Arden Hills, MNNewhouse Takes the Leadon Journey to SustainabilityRotating position helps drive Land O’Lakes sustainability strategyAccording to Keith Newhouse,“Sustainability is a journey,not a single event,” and he’llcontinue to share this mantrain his new role as Land O’Lakes directorof Sustainability. In November 2010,Newhouse took on this rotating position tohelp bolster the company’s growing effortsto support sustainable business practices.“Land O’Lakes has a long and great traditionof being close to the land, and connectedthrough the entire food chain from the foodand feed that our members produce to theLand O’Lakes brands that consumers buyfrom the grocery shelf,” Newhouse said.Newhouse has been with Land O’Lakesfor more than 10 years, and has served invarious leadership roles throughout theorganization – his previous position wasdirector of Business Development forWinfield Solutions. His background in agriculturedates back to his childhood growingup on the family farm in northeastern Iowa.Being a member of a 4-H club and FFAhelped Newhouse foster an interest in thefuture of agriculture. His parents encouragedall seven kids to attend college – Keithwent to Iowa State University (ISU), wherehe received a bachelor’s degree in botany.Following graduation, Newhouse heldjobs in seed research and ran an animalnutrition laboratory. He went on to pursuea master’s degree in Genetics at ISU. Afterspending 18 months milking cows back atthe family farm, he returned to ISU to geta doctorate in plant breeding and genetics.“I’m excited to bring my background inagricultural production and in creatingnew business initiatives to this position,”Newhouse said. “The emergenceof consumer interest in understandingthe relationship that food production haswith the environment is perfectly alignedwith Land O’Lakes values of People,Performance, Customer Commitment,Quality and Integrity.”In his new role, Newhouse will lead theLand O’Lakes Sustainability Council andcontinue to strengthen its strategy; leadand facilitate company-wide environmentalsustainability initiatives; representLand O’Lakes at key forums and events;act as Land O’Lakes internal and externalsustainability point person; and provideregular progress reports to the SeniorSteering Team.“Acting in a sustainable fashion is in theDNA of Land O’Lakes, but we need tocontinue to reduce our impact and moreeffectively communicate our actions externally,”he added. “Each of our businessareas – food, feed and agricultural inputs– are taking somewhat different actions inimplementing sustainability practices andmessages. I hope to create an interactiveteam environment to properly address thegoals and needs for our individual businessesand for our overall corporation.”Newhouse will focus on how sustainabilityfits alongside the corporate TotalMargin Management plan. And he willwork to determine how the Land O’Lakesbusiness units’ different sustainabilityneeds and opportunities can be recognizedin the business planning process.Newhouse took over the role fromTim Makens, who has returned to theFeed business as director of IncomeOptimization and Strategic ImperativeImplementation. Makens made a strongcontribution to the Land O’Lakes sustainabilityvision, including expandingthe Corporate Sustainability Report,formalizing the organizational structure,and creating a company-widesustainability scorecard. ■Keith Newhouse, the new director of Sustainabilityfor Land O’Lakes.10 growingtogether www.landolakesinc.com

LAND O’LAKES EXECUTIVE AGRIBUSINESS PROGRAM (LEAP), Arden Hills, MNCo-op Leaders LEAP ForwardLand O’Lakes leadership development program teaches fundamentalsof business successdedication and commitmentthat Land O’Lakes andPurdue University showed“Thewas very impressive – morethan I expected,” said Jon Setterdahl,one of three employees from FarmersCooperative Co. (FC) in Ames, Iowa, tograduate from the inaugural Land O’LakesExecutive Agribusiness Program (LEAP).Introduced in 2009, LEAP is an executivedevelopment program for senior-levelco-op leaders and their managementteams. Jointly developed by Land O'Lakesand Purdue University – Center forFood and Agricultural Business, the programincludes three classroom residencysessions, Internet-based sessions and aninternational session in Argentina.Taught by a mix of renowned Purdue professors,external experts and Land O’Lakespractitioners, curriculum topics include:• Business Strategy and Planning• Economics, Policy and Trade• Financial Management• Sales and Marketing Management• Human Resources Management andOrganizational Behavior“The program provided an excellent opportunityto interact with top management fromother co-ops,” said Devin Mogler, vice presidentof agronomy operations for FC and LEAPgraduate. “Exposure to all of the extremely intelligentpeople both enrolled in and teachingthe class was tremendously beneficial.”Capping off their classroomlearning, students were requiredto complete a Pinnacle Project– a project that tackles real andmeaningful business challengesand contributes to the students’co-op success.The FC Pinnacle Project involveddetermining what farmingwill look like in 2025. By looking aheadat the agricultural landscape, the three participantsbelieve they can help their co-optake the necessary steps to be prepared andstay competitive.To gather the information, the third memberof the FC’s graduating class, ChiefFinancial Officer Mark Miner, said theteam completed a series of farmer and coopmember surveys, consulted with industryand legislative experts, and examinedexisting data, including a Purdue Universitylarge-grower survey.As a result of the research, they concludedthat industry consolidation would continue,with large farmers accounting for a greatershare of available acres. The data indicatedthat these producers will require differentproducts and services than other segments,including custom application of crop nutrientproducts and perhaps custom plantingand harvesting.“We feel we need to gain a better understandingof who our customers are, sowe can provide specialized products andFrom left to right: Gene Traxler, Land O’Lakes BusinessDevelopment Services, joins FC LEAP participants MarkMiner, Devin Mogler, and Jon Setterdahl.services to this growing segment of producers,”Mogler said.The FC graduates said their cooperativemanagement team definitely recognizedthe benefits of the program. “Our managementand board were supportive throughoutthe entire program,” Setterdahl said. “Eachtime we came back from Purdue they wanteda full report, and we were invited to presentour Pinnacle Project findings to the board.”Combining classroom learning withhands-on application and internationalbusiness experiences, the three graduatessaid the LEAP program is a necessary toolfor any senior leader looking to positionthemselves and their cooperative for futuregrowth and success. ■To Find Out MoreThe second LEAP class will complete theprogram in September 2011. For more information,contact a Business DevelopmentManager. Go to www.landolakesinc.com andclick Members, then click Business DevelopmentServices in the left-hand navigation.www.landolakesinc.com MARCH/APRIL 2011 11

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PROFILESSARA MORTIMORE, Vice President of Quality Assurance and Regulatory Affairs, Land O’Lakes, Arden Hills, MNLand O’Lakes in Forefrontof Food SafetyCooperative invests in people and plants to meet greater foodsafety expectations of customers and CongressSalmonella, E.coli, Listeria: these microorganismshave become householdwords due to food safety scaresin recent years. “The food industryhas been under intense scrutiny by consumersand regulators, and that has led to achange in expectations,” said Land O’LakesVice President of Quality Assurance andRegulatory Affairs Sara Mortimore.In fact, Congress passed the first comprehensivefood safety bill in 72 years, whichthe president signed into law early this year.The legislation, known as the Food SafetyModernization Act, requires companiesto implement written food safety plans thatwill be subject to inspection by the Food andDrug Administration (FDA). It authorizesrecalls of tainted food products instead ofrelying on voluntary recalls, and calls formore inspections of food facilities.Maintaining trust top priority“Maintaining our consumers’ and customers’trust when it comes to a safe foodsupply continues to be our highest priority– there’s no margin for error,” saidMortimore. “We have to protect consumers– both human and animal – as well asour brands and our industry.”In addition to protecting health, focusingon food safety makes business sense.Land O’Lakes President and CEO ChrisPolicinski said in his January/Februarygrowingtogether column, “Trust createsvalue.” Mortimore believes Land O’Lakeshas to “get it right the first time” to earnand keep that trust.The cooperative’s quality assurance teamhas been spreading its food safety focus andsharing responsibility for it at all levels inthe feed and dairy foods manufacturing system.“Land O’Lakes has been a leader in thisarea,” Mortimore noted. “We share ideasand develop solutions with all those involvedin our plants. We all own the ‘Q’ in quality.”Just as member dairy farms have to meetGrade A standards for milk, the cooperative’sdairy plants now are required to meet GlobalFood Safety Initiative (GFSI) productionstandards. The certification process includesa rigorous review by an independent auditor.Feed operations also undergo annual auditsthat measure product safety compliance.Investing in preventionWhile Land O’Lakes has a strong track recordin food safety, it’s not resting on its laurels,“We’re investing in people and plantsacross our business,” Mortimore said. Sheand her staff teach a three-day class on foodsafety and the Hazard Analysis CriticalControl Point (HACCP) system to help employeesanalyze and control food safety risks.“HACCP is a straightforward, common-sensesystem that helps you think about what couldgo wrong and then figure out ways to preventit,” she said. “It takes a cooperative effort toassess and address all the potential risks.”Mortimore said the cost of a food safetyfailure is much greater than the cost ofprevention, based on the business andpublic relations costs of a product recall.Even if your product or commodity escapeswithout major damage to your reputation,she said, it can take years for salesto rebound and often companies go out ofbusiness, as in the case of the peanut butterrecall due to salmonella in 2009.“Quality is what sets Land O’Lakesbrands apart,” Mortimore said, “and foodsafety is the foundation for all the quality attributesthat create value for customers andmember-owners.” ■Sara Mortimore is vice presidentof Quality Assurance and RegulatoryAffairs for Land O’Lakes. Sara joinedLand O’Lakes in 2008, after serving nearly20 years in several quality and food safetyroles at General Mills. She is a British citizen,and has lived in the U.S. since 2002.www.landolakesinc.com MARCH/APRIL 2011 13

SUCCESS IN THEMARKETPLACEISSUES UPDATE by Mark McCaslin, President of Forage Genetics InternationalTechnology – A Key toSustainable AgricultureUSDA approval of Roundup Ready ® Alfalfa benefitsgrowers and consumersEarlier this year, the U.S.Department of Agriculture deregulated– for a second time – geneticallyenhanced (GE) alfalfa seeds,called Roundup Ready® alfalfa (RRA).The industry had been waiting for theUSDA decision for three years, while asecond environmental assessment of RRAwas conducted. During the process, morethan 1,000 Land O’Lakes members andother alfalfa growers expressed their supportfor RRA during a public comment period.This was the largest outpouring ofsupport for a GE crop ever, and we appreciategrowers making their voices heard.In late January, when the long-awaiteddecision came, the USDA cleared the wayfor RRA sales in the U.S. and again confirmedthat RRA is a safe, beneficial technology– something many growers haveknown for years.The history of RRARRA was co-developed by ForageGenetics International, a Land O’Lakessubsidiary, and Monsanto. Planting beganin fall 2005, immediately after USDA’sfirst deregulation decision. More than5,500 alfalfa growers planted approximately250,000 acres of RRA hay productionin 48 states before a California courtruled in 2007 that the seed be taken off themarket until the USDA completed a secondenvironmental assessment.Those RRA hay production acres, establishedin 2005-2007, remained in productionafter the injunction. Six years and acouple of million harvests later, we are notaware of a single report of gene flow betweenRoundup Ready® and conventionalor organic alfalfa hay fields. Industry adoptedstewardship programs governingRRA seed production, now evaluated overmultiple years and tens of thousands ofacres, have also been proven effective inmanaging gene flow.This is important, because it clearlyshows that normal alfalfa managementpractices, augmented by stewardshipsafeguards, are effective in managinggene flow and enabling co-existence ofall types of alfalfa crop production. TheUnited States Supreme Court took thatfact into consideration in 2010, when,in a 7 to 1 vote, the Court found that thelower court’s injunction prohibiting thesale of Roundup Ready® alfalfa seeds wasoverly broad.Facts versus fearRoundup Ready® crops – which havebeen approved by the EnvironmentalProtection Agency, the Food and DrugAdministration and the USDA – have along history of safe use over millions ofproduction acres. The economic andenvironmental benefits associated withherbicide tolerance and insect resistancetraits in corn, soy and cotton are welldocumented, and are reflected in thebroad adoption of these traits by growersaround the world. Yet, if you’ve read theRoundup Ready ® crops –which have been approved bythe Environmental ProtectionAgency, the Food andDrug Administration and theUSDA – have a long historyof safe use over millions ofproduction acres.stories in the media it’s clear that thereare conflicting views over the role of biotechnologyin agriculture.There have been numerous claimsthat commercialization of RoundupReady® alfalfa will ruin the organicdairy industry, ignoring the completelack of evidence for gene flow in hayproduction, and that organic dairieshave thrived during a period in whichadoption of GE traits in corn and soybeanhave grown rapidly.14 growingtogether www.landolakesinc.com

It’s easy to find critics of biotechnologyin agriculture, who too often ignore theefficiency and yield benefits of the technology,and the importance of such gainsin making U.S. growers competitive andcapable of feeding a growing global population.Stakeholders seem to be takingsides, with the organic community in onecorner and those who support agriculturaltechnology in another. And the publicis in the middle – trying to sort out factfrom fiction and make good food choicesfor their families.Understanding the factsOne undeniable fact is that the worldpopulation is growing – expected to increasefrom 7 billion people today tomore than 9 billion by 2050. With themajority of the growth taking place inlow-income, developing nations wherehigh-quality land and water are not plentiful,agricultural technology will be keyto doubling the world’s food productionin time to meet the growing demand.GE crops contain unique traits that arenot possible with conventional breedingtechniques. Worldwide, there aremore than 300 million acres of GE cropsgrown by more than 13 million farmersin 25 countries. Improved weed and insectcontrol, increased no-till cultivationand decreased herbicide/insecticide useare grower-reported benefits of this technology.New GE traits that will improveyield, drought tolerance, nutrient use efficiencyand quality are now on the horizon,giving crop producers additionaltools to increase efficiency.U.S. alfalfa growers achieved increasesin forage yield of nearly a ton per acrewith Roundup Ready® alfalfa compared toconventional alfalfa; they also experiencedimproved forage quality due to better weedcontrol, and longer stand life by controllingweed competition. This translates toa benefit of about $115 more per acre comparedto conventional varieties.The advantages for growers are clear.And when America’s farmers are able toachieve greater yields at lower costs, consumersbenefit as well – paying less forfood, including the dairy products andbeef many Americans buy at the grocerystore every week.At a time of economic uncertainty –when many families are struggling, foodprices are on the rise, and we face theNew GE traits that willimprove yield, droughttolerance, nutrient useefficiency and quality are nowon the horizon, giving cropproducers additional toolsto increase efficiency.challenge of feeding a growing world population– it’s essential to give farmers everytool available to provide a safe, economicaland plentiful food supply.The USDA gave growers an importanttool by bringing Roundup Ready® alfalfaback to the U.S. market. But the controversyis far from over. As those of us inagriculture work to bring this debate to ahigher level, it’s important that we presentthe facts and help the public sort outfact from fiction. ■Mark is president of Forage Genetics International,a Land O’Lakes subsidiary and theworld leader in value-added alfalfa genetics.Land O’Lakes MobilizesGrowers and Othersfor RRAAn important factor throughout theRoundup Ready ® alfalfa (RRA) decisionmakingprocess was that the USDA andother policy makers heard from growersand the organizations that support them.Those voices came through loud andclear during the public comment periodfor RRA’s Environmental Impact Statement.But grassroots action played a keyrole throughout the three-year process.Alfalfa growers, dairy farmers, co-opmanagers, elected co-op leaders andLand O’Lakes staff traveled to WashingtonD.C. regularly to make the casefor RRA. Members and staff met withelected leaders, including officials atthe USDA and the department’s Animaland Plant Health Inspection Service(which conducted the environmentalevaluation); the President’s agricultureand science policy advisers in the WhiteHouse; and Senators and Representativeson Capitol Hill.Within Land O’Lakes and ForageGenetics International, a team of staffmembers monitored progress, reportedto members and management, facilitatedmedia interviews and other communications,and generally worked to ensurethat the RRA deregulation decisionwas based on sound science and notunduly delayed by political pressure. Forexample, when opponents recruited theirpolitical allies to prevent deregulation,the Land O’Lakes team mobilized 75members of Congress and key industryorganizations to send a letter to theUSDA expressing support for RRA.Although the effort to bring RRAback to the U.S. market was successful,it highlighted the importance ofadvocacy in an environment wherepolitics can affect the future of a safe,beneficial technology.www.landolakesinc.com MARCH/APRIL 2011 15

SUCCESS IN THEMARKETPLACELEGISLATIVE NEWS by Steven KrikavaSetting the Policy Coursefor 2011Annual Meeting delegates approve Policies & Resolutionson behalf of membershipOne of the important pieces ofbusiness that Land O'Lakesmembers handle at the AnnualMeeting is review and approvalof the Policies & Resolutions. But the actualvoting belies the significant time andenergy that the members of the Policies &Resolutions Committee spend developingthe proposals for delegates.The committee consists of 24Land O'Lakes members who have beenelected to serve in the cooperative’s leadership.The committee members have accessto technical experts within Land O'Lakes tohelp provide analysis and insight on the impactof issues that affect farmers, the cooperativesystem, and Land O'Lakes business.Developing the Policies & Resolutionsis a year-round process. Committee membersmeet in August to receive an updateon the current issues and to begin work onnew and emerging issues. They have an opportunityto get input from other membersthrough late summer and fall. They attendfall membership meetings in November andearly December. Then in mid-December,the committee has a full-day meeting to developproposed positions for the next year.The committee’s proposals are made availableto all members and voting delegates inJanuary. Members who have questions, concerns,amendments, or new resolutions cangive that input up until the Annual Meeting.The committee meets the day before theAnnual Meeting to finalize their report. Theyalso give members a final opportunity for inputthe morning of the meeting. When thecommittee’s report is presented, delegatescan ask questions and debate the proposals.When the discussion is done, they vote, andHere are some highlightsfor 2011:Resolution 1 – New Farm Bill. ThoughCongress isn’t expected to write a new farmbill until 2012, discussion of what should bein that bill has already begun. Land O'Lakesmembers revised their farm bill resolutionto set some parameters on the debate.Resolution 4 – National Dairy Policy.As a member of the National Milk ProducersFederation (NMPF), Land O'Lakes has participatedin a comprehensive and extensiveprocess of coming up with a new approach todairy policy. This resolution puts Land O'Lakesofficially in support of the NMPF’s Foundationfor the Future plan. It shifts dairy policy fromthe current price support and direct paymentsto a margin insurance system.Resolution 10 – Environmental Regulationof Agriculture. With this resolution,Land O'Lakes members are joining many otherag groups in objecting to a series of proposalsfrom the Environmental Protection Agency.These proposals would have a significant impacton agriculture and would duplicate rulesthat already exist to protect the environment.the approved Policies & Resolutions becomeLand O'Lakes policy for the coming year. ■Steven is the director of GovernmentRelations for Land O’Lakes, Inc. He has beenwith the company since 1976, when he washired at Midland Cooperatives. Steve isbased in Arden Hills, Minn.Policy 1 – Cooperative Policy. This policywas amended by our members to include astatement reaffirming the important rolethat cooperatives play in the 21st centuryfood and agriculture system.Policy 2 – Sustainability. Land O'Lakesmembers ratified this policy statementthat commits the cooperative to serving apositive, constructive role in the nationaldiscussion on sustainability, especially as itpertains to agriculture and food production.The development of policies and resolutionsis an example of grassroots activismby the member-owners of the cooperative.They provide insights to how our membersfeel about the issues that affect farmers andthe cooperatives they own and use.For More InfoYou can read the approved Policies &Resolutions on the Land O'Lakes corporatewebsite: www.landolakesinc.com.Click Members in the main navigation,then under “Government Relations” inthe left-hand column, click Resolutionsand/or Policies.Get updates from Steve via Twitter at twitter.com/SPKrikava16 growingtogether www.landolakesinc.com

ECONOMIC OUTLOOK by Tom WegnerA Look at Dairy PricesFundamental market factors drive prices in 2011Economists often look to fundamentalmarket factors when explainingor projecting prices. Fundamentalfactors impacting farm milkprices include weather, number of milkcows, cow productivity and stocks of dairyproducts. Occasionally, these fundamentalfactors line up in a nice way, allowingeconomists and market participants toclearly explain and even project futureprice movements.For example, most analysts attributethe record milk prices experienced in2007-08 to the poor weather conditions inNew Zealand, which reduced the supply ofmilk for exports. Thus, the available milksupply residing on the U.S. market got bidup and effectively allocated dairy productsamong global customers.In the corn market, fundamental factorshave strengthened prices to unprecedentedlevels; a smaller than predictedU.S. crop and low carryover stocks, coupledwith strong demand from both exportcustomers and ethanol plants, has liftedprices to levels well in excess of $7 perbushel. Economists with the Universityof Illinois have developed price scenariosfor next year that rely heavily on assumptionsabout U.S. weather. Their analysisconcludes that under a poor weather scenario,corn prices could average as high as$7 per bushel, while under a good weatherscenario, prices would still average $4.75per bushel. These estimates do not takeinto account the most current reports ofhistorically low levels of corn carryover. Bycomparison, USDA has conservatively estimatedthe corn price will average $5.40per bushel, and the Food and AgriculturalPolicy Research Institute (FAPRI) at theUniversity of Missouri, a major sourceof market analysis for the U.S. Congress,projects a corn price of $5.03 per bushel.Clearly, weather, and its accompanyingimpacts on acreage planted and yield, representsthe major fundamental factor influencingU.S. corn prices in 2011-12.Turning to the dairy markets, the key fundamentalin 2010 was increased internationaldemand, which pulled U.S. dairyproduct prices above 2009 levels andraised farm milk prices above $16. In 2011,USDA projects farm milk prices to top $18as international demand continues to drivedairy prices; the FAPRI projects milk pricesslightly lower at $17.79.Most analysts agree that the large volumeof U.S. cheese stocks do not line upneatly with the current price levels. Cheesestocks have exceeded 1 billion pounds everymonth since March 2010, leading to concernsabout cheese prices weakening in thecoming months as the U.S. approaches theseasonal production flush. Recent futuresseem to reflect this concern.Perhaps the factors underlying the impactof cheese stocks on prices are changing.One of the more difficult aspects of projectingprices is identifying such changesin fundamental factors. For example, thepopularity of pizza in U.S. diets significantlyaltered (for the better) the demandfor cheese. Similarly, the entrance of mega-sizedcheese plants (think Southwestand Hilmar cheese plants processing morethan 5 million pounds of cheese each day),combined with an ever-increasing level ofprice volatility, may have resulted in a desireby customers, suppliers and processorsto hold a larger level of inventory. Inshort, supply chain participants may havebeen consciously choosing to hold more inventory,and that 1 billion pounds of cheesein stocks may not be excessive consideringtoday’s price and processing environment.In summary, fundamental factors supportstrong milk prices and even stronger cornprices for 2011. Livestock producers – especiallydairy producers – need to proactivelytake steps to minimize their exposure to therisk that these two ever-heating markets puton their milk margins over feed costs. ■Tom is the director of Economics and DairyPolicy for Land O’Lakes, Inc. He has beenwith the cooperative since 2005 and holdsa master’s degree in applied economics.Tom is based in Arden Hills, Minn.www.landolakesinc.com MARCH/APRIL 2011 17

The Zonneveld family has been farming in California for more than 50 years. Pictured here are (back): Piet Zonneveld, Corey Zonneveld; (middle): Jack Zonneveld,John Zonneveld Jr.; and (front): Frank Zonneveld and Josh Zonneveld. Not pictured are Andy Zonneveld and John Zonneveld V.The Future of the FarmZonneveld Dairies shows that a multigenerational, family-runoperation is not a thing of the pastWhen John Zonneveld Sr. came to the U.S. fromHolland in 1950, he had $20 in his pocket. Thereweren’t many dairy farms in California’s centralvalley, today an agricultural hub of the U.S. Hestarted milking cows for a Dutch dairyman, getting five gallonsof milk per cow.John Sr. saw how well his boss lived and started saving his money.He was able to put $10,000 down on 300 cows, and the cattleowner carried the loan for the remaining amount while John Sr.rented the facility and paid him back. By 1968, John Sr. had savedup enough money to purchase 20 acres and build his own dairy inLaton, Calif. He brought his 300 cows with him, and the familybusiness has grown in the same location – today milking nearly6,500 cows and farming more than 6,000 acres.All three of John Sr.’s sons worked on the farm growing up. In1970, he gave them the option of joining him in the dairy businessand starting a family corporation. “We sold the assets to the corporationand continue to pay my father to this day,” said John Jr.PHOTOGRAPHY BY KELLY PETERSEN18 growingtogether www.landolakesinc.com

Josh (left) and John Zonneveld Jr. check in on one of the milking parlors where their 6,500 cows are milkedtwice a day.The success of the business started withthe basics – making sure the cows werehealthy and producing well, and maintainingfinancial strength. “My mom and dadwere always good with money,” said JohnJr. His father kept a journal for each of hissons to track their work on the farm andtheir individual earnings. He paid a percentageof interest from these earningsback into the dairy as investment.From the fifties to the futureJosh Zonneveld – John Jr.’s son and oneof the managers of the dairy today – alwaysknew he wanted to be in the family business.“I have the success and experiencesof my grandfather and my dad to learnfrom. Seeing what they’ve accomplishedmakes me excited to see what we can dofrom here,” he said. Several of Josh’s cousinsand his two brothers also help managethe day-to-day operations of the farm.But farming has changed dramaticallysince the fifties. “It seems like when mygrandpa started the business, the onlything standing in the way of success washard work,” said Josh. “Now we’re heavilyregulated with environmental issuesand permitting problems; there are a lotmore roadblocks.”Success in the future will rely on the nextgeneration of Zonnevelds being resilientto industry challenges, innovative in theircompetitive approach, and as always, extremelyhard-working.“We want to reduce our carbon footprintas much as we can by milking theleast amount of cows and getting the mostamount of milk, while still keeping ourcows healthy,” said John Jr.One of the biggest innovations on theZonnevelds’ farm is a new free stall facilityconstructed six years ago. The free stallsprovide a clean, comfortable place for thecows to rest, and allow plenty of fresh airand California sunshine into the space.“My dad always told me that the one thingyou want to see in your corrals is your ownshadow,” Josh added. Since installing thefree stalls, the dairy has benefited from increasedproduction.Back to the basicsToday the Zonnevelds get nine and a halfgallons of milk from each cow – versusthe 5 gallons 60 years ago. This adds upto nearly 65,000 gallons each day. Part ofthis increase is due to innovations in theindustry that have helped increase productivity,and part of it is the foundationJohn Sr. created that continues to drive theZonneveld Dairies today.“We’ve always strived to reduce inputcosts and get better at the basics,” saidJosh. “That’s a mentality that my grandfatherhas always shared with us.”Aside from the family members, manyZonneveld Dairies employees have workedat the farm for more than 10 years – contributinglong days and hard work to helpthe business thrive. And the second generationof Zonnevelds is carrying on thetradition of reinvestment into the dairy.They’ve established an ag services businessthat the third generation will help runas they carry the business into the future.Both John Jr. and Josh have taken onleadership roles not just on the farm, butalso in the industry. John served on theLand O’Lakes Board of Directors from1999 to 2010. In 2010, Josh joined theLand O’Lakes Ag Executive Council forRegion 3. “The more experiences a persongoes through, the more well-rounded andsuccessful they’ll be,” said Josh.The next generation of Zonnevelds inspiresconfidence in their elders. Josh, hisbrothers and cousins are interested in loweringcosts. They want to make sure that theanimals are healthy, and that every animalproduces well. They make sure that everycow is well cared for, and bred back in timeso she can produce milk into the future.“What’s most exciting is having my familyto come to work with every day,” said Josh.“I grew up running around and playing withmy cousins all day on the farm, so the factthat I’m able to continue that camaraderiein my day-to-day family operation makes thework that much more enjoyable.”John Jr. shares a similar sentiment as hisson. “Most families don’t get this opportunity,”he said. “It’s great to come to workevery day and see our family still workingtogether for a common goal.” ■The Zonneveld farm is home to 20,000 animals,including nearly 3,000 calves.www.landolakesinc.com MARCH/APRIL 2011 19

Farms and animals across the Midwest and East Coast dealt with record snowfalls this winter.Land O’Lakes Weathers the StormMembers keep up milk supply and delivery, even in tough winter conditionsSince 1921, Land O’Lakes has been committed to maintaininga home for member milk. Ninety years later,Land O’Lakes stands firm and continues to deliver onthat commitment – through rain, sleet, and especiallythis winter, through the mountains of snow that hit various partsof the country.The winter of 2010-11 has presented a number of challenges tothe 90-year-old promise, with some areas in the Upper Midwestand East Coast receiving record snowfalls of more than 60 inches.But with the help of experienced dairy producers, dedicatedhaulers and strategically located processing facilities, milk hasbeen produced, transported and processed day-in and day-out.“We have had at least eight storms this winter in our variousregions. Some of these storms included freezing rain before theyhit, and we’ve faced a three-day shutdown of interstates and secondaryroads with absolutely no travel possible,” said Roger Nordtvedt,director of Northwest Food Products Transportation. “But overallwe’ve fared pretty well despite these extreme conditions.”This success has not come by accident, but is the result of carefulplanning and teamwork. The process begins at the farm level,with dairy producers taking the necessary steps to ensure herdcomfort and safety.According to Pennsylvania dairy producer Scott Kreider, partnerof S&A Kreider & Sons, Inc., ensuring herd safety is an ongoingprocess that begins with keeping an eye on the weather report.“When a large storm is forecasted, we check the curtains anddoors on all the barns to make sure they can be closed tight, andwe check that the generators are running well and all fuel tanks20 growingtogether www.landolakesinc.com

A truck picks up milk at Hilltop Dairy in St. Charles, Minn.are full,” he said. “During the storm, weclose up barns to keep snow out of stallsand troughs. We remove snow from thebunker silo and commodity sheds to preventfeed from getting wet, and we tryhard to maintain both feeding and milkingschedules so we do not upset the cows.”These steps not only protect the herdfrom the elements, but also provide thebest opportunity to maintain optimal productionthrough the duration of the storm.With production running on schedule,the next step for producers is to maintaintheir facility’s accessibility.“We have several large four-wheeldrivetractors with plows and chainsthat we prepare in advance of storms,”said Kreider. “We remove snow fromdriveways and around the buildings. Wealso help clear our local roads, if necessary– which, if nothing else, makes theneighbors happy.”By clearing snow from the driveway andarea roads, the producer is making it possiblefor the hauler to pick up and removetheir milk safely – preventing milk frombeing wasted. This effort does not go unnoticedby haulers, and allows them to focuson safely navigating through the stormwhich is not a simple task.“We try and start the routes early, gettinga jump on the storm,” Nordtvedt said.“We also use several different optionsBy clearing snow from thedriveway and area roads,the producer is making itpossible for the hauler topick up and remove their milksafely – preventing milkfrom being wasted.during the storm, including dispatchingadditional drivers and trucks, callingahead to ensure roadways are clear and usinga system called ‘drop and hook,’ whereone driver fills a trailer with milk, drops itoff and returns an empty trailer, while anotherdriver delivers the filled trailer to theprocessing facility.”Successfully producingand transportingmilk are obviously crucialto managing supplythrough a winterstorm, but it is all fornaught if the processingfacility is unable toremain open. For thisreason, it is imperativefor Land O’Lakes dairyfacilities to maintainoperations regardlessof the weather.Land O’Lakes Carlisle Plant ManagerDonald Holtan said the first, and most important,step in doing so is providing a safeenvironment for employees.“From an employee safety standpoint,we make sure we are keeping the parkinglots and sidewalks clear of snow andice,” he said. “In the case of a very severestorm, the plant makes arrangementswith the local inn so, in the event of aheavy snowfall, our employees who havelong commutes have a more convenientplace to stay.”Holtan said this is also beneficial becauseit better guarantees that employees will beable to safely return to work the followingday – thus maintaining plant operations.Once employees are in the buildingsafely, the plant focuses on being readyand able to receive milk upon arrival. Thebest way to do so, according to Holtan, issimply to maintain “business as usual.”“We keep the plant open and are veryflexible to changes in delivery times,” hesaid. “That way, when the haulers showup, we are ready to go.”Although this winter may have presentedmany obstacles, the combination of experience,teamwork and discipline has allowedLand O’Lakes member milk to continue beingproduced, transported and processedeach day – regardless of the forecast. ■Even in deep snowfalls, producers aim to keep the cows on schedule.www.landolakesinc.com MARCH/APRIL 2011 21

GLOBAL FOCUSINTERNATIONAL DEVELOPMENTNote From MalawiEncouraging smallholder development through milk bulking groupsLucy Chimeta’s decision to purchaselivestock insurance for hercow months before its untimelydeath was more than fortuitous;it signaled a paradigm shift. In fact, justtwo years ago, it would have been nearlyimpossible for a struggling smallholderlike Lucy to purchase insurance for herfamily, let alone her cattle. But as a memberof the Magomero Milk Bulking Group(MBG), Lucy found a reliable buyer forher milk and also gained access to a widerange of agricultural inputs and financialservices to improve production.Creating full-service, commercially viableMBGs is a cornerstone of the USAIDfundedMalawi Dairy DevelopmentAlliance (MDDA), as it creates sustainableoutput markets for farmersto generate household income frommilk sales, while also developing viablemarkets for input and service providers.Since January 2007, Land O'LakesInternational Development has workedwith MDDA partners to improve livelihoods,business development servicesand household nutrition for approximately2,600 smallholder farmer-memberswithin 23 MBGs, as well as their15,000 family members, in Malawi’s centraland northern regions.By supporting MBGs, the alliance is alsohelping Malawi’s smallholder dairy industryThe Malawi Dairy Development Alliance supports 23 milk bulking groups.meet local demand, diminishing the country’sheavy reliance on imports. The programis strengthening 14 private sectorinput suppliers and four dairy producer associationsby helping them offer the rightproducts and services, at the right price, toa customer base of MBG members.For example, Land O’Lakes began partneringwith NICO General InsuranceCompany, a Malawian firm, to developan appropriate insurance product tailoredfor local smallholder dairy farmers22 growingtogether www.landolakesinc.com

organized through MBGs in early 2008.By going through MBGs, members cannow access livestock insurance under ablanket policy that reduces the premiumcost per cow, depending on the breed.Lucy Chimeta paid $31 for a one-yearinsurance policy to cover her cross-breedcow, which was producing an average ofSince January 2007,Land O'Lakes InternationalDevelopment has workedwith MDDA partners toimprove livelihoods,business developmentservices and householdnutrition for approximately2,600 smallholderfarmer-members…10 liters a day and providing the familywith $140 a month in earnings. Lucynoted, "The income from the cow allowedme to send my children to school and buyclothing and other food for them, likemeat and eggs that they wouldn’t otherwisehave."Stimulating financial vitalityThe death of Lucy’s cow due to calvingcomplications could have had a disastrousimpact on her family’s quality oflife. But since she had purchased an insurancepolicy, Lucy was able to replacethe cow and even purchase a second femalecalf that is providing the family withadditional milk income.As much as insurance has helped,MDDA beneficiary farmers face additionalchallenges in accessing secureand efficient banking systems to capturemilk proceeds from dairy processors. Tomanage this challenge, Land O'Lakespartnered with NBS Bank to bring a mobilebank to the MBGs, a service thatallowed them to access banking at theirfront door. MDDA is currently workingto integrate cell phone banking into theprogram so that farmers can move andaccess funds more efficiently from remotelocales.The program’s innovative financingmechanisms – such as banking, insuranceand one-time matching grants –stimulate investments in the value chainto boost milk production, and improveherds and animal health.One MDDA grant enabled the firmNdatani Investments to begin sellingthe urea mineral licking blocks anddairy mash feed smallholders desiredto improve their cows’ production. Asa result, Ndatani was able to roll out itsnew Premier Feeds brand of dairy mash,which it now sells to farmers by travelingto MBGs on a weekly basis.As integral as private sector approachesare to the alliance’s success, respondingto smallholders’ demand-driven needs isequally fundamental. For many, the mosturgent need is access to dairy cows. Tomeet this demand, MDDA developed asustainable heifer loan scheme, workedwith the government to formalize correspondingnational policy, expanded theavailability of heifers through breedingservices, and improved animal healthand breeding rates with veterinary care.On average, farmers receiving a singlecow through the MDDA program have increasedtheir incomes by at least $1,454 ayear in a country with an average annualincome of $250.Supporting community healthand prosperityAt the Chitsanzo Milk Bulking Group, 63kilometers south of Lilongwe, the MDDAmodel has been so successful in improvingincomes and food security that its membersare now donating 15 liters of milk each weekto a local childcare center. Their donatedmilk is used to create an enriched porridgefed to at-risk children, with the local communitydonating flour toward the meal.Land O’Lakes provides training on nutrition,milk handling and hygiene to staff andcaregivers at the childcare center.Many MBGs have capitalized on theirsuccess by using the model to diversify investmentstrategies and business lines. Inturn, this has helped insulate the groupsfrom “shock” in the dairy market. For example,Chitsanzo MBG raises funds byselling oil produced through a collectivelyowned oil press that they use to grindnuts and sunflower seeds.The MBG structure provides an excellentvenue for raising awareness ofhealth issues. With funding from the U.S.President's Emergency Plan for AIDSAt the Chitsanzo Milk BulkingGroup, 63 km south ofLilongwe, the MDDA model hasbeen so successful in improvingincomes and food security thatits members are now donating15 liters of milk each week to alocal childcare center.Relief (PEPFAR), MDDA and its partnershave already conducted HIV prevention andeducation efforts at all 23 MBGs. To date, atotal of 2,658 farmers have been reachedthrough behavior change communicationsefforts, of whom 44.6 percent have accessedHIV counseling and testing servicesthrough the program – an access point fornutrition and health awareness that wouldnot have been possible otherwise.This “Note From the Field” was preparedfor the USAID Microenterprise Developmentoffice under the Knowledge-DrivenInternational Development (KDMD) project.This Note is featured on the Microlinks website(link to: http://microlinks.kdid.org/),and in the December 2010 issue of MicrolinksConnections. ■www.landolakesinc.com MARCH/APRIL 2011 23

GLOBAL FOCUSINTERNATIONAL BUSINESSInside the Mindof a Global GrowerQ&A with Carol Kitchen, Vice President of International for Land O’Lakes, Inc.By 2050, food production aroundthe world must increase by 80percent in order to meet thedemands of expanding populations.Much of this growth willtake place in countries like China andBrazil that already produce significantamounts of food. But without the technologyused in the U.S., the world willhave a difficult time meeting this increaseddemand for food.Carol Kitchen leads international business growthfor Land O'Lakes.Land O’Lakes is an expert in agriculturalproductivity and can bring significantadvancements to these markets. Asvice president of International, CarolKitchen helps guide the cooperative’sinternational growth strategy. Here,Kitchen provides growingtogether withsome insights on the importance of thiswork and the ins-and-outs of doing businessaround the globe.Business is conducted differently acrossgeographic boundaries and cultures.How do you make things happen?Generally, there are three things that arefoundational to business success abroad:thorough outside research on particulartopics; networking with contacts in our industries;and spending time in the marketto grasp the nuances within our sectors.The information-gathering ranges acrossmany topics, including cultural practices;financial and regulatory requirements;producer and industry economies; andmarket and customer segments.Many of our international opportunitiesare joint ventures. Why are partnershipsabroad so important?Our feed businesses outside the U.S.are very similar to our U.S. business.The feed industry is local with manycompetitors in a dynamic market; itwould be difficult to understand andrespond to the market needs if we managedthe business from the U.S. Culturaldifferences, including language, makeGenerally, there are threethings that are foundationalto business success abroad:thorough outside research onparticular topics; networkingwith contacts in our industries;and spending time in themarket to grasp the nuanceswithin our sectors.it important to have a local partner tomanage the day-to-day operations ofthe business. And in a joint venture, weshare the risk and capital investment requiredto start up a new business.Has there been a particularly challengingexperience? What was the outcome?The area around one of our plants inChina experienced a significant outbreakin 2010 – a highly contagious diseaserequiring animals to be culled. The24 growingtogether www.landolakesinc.com

outbreak near our plant was so broad that20 percent of the cows in the area wereculled and even quality producers werenot allowing feed salespeople to visittheir farms to avoid contamination fromoutside parties.This outbreak affected the volumesin our business. We responded by continuingto work with those producerswho had healthy cows, demonstratingour understanding of biosecurity issues.We also took a step back to analyzewhat kinds of customers survivedthis disease and developed a new productto reach some new customers toreplace the volume we lost. This newproduct has now added nearly 1,000metric tons per month.What are some of the things youconsider before entering aninternational venture?While international business is rewardingand can bring a lot of growthto our business, there are also risks. Welook at government stability – even inexport opportunities we adapt as appropriate– as well as the ability to complywith all necessary laws and regulations.We also look at background analysis ofpotential partners; employee personaland overall business security; abilityto manage and protect our intellectualproperty; acceptance of our products inthe country, especially around geneticallymodified organisms and technologydrivenproducts; and the reputation ofour partners. As our international businessgrows, we continue to expand ourability to use the appropriate channelsto mitigate these risks.What are some lessons learned increating successful internationalalliances?Patience is required. Growth andemerging markets are more volatile thanmature markets like the U.S. Also, selectinga partner is one of the most importantsteps in the process. Both parties shouldhave complementary things they bring tothe venture, and trust is extremely important.Finally, customers are lookingfor the same things regardless of wherethey are. They want good value, and goodproduct performance that they can see.What do you like best about your job?As much as it is difficult to be awayfrom my family, I have enjoyed getting tosee culture and agriculture in many settings,particularly seeing the advancementof the Chinese dairy industry.Carol Kitchen: VicePresident of International,Land O’Lakes, Inc.Education: Bachelor’s degree in accountancyfrom the University of Illinois; CertifiedPublic Accountant (CPA) in Illinois; MBAfrom the University of Minnesota.Background: Kitchen worked atGROWMARK Inc. for seven years inaccounting, where she gained experiencein the cooperative model with feed, cropinputs and retail stores business. She joinedLand O’Lakes in 1998 in Ontario, and soonbecame the Western Feed Division controller.She then transferred to Shoreview,Minn., where she provided financial analysisThese advances have a direct impact oneveryday peoples’ lives.I like the opportunity to create new opportunitiesfor Land O’Lakes, as well as for localproducers, by taking things that we haveAs much as it is difficult tobe away from my family,I have enjoyed getting to seeculture and agriculture inmany settings, particularlyseeing the advancement ofthe Chinese dairy industry.developed or learned in the U.S. and applyingthem in different markets. I get to useall the skills I have developed – from financialto management to marketing – to movefrom an idea to an operating business. ■and support to several areas in Feed beforetransitioning into strategy and long-termplanning. Kitchen then ran the Land O’LakesB2B businesses (premix, lab diet, plasma,and international) – all with internationalcomponents, either export sales or importingkey ingredients.Personal passions: Reading, working outand family.Area of international growth she’s mostinterested in: Brazil. “This is such a huge agmarket, and is a huge player on the globalstage. It seems like a great opportunity forLand O’Lakes,” she said.Fun fact: Kitchen grew up on a corn andsoybean farm in Illinois.www.landolakesinc.com MARCH/APRIL 2011 25

CO-OP NEWSNews HeadlinesLand O’Lakes Annual Meeting recap, Business Development Servicesleadership conference, Foundation for the Future update and other newsAnnual Meeting RecapLand O’Lakes hosted approximately 1,000members, delegates and visitors at its 90thAnnual Meeting in Minneapolis on March 2.The three-day event included financial andoperating reports, as well as meetings for theBoard, Policies and Resolutions Committee,Land O’Lakes Foundation and Executive Council.It also featured a variety of guest speakers, aspecial event for members and dairy productsamplings. At the general session and businessmeeting, voting delegates elected two newdirectors to the Board, and ratified 21 resolutionsand 17 policy statements to guide the newLand O’Lakes lobbying platform.This year’s event observed Land O’Lakes 90-year history, with an appropriately-titled themeof “Proud Heritage, Powerful Future.” The themerecognized the cooperative’s efforts in linkingmembers to the most advanced productioninsights and technologies, and linking the farmto the marketplace.“As Land O’Lakes members, we are linked toa proud heritage and to the cooperative membersand leaders who have gone before us,” saidLand O’Lakes Board Chairman Pete Kappelman.“We are linked to a powerful future andto working together to help chart a course forcontinued growth and performance.”Keynote Speaker Dan Glickman, former U.S.Secretary of Agriculture, shared his thoughtson increasing food productivity in the faceof budget and environmental challenges. Hediscussed the need to conserve resources tokeep pace with an ever-growing populationand how technology will impact the future ofAg production.Chairman Pete Kappelman along with his wife, Shellie, and daughters Bethany (left) and Erin (right), getan old-fashioned family snapshot at the Annual Meeting special event. The photo represents the thirdand fourth generations of Land O'Lakes cooperative system membership for the Kappelman family.Meeting attendees check out the Land O’Lakessocial media network at the Special Event.26 growingtogether www.landolakesinc.com

25 Years of CooperativeServiceEach year, Land O’Lakes recognizeslocal co-op general managers and CEOsfor service of 25 years or more to thecooperative system. During the 2011Annual Meeting Cooperative ManagersLuncheon, 10 members were recognizedfor their service.Board member Mark Clark of Rollingstone, Minn., and Co-op Leadership 101 participant Deborah Errett ofUrbana, Ohio, dig into the snacks during a break.For the second year, all activities were held atthe Hilton Minneapolis hotel, with more than 50members participating in the Growing Our Future:Co-op Leadership 101 Conference, designedas an introduction to cooperative leadership,principles, history and involvement. ■Glickman Addresses“Critical Time” inAgricultureTo Find Out MoreLearn more about the Annual Meeting andwatch videos of meeting presentations atwww.landolakesinc.com. Click 2011 AnnualMeeting Video Recaps under "Quick Links."Former U.S. Secretary of AgricultureDan Glickman gave a keynote address atthe Annual Meeting, covering a wide rangeof topics. Here are some highlights:Economics of Food Production: “Theera of cheap food has come to an end,”Glickman said. “Consider the rising demandin China, India and many parts of thedeveloping world; a dietary shift towardmeat, dairy and vegetables; increased useof corn as a fuel; population growth in theworld; and the falling dollar. We are in for along period of sustained higher prices andgreater supply problems with respect topopulation issues of the world.”Focus on Policy Intensifies: The focuson agriculture and food policy is intensifying– “now nearing the top of the worldagenda, along with such issues as nationalsecurity, terrorism, energy and education,”Glickman said.“On one hand, it’s good to raise theawareness and importance of these issuesamong the broader public. On the otherhand, there will be a lot more people playingin this sandbox,” he said, indicating theimportance of being engaged in agriculturepolicy and helping educate those who influencethe policy.The Role of Technology: Glickmanechoed other speakers when he noted theimportance of technological innovation.“We need to pursue all the technologicalopportunities available to us – from newexotic technologies, genetic engineeringand biotechnology, as well as more traditionaltechnologies, like better irrigationtechniques, more examination of postharvestloss, and traditional seeds as wellas hybrids.” ■Kent ApplerViafieldMarble Rock, IowaKirk CarlsonRoaring Fork ValleyCo-opCarbondale, Co.Dan DeRoucheyBerthold FarmersElevator Co.Berthold, N.D.Jerry FuchsCreative EnergyJamestown, N.D.Jimmy RoppoloFarmersCooperativeEl Campo, TexasAlan ScherrFarmers Union OilCompanyMohall, N.D.George SecorSunriseCooperativeFremont, OhioRoger ShawDedhamCooperativeAssociationDedham, IowaJoseph VarilekCo-op Farmers, Inc.Tyndall, S.D.Steve ZutzAgri-PartnersCooperativeBrillion, Wis.Kent Appler and Steve Zutz were presentedwith commemorative watches at the AnnualMeeting for their 25 years of service. Fromleft to right: Chris Policinski, president andCEO of Land O’Lakes; Kent Appler, Viafield;Steve Zutz, Agri-Partners Cooperative;and Karen Grabow, senior vice presidentof Business Development Services andGovernment Relations for Land O’Lakes.www.landolakesinc.com MARCH/APRIL 2011 27

CO-OP NEWSRobert ThompsonSelected for DistinguishedService AwardA Land O’Lakes Advisory Board Memberreceived top industry recognition from theAmerican Farm Bureau Federation (AFBF).Robert Thompson, retired Gardner EndowedChair in Agricultural Policy at the Universityof Illinois, received the Distinguished Serviceto Agriculture Award – the highest honor presentedby the AFBF.Raised on a dairy farm in New York, Thompsonhas served more than 40 years in theagriculture industry. He formerly served asdean of agriculture at Purdue University andassistant secretary of Agriculture at USDA. Hehas dedicated much of his career to agriculturaldevelopment in low-income countries.As an Advisory Member of the Land O’LakesBoard of Directors, Thompson attendscooperative board events and advisesLand O’Lakes executives and Board memberson agricultural policy in the U.S. as well asinternationally.AFBF established the Distinguished ServiceAward to honor individuals who have devotedtheir careers to serving farming and ranching.Go to www.fb.org and select “News Releases"from the Newsroom menu to read more. ■Chris Policinski Speaks atInternational Women’s DayEvent in Washington, D.C.Land O'Lakes President and CEO ChrisPolicinski was a featured speaker at the thirdannual International Women’s Day Breakfast,an event marking the 100th anniversary ofInternational Women's Day, which is celebratedannually on March 8.Land O'Lakes was the corporate sponsor ofthe event, which was coordinated and hosted byWomen Thrive, an organization that advocatesfor policies that benefit and empower womenliving in poverty around the world.The event, held on Capitol Hill, addressedthe issue of global hunger and the role ofU.S. agriculture in feeding a growing worldpopulation. ■National Milk MakesStrides With "Foundationfor the Future"The National Milk Producers Federation(NMPF) took a major step forward with Foundationfor the Future in early March when itsBoard of Directors (including Land O’LakesPresident and CEO Chris Policinski and BoardDirectors Pete Kappelman, Cornell Kasbergenand Tom Wakefield) voted to supportmajor reforms of the Federal Milk MarketingOrder program.The proposal:• Replaces end-product pricing formulas witha competitive milk pricing system.• Incorporates two classes of milk – fluid(Class I) and manufacturing (formerly ClassII, III and IV product uses).• Maintains the “higher of” for establishing thefluid use (Class I) minimum base price.• Maintains current Class I regional differentials.• Maintains the number and basic structureand provisions of Federal Orders.With the approval of the Marketing Order reforms,the Foundation for the Future legislativelanguage has been drafted.In addition to the Milk Marketing Order reform,Foundation for the Future is made up of twoother components for dairy policy reform: aMargin Insurance element and a Price Stabilizationcomponent.Because new Farm Bill legislation is not expectedto be heard until 2012, at the urging ofHouse Agriculture Committee Chairman FrankLucas, NMPF has begun seeking congressionalsupport for Foundation for the Futureindependent from the Farm Bill.Land O’Lakes has been involved closelythroughout this process. The Policies andResolutions Committee will be workingto gain legislator support during the 2011Washington, D.C., fly-ins.For up-to-date news and informationabout Foundation for the Future,visit www.futurefordairy.com. Also,Land O’Lakes has provided a Foundationfor the Future page in the Membersection of www.landolakesinc.com tosummarize the cooperative’s involvementand keep members aware of newpolicy developments. ■Purina Introduces ChallengeCampaignIn March, Purina launched the largest marketingand public relations campaign it has everundertaken to target new customers and engageexisting customers. The campaign will usedirect mail, TV, radio, print, and online vehiclesto reach targeted audiences. You can see one ofthe print ads on page 2.Through the campaign, Purina invites animalowners to take its 60-Day See the DifferenceChallenge to see the difference its feeds makein their animals.Participants can register up to two speciesonline at www.PurinaDifference.com for a 60day trial of Purina ® Feeds. Species includedin the Challenge are horse, flock, rabbit, goat,cattle and show animals. ■Land O’Lakes Teams Up to“Kick Hunger”Food insecurity is an issue affecting more than50 million people nationwide. To help counter this,Land O’Lakes once again teamed up with Cargilland General Mills to sponsor Minnesota WCCORadio’s “Let’s Kick Hunger Day” radiothon benefitingSecond Harvest Heartland and 32 FeedingAmerica food banks through Taste of the NFL.The 13-hour radiothon, which took place inJanuary at the Mall of America in Bloomington,Minn., generated more than $213,000. The eventfeatured past and present NFL players andcoaches, celebrity chefs, and local and nationalmembers of the media.Land O’Lakes employees volunteer to answer phones atthe radiothon, raising funds to prevent hunger.28 growingtogether www.landolakesinc.com

In addition to sponsoring the event,Land O’Lakes volunteers worked throughoutthe event answering phones and working informationbooths at the mall. ■Ag Services Election ChangesIn response to feedback from members, therehave been several governance changes for AgServices region elections in 2011-2012:• The region voting meeting, normally scheduledfor fall 2011, will instead be held at the 2012Annual Meeting. This change will shorten thenomination and election process from 16months to 12 months; eliminate overlap fromone election cycle to the next; and allow sufficienttime for candidate selection and campaigning.Additionally, it reduces the numberof governance meetings held throughout theyear, and does away with the delay from regionnominee election to official corporate election.• Due to the election changes noted above, ExecutiveCouncil and Corporate Board terms willnow both begin and end at the Land O’Lakes AnnualMeeting, rather than at the Fall Meetings.• The regional voting meetings will be held onFeb. 28, 2012. The official election of directorswill occur during the Annual Meeting businessmeeting on February 29. ■Supporting JapanDisaster ReliefLand O’Lakes will contribute up to $20,000to the American Red Cross and SalvationArmy in direct donations and an employee/member match program. The Land O’LakesFoundation has activated its Member CoopMatch Program to provide additionalfinancial contribution through April 30, 2011.Go to www.landolakesinc.com/membersto learn more.Leadership ConferenceFocuses on sharedgrowthBusiness Development Services bringsco-op leaders together to talk aboutbusiness growthRecognizing that Land O’Lakes and membercooperatives’ business growth go hand-in-hand,Land O’Lakes Business Development Services(BDS) hosted its first CEO/General ManagersLeadership Conference under the theme ofsharedgrowth. Leaders from 70 Land O’Lakesmember cooperatives attended the conferencein Nassau, Bahamas, in early 2011.“For our inaugural leadership conference,we wanted to feature growth, which cooperativeCEOs and GMs ranked as a priority whenwe last surveyed them,” said BDS Senior VicePresident Karen Grabow. “Our goal was toshare relevant insights and tools that theco-op leaders could apply to their businessesto strengthen their competitive advantage.”Conference attendees enjoyed traditional Bahamiancuisine and the expansive grounds of the Atlantis Resort.The conference featured a pair of guestspeakers who shared excellent outside-inperspectives. Dr. Allan Gray, director of Centerfor Food and Agricultural Business and MS-MBA in Food and Agribusiness Managementat Purdue University, shared a global outlookfor the agriculture industry. He highlighted,despite the many challenges, the numerousopportunities for growth in agriculture – includingan increased global demand, improvedproduction practices and new opportunities inthe form of renewable fuels.Ted Rouse, senior partner at Bain & Co.,expressed the value of companies definingtheir core customers, products, capabilitiesand cost advantages. Rouse shared examplesof companies that strayed from their core andfell on challenging times, and highlighted companiesthat narrowed their scope, focused ontheir core and achieved meaningful growth.The second session illustrated the importanceof customer experience. ForresterResearch Principal Analyst Megan Burnspresented the results of a recentBDS survey that rated the experienceof 2,700 producer-customers whopurchase from one of six differentLand O’Lakes member co-ops rangingin size and geography.“The findings revealed that customersare generally satisfied with theirinteractions,” Grabow said. “In fact, asa group, the six cooperatives rankedhigher than most industries measuredby Forrester Research in delivering apositive customer experience.”Despite the positive results, Grabowsaid the survey still provided clear insightsinto areas of service opportunity. Burnsagreed and added that there are many areasin which co-ops could improve their customerexperience and explained that, by doing so,they could create a more loyal customer base.Grabow said customer surveys are animportant tool for ensuring cooperativegrowth. “We in BDS continue to grow our surveycapability to help cooperatives understandtheir strengths and opportunities in meetingcustomers’ needs,” she said. “By adding thisoffering to our portfolio, we can help promotesuccess for both individual cooperatives andthe entire federated system.”Taking the survey results a step further,Shaun Smith, partner from Smith & Co.,turned the focus to how co-ops can improvethe customer experience. Smith offereda number of examples of companies thatprovide exceptional customer experience andthe benefits of doing so – such as creatinga dedicated customer base willing to pay apremium and refer others to their business. ■Land O’Lakes CEO Chris Policinski shares the stagewith Ted Rouse, senior partner at Bain & Co.www.landolakesinc.com MARCH/APRIL 2011 29

FROM OURTEST KITCHENSSpring TreatsSPRING CUPCAKE BOUQUETThese pretty cupcakes are made with crushedpineapple and frosted with a creamy orangemarmalade frosting. A prefect way to welcome spring!Preparation time: 45 minutesTotal time: 1 hour 30 minutesCupcakes1 (18.25-ounce) package butter recipeyellow cake mix½ cup LAND O LAKES ® Butter, melted¼ cup water3 eggs1 (8-ounce) can crushed pineapple, undrainedFrosting½ cup LAND O LAKES ® Butter, softened1 (8-ounce) package cream cheese, softened4-4½ cups powdered sugar¼ cup orange marmaladeDecorationsAssorted candies, marshmallows, nuts, decoratorsugars etc.Heat oven to 350°F. Place paper baking cups into 24muffin pan cups; set aside.Combine all cupcake ingredients in large bowl. Beat atlow speed 30 seconds. Increase speed to high; beat, scrapingbowl often, until well mixed.Fill each prepared muffin cup 2 /3 full. Bake for 16 to 19minutes or until toothpick inserted in center comes out clean.Cool 10 minutes in pans; remove to wire cooling rack.Cool completely.Combine ½ cup butter and cream cheese in large bowl. Beatat high speed, scraping bowl often, until creamy. Reduce speed tolow; add 4 cups powdered sugar and marmalade. Beat until wellmixed. Increase speed to high; beat until creamy, addingadditional powdered sugar for desired spreading consistency.Frost cooled cupcakes. Decorate as desired to createflowers. Store covered in refrigerator.TIPS: Make both mini and regular-sized cupcakes for anextra special bouquet. Bake mini cupcakes for 13 to 15 minutes.• Use green licorice and spearmint leaves to create stemsand leaves on plate.• To make daisies, cut large marshmallows into 5 slices. Use roundcandy for center and arrange marshmallow slices around candy.Sprinkle with yellow decorator sugar.Makes 24 cupcakesNutrition Facts (1 cupcake without decorations)Calories 300 • Fat 14g • Cholesterol 55mgSodium 250mg • Carbohydrate 41g Dietary Fiber 0g • Protein 3g©2008 Land O’Lakes, Inc.Find More RecipesGet more recipes, tips and techniques from the Land O’Lakes Test Kitchens atwww.landolakes.com and on Facebook at www.facebook.com/LandOLakes.30 growingtogether www.landolakesinc.com

BUNNY CREAM PUFFSThese delightful cream puff bunnieswill make young and old smile.They taste great too!Preparation time: 1 hourTotal time: 2 hours 35 minutesCream Puffs1 cup water½ cup LAND O LAKES ® Butter1 cup all-purpose flour4 eggsFilling1 (3.3-ounce) package whitechocolate instant puddingand pie filling mix1¼ cups cold milk1 cup whipping cream, whippedDecorationsLarge marshmallows, decorator sugar,toothpicks, vanilla-flavoredcandy-coating (almond bark), melted,mini semi-sweet chocolate chips,black string licorice, cut into thin¾-inch strips, small round pink candies,such as mini candy-covered chocolatepieces, powdered sugar, if desiredHeat oven to 400°F. Combine water andbutter in 2-quart saucepan. Cook over mediumheat until mixture comes to a full boil (4 to 7minutes). Reduce heat to low; stir in flourvigorously until mixture leaves sides of panand forms a ball. Remove from heat. Beatin 1 egg at a time until mixture is smooth.Drop dough by ¼ cupfuls, 3 inches apart,onto ungreased baking sheet. Bake for 35to 40 minutes or until puffed and goldenbrown. Pierce each puff gently with fork toallow steam to escape. Cool completely.Prepare pudding mix, using 1¼ cupsmilk, as directed on package. After puddingis set, gently stir in whipped cream.Cover; refrigerate until serving time.To create bunnies, cut off cream pufftops. Cut large marshmallows crosswiseinto 3 pieces. Dip cut-sides into decoratorsugar for ears. Using toothpicks, attachsugared marshmallows into top of creampuff for ears. Use melted candy coatingto attach chocolate chips for eyes.Just before serving, fill bottom halfof cream puff with 1 /3 cup filling. Presslicorice strips for whiskers and pink candiesfor nose into filling. Place decoratedcream puff top over filling. Sprinklewith powdered sugar, if desired.Makes 12 servingsNutrition Facts (1 serving without decorations)Calories 250 • Fat 18g • Cholesterol 120mgSodium 220mg • Carbohydrate 17gDietary Fiber 0g • Protein 5g©2011 Land O'Lakes, Inc.UMBRELLA BUTTERCOOKIESThese crisp, tender almond-flavoredcut-out cookies are creatively decoratedfor springtime fun.Preparation time: 1 hourTotal time: 3 hours 30 minutesCookie1 cup LAND O LAKES ® Butter, softened1 cup sugar1 egg2 tablespoons milk1 teaspoon almond extract2½ cups all purpose flour1 teaspoon baking powder60 (4-inch) lollipop sticksFrosting3 cups powdered sugar1 /3 cup LAND O LAKES ® Butter, softened1½ teaspoons vanilla2-3 tablespoons milkFood colorDecorationsDecorator candies, as desiredWhite decorator gelColored bendable drinking strawsCombine 1 cup butter, sugar and egg in largebowl. Beat at medium speed until creamy. Add 2tablespoons milk and almond extract. Continuebeating, scraping bowl often, until well mixed.Reduce speed to low; add flour and baking powder.Beat, scraping bowl often, until well mixed.Divide dough into thirds. Shape each thirdinto a ball; flatten slightly. Wrap each in plasticfood wrap; refrigerate until firm (2 to 3 hours).Heat oven to 400°F. Roll out dough, onethirdat a time, on lightly floured surface (keepingremaining dough refrigerated) to ¼-inchthickness. Cut with 3-inch round cookie cutter.Cut each cookie in half, using crinkle cutterif scalloped edge is desired. Place eachcookie, cut-side down, over lollipop stick onungreased cookie sheets; press dough lightlyaround stick to adhere cookie to stick. Bakefor 6 to 10 minutes or until edges are lightlybrowned. Let stand on cookie sheet 1 minute;remove to wire cooling rack. Cool completely.Combine powdered sugar, 1 /3 cup butterand vanilla in medium bowl. Beat atlow speed, adding enough milk for desiredfrosting consistency, until creamy.Tint frosting with food color, as desired.Frost cooled cookies. Decorate as desired.Using white decorator gel, draw 3or 4 horizontal lines across umbrella. Toform umbrella ribs, drag toothpick fromtop center of umbrella down to bottomedge. Let stand until frosting is set.Pull out bendable portion of straws to resembleumbrella. Trim straight portion tosame length as umbrella stick. Slide strawover stick; trim bent end, if necessary.TIPS: If lollipop stick appears to be comingout of base of cookie, spread frostingover stick and let stand until set.• Crinkle cutters can be found in the cookingutensil section of major department stores orcooking specialty shops. This handy kitchengadget can be used for making crinkle cut Frenchfries, carrots and many other food garnishes.Makes 4 dozen cookiesNutrition Facts (1 cookie without decorations)Calories 120 • Fat 5g • Cholesterol 20mgSodium 55mg • Carbohydrate 17gDietary Fiber 0g • Protein 1g©2011 Land O'Lakes, Inc.www.landolakesinc.com MARCH/APRIL 2011 31

TMLand O’Lakes, Inc.PO Box 64101MS 2020St. Paul, MN 55164-0101growingtogether@landolakes.com(800) 328-1341 www.landolakesinc.comFind us on Facebook, search for Land O’Lakes, Inc.Find us on YouTube, search for LandOLakes2010Your field needs itsnutrition, too.A healthy season starts with your plants. AgriSolutionsmicronutrients make sure your plants get the nutrients theyneed, so you get the results you want. And MAX-IN ® technologyensures that micronutrients reach internal leaf structures,increasing the nutrients available to the plant. To learn more, talkto your local agronomist or visit AgriSolutionsInfo.com.AgriSolutions is a trademark and MAX-IN is a registered trademark of Winfield Solutions, LLC.© 2011 Winfield Solutions, LLCMICRONUTRIENTSMicronutrients | Adjuvants | Herbicides | Insecticides | Fungicides | Seed Treatments | Grain Protectants