Land O'Lakes Inc. recently announced record annual sales of $14.2 billion, up 4.4% from the prior year, and record net earnings of almost $306 million, a 27% increase over the prior year. The strong 2013 results continue a trend of significant growth during which the farmer-owned, Fortune 200 food and agriculture cooperative has more than doubled annual sales and grown net earnings by more than 330 percent% over the last seven years.
"Our strong 2013 performance builds on our success of the last seven years," said Land O'Lakes Inc., president and chief executive officer Chris Policinski. "The record-setting year in Dairy Foods, combined with the continued strong performance of WinField, exemplify our commitment to delivering the products, programs and services that provide the greatest value for our customers and members alike."
Overall results for 2013 also included a record return of $147 million to members, representing a 30% increase in patronage compared to 2012. This is the fifth consecutive year cash to members has exceeded $100 million, bringing the seven-year total to more than $750 million.
The favorable year-end results were mainly attributed to a 101% year-over-year growth in Land O’ Lakes Dairy Foods’ pretax earnings. Additionally, the company said Crop Inputs had greater than $200 million in pretax earnings for the second consecutive year, and Feed reported a 12% annual sales growth in Companion Animal and a $25 million annual sales increase in Lifestyle Feed compare to 2012.
For the quarter ending December 31, 2013, Land O'Lakes delivered net earnings of $108 million, a 19% increase compared to Q4 2012. Fourth quarter pretax earnings were driven by a 306% increase in Feed, and a 421% increase in Layers compared to Q4 2012.
Land O'Lakes, Inc. Businesses
Dairy Foods generated record pretax earnings of $75 million on sales of $4.5 billion, up 8% from 2012. Land O’ Lakes said Dairy Foods’ highest earnings ever were driven by improved margins on milk powders and butter in Global Dairy Ingredients along with records in sales volume and earnings in its Retail Foods and Foodservice businesses.
Crop Inputs, operated through WinField Solutions, delivered $218 million in pretax earnings on sales of $4.76 billion. The performance in Crop Inputs resulted from the company’s focus on key business segments with strong margins such as herbicides, insecticides and fungicides; seed treatments, adjuvants, micronutrients and plant growth regulators; and corn and alfalfa seed.
Feed, operated through the Purina Animal Nutrition business, delivered $18 million in pretax earnings on sales of $4.77 billion, a 5% increase over 2012. While unfavorable commodity markets and trading results resulted in a decline in year-over-years pretax earnings, Purina's overall volumes in the Lifestyle business increased, including strong advances in the Companion Animal business.
Layers, run by Land O’ Lakes subsidiary Moark LLC, recorded sales of $259 million. Pretax losses of $25 million in 2013 represent a $14 million year-over-year performance improvement compared to 2012. Land O’ Lakes said that while challenges related to supply issues and high feed prices relative to egg prices impacted its Layers business, an extensive focus on cost savings and improved operational efficiency drove the financial improvements in 2013.