Tough Farm Economy Fails To Slow Land O’Lakes From Record Earnings Year
Strong gains in its crop inputs business pushed Land O’Lakes Inc., one of the largest food co-ops in the nation, past its record earnings year last year to an all-time earnings high of $320 million in 2016.
Its June 2015 merger with United Suppliers, which produces seed and crop protection products among other things, provided significant sales growth in all three of Land O’Lakes’ business segments, the company said.
The Arden Hills-based food company’s crops inputs and insights business, which provides agriculture products and solutions to farmers, posted the biggest year-over-year gain. Compared to $4.8 billion in sales and nearly $190 million in earnings in 2015, the unit’s sales grew about 15 percent to $5.5 billion with earnings of $203 million.
Overall, Land O’Lakes took in revenues of $13.2 billion for the year. It posted sales declines in its other two units: $3.8 billion in dairy foods (down from $4 billion in 2015) and $3.8 billion in animal nutrition (down from $4.2 billion).
The company’s fourth quarter sales were flat with last year’s result at $3.3 billion. Earnings for the three-month period ending December 31, 2016, totaled $73 million, down from $116 million a year ago.
“We are pleased with another record year, particularly under current market conditions,” said Chris Policinski, chief executive of Land O’Lakes. “We attribute our continued strong performance to our ‘marketplace back’ approach to doing business, which is different from the production orientation of many of our competitors.”
Policinski described the company’s approach as a consumer-, customer- and farmer-facing strategy that has allowed it to develop new “value-added products” and services.
Construction on the food company’s new headquarters is currently underway. Last November, Land O’Lakes broke ground on an $80 million, 155,000-square-foot addition to its Arden Hills space.
The expanded facility will allow for the company to consolidate its workforce, who are spread among three campuses in Arden Hills, Shoreview and Roseville, as well as bring in an additional 200 employees.