ARE INCREDIBLE

Land O’Lakes, Inc. is a cooperative that’s nearly 3,000 member-owners strong. We know farmers and ag retailers are at the heart of creating a better world for all. We also know they don’t always get credit for the heroic effort they put forth each day. Farmers represent fewer than 1 percent of the U.S. population yet are responsible for solving some of society’s biggest challenges.

Because our success is tied to our member-owners’ success, we are committed to helping solve these shared challenges through innovative solutions, strong annual performance and by championing agriculture’s true potential. Throughout our system, we know Farmers Are Incredible, and we celebrate the farmers and ag retailers on the front lines working to create a sustainable future, vibrant rural communities and a safe and plentiful food supply.

At Land O’Lakes, our success starts with our members’ success. When inflationary and other pressures increased, we worked to deliver both enterprise and member success. The company performed well, and we closed 2022 with net sales of $19 billion and net earnings of $248 million.

The results reflect market conditions and business agility, with strong performance in Crop Inputs insulating more challenging market conditions in Animal Nutrition and Dairy Foods. WinField United outperformed with a differentiated approach tied to in-season decision making, increased use of insights tied to data and stronger key partnerships. We understand from conversations with you, our retail-owners, that you also had very strong performance. We believe our partnership in technology and insights, as well as our influence with Basics, helped put you in a position to win.

In Animal Nutrition, we experienced the margin compression resulting from the strong crop inputs market. Despite this pressure, we showed solid results and invested for future competitive success. Truterra’s momentum continued as it scaled climate-smart commodities with selection from USDA and built capacity, while expanding new market opportunities.

In the Dairy Foods business, we saw fundamental success in commodity and retail brand volumes, share and new product launches. Additionally, higher milk prices at the farm gate generally resulted in a profitable year for you, our members. Even with these successes, cost pressures tied to dramatic inflationary pressure (transportation rates increased more in the last two years than in the previous 20 years, for example), an inverted powder market and a make allowance that has lagged inflation and hasn’t had an adjustment since 2008, resulted in a loss. We continue to be excited about the growth potential for the Dairy business as per capita consumption of dairy is at the highest it’s been in 30 years and U.S. dairy exports were the largest on record.

Our member-owned cooperative is rooted in communities across the country. The health and vitality of our industry and the communities that we live, work and operate in are vital to our long-term success. That’s why we continue to engage with policymakers in Washington, D.C., and in states across the country to help tackle big challenges and work together to create a better future for everyone.

To that end, our close to 3,000 member-owners and 9,000 employees are united in protecting member equity, supporting short-term profitability and capitalizing on the positive momentum of recent years to drive long-term business growth and shared success. We are committed to building on the collaborative spirit and trust developed over more than 100 years together.