In the midst of sagging commodity prices, Land O'Lakes Inc. made more money this year than it did last year.
The Arden Hills-based agribusiness cooperative's mix of businesses helped insulate the company against volatility that many in the commodity foods industry have faced as prices remain low. The three main business divisions within Land O'Lakes are its consumer dairy products, animal feed and crop inputs.
"We have to be competent on the commodity side," said Chris Policinski, Land O'Lakes chief executive. But, he added, the company is still able to grow through its "value-add" philosophy — which leads to consumer-driven product innovation or premium features in animal feed not offered by competitors — that gives the company a footing that is not dependent on the sale of commodity goods.
"This distinction has allowed us to power through the market a little better than others. It is pretty darn important right now," he said.
The co-op said Tuesday it earned $134 million, up 65 percent, off $3.5 billion in sales for the quarter ending in June.
For the first six months of the year, Land O'Lakes said it earned $238 million off $7.1 billion in sales.
In June, Land O'Lakes announced its plans to acquire Ceres Inc., a publicly traded biotech company based in California that develops forage crops, like sorghum and alfalfa. Ceres also makes seeds designed to increase crop productivity and food quality. Land O'Lakes said it will complement its existing forage development business, called Forage Genetics International (FGI).
And last month, Land O'Lakes formed a new business unit focused on sustainable crop production. The co-op hopes the division can guide farmers in tracking the health of their land to prevent fertilizer and chemical runoff into the water system.
