Growing together with dairy-producer members like Rick Faria, Faria Farms, Tipton, Calif.

The Industrial Group achieved increased efficiencies on the processing side of Land O'Lakes Dairy Foods business in 2001—with particularly strong performance in butter and dry cheese production.

Land O'Lakes continued to make progress upgrading its Upper Midwest dairy infrastructure in 2001, highlighted by the purchase of a cheese plant in Melrose, Minn., and the establishment of Melrose Dairy Proteins LLC, a joint venture with Dairy Farmers of America. In addition, Land O'Lakes formed a cheese-marketing joint venture with Alto Dairy Cooperative in Wisconsin, and formed an alliance with Davisco Foods International, which will lead to Land O'Lakes providing the milk supply to, and marketing the cheese manufactured at, a soon-to-be-constructed, state-of-the-art cheese manufacturing plant in South Dakota.

In the West, construction on a new, world-class joint venture cheese and whey facility in California (with Mitsui of Japan) continued on schedule. In the East, with its recently completed expansion, the Land O'Lakes Carlisle, Pa., facility is establishing itself as the system's lowest-cost butter source.

Land O'Lakes also took steps to improve its ability to serve dairy members' interests in the fluid milk market. In 2001, Land O'Lakes established a new Fluid Milk Supply Division which will proactively represent its dairy producers in the national fluid milk marketing industry by establishing a national presence and a leadership role in serving fluid bottling customers, and by fulfilling a committed, long-term agreement with Dean Foods.