10. PENSION AND OTHER POSTRETIREMENT PLANS

The Company has a defined pension plan, which covers all eligible employees not participating in a labor negotiated plan. Plan benefits are generally based on years of service and employees' highest compensation during five consecutive years of employment. Annual payments to the pension trust fund are determined in compliance with the Employee Retirement Income Security Act (ERISA). The Company also sponsors plans that provide certain health care benefits for retired employees. Employees become eligible for these benefits upon meeting certain age and service requirements. The Company funds only the plans' annual cash requirements. Reconciliation of the funded status of the plans and the amounts included in the balance sheets are as follows:

		Pension Benefits						Other Postretirement Benefits
			2001			2000			2001			2000
Change in benefit obligation:
	Benefit obligation at beginning of year	$	288,267	$		279,726	$		51,530	$		47,679
	Service cost	9,471		9,749			818			794
	Interest cost	21,091		19,931			3,918			3,649
	Plan amendments	750		-			-			3,724
	Actuarial loss (gain)	10,922		(5,139			)	8,112		(579			)
	Benefits paid	(16,821		)	(16,000		)	(5,082		)	(3,737		)
	Benefit obligation at end of year	$	313,680	$		288,267	$		59,296	$		51,530
Change in plan assets:
	Fair value of plan assets at beginning of year	$	304,506	$		284,335	$		-	$		-
	Actual (loss) return on plan assets	(5,702		)	23,171		-			-
	Company contributions	2,000		13,000			5,082			3,737
	Benefits paid	(16,821		)	(16,000		)	(5,082		)	(3,737		)
	Fair value of plan assets at end of year	$	283,983	$		304,506	$		-	$		-
Reconciliation of prepaid (accrued) benefits:
	Funded status	$	(29,697	)	$	16,239	$		(59,296	)	$	(51,530	)
	Unrecognized net actuarial loss	65,591		20,538			28,191			21,405
	Unrecognized transition obligation	-		-			7,071			7,714
	Unrecognized prior service cost	3,823		3,887			3,192			3,458
	Prepaid (accrued) benefit cost	$	39,717	$		40,664	$		(20,842	)	$	(18,953	)
Weighted-average assumptions:
	Discount rate	7.25%		7.50%			7.25%			7.50%
	Expected return on plan assets	9.50%		9.50%			N/A			N/A
	Rate of compensation increase	4.75%		4.75%			N/A			N/A

For measurement purposes, a 6.0% annual rate of increase in the per capita cost of covered health care benefits was assumed for all years. The health care cost trend rate assumption affects the amounts reported. For example, a 1% increase in the assumed trend rate for health care costs would have increased the service cost and the interest cost components of 2001 postretirement health care benefits expense by $0.3 million and the accumulated postretirement benefit obligation by $4.2 million as of December 31, 2001. In contrast, a 1% decrease in the assumed trend rate for health care costs would have decreased the service cost and interest cost components of 2001 postretirement health care benefits expense by $0.2 million and the accumulated postretirement benefit obligation by $3.5 million as of December 31, 2001. Components of net periodic benefit cost are as follows:

	Pension Benefits							Other Postretirement Benefits
		2001		2000		1999		2001		2000		1999
Service cost	$	9,471	$	9,749	$	9,433	$	818	$	794	$	472
Interest cost	21,091		19,931		19,047		3,918		3,649		3,264
Expected return on assets		(28,428	)	(26,916	)	(23,249	)	-	-		-
Amortization of prior service cost	814		814		814		266		266		-
Amortization of actuarial loss	-		-		1,567		1,326		1,346		1,476
Amortization of transition obligation	-		-		-		643		643		643
Net periodic benefit cost	$	2,948	$	3,578	$	7,612	$	6,971	$	6,698	$	5,855

In addition to the defined benefit pension plan, the Company has a noncontributory, supplemental executive retirement plan (SERP), which is an unfunded, defined benefit plan. The projected benefit obligation of the unfunded plan was $14.4 million and $15.7 million at December 31, 2001 and 2000, respectively. The accumulated benefit obligation of this plan and the accrued SERP liability were $13.2 million and $12.8 million at December 31, 2001 and 2000, respectively. Net periodic pension cost was $1.2 million, $1.9 million and $2.3 million for 2001, 2000 and 1999, respectively. Certain eligible employees are covered by defined contribution plans. The expense for these plans was $4.9 million, $5.8 million and $6.8 million for 2001, 2000 and 1999, respectively. As a result of the acquisition of Purina Mills on October 11, 2001, the Company has two additional defined benefit pension plans as of December 31, 2001. As of the November 30, 2001 measurement date, the pension plan for production employees and the discretionary capital accumulation plan had estimated projected benefit obligations of $26.2 million and $24.9 million, respectively. The fair value of assets was $20.9 million and $0.0 million, respectively. At December 31, 2001, the accrued pension liability was $5.3 million and the accrued discretionary capital accumulation liability was $24.9 million.

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