FOCUS ON AG SERVICES

Tom Burmood, Senior Product Manager specializing in corn and sorghum for the Land O’Lakes Seed division has been in the seed business for 30 years. He also coordinates the training and testing answer plot program, and focuses his efforts on delivering the very best product solutions to the farm and field.

MoArk’s good fortune would not have been possible without the organization’s vigilant efforts to reduce costs, capture synergies and leverage the LAND O LAKES brand. The company has moved beyond the test-marketing phase of its higher-margin branded eggs and is experiencing strong sales in the markets where these products are available.

Citing continued growth, particularly in soybean and corn sales, paired with aggressive cost-reduction efforts, the Croplan Genetics division had record sales and earnings before income taxes in 2003. The Seed division has continued its strategy of partnering with local cooperatives to build sales through the delivery of expertise. This strategy continues to pay off because of the cooperative staff’s knowledge of their producers’ operations. An exceptional sales force, great products and efficiently-run operation have propelled Seed to become the third-largest crop seed company in the United States.

Turning to Swine, great headway was made in the restructuring of this business. While significant losses continued, Swine leaders have taken steps to stem future losses by exiting higher-risk ventures. The ultimate goal is to reduce risk, scale and capital usage, while preserving the components of the Swine program that are of greatest value to members.

The Agriliance agronomy joint venture had its third consecutive year of increased earnings.
The division attributes these positive earnings to increased field sales efforts and prudent
resource management.

Agriliance has sharpened its focus by revamping its customer segmentation and marketing approach. It successfully reorganized much of the company, creating a more accurate and responsive organization. AgriSolutions™ product introductions also helped the bottom line. In addition, many other operational and logistical enhancements have been made this past year that will position the company well for the coming growing season.

While 2004 will continue to present challenges similar to last year, the Ag Services group is confident in the progress it has made. Each business is taking the steps necessary to promote long-term stability and performance. Across the board, a sharper focus means getting back to the basics and continuing to build upon past successes.

Board of Directors-->