Its year-to-date alfalfa seed sales are down 20%, reports Land O'Lakes, Inc., in its third-quarter financial statement. The farmer-owned cooperative's seed business in general reports a third-quarter, negative $15 million due to seed returns ˗ typical in this quarter ˗ and a pretax loss of $12.9 million. That compares to sales of $45 million and a pretax loss of $7.3 million for the third quarter of 2008. Through September, the company's seed business reported $1.1 billion in sales and $68.9 million in pretax earnings vs $920 million in sales and $47.5 million in pretax earnings one year ago.
Alfalfa seed volume wasn't the only decrease; year-to-date corn volumes were down 7 percent and soybean, 9 percent, compared with those of a year ago. A number of factors contributed to the declines, including a general increase in seed returns, a reduction in planted acres (corn) and weakness in dairy markets (alfalfa), according to Land O'Lakes.
The company's third-quarter net sales totaled $2.2 billion with a net loss for the quarter of $4.3 million as compared to net sales of $2.8 billion and net earnings of $28.6 million for the same quarter one year ago. Year-to-date, Land O'Lakes reported net sales of $7.9 billion and net earnings of $159.8 million, as compared to $9.4 billion and $192.6 million, respectively, for the first three quarters of 2008.
The third-quarter performance was in line with the company’s expectations, with overall year-to-date results affected by a combination of lower commodity prices and a consumer shift toward a lower-priced product mix, says Chris Policinski, Land O’Lakes president and CEO.
“We have performed well in a very challenging economic environment,” Policinski adds. “Our third-quarter performance is typically soft due to seasonal impacts. Year-to-date, we are on track with our projections, and we remain cautiously optimistic about prospects for the fourth quarter. We are maintaining our earlier guidance (earnings projections) for year-end.
“While we have not been immune to the impact of the global recession and 2009’s volatile economic conditions, we have taken a disciplined approach to economic and marketplace challenges and, as a result, have delivered solid results,” he says.
Land O’Lakes total EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) was $288.3 million year-to-date and $34.2 million for the quarter, vs $346.3 million and $73.2 million for the same periods in 2008.
The company is a leading marketer of a full line of dairy-based consumer, foodservice and food ingredient products across the U.S; serves international customers with food and animal feed ingredients; and provides farmers and ranchers with ag services and supplies ˗ feed, seed, and crop protection products.