Arden Hills, Minn.-Land O’Lakes Inc. on Oct. 26 reported a third-quarter net loss of $16.7 million on sales of $1.6 billion, compared with earnings of $80.4 million on sales of $1.7 billion in the comparable 2005 quarter. Although the company noted improved earnings in its Dairy Foods and Feed segments, the 2006 third-quarter results included a $15 million non-cash impairment charge against the company’s holdings in MoArk LLC. The 2005 results also included an $87.5 million third-quarter pretax gain on the sale of the company’s interest in CF Industries Inc. Year-to-date sales were $5.3 billion with net earnings of $44.2 million, compared with $5.6 billion and $130.6 million, respectively, in the first nine months of 2005, with the year-ago period again benefiting from the $87.5 million pretax gain on the CF sale. Land O’Lakes reported $28.1 million in pretax earnings in Agronomy through September, generated primarily through its 50-percent ownership in the Agriliance joint venture (although Agriliance sales are not included in Land O’Lakes financial reporting). In 2005, Agronomy earnings through September totaled $115.5 million, which included the gain on the CF sale. Factoring out that gain, reported pretax earnings are essentially flat year over year, the company said. Company officials noted that despite the stable earnings, business performance in Agronomy was down somewhat due to reduced volumes in crop nutrients and crop protection products. Both volumes and margins in crop nutrients were depressed by a late planting season and uncertainty early in the year regarding nitrogen prices. These factors were offset by reduced interest assigned to the segment, which benefited from the cash generated from the 2005 sale of CF. For the quarter, Agronomy reported a $4 million pretax loss, compared to $81 million in pretax earnings for the third quarter of 2005. Factoring out the CF gain, Agronomy would have shown a $6.6 million pretax loss for the 2005 third quarter, the company said. Land O’Lakes’ Seed segment reported $607 million in sales and $39.4 million in pretax earnings through September, as compared to $533 million and $31.0 million, respectively, in 2005. For the 2006 third quarter, Seed reported sales of $55 million and a $7.7 million pretax loss, compared to sales of $43 million and $0.4 million in pretax earnings in the third quarter of 2005. Seed volumes through September were up 5 percent in corn, 6 percent in soybeans, and 21 percent in alfalfa. Land O’Lakes said the alfalfa sales growth could be traced in great part to the success of Roundup Ready® alfalfa, developed in collaboration with Monsanto.
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