Policinski

Mr. Chris Policinski
President & CEO
Land O’Lakes, Inc.

Theme of the Meeting
Proud Past
Strong Today
Vibrant Tomorrow

Land O’Lakes
Proud Past
Founded in 1921; cooperative owned by farmer-members; deep roots in the country
Strong Today
Size … $10 billion agriculture and food company
Scope … farm to table
Focus … branded business
Reach … all fifty states, expanding global business,
30 years involvement in international development
Social Responsibility … As a food company,
alleviating hunger is the centerpiece of our
philanthropic efforts
Vibrant Tomorrow
Focused on growth and innovation
Information, insights, expertise key to competitive
advantage

Agriculture / Agribusiness
Proud Past
Amazing productivity story
Strong Today
Producing more, with fewer resources and less impact on the environment
Delivering a safe, accessible affordable food supply
Vibrant Tomorrow
Capacity to capitalize on opportunity as population grows and need for food increases
Challenges to be met
A Call to Action

Proud Past - U.S. Ag Productivity Story
s
Changes in U.S. agricultural output / inputs, since 1948
Index 1948 = 100
Total inputs
2
Total output 1
~250%
Farming practices
Technology
2006
96
84
72
60
1948
In 1930, % of income spent on food was 25%
Today, % of income spent on food is 10%3
In 1930, one farmer fed 10 people
Today, one farmer feeds 155 people
In 1930, agriculture employed 22% of the US workforce
Today, it employs 2%
1 Total output is an aggregation of crop and livestock commodities and related services
2 Total input is an aggregation of land, labor, capital and intermediate inputs like fertilizer, feed and seed
3 Disposable income spent on all food-related purchases, in and out of the home. This number falls to <6% when only home consumption is considered.
SOURCE: Productivity Growth in US Agriculture, USDA (2007); Economic Research Service,
American Farm Bureau Federation

U.S. Ag Productivity
Corn yields
1930 – 20 bushels/acre
Wheat yields
Soybean yields

U.S. Ag Productivity
U.S. Pork Production Per Sow
1960-2001
Domestic
U.S. Milk Production Per Cow
Lbs. per cow

U.S. Ag Productivity Drivers
Adoption of modern business and production management practices on the farm
Development and use of safe, proven agricultural technologies

Strong Today – Productivity AND Sustainability
Dairy - 2007 vs. 1944 … per gallon of
milk used
Used only 10% of the land; 35% of the water
Generated only 24% of the manure; 43% of
the methane
Crops - 2007 vs. 1996 …
Environmental impact of crop protection products reduced by 17% on biotech crop acres
In 2007, reduced on-farm fuel use provided carbon dioxide equivalent to taking 6 million cars off the roads

,
Strong Today – Food Accessibility and Affordability
Food expenditures as a share of disposable personal income
Billion dollars
If we were spending the same
share of disposable personal income on food as in 1930, the U.S. families’ food bill would be $1.6 trillion higher
$1.6 trillion
Food spendingas share of disposable income at1930’s level
Actual U.S. food expenditures
SOURCE: USDA Economic Research Service

Vibrant Tomorrow
The global population is expected to rise from 6.8 billion today to 9 billion by 2050 – and a 70% increase in food production will be required to meet growing need

Vibrant Tomorrow
Well positioned, but plenty of work ahead.
Challenges
Growth
Changing markets / consumer demands /
perceptions
Finite resources … land and water
“Business Pillar” response
Address business fundamentals
Tell agriculture’s story

Business Fundamentals
Get the basics right
Technology; quality
Set aggressive performance goals
Global perspective
Balance short-term demands against
long-term point of view
Generate margin for today’s earnings and a
strong balance sheet

Telling Agriculture’s Story – Irony of Efficiency
Less than 2% of the U.S. population is
directly involved in production agriculture.

Vibrant Tomorrow – Telling Agriculture’s Story
A Call to Action
Improve the image and reputation of agriculture to counter:
Decisions about agriculture being driven by
misinformation, opinion, emotion or even nostalgia
Misinformation and misconceptions about agriculture
and the foods industry
Those who believe there is only one right way to produce
the food needed to feed the world

“The world has the technology, either available or well-advanced in the research pipeline, to feed a population of 10 billion people.The more pertinent question is whether farmers and ranchers will be permitted to use this new technology.”
Dr. Norman Borlaug

Not an “either / or” proposition
We don’t promote a single point-of-view
It’s about choice and co-existence
Protecting producers’ right to choose to
use – or not use – proven, safe, beneficialtechnologies
Protecting consumers’ right to choose from a variety of food products … those that reflect what they value

We Have To Get This Right!
Food Economic Political
Security Security Stability
Most Publicized Food Riots … 2007-2010

Agriculture’s Amazing Productivity Story
Past
Present
Future

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Policinski

by Minnesota Agri-Growth Council on Nov 05, 2010

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Policinski — Presentation Transcript