Beth FordLand O’Lakes, Inc.

Chief Operating Officer

PurinaAnimal nutrition

and feed

Diversified agribusinesses driven by insights and innovation

Winfield UnitedAg services, crop inputs,

precision agriculture

Land O’LakesDairy foods and

ingredients

Land O’LakesSUSTAINSustainability

Farmer-ownedInternational Development

Branded GoodsMarketing& Sales

B2B / IndustrialMarketing& Sales

R&D /ManufacturingPrimary

Processing

MilkQualityAnimal

Nutrition

Crop Inputs& Insights

Seed

Production Consumer

Our unique farm-to-fork business model enables us to see things differently

Market insights

Dairy Commodity Markets are depressed…

Dairy Markets

US Dairy Commodity Markets

Butter

Barrels

NFDM

Whey

Data Source: CME, NDPSR

…driven by a slowing demand• China import demand has

slowed down and Russia has banned dairy imports due to sanctions

• All resulting in EU Government NFDM inventory of 770 MM lb (equates to about 8 months of US NFDM exports)

• Potential trade disruptions would further depress US export demand and cause further dairy commodity market decline

• Mexico is a key trading partner, with over $1B of imports from US last year

Data Source: USDA Ag Prices Report; Blimling Import Data

…outpaced by a significant milk production growth in recent years

Data Source: USDA monthly Milk Production Report, Eurostat, and DCANZ

-5

0

5

10

15

20

25

2009 2010 2011 2012 2013 2014 2015 2016 2017

YOY

Chan

ge (B

illio

n lb

s)

Annual Change in Milk Production(Top Exporting regions)

United States EU-28 OceaniaGlobal MP-

Milk Production Quotas lifted in

May, 2015

• Key driver has been EU production expansion, due to lifted quotas

• But US production has been on a steady multiple-year growth as well

9000

9100

9200

9300

9400

9500

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

Feb-

07

Jul-0

7

Dec-

07

May

-08

Oct

-08

Mar

-09

Aug-

09

Jan-

10

Jun-

10

Nov

-10

Apr-

11

Sep-

11

Feb-

12

Jul-1

2

Dec-

12

May

-13

Oct

-13

Mar

-14

Aug-

14

Jan-

15

Jun-

15

Nov

-15

Apr-

16

Sep-

16

Feb-

17

Jul-1

7

Dec-

17

1000

Hea

d

$/CW

T

MPP-Dairy Margin: United States

Dairy Herd Size Milk Price - Feed Cost

Futures

Source: USDA Milk Production Report, USDA Agricultural Report, CME Futures; Blue MOF line calculated using futures

U.S. milk production growth is likely to continue, driven by solid margins

Expansionmargin area

Contractionmargin area

Neutralmargin area

• Dairy producer margins are highest since 2014, and are in the ‘expansion’ area

• Margins have been primarily supported by low feed costs

The oversupply is the most critical on the Northeast and Michigan

Milk Dumping Volume

• In 2016, over 180 MM lbs and 70 MM lbswas dumped in Northeast and Mideast FMMO, respectively

• Aggressive milk production growth has been combined with a reduction of processing capacity and Fluid milk consumption

While milk consumption is declining, butter demand is growing

• Most dairy categories experienced a solid demand growth (e.g. cream(ers), Natural cheese and Butter

• Butter has been growing at 3.2% rate of 3.2%, driven by the consumer preference for simple and natural food

• Fluid milk consumption has been declining at 1.8% rate

Source: IRi, LOL analysis

CAGR for key Dairy Retail Categories

Keys to addressing the challenges in this market

Product Innovation Trade

Risk management

availability

Balanced growth from producers

Integrated approach to

market decisions

Why create a sustainability business unit?

Ability to influence sustainability from farm to fork

W E TO U C H

2,200 dairy producers

1,270 ag producers

800 ag retail co-ops

O U R FA R M E R - O W N E R S

50% U.S. harvested acres

25% U.S. producers

Expertise

Build team –Jason Weller

AgilityFarm-to-

fork

FocusWater, Air, Soil

Land O’Lakes SUSTAIN Offers:Authentic sustainability from the single, most

comprehensive view of the food industry

We’re early on the journey, but see a path to:

Leverage our scale and

scope

Integrate all efforts with data and

technology

Develop science-based

approaches

Provide assistance to our farmers to make

best management

decisions

Answer the call from partners to

provide sustainability solutions for companies

connected to consumers

Further develop collaborative

partnerships with organizations such

as the Environmental Defense Fund

Thank you