Land O'Lakes, Inc., Farmland Industries, and Cenex Harvest States Cooperatives today announced the signing of a letter of intent, which would establish a new seed marketing structure for the three producer-owned cooperatives. The new structure, which will be led by Land O'Lakes, will be closely tied to an agronomy joint venture involving Land O'Lakes and United Country Brands (a new organization which would be created by the proposed unification of Farmland and Cenex Harvest States).

The letter of intent includes provisions for combining the seed businesses of Land O'Lakes, Farmland Industries and WILFARM, L.L.C. (a Farmland/Wilbur- Ellis Company joint venture), and establishing a formal marketing relationship between the combined Seed operation and the United Country Brands/Land O'Lakes agronomy venture. The transaction is expected to be effective in early 2000.

"We are very excited about this new venture,'' said Stan Riemann, Farmland Executive Vice President and President of Farmland's Crop Production Division. ``By combining operations, we will greatly enhance our position in relation to our goal of being a national player in the seed industry.''

"This new structure will generate increased efficiency and market strength, enable us to deliver additional value to customers and provide a foundation for future growth,'' added Duane Halverson, Land O'Lakes Executive Vice President and Chief Operating Officer for Ag Services. ``A key element, going forward, will be the expanding relationship of the Seed operation and the new agronomy joint venture, which will enable us to even more efficiently and effectively serve the total production needs of the customers of all the organizations involved.''

Projected annual sales for the expanded seed operation, which will serve producers in 29 states, are $300 million (year 2000). The new seed structure will result in a unified seed system that is among the top-five U.S. seed companies in soybeans, corn and wheat. Land O'Lakes is the global leader in alfalfa genetics and production.

Currently, Farmland markets seed through the WILFARM organization, while Land O'Lakes markets seed under the Croplan Genetics brand name.

Land O'Lakes, Inc., based at Arden Hills, Minnesota, is a national food and agricultural cooperative owned by farmers, ranchers and local cooperatives in 29 states. It is a leading marketer of dairy products across the U.S.; serves international customers with a variety of food products and animal feed ingredients; and provides family farmers and member cooperatives with an extensive line of feed, seed, plant food and crop protection products.

Farmland Industries, Inc. is a North American farmer-owned cooperative with 1998 company sales in all 50 states and nearly 90 countries. Farmland is headquartered in Kansas City, Missouri. Focused on meeting the needs of its 600,000 farmer-owners in the United States, Canada and Mexico, Farmland is a highly diversified company with major business lines in crop production and crop protection products, livestock feeds, petroleum, grain processing and marketing, and the processing and marketing of pork, beef and catfish products.

Cenex Harvest States Cooperatives, based at Inver Grove Heights, Minnesota, is a producer-to-consumer cooperative system owned by farmers, ranchers and their local co-ops from the Great Lakes to the Pacific Northwest and from the Canadian border to Texas. This fully integrated agricultural foods cooperative operates oil refineries/pipelines and provides a wide variety of products and services ranging from grain marketing to food processing. Through a broad range of working partnerships, Cenex Harvest States also markets and distributes petroleum products, agronomic inputs and feed to rural America, as well as grain and processed food products to customers around the world.

Company news release
N2175