Land O'Lakes, Inc., Cenex Harvest States Cooperatives and Farmland Industries announced today they are working on a proposal to form a new joint venture company that will distribute plant food and crop protection products to member cooperatives and other customers.

As part of the agreement, the sales, marketing and distribution of plant food, crop protection and related products will be combined in a joint venture company owned by Land O'Lakes and the new company that will result from the proposed unification of Farmland Industries and Cenex Harvest States Cooperatives. At the effective date of the joint venture, a formula will be used to  achieve 50/50 ownership of the new agronomy company.

The agronomy joint venture company will be governed by a board of directors with equal representation from the two parent companies. The joint venture will include the current Cenex/Land O'Lakes Agronomy Company, Land O'Lakes eastern agronomy operations and Farmland's wholesale agronomy business.

The partners in the proposed joint venture - Land O'Lakes, and the unified Cenex Harvest States and Farmland - would continue to hold separate ownership in fertilizer manufacturing facilities. Issues involving fertilizer manufacturing will be addressed through supply arrangements involving the CF Industries system and Farmland's production facilities. It is believed this arrangement will have no significant impact on production levels and offers opportunities to enhance operating practices.

The three cooperatives are committed to completing the agreement prior to the time that Cenex Harvest States and Farmland, which are in the midst of merger talks, seek merger approval from their members later this year.

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 the largest farmer-owned cooperative in North America with 1998 company sales of $8.8 billion in all 50 states and 90 countries. Farmland is headquartered in Kansas City, Missouri. When including Farmland's share of the sales of its affiliated businesses, sales were $11.9 billion. 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 and beef 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
N2080