What Land O'Lakes Is and Who Owns It

Land O'Lakes is a farmer-owned cooperative based in Minnesota that supplies dairy products, animal feed, crop inputs, and financial services to agricultural members across the United States. Unlike a corporation with outside shareholders, Land O'Lakes is owned by the farmers and ranchers who use it — roughly 4,000 farmer-members as of recent counts, though this number changes as members join or leave.

The cooperative operates two main business lines: dairy and agribusiness. On the dairy side, Land O'Lakes collects milk from member farms, processes it into butter, cheese, and other products, and sells those products under the Land O'Lakes brand and to food manufacturers. On the agribusiness side, it sells animal feed, seed, crop chemicals, and fuel to farmers, and offers crop insurance and financial services through its subsidiary Landolakes Financial.

Because it is member-owned, any profit the cooperative makes is returned to members as patronage dividends — payments based on how much business each member did with the cooperative that year. This is different from a regular company, where profits go to shareholders who may have no connection to the business itself.

Key Takeaways

  • Land O'Lakes is owned by its farmer and rancher members, not by outside investors, and returns profits to members as annual patronage dividends.
  • Membership requires owning or operating a farm that produces dairy, livestock, or crops, and you must buy at least one share of cooperative stock.
  • Members can purchase feed, seed, fuel, crop chemicals, and other inputs at member prices, which are typically lower than retail prices.
  • Land O'Lakes processes and markets member milk through its dairy division and handles logistics like collection, testing, and payment to the farm.
  • Members have voting rights in cooperative governance and can attend annual meetings to elect the board of directors.

How Membership Works

To become a member of Land O'Lakes, you must own or operate a farm that produces dairy, livestock, or crops in a state where the cooperative operates. You cannot straightforward buy products at a store and be a member — membership is for producers only. The specific requirements vary by region and by which division of the cooperative you want to join (dairy, agribusiness, or both).

When you join, you purchase at least one share of cooperative stock. The cost of a share varies depending on the division and region, but typically ranges from a few hundred to a few thousand dollars. This stock purchase is your ownership stake in the cooperative. You do not get dividends on the stock itself; instead, you receive patronage dividends based on the volume of business you do with Land O'Lakes each year.

Once you are a member, you have voting rights. You can attend the annual meeting, vote on bylaw changes, and vote in the election of the board of directors. The board sets the cooperative's overall direction and strategy. Some regions also have local or regional meetings where members can discuss issues that affect their area.

What Members Buy and How Pricing Works

Land O'Lakes sells a wide range of products and services to member farms. On the feed side, the cooperative offers dairy feed, beef feed, swine feed, poultry feed, and specialty feeds for other livestock. On the crop side, it sells seed (corn, soybeans, and other crops), crop chemicals (herbicides, insecticides, fungicides), fertilizer, and fuel. It also provides crop insurance products and financial services such as operating loans and equipment financing through Landolakes Financial.

Member pricing is typically lower than what you would pay at a retail agricultural supplier, because the cooperative passes savings back to members. The exact discount depends on the product, the volume you purchase, and current market conditions. At the end of the year, if the cooperative made a profit on the products and services you purchased, you receive a patronage dividend — a check or credit based on your share of that profit.

For example, if you bought $50,000 worth of feed from Land O'Lakes in a year, and the feed division earned a 5 percent profit margin on all member purchases that year, you might receive a patronage dividend of $2,500 (5 percent of $50,000). The exact calculation depends on the cooperative's financial performance and how it allocates profits among its divisions.

How the Dairy Division Handles Milk

If you are a dairy farmer and a member of Land O'Lakes, the cooperative collects your milk, tests it for quality and composition, pays you for it, and then processes and sells it. Land O'Lakes operates milk collection routes in its service areas, so a truck comes to your farm on a regular schedule (usually every other day) to pick up your milk.

The cooperative tests your milk for butterfat, protein, somatic cell count (an indicator of udder health), and other quality measures. These test results affect the price you receive — milk with higher butterfat and protein, and lower somatic cell counts, commands a premium. Land O'Lakes publishes a milk price each month based on commodity prices for butter, cheese, and other dairy products, and your individual price is adjusted up or down based on your milk's composition and quality.

Land O'Lakes processes member milk into butter, cheese, and other dairy products, which it sells under the Land O'Lakes brand (the familiar butter and cheese you see in grocery stores) and to food manufacturers and foodservice companies. The cooperative also sells milk to other processors. Because Land O'Lakes is member-owned, the cooperative's goal is to maximize the price paid to farmers, not to maximize profit for outside shareholders.

Regional Differences and Service Areas

Land O'Lakes operates in multiple regions across the United States, and membership requirements, available services, and pricing can vary by region. The cooperative has a strong presence in the Upper Midwest (Minnesota, Wisconsin, Iowa, Illinois, Missouri), but also operates in other states. Some regions focus primarily on dairy, while others emphasize agribusiness or both.

If you are interested in joining, you should contact the Land O'Lakes office or representative in your state or region to learn about membership requirements, stock purchase costs, and the specific products and services available to you. The cooperative's website lists regional offices and contact information. Some regions may have waiting lists or may not be open to new members in certain categories, so it is worth asking directly.

Patronage Dividends and Financial Returns

The main financial benefit of membership is the patronage dividend. Each year, Land O'Lakes calculates the profit earned on products and services sold to members, and distributes a portion of that profit back to members in proportion to their business volume. A member who purchased $100,000 worth of products receives twice the dividend of a member who purchased $50,000, assuming the same profit margin.

Patronage dividends are typically paid in cash, though some cooperatives allow members to reinvest dividends back into cooperative stock or other investments. The amount varies year to year depending on market conditions, input costs, and the cooperative's operational efficiency. In years when commodity prices are low or input costs are high, dividends may be small or zero. In strong years, they can be substantial.

You should not count on a specific dividend amount when planning your farm budget, because it is not may provide. However, over time, the patronage dividend system means that members who do significant business with the cooperative tend to see a return on their membership investment and their stock purchase.

Governance and Member Rights

As a member, you have the right to vote on major cooperative decisions. Each member typically has one vote, regardless of how much business they do with the cooperative (though some cooperatives use a different voting structure). Members elect a board of directors, usually from among the membership, who oversee the cooperative's management and set policy.

The annual meeting is the main forum where members gather to hear financial reports, vote on bylaw changes, and elect board members. Some cooperatives also hold regional meetings or member forums to discuss specific issues. If you have concerns about how the cooperative is being run, you can raise them at these meetings or contact your board representative directly.

Member governance is one of the defining features of a cooperative. Unlike a corporation, where management answers to shareholders who may never use the company's products, a cooperative's management answers to the members who actually use it. This alignment of interest is supposed to keep the cooperative focused on serving members rather than maximizing profit for outside investors.

Frequently Asked Questions

Do I have to sell all my milk to Land O'Lakes if I join the dairy division?

No. Membership does not require you to sell exclusively to Land O'Lakes. However, the patronage dividend is based on the volume you sell to the cooperative, so selling milk elsewhere means you receive a smaller dividend. Some members sell the majority of their milk to Land O'Lakes and some to other buyers, depending on their situation and market conditions.

What happens to my stock if I leave the cooperative?

When you leave the cooperative, you can usually sell your stock back to the cooperative at its book value (the value shown on the cooperative's balance sheet), though the exact terms depend on the cooperative's bylaws. The cooperative may also retain some of your patronage dividends to cover any outstanding obligations. You should review the membership agreement and bylaws before joining to understand the exit terms.

Can I vote by proxy or mail if I cannot attend the annual meeting?

Most cooperatives allow proxy voting, meaning you can authorize another member to vote on your behalf, or you can submit a mail-in ballot. The specific rules vary by cooperative and are outlined in the bylaws. Contact your regional Land O'Lakes office to learn about voting options in your area.

How is the milk price set each month?

Land O'Lakes sets a base milk price each month based on the commodity prices for butter, cheese, and other dairy products that the cooperative produces and sells. Your individual price is adjusted up or down based on your milk's butterfat, protein, and quality measures. The cooperative publishes the price formula so members can see how it is calculated.

What if I want to buy agribusiness products but do not have dairy?

You can join the agribusiness division of Land O'Lakes as a crop or livestock farmer without joining the dairy division. Membership requirements and stock purchase costs may differ for the agribusiness division. Contact your regional office to learn about membership options for your type of farm.