Land O Lakes third quarter SEC filing is at the above link. Essentially, the picture for dairy is:
In Dairy Foods, the company reported third-quarter sales of $776 million and pretax earnings of $8.9 million, versus sales of $985 million and a $25.4 million pretax loss for the third quarter of 2008. Year-to-date sales in Dairy Foods were $2.2 billion, versus $3.1 billion for the first three quarters of 2008. The company reported $9.0 million in pretax earnings in Dairy Foods through September, versus $14.2 million in pretax earnings for the first three quarters of 2008.
Volumes in Dairy Foods were mixed, but generally reflected a consumer shift toward lower-priced private label products. Overall Value Added volume was down 1 percent versus one year ago. Volume in the company’s industry-leading branded butter was down 1 percent, while the company’s private label butter volume was up 1 percent. Retail cheese volume (Deli and Dairy Case) was down 4 percent versus the first three quarters of 2008, while Dairy Solutions (Foodservice and Ingredient Solutions) was up 7 percent. In the Industrial segment, Cheese volumes were up 6 percent over the same period last year, Whey volume was down 1 percent and volume in Butter By-Products was flat.
Company officials, while noting that Dairy Foods’ performance over the first three quarters was negatively affected by commodity market volatility and the impact of higher prices and economic uncertainty on consumer purchasing decisions, indicated expectations for a strong fourth quarter. Fourth-quarter results, they said, should be bolstered by traditional holiday volume increases and the effective hedging of inventory positions earlier in the year, which should generate fourth-quarter gains.
Note, there is nothing in the report to suggest people are consuming less dairy.
Tucked in, is an interesting tidbit, “Unrealized hedging gain” of $39,742,000. Talk about risk management – where is the money going to come from if not dairy farmers?