U.S. markets close in 1 hour
  • S&P 500

    3,636.99
    +7.34 (+0.20%)
     
  • Dow 30

    29,895.58
    +23.11 (+0.08%)
     
  • Nasdaq

    12,198.64
    +104.24 (+0.86%)
     
  • Russell 2000

    1,849.07
    +4.05 (+0.22%)
     
  • Crude Oil

    45.34
    -0.37 (-0.81%)
     
  • Gold

    1,789.20
    -22.00 (-1.21%)
     
  • Silver

    22.70
    -0.75 (-3.18%)
     
  • EUR/USD

    1.1957
    +0.0044 (+0.37%)
     
  • 10-Yr Bond

    0.8520
    -0.0260 (-2.96%)
     
  • GBP/USD

    1.3307
    -0.0049 (-0.37%)
     
  • USD/JPY

    104.0620
    -0.1880 (-0.18%)
     
  • BTC-USD

    16,810.75
    -355.90 (-2.07%)
     
  • CMC Crypto 200

    328.26
    -9.24 (-2.74%)
     
  • FTSE 100

    6,373.84
    +10.91 (+0.17%)
     
  • Nikkei 225

    26,644.71
    +107.40 (+0.40%)
     

Land O'Lakes CEO Beth Ford speaks on the farming sector during the COVID-19 pandemic

Land O'Lakes CEO Beth Ford speaks with Yahoo Finance reporter Alexis Christoforous on how the COVID-19 pandemic is affecting the farming and agricultural industries, and how the company is adapting to an increasingly challenging environment.

Video Transcript

[MUSIC PLAYING]

- Beth Ford has run Land O'Lakes since 2018. It's one of the largest food and agricultural cooperatives in the US. It's fully farmer-owned and will be in business 100 years next year. Ford has helped lead the farming sector through multiple recent challenges, including COVID-19, tariffs, and extreme weather conditions. For the first time in Gallup's 20 years of polling Americans' views of business and industry, farming and agriculture is now number one.

ALEXIS CHRISTOFOROUS: I'm Alexis Christoforous is with Yahoo Finance and joining me today is Beth Ford, president and CEO of Land O'Lakes. Beth, it is so good to see you again. Thanks for joining us on the All Markets Summit.

BETH FORD: No. Thanks for the opportunity. Looking forward to the conversation.

ALEXIS CHRISTOFOROUS: Well, there's a lot to get to. But look, I want to start with this. I don't need to tell you how much people are baking and cooking throughout this pandemic, myself included. And I know you're on track to sell something like a record 300 million pounds of butter. This would be a company record for you.

Do you see demand remaining this high? Is it sustainable?

BETH FORD: Well, it's certainly elevated. You know, it's really interesting. We're stepping into November, December. That's normally key season for the butter business, right? Because that's normally when we're all baking and cooking and getting together.

We've seen this incredible elevated amount of butter being sold and cheese as well. We have cheese business, et cetera, since the start of this pandemic. And so do we see it staying elevated?

Well, I'm really going to be interested in what that holiday season looks like. Normally, there's a surge. We're starting to see the our order book is really quite full for October, as we step into that filling of retail shelves. I think it'll stay elevated certainly towards the end of the year.

And then the question really goes to, what is the reopening? Because a lot of dairy products are sold into service, right? Bulk butter type stuff. And so will there be a shift? How quickly does that open? What is that dynamic?

I do expect that we'll continue to see elevated levels through the holiday season. And then we're going to see what the reopening plans look like in next year.

ALEXIS CHRISTOFOROUS: How have you been keeping up with demand? What does a supply chain look like? I remember I went to the market not long ago looking for unsalted butter because I wanted to bake. There was only salted butter out there, and I had to wait a while. So what's it like keeping up with that demand?

BETH FORD: It has been really, really amazing. You know, it's not that there's not enough milk to make the butter, right? Milk production has been strong for dairy producers. But we are operating-- literally we had to reduce the variety of SKUs. You said salted. That's interesting that you couldn't get unsalted.

But we also have different types of butters that we put on the shelf. We had to pull back from those. We had to go to one particular case count for every retailer like 36 versus 18, right? So that we could maximize production on our lines. Oftentimes in the spring, which is the most productive for cows making milk-- it's called flush-- you make a bunch of butter, and then you put it in your refrigerator for key season-- key season being November, December.

Well, we've been selling everything. So there was no butter put up because everything was coming off the lines and going into retail stores. And so you know, how is it? Well, we're maximizing production. We're reducing SKU variety. We're in a good position as we get into to key season. But we're going to see how the year ends.

ALEXIS CHRISTOFOROUS: We know that farmers are the lifeblood of Land O'Lakes, you know. And people may not realize that your company is a $14 billion farm-owned cooperative. And it's in a tough couple of years for farmers.

I mean, they always have to deal with sort of challenging weather. That's always sort of in the backdrop. But they also, of course, now have the pandemic. And then there were trade issues concerning China during the Trump administration. Just give us a feel for what our nation's farmers are feeling right now. How are they doing?

BETH FORD: You know, you went through the waterfall-- the cascade-- of issues that have been present for agriculture and for farmers. You know, as you note, farming is an outdoor sport. So it can be too hot, too cold, too wet, too dry. You can be a brilliant farmer. You can still have issues.

Well, how are they feeling right now? The pandemic did exacerbate supply chain backups. So I mentioned what happens with food service. Oftentimes producers-- farmers-- on the dairy side ship to food service, restaurants, processors who make products for food service. Schools have been shut down.

So you know, you lost basically 15-20% plus off the market for distribution. You saw backup in meat processing, right-- hogs, cattle. And so what happened was that there was an immediate drop in collapse and commodity prices as well there wasn't a lot of international trade because a lot of things were staying here in the United States, especially early in the pandemic.

And exports are crucial to profitability for farmers. For instance, on dairy, one day out of seven of production is exported in variety of products. So this was really-- this was really causing pressure at the farm gate, in terms of pricing.

Now how are they feeling right now? Well, we've made it past this particular-- the peak point of the pressure. The administration and the Senate and the House did provide funding for farmers, interim payments to make up for this gap. Many will make it to the other side. We're going to see what happens with this next few challenging months, depending on what happens with the pandemic.

I have seen grain pricing-- so row crop farmers, so beans and corn-- have started to strengthen. Bean price up over $10.20-10.30. Corn price-- I saw a 4 number in front of it. And so that's stronger performance for those crops. Those are core crops.

And so that's a positive. That's a positive. I'm seeing a little bit more momentum, a little bit stronger performance. For dairy, the food box program that is providing food for underserved communities and for the food insecure has elevated milk price a bit at farm gate. So we're not seeing the same level of bankruptcies at the dairy farm level.

So they're feeling a little bit-- you know, it's not stable. Let's not say that, oh, we're in this stable environment. But there are more positive signs than there have been for the last couple of years especially. Trade has started to pick up in China. We're seeing a lot of shipments, especially for soybeans for hogs, et cetera, into China.

ALEXIS CHRISTOFOROUS: Are you looking for any more aid to come from the government? You know, we're still waiting for this next stimulus deal to materialize. And when it does, are you hopeful or do you have reason to believe that there will be some aid in there for our country's farmers?

BETH FORD: Well, the administration and I think the House and Senate reallocated some funding to a funding area that it provides funding-- or support to farmers. As well, you know, support programs or insurance programs will be critical. You know, so the farmer has to sign up for insurance and same thing for the dairy side.

So are we looking for support? Well, we're going to see. I mentioned the food box program. Actually, funding had run out for that food box program. But it looks like they're reupping for maybe another billion dollars is what we're hearing.

Do I expect we're going to see something? Well, we all don't know what's going to happen in that realm for my government affairs team. And certainly, we are connected through our government affairs team into both the administration, the House, and the Senate to get a view and then advocate appropriately for, you know, some level of gap payments for farmers as we move through this pandemic.

ALEXIS CHRISTOFOROUS: You know, something that farmers have had to deal with even hs pandemic has been access to connectivity and to the internet. And the pandemic has really just exacerbated that need. I know that you are a huge proponent for internet access in rural areas. You've backed legislation regarding this.

Where do things stand right now? And what else can the public and private sector do and come together to help aid the farmers?

BETH FORD: Thank you for phrasing it that way. This is about coming together. 18 million plus Americans lack access to broadband. Majority of them are in rural communities. One in four farmers or rural community citizens lack access to broadband. This has exacerbated-- this has highlighted this digital divide that we have.

You know, oftentimes on a farm, they're having-- the teachers have to drive out with this paper homework so these kids can do homework. Because you don't have enough technology on the farm, or you got to run farm equipment. I mean, it's really unacceptable.

And this isn't a rural issue. This is an American issue. Food security is a national security issue. We see this front and center, right? We all see this where we're working from home, where we're connecting with doctors from home.

And there's a shortage of 40,000 doctors in rural America. There's a lack of hospitals. And now we see COVID going into these areas. So what are we doing?

We are advocating. We've started a coalition called the American Connection Project. We've got over 120 other companies-- Microsoft, Cargill, Polaris, Tractor Supply, any number of company partners-- who also see this as a need. We must fix this lack of access to broadband. It needs to be like a 1930s rural electric initiative going across the country.

ALEXIS CHRISTOFOROUS: I want to switch gears for a moment and talk about the world we're living in right now. And Land O'Lakes is headquartered a short drive from the Minneapolis neighborhood where George Floyd was killed. What has it been like leading an organization that is at the epicenter of what sparked a lot of these protests throughout our country?

BETH FORD: It's been painful. It's been difficult. You know, first of all, our responsibility-- my responsibility as a leader-- is to acknowledge this is just terrible and painful. This should never have happened, this-- basically, we saw somebody lose their life right in front of our eyes.

And what I would say is many folks in the org-- in the community-- and you know, in Twin Cities of Minneapolis-St. Paul, they have 17 Fortune 500 businesses here. This is not an inactive community of making reinvestment in the community to say, we've got to close some of these disparities. There's been a disparate outcome between minorities in these communities and the rest. And we can't have that.

So what has it been like? It's been very painful in the community and then very difficult as a CEO in this business. We have held listening sessions for our team. And you know, I don't have that lived experience of having fear to have my children go out to ride their bike, to drive.

We've had stories, you know, where senior executives-- minorities-- pulled over on their way to work. And we don't live that. I don't live that. We have to listen to that. We have to understand, what are the systemic issues? How do we make sure our employees feel engaged, feel safe in their workplace, feel part of our community? And then as they leave work, how do we make sure we are committed to making appropriate investments to make sure that they feel safe and engaged and happy in their communities?

So it's been painful, a learning session for many of us and, you know, a commitment through the Minnesota business partners as well as through the Business Roundtable-- I sit on some of those committees as well and I'm sitting on their board-- to try to address what is a very challenging time I think for all of us.

ALEXIS CHRISTOFOROUS: Land O'Lakes is going to be celebrating its birthday. I think it's next year. And this past spring, you removed the image of a Native American woman from your butter packaging. And there have been all sorts of ideas out there as to why you may have done that.

You know, shortly thereafter, we saw other changes, like Aunt Jemima changing up its products, Uncle Ben's changing up its products. But tell us the reasoning behind why you changed the imagery on the butter products?

BETH FORD: Yeah. I mean, it's interesting because we did that in January, February, right? And then all of these other changes came after some of these discussions on racial equity and those types of things. Why did we do it?

Well, when I took over as CEO-- which has been a little over a couple of years-- we started looking at a number of things. Yes, we're coming into our 100th anniversary. We are a farmer-owned cooperative. We take a great deal of pride. In fact, research tells us-- our marketing research-- that nobody is more respected than the farmer, right?

And so what we recognized is, were we messaging that, that what is special about us-- that we're farmer-owned, that we're a cooperative? And when we did our research, what we found from consumers is they didn't know that. Wait a minute. We didn't know that. If you'd've told us that, that would have been more reason to be connected to your products.

So we made that decision. And some people view it as you took it away. I view it as we moved forward to message what differentiates us, our products, who we are.

We go right from the farm. We know we know the cows/ You know, we own Purina. You know, we feed the cows. You know, we have a retail business. And so we're different, and we wanted to message that consumers. And that's why we made those changes.

ALEXIS CHRISTOFOROUS: I also want to congratulate you on making Fortune's most powerful women's list of 2020.

BETH FORD: Thank you.

ALEXIS CHRISTOFOROUS: That is awesome. I know that from reading about your background you grew up in a large family in Sioux City, Iowa. Growing up, who were some of your female role models?

BETH FORD: I always say my biggest role model was my mother. You know, I'm fifth in the family of eight. I have three sisters, four brothers. We were very much a working class family.

My dad was a truck driver. You know, we started working very early in our lives. Because if you wanted your own clothes, you had to work for that. And I got one drawer that was mine in a room I shared with my three sisters.

But I want to-- I want to say my mother is my biggest role model. And the reason is, here's a woman who-- you know, who grew up kind of in an orphanage. She was adopted. She became a nurse. She got married young. She was a nurse. She had eight of us.

She went back to school and became a psychologist-- a psychiatrist. And then she became a minister. She said, I worked on their body and their mind and now their soul. She's still with us, I'm very fortunate to say.

But her resilience, her kindness, her empathy-- we didn't have, as we said, two nickels to rub together. But I remember so vividly her telling me-- you know, we would have to go take a meal to a family in need at Thanksgiving. I'm thinking, well, we don't have tons.

But we'd go there. And then she'd say to me-- I can just see it so vividly in a home with a couple of kids and they didn't really have a lot-- and she said, do understand your responsibility? You have been given so much. You know, don't disappoint. Understand this is about somebody else.

So my mother is my role model. She's incredibly bright, strong, resilient, capable. And that-- I think we should all aspire for that.

ALEXIS CHRISTOFOROUS: Well, it's certainly a blessing to have your mom. If you don't mind me, asking what's her first name and how old is she?

BETH FORD: Her name is Carol [INAUDIBLE]. And she is 83 now, I believe. Yeah.

ALEXIS CHRISTOFOROUS: [LAUGHTER]

BETH FORD: I'm like, I want to get that right.

[INTERPOSING VOICES]

BETH FORD: You know, what's been funny is that I have all these siblings. But you know, we live in all parts of the country. But you know, now what we do is we do a Zoom with all of us. And there for a long many years, I wouldn't see some of my siblings for a couple of years, right? Because they're in some other.

But now, it's like we're seeing my mom and all of us, you know, on Zoom on Sundays and catching up. And it's been a blessing.

ALEXIS CHRISTOFOROUS: Yeah. I can relate. I can relate to that for sure. Before we let you go, if you had five minutes alone with the next President-- you had his ear for five minutes-- what would you want to tell him?

BETH FORD: I would say that we have work to do on where we think about investing to close some of this economic disparity that we see and to make sure we stabilize operating environments. If I'd say it in my role as the CEO of Land O'Lakes, I would say, I have concern and continued concern for rural vibrancy, for the challenges that I see in these communities that lack investment, lack of access to health care.

Some of the most food insecure are actually rural America. Lack of housing, lack of-- and we need to do better. It leaves us insecure and leaves us, as a nation, less secure. And we need to focus on that.

And oftentimes, this is viewed as somebody else's issue. That's a rural issue. This is an American issue. And that's what I would be-- I would be saying.

It's no different than-- and I have used this phrase, that rural America's the new inner city. And we should think about that. Because what we've done is we've not invested appropriately for this-- 19% of America lives in rural America. They comprise 44% of the military.

These are people willing to do the hard work for our country, and we must invest in them in these communities to make sure we have a vibrant America. So that would be my focus.

Technology is an enabler to close this gap. We should be excited about the ways that we can think about that, including technology as an enabler for data and analytics for sustainable production, so that farmers and farming can be part of the solution for climate change and for other bigger problems, you know, in society.

ALEXIS CHRISTOFOROUS: Thanks for shedding a light on rural America. Beth Ford, CEO and President of Land O'Lakes. It's always a pleasure. And thanks so much for spending time with us.

BETH FORD: You bet. Good to see you.