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The Land O'Lakes strategy of growth also reshaped the portfolio mix of Dairy Foods in 2012. New growth initiatives included the launch of Saute ExpressTM Saute Starter, an on-trend, highly convenient product. Another significant growth development was the launch of Koru(TM) Creamery Style Yoghurt, a premium craft yoghurt that is targeted at the highly valued younger consumer.

Dairy Foods also grew through significant new acquisitions in 2012, including that of Kozy Shack Enterprises, Inc., adding this leading brand of refrigerated desserts to its product offerings. Dairy Foods also benefited from its 50 percent ownership in Eggland's Best, LLC, a newly formed joint venture with Eggland's Best, Inc. Eggland's Best, LLC provides new outlets for the LAND O LAKES brand in the high growth category of specialty eggs.

Strong results were also achieved in the Business-to-Business segment of Dairy Foods, specifically Foodservice, which provides products to schools, full-service restaurants, and government organizations. The Industrial Foods business was negatively impacted by unexpected milk volume in the first half of the year plus commodity price impacts on cheese and whey. Despite these adverse market conditions, Land O'Lakes continued to expand its relationships with large, global customers.

Feed Purina Animal Nutrition delivered very good performance in 2012. Results were driven by strong margins throughout its portfolio plus the launch of a major new branding platform, new product lines and a key acquisition. Net sales were $4.6 billion, 15 percent more than last year while pretax earnings for the year totaled $31 million, 63 percent favorable to 2011.

Purina achieved significant margin improvement gains in the Lifestyle and Livestock businesses through improved product mix, focused pricing actions and successful risk management. The 2012 results were also favorably influenced by strong protein margins in the ingredients business and by the successful acquisition of Old Mill Troy in the premix business.

In 2012 the company unified its feed products under the Purina brand name and changed the name of the feed company to Purina Animal Nutrition, LLC. This strategy was designed to foster growth by leveraging the power of the iconic Purina brand, focusing product identity and maximizing brand marketing power to drive sales.

This brand strategy came to life with the launch of a new Purina(R) small animal product line, expanding the power of the Purina brand into the $500 million small pet market. Additional product innovations included the introduction of several new horse products including high-margin supplements and Hydration Hay(TM) Blocks. Livestock and cattle innovations included HeiferSmart(R) and STORM(R) Cattle Mineral, an industry-leading weatherized cattle mineral product.

Crop Inputs Winfield Solutions delivered record results in 2012 bolstered by a powerful new branding strategy, continuing innovation and warmer-than-normal weather conditions that drove demand for WinField's industry-leading products and services to new highs. Net sales for 2012 totaled $4.7 billion, 18 percent higher than the prior year. Pretax earnings for the year were $228 million, 62 percent more than 2011.

Major brand building advances in 2012 included uniting the company's extensive lineup of product and services under the WinField brand, providing an integrated, customer-facing brand platform. This initiative was launched with a national media campaign including television and print advertising, public relations and on-line brand awareness strategies.

WinField also continued to build its leadership position in technology and innovation. The acclaimed R7(R) Tool continued to expand with over 300 accounts enrolled and 2,500 sellers trained to leverage Answer Plot(R) data in a Global Information System framework. In recognition of its achievements, WinField earned the 2012 Agriculture Technologies Award from the Agricultural Retailers Association.

In 2012, WinField also acquired Precision Turf & Chemical, Inc., the latest expansion of the company's Professional Products Group, which markets products and services to golf courses, recreational facilities and sports venues.

Layers The Layers segment, conducted through Moark, LLC, experienced a challenging year with unfavorable results driven primarily by high feed costs and lower commodity and brown egg pricing. Losses for the Layers segment totaled $34 million in 2012 compared with a loss of $3 million in 2011. Net sales achieved a new record of $735 million, 23 percent more than 2011.

A confluence of significant industry-wide challenges combined to produce the losses in Layers in 2012. These included lower than average commodity pricing, lower brown egg pricing due to excess supply in the market and excess production of small and medium eggs as a result of younger flocks and hot weather during the summer. The earnings challenges in Layers are being addressed through a sharpened focus on quality improvements and margin enhancement initiatives. Despite the industry-wide headwinds, Moark continued to pursue sales growth and achieved significant success with product introduction into one of the nation's largest retailers.