Land O' Lakes Continues To Drift

Dealers saidLand O'Lakes traded a few times in the 87-89 context last week. The Arden Hills, Minn.-based co-operative held an investor meeting in New York last Tuesday. One trader said the response from that meeting was neutral, but another said the situation is not good. Levels for Land O' Lakes' bank debt have been falling since the company released its quarterly earnings report, which spooked investors. Before the results came out on July 26, the company's bank debt was pricing above par (LMW, 8/19). Calls to Daniel Knutson, cfo, were referred to a spokeswoman. The company revised its full-year EBITDA down $10 million to $245 million with the key reason for that adjustment coming from the affect of low hog prices on the company's swine feed business, a spokeswoman noted. "Despite the downturn in dairy and swine, the company believes that $245 million in full year EBITDA is achievable," she said. She added that Land O' Lakes has a solid liquidity position and ample room under its covenants; retail volume in the dairy segment is likely to increase; and the Purina Mills synergies are ahead of schedule.