Jack Gherty, president and CEO of Land O'Lakes, on leading a branded food and farm supply cooperative

Abstract

Executive Overview Cooperatives are a unique form of organization compared to the more familiar corporate forms of ownership, limited liability companies, partnerships, and proprietorships. Users of the cooperative's services are also voting members who control the cooperative, the owners who provided the equity capital, and patrons who received the benefits of use. Profits or net income are usually distributed as patronage-based refunds. Globally, farmer-owned cooperatives are important suppliers in the world food economy. Cyclical downturns in agriculture contributed to the recent bankruptcy of two large cooperatives. Farmland Industries and Agway, and caused financial stress in others. Like other businesses, cooperatives have become increasingly aware of the need to more proactively manage uncertainty in the food economy. A unique aspect of leading a cooperative includes educating its member-owners, who must understand the risks and rewards of growing a modern cooperatively organized company in the food economy, in addition to profitably managing their own farms, ranches, and local cooperatives. Headquartered in Arden Hills, Minnesota, Land O'Lakes (www.landolakesinc.com) is a national farmer-owned food and agricultural cooperative, with sales in all 50 states and more than 50 countries. It is a leading marketer of a full line of dairy-based consumer, foodservice, and food ingredient products across the U.S., serves its international customers with a variety of food and animal feed ingredients, and provides farmers and local cooperatives with an extensive line of agricultural supplies (feed, seed, crop nutrient, and crop protection products) and services. Land O'Lakes sales in 2002 were $6.0 billion. John “Jack” Gherty is president and chief executive officer of Land O'Lakes, Inc. Mr. Gherty, 59, grew up on a family dairy and livestock farm in western Wisconsin. He began his career as an attorney for Land O'Lakes in 1970, following completion of graduate degrees in law and industrial relations at the University of Wisconsin. Before joining Land O'Lakes, he also worked as a volunteer with VISTA (Volunteers in Service to America), serving on Chicago's southside. Gherty was named assistant to the president of Land O'Lakes in 1979. In 1981, he became a group vice president and chief administrative officer. He was named president and CEO in 1989. Mr. Gherty serves as chairman of the board of the National Council of Farmer Cooperatives. He serves on the board of CF Industries, the board of trustees of the Graduate Institute of Cooperative Leadership, and on the National 4-H Council. He is past chairman of CF Industries, Inc. Locally, he serves on the board of the Greater Twin Cities United Way and is a member of the board of the Minnesota Business Partnership. The challenges and rewards of leading a cooperatively organized company are thoughtfully described in this interview, which was done April 3, 2003 as part of the Kansas State University Food and Agribusiness Executive in the Classroom series.