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                                                                     EXHIBIT 3.2

                               LAND O'LAKES, INC.
                 RESTATED ARTICLES OF INCORPORATION AND BY-LAWS

                            AS AMENDED, FEBRUARY 2003

                            ARTICLES OF INCORPORATION

                                    ARTICLE I

The name of this corporation is Land O'Lakes, Inc.

                                   ARTICLE II

The nature of the business, or the objects or purposes to be transacted,
promoted or carried on, are:

      1. To engage in any activity in connection with the production, grading,
handling, processing, manufacturing, preserving, drying, packing,
transportation, storage, warehousing, financing, advertising, buying, selling,
marketing or distributing directly or through agents, in intrastate, interstate,
or foreign commerce, of any agricultural product or products derived therefrom
for itself, its stockholder members, and other farmer owned and operated
associations of producers of such agricultural products;

      2. To promote, foster and encourage the orderly marketing of agricultural
products through collective action; and to represent and advise its stockholders
in matters relating to the production, procurement, storage, handling,
transportation, processing, manufacture, distribution, marketing, and promotion
of the use and sale of agricultural products;

      3. To purchase, manufacture, process, mine, store, handle, sell,
transport, and distribute feed, seed, chemicals, fertilizers, petroleum, and
petroleum products, building materials, and all commodities, supplies, services
and equipment, related to agricultural operation, for the use and benefit of its
stockholders and other patrons;

      4. To carry out all or any part of the foregoing objects as principal,
factor, agent, contractor, joint venturer or otherwise, either alone or through
or in conjunction with any person, firm, partnership, association or
corporation;

      5. To provide management, financial, promotional, educational and other
services for stockholders and patrons in connection with any of the foregoing
objects and purposes;

      6. To engage in and carry on any other business which may conveniently be
conducted in conjunction with the business of the corporation;

      7. To purchase, lease, hire or otherwise acquire, hold, own, construct,
erect, improve, manage and operate, and to aid and subscribe toward the
acquisition, construction or improvement of mines, plants, mills, factories,
works, buildings, machinery, equipment, and facilities and any other property or
appliances which may appertain to or be useful in the conduct of the business of
the corporation.

      For such purposes, it shall have and may exercise all the powers permitted
under the laws of the State of Minnesota.


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                                   ARTICLE III

The corporation shall have perpetual existence.

                                   ARTICLE IV

      1. The amount of the total authorized capital stock of this corporation is
Twelve Million Five Hundred Sixty Thousand Dollars ($12,560,000.00) divided into
One Million (1,000,000) shares of Preferred Stock, par value Ten Dollars
($10.00) per share; Two Thousand (2,000) shares of Class A Common Stock, par
value One Thousand Dollars ($1,000.00) per share; Fifty Thousand (50,000) shares
of Class B Common Stock, par value One Dollar ($1.00) per share; Five Hundred
(500) shares of Class C Stock, par value One Thousand Dollars ($1,000.00) per
share; and Ten Thousand (10,000) shares of Class D Stock, par value One Dollar
($1.00) per share.

      2. Class A Common Stock shall only be issued to and held by farmers'
cooperative associations as defined in the Agricultural Marketing Act (12
U.S.C.A. 1141j (a)). Class B Common Stock shall only be issued to and held by
individual farmers, or corporations which are engaged primarily in farming
operations, substantially all of whose stockholders, officers and directors are
farmers or share in the productivity of the farm. Class C Stock may be issued to
and held by any association, firm, corporation or any other entity doing
business on a cooperative basis other than an entity which is eligible to hold
Class A Common Stock. Class D Stock may be issued to and held by any individual
other than an individual who is eligible to hold Class B Common Stock. Preferred
Stock may be issued to and held by any person, firm or corporation.

      3. The voting power shall be vested in the holders of Class A and Class B
Common Stock exclusively. Individuals owning Class B Common Stock and
corporations owning Class B Common Stock shall be restricted to one (1) vote in
the affairs of this corporation. Class A common stockholders may have additional
votes as provided for in the By-laws. Class C and Class D stockholders shall not
be entitled to vote in the affairs of this corporation. Shares of stock shall be
transferable only with the approval of the Board of Directors of this
corporation.

      4. No dividends shall be paid on common stock of any class. Dividends on
preferred stock shall not exceed eight percent (8%) per annum and shall be
non-cumulative.

      5. Preferred stock may be retired in whole or in part at any time as
determined by the Board of Directors, upon payment of the par value thereof plus
any unpaid dividends declared thereon.

      6. In case of dissolution or liquidation, the owners of Preferred Stock
shall be entitled and limited to receive the par value of their stock, plus any
unpaid dividends declared thereon, before any payment is made to the holders of
Class A and Class B Common Stock or Class C and Class D Stock.

      7. Net income in excess of dividends and additions to reserves shall be
distributed on the basis of patronage, as provided for in the By-laws, and the
records of the corporation may show the interest of patrons, stockholders of any
classes, and members in the reserves, as provided for in the By-laws.


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                                    ARTICLE V

This corporation shall have its registered and principal office at 4001
Lexington Avenue North, Arden Hills, Minnesota, and may have other offices in
other localities.

                                   ARTICLE VI

These Articles of Incorporation may be amended as provided by law.

                                   ARTICLE VII

The members of the Board of Directors of this association shall not be held
personally liable to this association or its members and patrons for any
monetary damages for breach of fiduciary duty, except for: a breach of the
director's duty of loyalty to this association or its members; for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law; for a transaction from which the director derived an improper
personal benefit; or for an act or omission occurring prior to the effective
date of this provision, which is the date on which the amendment to the Articles
of Incorporation of this association adding this provision is filed in the
office of the Minnesota Secretary of State as required by law.


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                                     BY-LAWS

                                    ARTICLE I
                                NAME AND LOCATION

Section 1. Name. The name of this association shall be Land O'Lakes, Inc.

Section 2. Location of Office. The principal office shall be located in Arden
Hills, Minnesota. Other offices for the transaction of business shall be located
at such places as the Board of Directors may determine.

                                   ARTICLE II
                                    PURPOSES

The nature of the business, and the objects and purposes of this association are
set forth in the Articles of Incorporation.

                                   ARTICLE III
                                   MEMBERSHIP

Section 1. Qualification of Members. Persons and associations eligible for
membership in this association who shall enter into a business transaction with
this association shall be deemed to have applied for membership herein as of the
date of the first business transaction within the year of application for
membership. Membership in this association shall be of four (4) classes, as
follows:

      (a) Class A. An association of producers of agricultural products
operating on a cooperative basis, and (1) engaged in the processing, preparing
for market, handling or marketing of farm products of its members; or (2)
engaged in purchasing, producing, distributing and furnishing of farm supplies
and farm business services, may become a corporate member of this association
upon approval of the Board of Directors by the purchase of a share of Class A
Common Stock, par value $1,000, and compliance with such uniform conditions as
may be prescribed by the Board of Directors.

      (b) Class B. Any person (including an individual, partnership, limited
liability company, corporation, and landlord and tenant in a share tenancy) who
is actually engaged in the production of agricultural commodities in the
territory in which this association is doing business may become an individual
member of this association upon approval of the Board of Directors by the
purchase of a share of Class B Common Stock, par value $1.00, and compliance
with such uniform conditions as may be prescribed by the Board of Directors.

      (c) Class C. Any association, firm, corporation or any other entity, doing
business on a cooperative basis other than an entity which is eligible to hold
Class A Common Stock, may become a non-voting member of this association upon
the approval of the Board of


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Directors, by the purchase of a share of Class C Stock, par value $1,000, and
compliance with such uniform conditions as may be prescribed by the Board of
Directors.

      (d) Class D. Any individual other than an individual which is eligible to
hold Class B Common Stock may become a non-voting member of this association
upon the approval of the Board of Directors, by the purchase of a share of Class
D Stock, par value $1.00, and compliance with such uniform conditions as may be
prescribed by the Board of Directors.

Section 2. Voting. Each member of this association holding one or more shares of
Class B Stock shall have one (1) vote in the affairs of this association at all
membership meetings. Each member of this association holding one or more shares
of Class A Stock shall have such number of votes in the affairs of this
association at all membership meetings as its annual volume of patronage
business with this association bears to a representative volume of business of
an individual member marketing products through, or purchasing supplies from,
this association. Each corporate member shall by action of its board of
directors or of its membership appoint a person to act as delegate to cast its
multiple votes at membership meetings.

      Individual members may, by action of the Board of Directors, be grouped
into voting units and may be represented at membership meetings by delegates of
their own choosing who shall cast the votes of all of the members of the unit or
part of the unit they represent, except the votes of any members who have
informed this association of their desire to personally cast their votes. A
voting unit may be, but is not required to be, referred to as either a
Dairy/Foods Unit or an Ag Service Unit. For purposes of these By-laws, a voting
unit and the members thereof shall be deemed to be located in that region which,
compared to any other region, contains the most residences of the members of
such unit.

      The Board of Directors may submit any motion, resolution or amendment,
including final action upon nominees, and alternates, for the office of director
to the membership for a vote by electronic means or by mail on a ballot in the
form prescribed in Section 308A.635, Minnesota Statutes, and submitted in
conformity with the procedure defined in said section.

      Whenever the term "member" is used herein, except in Article VIII, Method
of Operation, it shall refer to voting members only; that is, the holders of
Class A Common Stock or Class B Common Stock.

Section 3. Termination of Members. The Board of Directors shall have the power
to terminate the membership of any member for cause or whenever, in its
judgment, such member has ceased adequately to patronize this association under
the same terms and conditions as other members. Furthermore, the Board shall
have the power, in its sole discretion, to terminate the membership of any
member whenever such member has executed an agreement with any third party
organization, in which such third party acts as an intermediary or agent either
in the sale of the member's products or in the procurement for the member of
product or supplies, and such relationship is deemed by the Board to be
detrimental to this association. In any case in which a membership has been
terminated,


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the stock of such member shall automatically become non-voting stock, and notice
to that effect shall be mailed to the member. The Board's determination as to
cancellation of membership shall be final and conclusive without requirement of
prior notice. Termination of membership shall mean cancellation of voting
rights. Such termination, however, shall not affect the member's property
interest in this association. This association may redeem at par value any
common stock which has become non-voting common stock.

Section 4. Affiliation of Members. When so provided by marketing agreements with
members, the Board of Directors shall have the power to enter into one or more
contracts of affiliation with another cooperative, appointing such other
cooperative as the agent for the marketing of milk of this association's members
and agreeing that each member covered by the contract shall with respect to such
contract and during the term thereof be deemed to be an affiliated member of
such other cooperative.

                                   ARTICLE IV
                                     REGIONS

Section 1. Regions. The territory in which the members of this association, both
individual and corporate, are located shall initially be divided into five
contiguous Ag Service Regions and twelve Dairy/Foods Regions, the boundaries of
which have been determined by action of the Board of Directors. The boundaries
of such regions shall be so defined that when the volume of patronage business
done by this association with the members located within each region is divided
by the number of directors to be nominated from that region, the result among
the regions shall not be excessively disproportionate. To achieve this
objective, the Board shall adopt a formula which may include, but which is not
limited to, the following factors; the number of directors nominated from each
region; amount of sales of agricultural products for members; amount of sales of
equipment, supplies, and services to members; amount of equities of active
member patrons attributable to patronage.

Section 2. Assignment of Members to Regions. Each member of this association
shall be assigned to an Ag Service Region if they transact business with this
association on a cooperative basis in the procurement of agricultural supplies
or services. Each member of this association shall be assigned to a Dairy/Foods
Region if they transact business with this association on a cooperative basis in
the marketing of dairy or food products. In the event a member with a single
vote transacts business on a cooperative basis in both the procurement of
agricultural supplies or services and the marketing of dairy or food products,
such member shall be assigned to an Ag Service Region or to a Dairy/Foods Region
depending on the member's preference. In the event a member with multiple votes
transacts business on a cooperative basis in both the procurement of
agricultural supplies or services and the marketing of dairy or food products,
such member shall be assigned to both an Ag Service Region and a Dairy/Foods
Region. Members with multiple votes assigned to two regions shall be entitled to
cast votes based upon the procurement of agricultural supplies or services in
the Ag Service Region and to cast votes based upon


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marketing of dairy or food products in the Dairy/Foods Region. Members assigned
to voting units shall be assigned to regions as set forth in Article III,
Section 2 of these by-laws. Members not assigned to voting units shall be
assigned to regions dependent on the location of his or her farm residence if an
individual or its principal place of business if an entity.

Section 3. Representation Committee. At any time up to five years from the
establishment of the original regions, as provide herein, the Board of Directors
shall appoint a Representation Committee. The Representation Committee shall
review the number of directors nominated from the Ag Service Regions taken as a
group and from the Dairy/Foods Regions taken as a group and shall adjust the
apportionment thereof as necessary to achieve the objective stated in Section 1
of this Article. With such objective, the Representation Committee shall then
review the number and boundaries of the Dairy/Foods Regions and shall recommend
for final action by the Board of Directors such changes in the number and
boundaries and any reallocation among the Dairy/Foods Regions of the total
number of directors to be nominated from the Dairy/Foods Regions as they deem
necessary. With the same objective, the Representation Committee shall also
review the volume of ag service patronage business done by this association with
the members located within each Ag Service Region and shall, to the extent it
deems necessary, recommend for final action by the Board of Directors any change
in the number and boundaries of Ag Service Regions and any reallocation among
the Ag Service Regions of the total number of directors to be nominated from the
Ag Service Regions. The number and boundaries of all regions and the number of
directors to be nominated from each of the regions shall be the subject of
review in this manner at least every five years. Whenever the boundaries or
number of director nominations allocated to a region are varied as the result of
this section, the terms of all directors meeting substantially similar
qualifications in affected regions shall end as of the next following annual
meeting without regard to the amount of time otherwise remaining in their terms.
At such meeting elections shall be held to fill all then open directorships.

Section 4. Region Councils. Within each region, a council shall be constituted
in accordance with policies and procedures adopted from time to time by the
Board of Directors of this association. Each such council shall, subject to the
policies and procedures of the Board of Directors, determine their internal
governance and representatives, shall provide nominations for director
candidates from such district, and shall participate in regional and association
programs and communication efforts within the region as requested by the Board
of Directors.

                                    ARTICLE V
                               MEETINGS OF MEMBERS

Section 1. Annual Meeting of Members. The annual meeting of the members of this
association shall be held in Minneapolis, Minnesota, in Saint Paul, Minnesota,
or at such


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other place as may be chosen by the Board of Directors, within six months after
the end of the fiscal year. The Chairman of this association shall preside at
such meetings.

Section 2. Special Meetings of Members. Special meetings of the members of this
association may be called at any time by the Board of Directors or on the
petition of twenty per cent (20%) of the members.

Section 3. Notice of Meetings. Notice of all regular and special meetings of
this association shall be given by the Secretary of this association in this
association's regular publication mailed to all of its members at least two (2)
weeks previous to the date of the meeting, or by mailing notice thereof to each
and every member personally; or in the case of an association, to the Secretary
thereof at the post address of such association not less than fifteen (15) days
previous to the date of the meeting.

Section 4. Meetings of Members within Regions. A meeting of the members may be
held annually in each Ag Service Region and each Dairy/Foods Region. Notice of
all such meetings shall be provided to each member in such region as provided by
law.

Section 5. Quorum. A quorum at all general meetings of this association (regular
and special) shall be such number as is provided in Section 308A.631 of the
Minnesota Statutes. A quorum at all Ag Service Region and Dairy/Foods Region
meetings shall be not less than ten percent of the members assigned to such
region.

Section 6. Election of Directors. At each annual meeting of this association the
election of directors shall be as follows: The Chairman of this association
shall present to the meeting the name of each nominee from each region from
which a director is to be elected and all of the members from all of the Ag
Service Regions and Dairy/Foods Regions assembled at the annual meeting shall
vote acceptance or rejection of said nominee. If the nominee is rejected, the
Chairman of this association shall present the name of the alternate nominee
from that region and all of the members assembled at the annual meeting shall
vote acceptance or rejection of said alternate nominee. If the alternate nominee
is rejected, there shall be nominations from the floor of persons eligible for
the vacant directorship from such region and election by ballot by majority vote
of all the members present and voting.

                                   ARTICLE VI
                               BOARD OF DIRECTORS

Section 1. Number. The Board of Directors shall consist of twenty-four (24)
persons, twelve nominated from Ag Service Regions and twelve nominated from
Dairy Foods Regions, elected in the manner provided for herein. In addition to
the elected Board of Directors, the Board may appoint annually for a term of one
(1) year, up to three additional persons, who shall be non-voting members of the
Board of Directors, but who need not be members of this association, who possess
special qualifications deemed valuable in determining the policies of this
association.


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Section 2. Term of Office. Except as may result from the operation of Article
VI, Section 4, the term of office of an elected director shall be four years,
provided, however, that the terms of office of directors elected shall be so
arranged that approximately one-fourth of the Board shall regularly be elected
annually.

      No person shall be elected to an additional consecutive term as director
if such person has then served as a director for more than 20 consecutive years.

Section 3. Qualifications. The qualifications for the office of director are as
follows:

      (a) The candidate must be less than sixty-five years of age at the date of
election.

      (b) The director must, at the time of election and at all times during the
term of his or her service, be (1) an active producer of agricultural
commodities who is a Class B common stockholder; (2) an active producer of
agricultural commodities who is a member of an association which is a Class A
common stockholder; or (3) a manager or other employee of a Class A common
stockholder whose reporting relationship within such stockholder is directly
with, and who can only be hired and fired by, its board of directors. At all
times during the term of his or her service directors hereafter elected must
remain affiliated with the region with respect to which they were nominated and
maintain the nature of the affiliation at the time of their election, both as to
whether they are a producer or a manager as above described and as to whether
their relationship to this association is primarily one of Dairy/ Foods
orientation or of Ag Service orientation.

      (c) The serving director must have no loyalties to other organizations
that transcend or interfere with the director's loyalty to this association, and
the director's loyalty to the member association of this association with which
the director is connected if she or he has such connections.

      (d) The person must not at any time during the term of directorship serve
as an officer, director or manager of, or advisor to, any business organization
which, in the determination of this association's Board of Directors, is
significantly competing with this association in the procurement of milk or in
the marketing of food products or agricultural supplies.

      (e) At least one of the directors serving from each Ag Service Region
shall, at all times, be an active producer of agricultural commodities. If there
are two or more directors serving from an Ag Service Region, at least one of
such directors shall at all times meet the qualifications of Section 3(b)(3)
above. At no time shall the number of managers serving as directors from any Ag
Service Region exceed the number of active producers of agricultural commodities
serving as directors from such region. Directors nominated from Dairy/Foods
Regions who are active producers of agricultural products must at all times
during the term of directorship market dairy products through this association
or through a Class A common stockholder of this association. Whenever a member
of the Board of Directors becomes disqualified to hold office before his or her
term expires, the Board shall declare the office vacant.

Section 4. Apportionment of Directors. Hereafter, all apportionment of the right
to nominate directors shall be determined in accordance with Article IV, Section
3. All terms


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of all open directorships shall be for such length, not exceeding four years, as
the Board of Directors determines will best facilitate staggered terms for the
Board of Directors.

Section 5. Nomination of Directors. Prior to the annual meeting in each Region
in which a vacancy on the Board of Directors will occur, the Region Council
shall act as a nominating committee and shall meet and nominate at least two (2)
eligible candidates as nominees for each vacancy for the office of director.
Such Region Council shall report the names of such persons to the meeting.
Additional nominations may be made by submission of a nominating petition to the
Region Council documenting the eligibility of the proposed candidate and
evidencing the support of either (1) fifteen or more members, or (2) a lesser
number of members who together hold at least 10% of the votes eligible to be
cast for nominees. The members attending the annual meeting in such region shall
select one nominee and one alternate for the office of director. The names of
those selected shall then be certified to the annual meeting of the members of
this association for final action as provided in Article V of these By-laws.
Said nominee, if a Class B member, must either reside in the region or be a
member of a recognized voting unit which is located in said region; if the
nominee is a member of a Class A member or a manager of a Class A member, then
the Class A member's principal place of business must be located within said
region.

Section 6. Vacancies. Whenever a vacancy occurs on the Board of Directors, other
than from expiration of a term of office, the remaining directors may appoint a
person to fill such vacancy until the next annual meeting of the region in which
the vacancy occurred, and until a successor shall be duly elected and qualified.

Section 7. Removal of Directors. Any director may be removed from office for
cause after reasonable notice and opportunity for hearing, by majority vote of
the members of this association attending a general or special meeting of this
association. A vacancy resulting from such action shall be filled by the members
at said meeting by election of a qualified person from the region affected who
will serve until the next annual meeting.

Section 8. Meetings The annual meeting of the Board of Directors for the
election of officers and for the transaction of such other business as may
properly come before the meeting shall be held within thirty days after the
annual general meeting of this association.

      Regular meetings of the Board of Directors may be held without call or
formal notice at such time and place and in such manner as the Board may
determine. Special meetings may be held at any place designated by the Chairman
of this association or by a majority of the members of the Board of Directors.

      Notice of meetings of the Board of Directors shall be given as provided by
law.

Section 9. Quorum. A majority of the Board of Directors shall constitute a
quorum for the transaction of business at all meetings thereof, and the act of a
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.


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      Section 10. Powers and Duties. The directors shall have and exercise full
control of the affairs of this association, except such as are conferred by law,
these By-laws, or the Articles of Incorporation upon the stockholders or upon an
officer of this association.

Section 11. Annual Audit. At least once annually the Board of Directors shall
secure the services of a competent and disinterested certified public
accountant, who shall make a certified audit of the books and accounts of this
association and render a report in writing thereon, which report shall be
submitted to the stockholders.

Section 12. Compensation. Directors of this association may receive such
compensation as may be fixed by resolution of the Board.

Section 13. Executive Committee. The Board of Directors shall establish an
Executive Committee consisting of the Chairman of this association, the two
Vice-Chairmen, and the Secretary, plus such additional members as determined by
the Board of Directors from time to time. The Chairman of this association shall
serve as Chairman of the Committee. The Executive Committee shall meet upon call
of the Chairman and shall, subject to the limits provided by law, have such
powers and duties as may, from time to time, be granted by the Board of
Directors. Minutes of all meetings of the Executive Committee shall be taken and
submitted to the Board at its next meeting. The Board of Directors may, in its
discretion, appoint such other committees as it may deem necessary.

                                   ARTICLE VII
                                    OFFICERS

Section 1. Officers. The Board of Directors shall elect from amongst their
number the following officers at each annual meeting of the Board: A Chairman, a
First Vice Chairman, a Second Vice Chairman, and a Secretary. Said officers
shall hold office until the next annual Board meeting and until their successors
take office. The Board shall have power to fill a vacancy in any of such
offices.

Section 2. Duties of Chairman. The Chairman of this association shall preside at
all general meetings of this association, and all meetings of the Board of
Directors at which he or she is present, and shall perform such other duties as
may be assigned by these By-laws or by the Board of Directors. The Chairman
shall serve as an ex officio member on all committees of the Board of Directors.

Section 3. Duties of Vice Chairmen. The First Vice Chairman shall, at the
request of the Chairman, or in the case of her or his absence, perform
temporarily the functions of the Chairman. In the event of death, resignation,
or the ineligibility of the Chairman, the First Vice Chairman shall succeed to
the office of Chairman. The Second Vice Chairman shall perform such duties as
may be assigned by the Chairman or by the Board.


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Section 4. Duties of Secretary. The Secretary shall record the proceedings of
all general meetings of this association and all meetings of the Board of
Directors. The Secretary shall have charge of the stock ledger and shall compile
a list of all stockholders eligible to vote at each member meeting. He or she
shall act as custodian of the records of this association and the seal of this
association. He or she shall be responsible for publication and mailing of all
notices of meetings. He or she shall execute all documents required to bear the
corporate seal. He or she shall do and perform all other functions and duties
customarily performed by corporate secretaries and have the power and authority
incident to that office. The Board of Directors may appoint any number of
assistant secretaries, who need not be members of the Board, from amongst
nominees as submitted by the President, who may exercise such authority and
powers of the office of Secretary as the Board shall prescribe.

Section 5. Duties of Treasurer. The Treasurer, who shall be elected by the Board
of Directors from amongst a nominee, or nominees, as presented by the President,
shall be the financial officer of this association and shall perform all the
powers and duties incident to that office. The Board of Directors may appoint
any number of assistant treasurers, who need not be members of the Board, from
amongst nominees as submitted by the President, and shall prescribe their powers
and duties.

Section 6. President and Vice Presidents. The Board of Directors shall elect a
President of this association who shall not be a member of the Board of
Directors. The Board of Directors may also elect such Vice Presidents and
Executive Vice Presidents from amongst nominees for such offices as presented to
the Board by the President. Each Vice President shall have such duties as are
assigned from time to time by the President.

Section 7. Duties of President. The President shall be the chief executive of
this association and as such shall have general charge and management of the
business of this association, and shall sign or countersign all certificates,
contracts or other instruments of this association as authorized by the Board of
Directors, shall make reports to the Board of Directors and members, and shall
perform such other duties as are incident to the office or are properly required
by the Board of Directors. The President shall be responsible for the direction
and supervision of all personnel within his or her appointive powers and shall
also have the power to discipline or discharge such personnel. In the event any
office is held by an employee who is not a member of the Board of Directors,
then such office shall be terminated upon termination or discharge of said
employee by the President.

      The President shall sit with the Board of Directors and the Executive
Committee in deliberation upon all matters pertaining to the general business
and policies of this association.

Section 8. Compensation of Personnel. The compensation of the President shall be
determined by the Board of Directors. The compensation of all other employees
shall be set by the President, and may be reviewed by the Board of Directors. No
member of the Board of Directors shall be regularly employed by this
association.


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Section 9. Removal. All officers who have been elected by the Board of Directors
shall be subject to removal at any time by the affirmative vote of a majority of
the Board of Directors.

                                  ARTICLE VIII
                               METHOD OF OPERATION

Section 1. This association shall be operated upon the cooperative basis in
carrying out its business within the scope of the objects and purposes defined
in Article II of the Articles of Incorporation. It shall be operated in such
manner as to qualify this association as a farmers cooperative association as
defined in the Agricultural Marketing Act (12 U.S.C.A. 1141j (a)), and the
Capper-Volstead Act (7 U.S.C.A. 291).

Section 2. The term "patron" as used in the Article of Incorporation shall mean
member-patron. Whenever the term "member-patron" or "member" is used in this
Article, it shall mean all member-patrons or members whether voting or
non-voting. Each transaction between this association and each member-patron
shall be subject to and shall include as a part of its terms, whether or not the
same be expressly referred to in said transaction, the following provisions:

      (a) This association shall apportion to each member-patron within eight
and one-half (8 1/2) months after the close of the fiscal year such member's
proportionate share of the annual net earnings of this association from the
business done with or for its member-patrons as hereinafter more particularly
described; provided, however, that a member-patron shall not be entitled to a
distribution of net earnings on any product marketed with this association
unless there is a marketing agreement between the member-patron and this
association which provides for the payment of net earnings on such product. Any
marketing or membership agreement between the member-patron and this association
which does not otherwise specify a different term or termination procedure may
be terminated by either party providing the other prior written notice of not
less than 365 days.

      (b) Annual net earnings shall be determined in accordance with generally
accepted accounting principles; provided however, that for purposes of this
Section positive and negative impacts of open positions on futures contracts
entered into for hedging purposes shall be excluded from the calculation
thereof.

      (c) The Board of Directors may also deduct such amount as the Board deems
necessary in its discretion for payment of dividends on preferred stock, if
necessary to do so, and amounts necessary to establish reasonable reserves for
any necessary purpose.

      (d) Annual net earnings from member-patron business may be calculated
according to the several departments or divisions of said business and
distribution thereof as between departments or divisions need not be uniform,
provided, however, that there shall be no discrimination between member-patrons
of the same department or division. Any amounts paid as interest on debt shall
reduce such earnings even if such debt is owed to a division or entity included
in the consolidated financial statements of this association in accordance with
generally accepted accounting principles.


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<PAGE>

      (e) There shall be set aside in a reserve an amount equal to the sum of
the following, determined in accordance with generally accepted accounting
principles:

      (1) Annual net earnings after provisions for income taxes thereon derived
from sources other than member-patron business; and

      (2) An amount equal to such percentages from zero to fifteen percent (15%)
as may be determined by the Board of Directors of the annual net earnings from
each of the profitable member-patron business pools less the amount of provision
for income taxes thereon; provided that, current members participating in such
pools shall have been notified of the amount of such determination as to each of
the pools prior to the beginning of the fiscal year and new members shall have
been notified of such determinations prior to becoming members. Provided,
however, that for any such pool with respect to which the above required notice
of percentage determination is not provided prior to the beginning of the fiscal
year such percentage for such pool is hereby fixed at 10% for such year.

      In any event, however, this association shall be operated as provided for
in Section 1 of this Article.

      Said reserve shall be credited to a retained earnings account, and said
account may be used for any lawful purpose as determined by the Board of
Directors.


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<PAGE>

      (f) The annual net earnings after any deductions as provided for in (e)
above shall be distributed on a patronage basis in the form of cash or in the
form of equity credits evidenced by written notices of allocation (whether such
notices are qualified written notices of allocation within the meaning of 26
U.S.C.A. 1388(c) or otherwise), or any combination thereof. The records of this
association shall reflect the amount credited to each member, and notice shall
be given to each member of the amount so credited to the member's account.

      (g) All equity credits may be paid or redeemed in whole or in part at such
time, in such manner and in such order as shall be determined by the Board of
Directors and the payment thereof whether arising as the result of patronage
with this association or otherwise shall be payable subject to the discretion of
the Board of Directors.

      (h) If this association has sustained an annual loss in its member-patron
business, it shall have the power and authority to allocate such loss to the
member-patrons for such year or years on a patronage basis and apply the same
against the equity credits of said member-patrons.

      (i) Each person (including individuals, partnerships, limited liability
companies, corporations and cooperative associations) who becomes a
member-patron of this association and each member-patron of this association on
the effective date of this By-law who continues as such after said date shall,
by such act alone, consent (i) to the payment for and on his or its behalf of
the cost of a one-year subscription to the general membership magazine published
by this association; and (ii) for each year in which a business transaction
occurs between said member-patron and this association, to the annual renewal of
said subscription and to the payment for and on his or its behalf of the
subscription price for each annual renewal; provided, however, that any
subscription may be terminated by giving written notice to this association.

      Because this association is a cooperative owned by its members of which it
is their agent, payment of such subscription price by this association on behalf
of said members is actually payment by them.

      (j) The Board of Directors shall establish and maintain, not necessarily
to the exclusion of other programs established by the Board of Directors, an
Equity Target Program which shall, subject to the discretion of the Board of
Directors, provide the basis for redemption of equity credits issued to members
and patrons of this association hereunder in conjunction with the cooperative
marketing of such members milk or other food products ("Dairy/Foods Equity
Credits"). Such program shall contain elements as hereafter set forth. The Board
of Directors shall from time to time determine a level of equity per
hundredweight of milk (or its food equivalent as measured by value) marketed
through the association (or such other measure as the Board deems appropriate)
which level the Board deems would provide a fair and adequate level of equity
capitalization for the operations of the association in conjunction with such
marketing. Such level, referred to as the "Equity Target" is subject to change
by the Board of Directors. Using such Equity Target, there shall be calculated
with respect to each member a "Current Equity Target" which shall be used for
purposes of determining the portion of the allocated patronage payable to such


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<PAGE>

member in cash. The Current Equity Target shall be calculated with respect to
each member as of the end of each fiscal year by multiplying the Equity Target
by such member's volume of milk or food product marketed with the association
during such year. Any member whose Calculated Dairy/Foods Equity Credits
(measured at 60% of face value with respect to credits originally issued
pursuant to notices of allocation which were not qualified notices of allocation
within the meaning of 26 U.S.C.A. 1388(c) and at face value with respect to
other credits) exceed the amount of such member's Current Equity Target as of
December 31 of any year shall, subject to the approval of the Board of
Directors, be entitled to receive in cash 100% of such year's patronage earnings
otherwise allocable to such member in conjunction with the cooperative marketing
during such year of such member's milk and food products. For purposes of
determining eligibility for redemption of Dairy/Foods Equity Credits, an
"Averaged Equity Target" shall also be calculated with respect to each member
and equity holder by multiplying the Equity Target by a rolling average of such
member's or equity holder's volume of milk or food product marketed with the
association over a period of years determined by the Board of Directors and
called the "Averaging Period". The Averaging Period is initially set at six
years at the time of adoption of this by law and is expected to be increased by
the Board of directors by one year on December 31 of each year hereafter until
the Averaging Period is twelve years. All holders of equity credits who had been
inactive during the calendar year 1995 shall each, subject to the approval of
the Board of Directors, have their equities redeemed during a twelve year
period. Subject to the approval of the Board of Directors, the redemption of all
such equity held by such inactive persons shall be made, in aggregate, in twelve
equal annual installments on an oldest first basis beginning in the year 1996.
Any member who holds equity exceeding the amount of such member's Averaged
Equity Target at the time of the adoption of this bylaw and for so long as shall
such member's Dairy/Foods Equity Credits continue to exceed such member's
Current Equity Target shall have, subject to the approval of the Board of
Directors, equities redeemed at one twelfth of the amount of such initial excess
each year reduced by a ratable portion of any such equities assigned or
transferred by such holder. Following the adoption of this bylaw and except as
above provided, when the Calculated Dairy/Foods Equity Credits of any holder are
in excess of such holders Averaged Equity Target measured as of any fiscal year
end, Dairy/Foods Equity Credits of such member in an amount sufficient to
equalize the Calculated Dairy/Foods Equity Credits and the Averaged Equity
Target shall be redeemed, subject to the approval of the Board of Directors,
during the following year. For purposes of this determining eligibility for such
redemption, any Dairy/Foods equities held as the result of assignment, bequest,
purchase or other method of accumulation excepting the earning of such equities
in conjunction with the marketing of products through the association shall be
credited to the account of the holder of Dairy/Foods Equity Credits at the rate
of one-twelfth of the amount of the equities thus otherwise acquired in each
year following the acquisition. It is envisioned that Dairy/Foods Equity Credits
shall be the primary source of equity for members to reach Averaged Equity
Targets. However, the Board of Directors shall have the authority, under any
circumstances it deems extraordinary, to require members contribute such cash as
may be necessary to achieve a specified percentage of


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<PAGE>

each member's Average Equity Target. Such requirement would be a condition of
the agreement providing for the continued marketing of such member's product
through the association. The foregoing provisions of this Section 2 shall not be
deemed to limit the ability of the Board of Directors to establish one or more
other dairy foods pools for specific purposes which shall have their respective
included businesses, participation eligibility requirements, capital needs,
equity targets, equity redemption programs, and transitionary provisions, all as
determined by the Board of Directors from time to time.

      (k) All patronage equity credits shall be assignable or transferable by
the holders thereof only when and as approved pursuant to policies adopted by
the Board of Directors. Any Dairy/Foods Equity Credits assigned shall for
purposes of any redemption pursuant to the provisions of (j) above be deemed to
be a ratable assignment of each year's Dairy/Foods Equity Credits held by the
assignor.

Section 3. Each person who applies for and is accepted to membership in this
association and each member of this association on the effective date of this
By-law who continues as a member after such date shall, by such act alone,
consent that the amount of any distributions with respect to his, her, or its
patronage occurring in any fiscal year beginning after December 31, 1962, which
are made in written notices of allocation (other than those which are designated
on their face to be "nonqualified") and which are received by him or it from
this association, will be taken into account by him, her, or it at their stated
dollar amounts in the manner provided in 26 U.S.C.A. 1385 in the taxable year in
which such written notices of allocation are received by him or it -- it being
the intent of this By-law to provide a consent binding on all members who retain
or obtain membership in this association after the adoption of this By-law and
receipt of a written notification and copy of this By-law, for the purpose of
making such distributions "qualified written notices of allocation" within the
meaning of 26 U.S.C.A. 1388(c).

                                   ARTICLE IX
                                 MISCELLANEOUS

Section 1. Business with Non-Members. This association shall not deal in the
products of non-members in an amount greater in value than such as are handled
for its members, and shall not purchase supplies, machinery, equipment, or
render services for non-members in an amount greater in value than the supplies,
machinery, equipment, purchased for or services rendered for members.

Section 2. Lien. This association shall have a first lien upon all the shares of
its capital stock and all patronage credits standing on its books for any
indebtedness of the respective holders or owners thereof to this association,
and shall have the right of offset for the face amount thereof against such
indebtedness.

Section 3. Transfer of Stock. Class A Common Stock, Class B Common Stock, Class
C Stock, Class D Stock and Preferred Stock of this association shall be
transferable only with the consent of the Board of Directors and only after the
same shall have been offered for


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<PAGE>

sale to this association. Upon receipt of any such offer in writing, this
association shall have ninety (90) days thereafter in which to purchase the
share so offered. If this association within said period shall pay or tender to
the holder an amount equal to the par value of the share offered, the holder
shall endorse and deliver the Certificate therefor to this association, and such
share may be held as treasury stock or cancelled. If this association shall fail
to pay or tender said amount within said period, the holder shall be free to
dispose of said share provided that no stock shall be transferred to anyone not
eligible to hold the same.

Section 4. Indemnification of Directors, Officers, and Employees. This
association shall indemnify each person who is or has been a director, officer
or employee of this association, and each person who is serving or who has
served, at the request of this association, as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys' fees, judgments, fines, and
amounts paid in settlement, actually and reasonably incurred by him to the full
extent to which directors, officers and employees may be indemnified under the
provisions of Minnesota laws.

      This association may purchase and maintain insurance on behalf of any
person who may be indemnified to the extent permitted by law.

                                    ARTICLE X
                                   DISSOLUTION

Section 1. Upon the dissolution of this association the debts of this
association shall first be paid; and the remaining assets, if any, shall be paid
as follows: First, to the Preferred stockholders up to the par value of their
stock, plus accrued and unpaid dividends, if any, declared thereon; second, to
the Class A and Class B Common stockholders, Class C and Class D stockholders up
to the par value of their stock; and third, to all patrons, whether voting or
non-voting members, all the remainder of the assets which shall be distributed
to them on a patronage basis according to the patronage credits standing in
their names on the books of this association.

                                   ARTICLE XI
                                   FISCAL YEAR

The fiscal year of this association shall begin on January 1 and end on December
31.


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