EXHIBIT 10.12

SUBORDINATION AND INTERCREDITOR AGREEMENT

THIS SUBORDINATION AND INTERCREDITOR AGREEMENT, dated as of June 30, 2006, is made and given by LAND O’LAKES, INC., a Minnesota cooperative corporation, (the “ Junior Creditor ”) in favor of COBANK, ACB, a federally chartered instrumentality under the Farm Credit Act of 1971, as agent (the “ Agent ”) for the lenders from time to time party to the Credit Agreement (as defined below), (together with the Agent, the “ Senior Creditors ”).

RECITALS:

A.             Golden Oval Eggs, LLC, a limited liability company organized under the laws of the State of Delaware, Midwest Investors of Iowa, Cooperative, a cooperative organized under the laws of the State of Iowa and GOECA, LP, a Delaware limited partnership (individually, a “ Borrower ” and, collectively, the “ Borrowers ”), is or may become indebted to the Junior Creditor under that certain promissory note dated as of June 30, 2006 made by the Borrowers and payable to the Junior Creditor in the original principal amount of $17,000,000, in the form attached hereto as Exhibit A (the “ Subordinated Note ”).

B.             The Borrowers are now, or may hereafter be, indebted to the Senior Creditors as a result of the advance of monies and other extensions of credit by the Senior Creditors to the Borrowers under or pursuant to a Credit Agreement dated as of September 13, 2004, as amended from time to time (as the same may be amended, restated or otherwise modified from time to time hereafter, the “ Credit Agreement ”) between the Borrowers, the Agent and the Senior Creditors.

C.             The Junior Creditor and Senior Creditors each acknowledge that the loan or advance of monies or other extensions of any financial accommodation or credit to the Borrowers by each of the Junior Creditor and the Senior Creditors is of value to the other party.

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged by the parties, and in order to induce the Senior Creditors to continue to make loans or extend credit or any other financial accommodation to or for the benefit of the Borrowers, or to grant such renewals or extension thereof as the Senior Creditors may deem advisable, and to better secure the Senior Creditors in respect of the foregoing, the parties hereby agree as follows:

Section 1.                Definitions, Rules of Constructions.

1.1            For purpose of this Agreement, the following terms shall have the following meanings:

“ Bankruptcy Code ” shall mean 11 U.S.C. 101 et seq., as amended from time to time.

“ Borrower ” and “ Borrowers ” shall have the meaning given to such terms in Recital A, above, and any successor (including a debtor-in-possession under the Bankruptcy Code), assignee, receiver, trustee or estate thereof.

“ Credit Agreement ” shall have the meaning given to that term in Recital B, above, and shall include any amendments, modifications or restatements thereto or thereof and any credit agreement hereafter entered into in replacement thereof.

“ Default ” shall mean any event which with the giving of notice or lapse of time, or both, would become an Event of Default.

“ Event of Default ” shall mean (i) any Event of Default (as therein defined) under the Credit Agreement, (ii) any failure of any Borrower to pay when due (whether at the date scheduled therefor or earlier upon acceleration), or when demanded (with respect to any obligation payable on demand), any item constituting Senior Debt, or (iii) any event shall occur or condition shall exist and shall continue for more than the period of grace, if any, applicable thereto and shall have the effect of causing, or permitting the Senior Creditors or any subsequent holder of Senior Debt to cause, any item of Senior Debt to become due prior to its stated maturity or to realize upon any collateral given as security therefor.

“ Junior Collateral ” shall mean the property or interests in property of the Borrowers identified on Exhibit B hereto in which the Borrowers have granted to Junior Creditor a security interest to secure payment of the Subordinated Note.

“ Junior Creditor ” shall mean Land O’Lakes, Inc. and any successor thereto (including a debtor-in-possession under the Bankruptcy Code), assignee, receiver, trustee or estate thereof.

“ Junior Creditor Documents ” shall mean the Subordinated Note, the Subordinated Security Documents and any documents or instruments executed and delivered by the Borrowers in connection with any of the foregoing.

“ Lien ” shall mean any mortgage, deed of trust, pledge, lien, security interest, charge, set-off right or other encumbrance, whether now existing or hereafter created, acquired or arising.

“ Permitted Payments ” shall have the meaning given in Section 3 below.

“ Person ” shall mean an individual, cooperative, corporation, association, partnership, limited partnership, limited liability company, trust, organization, individual or government or any governmental agency or any political subdivision thereof.

“ Senior Collateral ” shall mean all collateral now or hereafter securing payment of the Senior Debt, including proceeds thereof.

“ Senior Creditors ” shall have the meaning given in the preamble to this Agreement and shall include any successor to any Senior Creditor (including a debtor-in-possession under the Bankruptcy Code), assignee, receiver, trustee or estate of any Senior Creditor.

“ Senior Creditor Documents ” shall mean (a) the Credit Agreement, (b) all promissory notes delivered in connection with the Credit Agreement, and (c) all Credit Documents (as described in the Credit Agreement) and any mortgages, guaranties, deeds of trust, security agreements or other documents given by any Person in favor of the Agent or the Senior Creditors to secure all or any portion of the Senior Debt, in each of the forgoing cases as any of the forgoing may be amended, supplemented, restated, extended or otherwise modified from time to time.

“ Senior Debt ” shall mean all liabilities and obligations of the Borrowers to the Senior Creditors howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising or incurred, including, without limitation, all of the Borrowers’ obligations to the Senior Creditors under the Senior Creditor Documents, and all other obligations under any other agreement between the Borrowers and the Agent or the Senior Creditors now or hereafter in effect, and also including, without limitation, any and all interest accruing on any of the Senior Debt after the commencement of any proceedings referred to in Section 6 hereof, notwithstanding any provision or rule of law which might restrict the rights of the Senior Creditors, as against the Borrowers or anyone else, to collect such interest.

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“ Subordinated Debt ” shall mean all obligations, liabilities and indebtedness of the Borrowers to the Junior Creditor under the Junior Creditor Documents.

“ Subordinated Note ” shall have the meaning given to such term in Recital A above, and shall include any amendments, modifications or restatements thereto or thereof and any note hereafter entered into in replacement thereof (but nothing in this definition shall be deemed to waive the provisions of Section 12 below requiring the Senior Creditors’ prior written consent to any change in any instrument or agreement evidencing the Subordinated Debt, including without limitation any warrants attached thereto).

“ Subordinated Security Documents ” shall mean any security agreement or other document in which the Borrowers have granted to the Junior Creditor a security interest in the Junior Collateral.

1.2            In this Agreement, in the computation of a period of time from a specified date to a later specified date, unless otherwise stated the word “from” means “from and including” and the word “to” or “until” each means “to but excluding.”

1.3            Other terms may be defined in other parts of this Agreement.  All references to agreements and other contractual instruments shall be deemed to include all subsequent amendments thereto or changes therein entered into in accordance with their respective terms, and all references to Persons shall be deemed to include their permitted successors and assigns.  Unless the context in which used herein otherwise clearly requires, “or” has the inclusive meaning represented by the phrase “and/or.”  All incorporations by reference of covenants, terms, definitions or other provisions from other agreements are incorporated into this Agreement as if such provisions were fully set forth herein, and include all necessary information and related provisions from such other agreements, and all such covenants, terms, definitions or other provisions from other agreements incorporated into this Agreement by reference shall survive any termination of such other agreements until the Senior Debt has been paid in full and all financing arrangements between the Borrowers and the Senior Creditors shall have been terminated.

Section 2.                Standby; Subordination; Standby; Subordination .

2.1            The payment and performance of the Subordinated Debt is hereby subordinated to the payment and performance of the Senior Debt, and, except as set forth in Section 3 below, the Junior Creditor will not ask, demand, sue for, take or receive from any Borrower or any other Person liable for all or any part of the Senior Debt, by setoff or in any other manner, the whole or any part of the Subordinated Debt, or any monies which may now or hereafter be owing in respect of the Subordinated Debt (whether such amounts represent principal or interest, or obligations which are due or not due, direct or indirect, absolute or contingent), including, without limitation, taking any security for any of the foregoing, except as set forth in Section 2.2, or the taking of any negotiable instrument therefor (except the Subordinated Note), unless and until all of the Senior Debt shall have been fully and indefeasibly paid and satisfied and all financing arrangements between the Borrowers and Senior Creditors pursuant to the Credit Agreement have been terminated.  The Subordinated Debt shall continue to be subordinated to the Senior Debt even if the Senior Debt is subordinated, avoided or disallowed under the United States Bankruptcy Code or other applicable law.  The Junior Creditor shall not challenge, and irrevocably waives any right it may have to challenge, the validity, enforceability or priority of the Senior Debt in any judicial, administrative or alternative dispute resolution proceeding.

2.2            The Junior Creditor warrants and represents that the Subordinated Debt is unsecured except for its subordinated security interest securing the Subordinated Note in the Junior Collateral as permitted hereunder, and agrees that the Junior Creditor hereafter will not, unless and until all of the Senior Debt shall have been fully and indefeasibly paid and satisfied and all financial arrangements between the Borrowers and the Senior Creditors pursuant to the Credit Agreement shall have been

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terminated, accept any other security therefor from any Borrower or any other Person liable for all or any part of the Senior Debt for the benefit of any Borrowers and in the event the Junior Creditor does obtain any such additional security for the Subordinated Debt, at the request of the Agent, the Junior Creditor hereby authorizes the Agent to file such subordinations, termination statements and releases as the Senior Creditors shall reasonably request to subordinate or release the Junior Creditor’s security interest in or lien against such property.  Prior to the indefeasible payment in full and discharge of the Senior Debt and the termination of all financial arrangements between the Borrowers and the Senior Creditors pursuant to the Credit Agreement, the Junior Creditor shall have no right to enforce any claim or take action against any collateral held by it with respect to the Subordinated Debt, or to take any action against any Borrower or the property of any Borrowers or of any other Person liable for all or any part of the Senior Debt.   The Junior Creditor shall not challenge, and irrevocably waives any right it may have to challenge, the attachment, validity, perfection, priority or extent of the Lien of the Senior Creditors or any of them, in the Senior Collateral in any judicial, administrative or alternative dispute resolution proceeding.

2.3            The Junior Creditor hereby agrees that its security interest in the Junior Collateral is subject and subordinate to the security interest of the Senior Creditors in the Junior Collateral to secure indebtedness of the Borrowers to Senior Creditors.  The Junior Creditor hereby further agrees that (A) the Junior Creditor shall have no right to possession of any of the Junior Collateral or to foreclose upon any of the Junior Collateral, whether by judicial action or otherwise, unless and until all of the indebtedness of the Borrowers to Senior Creditors secured by Senior Creditors’ senior security interest in the Junior Collateral shall have been fully and indefeasibly paid and satisfied and all financial arrangements between the Borrowers and Senior Creditors secured by such senior security interest have been terminated and (B) at the request of the Agent, in connection with any sale of all or any part of the Junior Collateral by the Senior Creditors or to which Senior Creditors have consented, the Junior Creditor shall execute and deliver to the Agent such termination statements and releases as the Senior Creditors shall reasonably request to release, or evidence the release of, the Junior Creditor’s security interest in the Junior Collateral.   The Junior Creditor will not join with any creditor (unless the Senior Creditors shall so join) in bringing any proceeding against any Borrower under any bankruptcy, reorganization, readjustment of debt, arrangement of debt receivership, liquidation or insolvency law or statute of the federal or any state government.

2.4            The Junior Creditor acknowledges and agrees that, to the extent the terms and provisions of this Agreement are inconsistent with any agreement or understanding between the Junior Creditor and the Borrowers, including without limitation, the Junior Creditor Documents, such agreement or understanding shall be subject to this Agreement.

Section 3.                Permitted Payments .

3.1            Notwithstanding the provisions of Section 2 of this Agreement, until the Agent gives the Junior Creditor written notice (in the manner set forth below) of the occurrence of an Event of Default or a Default, and provided that:

(a)            there shall not then exist any breach of this Agreement by the Junior Creditor which has not been waived, in writing, by the Senior Creditors,

(b)            at the time of the payment described below no Event of Default or Default exists and is continuing,

(c)            the payment described below, if made, would not give rise to the occurrence of any Event of Default or Default, and

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(d)            none of the events described in Section 6 has occurred,

the Borrowers may pay to the Junior Creditor, and the Junior Creditor may accept from the Borrowers the warrants set forth in the Subordinated Note (which may not be exercised prior to the scheduled maturity of the Subordinated Debt) and, following the second anniversary of the effective date hereof, interest and ordinary scheduled principal payments when due (without acceleration) set forth in the Subordinated Note (the “Permitted Payments”).  Notwithstanding the foregoing, Permitted Payments of scheduled principal may not exceed $200,000 per calendar quarter.

Section 4.                Notice of an Event of Default .  Immediately or no later than five (5) business days after the Junior Creditor becomes aware of an occurrence of an event of default under the Junior Creditor Documents, the Junior Creditor shall give written notice thereof to the other party as provided in Se