0 The Future of the HFCS Market Influences on Demand

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2 The Future of the HFCS Market U.S. HFCS demand: flat to slightly decliningU.S. HFCS demand: flat to slightly declining HFCS in Mexico: potential growthHFCS in Mexico: potential growth Alternatives for grind: less ethanolAlternatives for grind: less ethanol

Source: McKeany-Flavell Billion Pounds Dry North American HFCS Demand North American HFCS Demand 19.6 * Estimate 7 0 % o f U. S. H F C S U s e d i n B e v e r a g e s DIETING 101 Stay away from empty-calorie foods such as regular carbonated soft drinks.

4 U.S. HFCS Demand: Steady Decline Billion Pounds (dry basis) * Estimate From its peak in 2002, total HFCS demand has fallen 2.27 billion lbs., or 12.4% American Heart Association: Even moderate weight excess increases the risk of death, particularly in adults

5 U.S. Case Sales (Volume) of CSD Coca-ColaDown 2%Down 8% PepsiFlatDown 6% CottDown 4.8%Down 11%* *As of 2008 Q2 report. Foreign Sales Offset Coke’s Weak U.S. Cola Sales Non-Cola Bev Sales on the Rise at Home U.S. CSD Consumption * Estimate

6 Consumers Are Hesitant to Spend Source: USDA ERS, Congressional Budget Office * Estimate

7 Is Fructose Making You Fat? Most Consumers Don’t Know How Much HFCS They Eat American Medical Association Says HFCS the Same as Sucrose Consumers Are Concerned ?

8 Third-most used claim in product launches in 2007 and fourth-most popular for beverages Consumers Want Natural Foods Bottled Water Consumption in U.S. * Estimate Sources: Mintel, Beverage World Annual Report

9 Nearly two-thirds of Americans are concerned about the safety of artificial sweeteners Consumers Explore Other Sweeteners With Agave56176 HFCS-Free6146 New Products Sources: Datamonitor, Mintel FDA Decides HFCS Is Natural Sweetener HFCS Does Not Occur in Nature, Says Center for Science in the Public Interest FDA Oks Rebiana

10 Per Capita Nutritive Sweetener Deliveries Pounds C o n s u m e r s R e t u r n t o S u g a r i n S e a r c h o f L e s s - P r o c e s s e d F o o d Americans Still Like Sweet * Estimate

11 Source: U.S. Census Bureau, U.S. Dept of Commerce Demographic Profiles Hispanic – Young, increasing affluence, may favor nutritive sweeteners Asian – Increasing affluence, may favor non-nutritive sweeteners Who Buys Sweetened Products % of Population Hispanic6.5%12.6%18.0% Black11.6%12.3%12.9% Asian/Pacific Islander1.5%3.9%5.0% White79.9%70.4%62.5% The age group consumes the most sweeteners M i n o r i t y P u r c h a s i n g P o w e r M a y R e a c h $ 4. 3 T r i l l i o n b y

12 Sugar-Free Appeals to Aging Population People 65+ made up 12.4% of the population in 2000 and are expected to make up 20% by 2030.

13 Source: Beverage Marketing Corporation Carbonated Soft Drink Industry Market Share: Regular Nutritive CSD vs. Diet * Estimate 2008: Diet makes up over 30% of total

14 Future of HFCS Capacity No major capacity changes over the next ten years.No major capacity changes over the next ten years. Wild card: Tate & Lyle Fort Dodge, Iowa facility may add HFCS capacity – but probably not before 2011/12.Wild card: Tate & Lyle Fort Dodge, Iowa facility may add HFCS capacity – but probably not before 2011/12.

15 Source: McKeany-Flavell Includes Canada and Mexico. Assumed capacity expansion: 1% annually through 2003 due to de-bottlenecking. * Estimate Theoretical HFCS Production Capacity vs. Demand Industry expansion for Mexico Cargill stops HFCS production at Dayton, Ohio, then shutters Dimmitt, Tex. and Decatur, Ala. Cargill re-opens Dayton, Ohio and Decatur, Ala.

16 MEXICO - Estimated HFCS Imports Source: Mexican Trade Sources and McKeany-Flavell Thousand Metric Tons *Estimate Price of sugar within Mexico makes it difficult for U.S. HFCS to compete

17 Wet Milling Industry Compensates for Slowdown in HFCS Demand Industry ConsolidationIndustry Consolidation Capacity ReductionCapacity Reduction Grind DiversificationGrind Diversification –Ethanol, specialty starches, dextrose feedstock, crystalline fructose, bioplastics –About 2.0 billion lbs. (wet) of HFCS grind reallocated to other products since 2002 –Demand down for these products

/09 Crop Estimate = Billion Bushels Wet Milling Usage by Product Line % of Crop Fuel Ethanol = Billion Bushels*29.8% HFCS = 588 Million Bushels 4.9% Starch = 175 Million Bushels 1.4% Corn Syrup & Dextrose = 303 Million Bushels 2.5% Cereal and other products = 226 Million Bushels 1.9% Industrial Alcohol = 126 Million Bushels 1.0% Beverage Alcohol = 25 Million Bushels 0.2% Total = Billion Bushels 41.7% *Includes Dry Milling In 1975, corn refiners used 5% of the corn crop Source: USDA and CRA U.S. Corn Wet Milling Usage by Product Line Numbers may not add due to rounding

19 *Corn starch-based ethanol Biofuels Mandate by Type

20 Ethanol Supply/Demand/Capacity Utilization DemandDomestic SupplyUtilization % % % % % % % % % % % % % % (Billion Gallons) Source: McKeany-Flavell estimates

21 Ethanol vs. RBOB Gasoline Pricing $ per Gallon Note: as of Dec. 29, 2006, unleaded gas contract replaced by RBOB contract on NYMEX RBOB = Reformulated blendstock for oxygenate blending Ethanol trading at premium to RBOB gas reduces blender incentive to use ethanol

22 Key Factors that Impacted HFCS Negotiations for 2009 U.S. HFCS demand: flat to slightly decliningU.S. HFCS demand: flat to slightly declining HFCS in Mexico: potential growth?HFCS in Mexico: potential growth? Alternatives for grind: fewer options - less ethanol demandAlternatives for grind: fewer options - less ethanol demand HFCS prices at 20% to 25% discount to sugarHFCS prices at 20% to 25% discount to sugar