1. What’s the Value of Cooperatives? Farmer’s Cooperative Conference Tropicana, Las Vegas Tom McKenna, President United Sugars Corporation October 30, 2001

2. u Snapshot of Domestic Sugar Industry –Past & Current Trends –Competitive Positioning »Coops & Other Participants u Coops - Do they have an advantage? u Characteristics of Success for the Future Sugar Industry Model

3. Changing Customer Landscape Industrial Market u Consolidation of Food Processing Industry –Top 5 users buy 20% of Industrial volume –Customer concentration increasing

4. Changing Customer Landscape Consumer Market u Continued consolidation of retail grocery wholesalers and chains u 10 year trend –12 down to 5 today represent 35% of total grocery sales u Retail grocery sugar sales continue to decline

5. Competitive Environment Rapidly Changing u Imperial bankruptcy –Imperial closes and offers to sell beet sugar assets u Tate & Lyle –selling all U.S. beet and cane sugar assets u Interest in Coop structure increasing –“processing” –“marketing”

6. Midwest Beet Sugar Price Comparison November, 1999 - October, 2001 Source: Milling and Baking News

7. 1978 28 1991 13 2002 8 Industry Consolidation Estimated Sales Volume by Supplier

8. u Marketing Coop structure responds to: –slow growth opportunities –increasing buyer consolidation –need to reduce costs & increase productivity u Processing Coop structure responds to: –need for producers to preserve processing facilities or exit from market u View of future is positive Why Sugar Beet Coops?

9. u Strategic Rational for existence u Fit with market realities u Vision beyond just producing raw material u Decisions made on creditable information u Sound Financing Characteristics of Success

10. u Coop owners/Board of Director’s ability to “Govern” u Ability to source Professional Management u Desire to be “Best in Class” Vs “investing up the value chain” u Commitment to go “all the way” Characteristics of Success