1. 11 Capital Risks in Volatile Times 11th Annual Farmer Cooperatives Conference Cooperative Strategy, Structure and Finance St. Paul, Minnesota November 19, 2008 Mark J. Hanson Stoel Rives LLP 33 South Sixth Street, Suite 4200 Minneapolis, MN 55402

2. 2 Capital Risks Loans are supported by capital In times of volatile economies additional need for working capital and base or permanent capital Adequate capital determines the success or failure of business

3. 3 Capital Risks For Grain Handlers Consider Inventory and Hedging Risks

4. 4 TFC Commodity Charts Corn (C, CBOT) Monthly Price chart

5. 5 Capital Risks Inventory Acquisition Inventory Valuation Hedging Costs Loan Covenants

6. 6 Capital Risks Addressing Capital Risks Increase base or permanent capital –higher retained, less patronage distributions –change revolvement policies –attract capital investment (returns?)

7. 7 Capital Risks Addressing Capital Risks Change Business Plan –reduce inventories –“just in time” inventory –shift inventory acquisition risk to seller –new forms of inventory financing without capital needs

8. 8 Best Stock for 2008: Archer Daniels Midland By Toby Shute December 31, 2007 Boy, did ethanol have a bad year. Industry players like VeraSun Energy (NYSE: VSE) and Aventine Renewable Energy (NYSE: AVR) ramped up production capacity in excess of demand, and the price of the homegrown fuel fizzled... Finally, even if I’m dead wrong and the ethanol producers take another pasting in '08, ADM still comes out ahead, in my view. The company has many other profitable lines of business, and it is well-financed.

9. 9 Capital Risks