Export Opportunities for Specialty Soybeans University of Minnesota Soybean Symposium March 29, Bruce Abbe, MSA President & CEO

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1 Export Opportunities for Specialty Soybeans University of Minnesota Soybean Symposium March 29, 2018 Bruce Abbe, MSA President & CEO

2 A Bit About MSA Current Market Situation for Exporters & Farmers Longer term Opportunities, Needs Your Valuable Input

3 About the Midwest Shippers Association Regional trade association. Serves premium, specialty grains & oilseeds industry + commodity container exporters in Midwest USA, Medium and small business member companies. Grain and soybean processors, exporters, traders, seed suppliers, IP grain quality and shipping service providers Strong container shipping focus. Also freight forwarders, transloaders & logistics network members. Originally MN Shippers Association - then became Midwest focusing on five state area, now broader Midwest focus Dakotas to Ohio

4 Midwest Shippers Member IP Food Soybean Suppliers * Midwest Shippers has 20+ member companies that supply Non-GMO IP food grade soybeans to Asian soy food manufacturers. 11 in MN (Brushvale Seed, Friederich s Seed, J.B Global, Knewtson Soy, Grain Millers, Grass & Sons, Meadowland Soy, Parsley Farms, Richland IFC, Soyko/Circle C Seeds, SunOpta).Plus others who serve MN soy producers - (Scoular, SB&B, SK Food Intl, Global Processing, Stonebridge, Bes Beans & more.) * MSA also has 13 commodity feed & soy suppliers, including elevators & container exporters, like International Feed, Scoular, Landus Co-op, Hanley Falls, Colfax farmers elevator,s, Poet, Green Plains, Mirasco, Stone Arch, Zeeland. Some also export specialty soybean products.

5 MSA s Mission Develop logistics solutions for Upper Midwest Ag product Transportation Challenges. Promote the value of the Upper Midwest identity preserved and trait-specific soybeans, grains and related ag products. Engage with our network of members and industry partners to help education and strengthen our supply chain to the world.

6 Current Export Outlook The Market is Changing. After 3 brutal years, exporters are seeing some increased demand Nearly all MSA specialty soy exporters are looking for more contract growers yet for 2018 Some overseas buyers may be surprised to learn supply is not there like before

7 For Growers Premiums for IP soybeans showing some recovery General range -Non-GMO, clear hilum, food soybean premiums (i.e. not highly specialized varieties, Natto, etc.) Northern MN/RRV roughly $1.75 to $2 over local cash,.75 to $1 over board Southern MN/Iowa similar to a bit more Ill./Ind./Ohio roughly $2 over board Increased profit opportunity is there for producers willing to provide the extra management

8 Factors Behind Current Modest Recovery Value of $ change made us more competitive. Shipments began to move. Big China market starting to import food beans. Arch competitor Canada shipping substantial beans to China. U.S. opportunity to regain some added market share served by Canada. Some U.S. exporters dipping toes in China market (still risky) Some U.S. exporters were forced to move surplus IP soybean stocks to non-food, non-premium markets. Surplus stocks of non-gmo beans not there now.

9 Traditional Specialty Soy Food Markets Overall traditional Asian IP soy food markets continuing to grow. Japan - strong soy milk market growth, others stable. Thailand strong soy milk market, growing. SE Asian countries starting to show some more market interest in IP premium soybeans (in addition to commodity soybeans) for food Developing markets showing some growth Myanmar, Bangladesh, south Asia. China, China, China??? Go to: to view World Market Demand for Food Grade Soybeans from USSEC regional staff presentations

10 Still Riding the Roller Coaster You d think this special IP supply chain could offer more stability. Not so. Still follows overall CBOT market trends. Still easy to over supply this specialized market. (One MSA exporter wonders Will we need a lot more beans in 2019? Will buyers over buy again? Or are we in oversupply situation now.and just don t know it? Much uncertainty right now.) Do we need a secondary market outlet for value-added, premium non-gmo soybeans to eat up some stocks during surplus years? Can specialized feed markets be further developed? Dairy, poultry, livestock that require non-gmo IP soy meal. Zeeland, Landus doing this now. European feed markets for non-gmo soy? ADM expanding, Euros want to develop their own Storm clouds all around This market segment is at extreme risk in global trade disputes. China promise could evaporate. Current exporters to China exposed. TPP failure by U.S. hurt opportunity.

11 Longer Term Opportunities -Opportunities in more specific, export customer-tailored varieties? Like higher sucrose for some soy milk markets/beanie taste for others? -New traits in development hold export potential too, as IP varieties - High Oleic Soybeans Can they lead to consumer market recognition of (non-transfat) Healthy Soy oil? Consumer preference is most critical need now. -Triple Null varieties in development aquaculture, baby food. -Future holds much promise for IP premium specialty soybeans. -But are we doing enough to help Soy keep it s white hat, healthy image in consumer markets? Plant-based protein market demand offers opportunity.

12 2018 MSA Midwest Specialty Grains Conference + USSEC U.S. SOY Global Trade Exchange Over 225 International trade team buyers coming in through USSEC. Additional international buyers beginning to come on their own; plus Indonesia soy group (FAS) hosted by NCI & MSA Trade Team Buyer/Seller Meetings, Conference & Trade Show 29 th & 30 7h at KC s Crowne Center & Sheraton Hotel. Expected attendance 700+ THE Most Important Soy Industry International Trade Event of the Year

13 Bruce Abbe, President & CEO Midwest Shippers Association Lyndale Ave. S., Suite 159 Bloomington, MN USA Ph