13

Dry Mill Plant Profitability(% ROI for a 75 Million Gallon Plant, 60% Debt Financed)

Source: Roberts, OSU and Tiffany, U of MN, 2007.25

US Soybean Supply & Demand

Source: USDA WASDE Report, Jan. 11th, 2008.

14

$9.90

$10.90

U.S. Soybean Ending Stocks vs. Price(National Cash Average)

Source: USDA WASDE Reports, Jan. 11th, 2008.

27

s 500

600

700U.S. Soybean Carryover

Mill

ion

bush

el

100

200

300

400

Source: ProFarmer Newsletter, Jan. 11th, 2008.

28

1975

-76

1977

-78

1979

-80

1981

-82

1983

-84

1985

-86

1987

-88

1989

-90

1991

-92

1993

-94

1995

-96

1997

-98

1999

-00

2001

-02

2003

-04

2005

-06

2007

-08

0

15

ons

45

55

65Global Soybean Carryover

Mill

ion

met

ric t

5

15

25

35

45

Source: ProFarmer Newsletter, Dec. 11th, 2007.

29

1990

-91

1991

-92

1992

-93

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

2003

-04

2004

-05

2005

-06

2006

-07

2007

-085

Soybean Cash Price & Probability Forecast’07-’08 Marketing Year

$10.80/bu65%

$12.00/bu18%

$10.00/bu17%

Source: Wisner, ISU Ext. Economics, 1-14-08.

16

Soybeans Storage Costs

Source: ISU Extension Economics, Jan. 2008.

31

Biodiesel Refineries

32

Source: www.iowarfa.org, Dec, 2007.

17

Jul$13.37Jan. 15th , 2008

Soybean Futures Carry

May $13.20

Mar. $13.02

Jan XXXXX

Adequate carry, rewards on-farmJan. XXXXX

Source: CBOT & ISU Ext. Economics, Jan. 2008.

Nov. $12.85

33

rewards on farm storage

Seasonal Soybean Futures Trend

65% Odds: Spring Price Exceeds

CBOT data

Harvest Price

Source: U of MN, CFFM, 2007.

34

18

Historical Soybean Monthly Futures Price

Source: Jim Wyckoff, Dec. 2007.

35

Historical Soybean Weekly Futures Price

Source: Jim Wyckoff, Dec. 2007.

36

19

Soybean CFTC Report

Weekly Soybean Futures

1200

1300

1400

0.9

1.2

1.5

Speculative FundsCommercials

with trader positions

600

700

800

900

1000

1100

cent

s/bu

sh

09

-0.6

-0.3

0

0.3

0.6

Net

pos

ition

s - b

illio

n bu

CommercialsIndex Funds

Source: Commodity Futures Trading Commission & AgriVisor, Jan. 11th, 2008. 37

400

500

600

Feb-04 Aug-04 Feb-05 Aug-05 Feb-06 Aug-06 Feb-07 Aug-07 Feb-08-1.5

-1.2

-0.9

U.S. Planted Acreage Trend & Outlook

◊ - Estimated * - Forecast Source: USDA NASS & ISU Ext. Economics, Jan. 2008.

20

2008 U.S. Planted Acres

More WheatSource: Johnson, ISU Ext. Economics, Jan. 2008.

Soybean to Corn Price RatioNew Crop Soybean Futures ÷ New Crop Corn Futures

Average = 2.31

2008 Futures Price Ratio: $12.85 ÷ $5.29 = 2.43$ $

Source: CBOT & ISU Extension Economics, Jan. 2008.

40

21

Corn & Soybean Direct Input Costs ($/A)Historical vs. 2008 Estimates

Source: U of IL Extension Economics, Oct. 2007.

41

$314/A

Margins: Gross Revenue vs. Non-Land Costs ($/A)Historical vs. 2008 Estimates

$200/A Margin minus Land

Margin

$154/A Margin

$268/A Margin

42

Source: U of IL Extension Economics, Oct. 2007.

22

Corn Revenue Guarantee vs. Insurance Premium

* Forecast

Source: Johnson, ISU Ext. Economics, Jan. 2008.

43

Soybean Revenue Guarantee vs. Insurance Premium

* Forecast

Source: Johnson, ISU Ext. Economics, Jan. 2008.

44

23

2007 Iowa Crop Insurance Products

12%

6%RA – Revenue AssuranceCRC – Crop Revenue CoverageAPH – Actual Production HistoryGRIP – Group Risk Income ProtectionGRP – Group Risk ProtectionIP – Income Protection

21%59%

21%

Source: USDA Risk Management Agency, Nov. 2007.

45

2007 Iowa Crop Insurance Coverage

6%

5%5%

60% Coverage55% Coverage

34%

11%

24%

15%

Source: USDA Risk Management Agency, Nov. 2007.

46

24

Use of Crop Revenue

Insurance

Plan Ahead: Crop Rotation, Purchases and

P H t

5 Strategies for Growing Forward

Coverage

Match Crop Sales to Your Cash Flow &

Expect Large Gross Revenues

& Margin

Pre-Harvest Sales

Source: Johnson, ISU Ext. Economics, Jan. 2008.

47

Cash Flow & Storage

Manage Input Costs: Land, Fertilizer, Machinery

& Margin Compression

5 Advanced Decision Tools• Ag Decision Maker (Spreadsheets - Decision

Tools)www.extension.iastate.edu/agdm

• Ag Marketing Resource Centerwww.agmrc.org

• Center for Ag & Rural Development (CARD)www.card.iastate.edu

• Crop Marketing Newsletters/Webcastswww.extension.iastate.edu/polk/farmmanagement

• Farm Analysis Solution Tools (FAST Tools)www.farmdoc.uiuc.edu/fasttools/index.asp

Source: Johnson, ISU Ext. Economics, Jan. 2008.

48