Vital to the World Patricia Woertz – Chairman, CEO and President Steve Mills – EVP & CFO John Rice – EVP, Commercial & Production Ed Harjehausen – SVP, Global Corn Randy Kampfe – VP, Corn Processing Dwight Grimestad - VP, Investor Relations Corn Processing Business Review And Plant Tour October 7, 2008
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Vital to the World
Patricia Woertz – Chairman, CEO and PresidentSteve Mills – EVP & CFO John Rice – EVP, Commercial & Production Ed Harjehausen – SVP, Global CornRandy Kampfe – VP, Corn ProcessingDwight Grimestad - VP, Investor Relations
Corn Processing Business ReviewAnd Plant Tour
October 7, 2008
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Safety Moment
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Please Turn Off Cell Phones and Pagers
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Safe Harbor Statement
Some of our comments constitute forward-looking statements that reflect management’s current views and estimates of future economic circumstances, industry conditions, company performance and financial results.
The statements are based on many assumptions and factors, including availability and prices of raw materials, market conditions, operating efficiencies, access to capital and actions of governments. Anychanges in such assumptions or factors could produce significantly different results. To the extent permitted under applicable law, the Company assumes no obligation to update any forward-looking statements as a result of new information or future events.
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Agenda for the Day8:00am Overview Presentation: Strategy and Execution;
Patricia Woertz - Chairman, CEO and PresidentFinancial Performance and Capital Expenditures;
Steve Mills - EVP and CFORecent Trends Shaping Global Grain Supply, Demand and Prices;
John Rice - EVP, Commercial and Production
**Q&A
Break
8:55am Corn Processing Business Review; Ed Harjehausen - SVP, Global Corn
Corn Operations Review; Randy Kampfe - VP, Corn Processing
**Q&A
10:00am Cedar Rapids Plant Tour; Doug Brakhan - Plant Manager
12:00pm Wrap-up Q&A and Lunch; ADM Management Team
1:30pm Conclusion
Overview Presentation:Strategy and Execution
Pat Woertz – Chairman, Chief Executive Officer and President
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Sourcing facilitiesOilseed processingCorn processingCocoa & wheat processingSourcing distributionProcessing distribution
Our World-Class Asset Base Is Positioned for Global Growth
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We Have Leveraged our Value Chain and Executed on our Strategy
(Amounts in millions of gallons, except for percentages)
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Commercialization in progress
• Telles JV between ADM and Metabolix
- Biodegrades in soil and marine environments
- Heat resistant
• Glycols
New Products Offer Opportunities to Increase Value from Grind
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Industrial Chemicals Offer Growth Potential for the Future• Focus on direct chemical replacements
- Based on ADM feedstocks
- Low cost position possible
- Initial focus on North America
- High growth market or market support for bio-based
- Increases speed-to-market
• License external process technology where necessary
• Develop partners for specialty chemicals where performance knowledge is required
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Issues Affecting Corn Industry
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HFCS Is the Same as Table Sugar
• “It's basically no different from table sugar. Table sugar is glucose and fructose stuck together. Corn sweeteners are glucose and fructose separated. The body really can't tell them apart ...”
- Dr. Marion Nestle, Paulette Goddard Professor of Nutrition, Food Studies, and Public Health, New York University
• “If there was no high-fructose corn syrup, I don't think we would see a change in anything important.”
- Dr. Walter Willett, Chairman of the Nutrition Department, Harvard School of Public Health
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Facts about HFCS Are a Sweet Surprise
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U.S. DDGS Demand Is Growing With Supply
Source: Informa
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DDGS Are an Effective Feed Ingredient CHICKENS• “I’m very enthusiastic about using DDGS in poultry diets. We use it just like other
ingredients that are available. And as the ethanol Industry has grown, there are more and more tons of DDGS, and we’ll continue to use it”
- Philip Smith, Poultry Nutritionist, Tyson Foods, Inc.
TURKEYS• “Current feeding trials have examined the use of low and moderate levels of distillers
dried grains with solubles in broiler and turkey diets. In market tom turkeys, up to 20% DDGS in grow/finish diets is possible in diets with normal protein content and when feed intake is not limited.”
- Dr. Sally Knoll, Professor, University of Minnesota Extension Service
SWINE• “The Maschhoffs Inc. feed DDGS at up to 30% in some swine rations. At current
commodity prices DDGS is very competitive and allows for the replacement of corn, soybean meal, and monocalcium phosphate. ”
- Aaron Gaines, The Maschhoffs Inc.
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Food Prices Are Driven by Energy Costs
• “During the first four months of 2008, the all food CPI increasedby 4.8 percent, with increased ethanol and biodiesel consumption accounting for only about 4-5 percent of the total increase, while other factors accounted for 95-96 percent of the increase.”
- U.S. Dept. of Energy, U.S. Dept. of Agriculture
• Increasing petroleum prices have about twice the impact on consumer food prices as equivalent increases in corn prices.
- USDA Economic Research Service
• Food travels on average 1,500 miles before it gets to the retail establishment.
- National Farmers Union
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Ethanol Is Keeping Down Gasoline Costs
• “Oil and gas prices would be 15% higher if biofuelproducers weren’t increasing output.”
- Merrill Lynch commodity strategist Francisco Blanch
• “If we had not been blending ethanol into gasoline, gasoline prices would be between 20 cents and 35 cents per gallon higher.”
- U.S. Dept. of Energy, U.S. Dept. of Agriculture
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Global Agricultural Leaders Are Responding to Concerns
www.FoodAndEnergy.org
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ADM Has Competitive Advantages in Corn Processing• Diversification of product mix
• Advantages of combining wet and dry operations
• Cogeneration: steam and power from coal
• Size: first in grind and first or second in major product lines