Dried Distillers Grain Sean Bartlett Dried Distillers Grain EXPORT TRENDS in 2016

Introduction to Platts Agriculture The Chinese market snapshot Agenda Introduction to Platts Agriculture The Chinese market snapshot Non-China markets Conclusions

INTRODUCTION TO PLATTS AGRICULTURE

Platts Biofuels/Agriculture Team

Platts Global Grains coverage September 2014: Launched Daily Grains report with Black Sea wheat, Azov Sea Wheat, Sea of Marmara Wheat and Black Sea Corn assessments November 2015: Launched Australian wheat assessment in Daily Grains 2015 2016 2017 October 2015: Launched US DDGS assessments – CIF New Orleans, Channahon trucks in Biofuelscan TBD 2017: US wheat assessments coming

CHINESE MARKET SNAPSHOT

Chinese Market Snapshot Source: USDA

Chinese market snapshot Source: USDA

Chinese DDGS imports by country, 2015 DDGS volume (metric tons) France 775 USA 6,818,571 Japan 2 Brazil 99 Canada 477 Taiwan 0.417 Source: Chinese Customs Information Center

Tariffs Levied Sept. 23: Chinese commerce ministry levies 33.8% anti-dumping duty on US DDGS imports effective Sept. 28: Ministry adds additional 10 to 10.7% anti-subsidy duty effective immediately

DDGS prices after probe ended First tariff imposed Second tariff imposed Source: Platts

NON-CHINA MARKETS

Market factors US ethanol production has reached record levels in 2016 Record production levels US ethanol production has reached record levels in 2016 Federal law called for 14.5 billion gallons to be blended into US fuel supplies During summer months, 11 of 15 weeks broke 1 million b/d Source: US EIA

Market Factors US ethanol production aided by low corn prices. US corn ethanol production margins US ethanol production aided by low corn prices. High crush margins allowed ethanol production to continue despite lower ethanol prices Source: Platts

DDGS PRICES Source: USDA

DDGS purchases, first eight months of 2016 (MT) Non-China markets DDGS purchases, first eight months of 2016 (MT) Q1 Q2 July-Aug World total 2,408,908 2,951,996 2,254,190 China 551,139 788,310 621,186 Source: USDA 2 April, 2019

Year-on-Year DDGS purchases, first eight months of year (MT) Non-China markets Year-on-Year DDGS purchases, first eight months of year (MT) 2015 2016 Difference World Total 8,590,699 27,615,094 -975,605 China 5,051,264 1,960,635 -3,090,629 Source: USDA 2 April, 2019

Non-China Markets Top US DDGS customers, Nos. 2-10, in metric tons Country 2012 2013 2014 2015 Mexico 1,503,305 1,280,554 1,577,727 1,650,235 Vietnam 371,481 357,396 638,396 650,460 South Korea 345,584 394,900 690,046 636,523 Canada 593,721 474,912 456,538 512,229 Thailand 209,820 265,974 363,092 398,756 Ireland 89,556 225,421 260,518 248,281 Japan 377,620 384,432 488,178 241,031 Indonesia 165,197 236,799 282,941 230,565 Turkey 175,965 289,358 498,412 207,914 Source: USDA

2016 exports for selected non-China markets 2015 2016 Difference % change Mexico 1,046,746 1,297,490 250,744 24% Vietnam 332,071 687,620 355,549 107% S. Korea 323,977 532,032 208,055 64% Thailand 231,964 420,227 188,263 81% Turkey 28,904 516,530 487,626 1,687% Canada 305,022 340,621 35,599 12% Japan 154,424 208,920 54,496 35% Spain 36,929 89,167 52,238 141% Colombia 71,435 111,290 39,855 56% Indonesia 143,226 248,580 105,354 74% Ireland 141,792 163,407 21,615 15% Source: USDA

INDIA: AN UNTAPPED MARKET Projected to be world’s fourth-largest beef producer (4.3 million MT) and world’s largest beef exporter (1.95 million MT) Projected to be world’s fourth-largest broiler producer (4.2 million MT) Low corn supplies on the continent competing for use in feed, ethanol production and other uses Ban on GMOs, including in livestock feed Bureaucracy makes business difficult at times 2 April, 2019

CONCLUSIONS

China market has yet to shake out Conclusions China market has yet to shake out Existing markets, such as those in Southeast Asia, seem to be willing to take on more exports Trade-off is lower prices The future relationship with China, DDGS and otherwise 2 April, 2019

PLATTS DDGS ASSESSMENTS Private & Confidential

Platts US DDGS assessment methodlogy Currency Contract Type Basis Location Delivery Period Min size Unit of measurement Dried Distillers Grain with Solubles CIF New Orleans Barge USD Spot CIF New Orleans Delivery on a barge that has loaded in the front-month 1,500 Short ton Dried Distillers Grain with Solubles FOB Chicago Truck FOB delivered to the Channahon, Illinois, rail head Delivery 1-7 days forward from date of publication 25 Quality: Assessments will reflect export quality DDGS, protein content minimum of 25%, minimum color of 50 (according to the Hunter L test), fat minimum of 6%, and a moisture level in the range of 10% to 12%, standardized to 11.5%. Private & Confidential

Chicago delivered truck assessment Private & Confidential

CIF New Orleans barge assessment Private & Confidential