AFOA October 2012 Oils New Paradigm David Dzisiak Dow AgroSciences

Anti-fat Sentiment Is Declining

Majority Seek Good Fat Consumption Limit Bad / Consume Good No Strong Effort Limit Bad ONLY Consume Good ONLY 49% of Consumers Actively Consuming “Good Fats” 64% of Consumers Actively Consuming “Good Fats” The 2010 Gallup Study of Healthy Fats & Oils Multi-sponsor Surveys, Inc.

US/capita Food Veg Oil Consumption Soybean Canola Corn Palm Trans-fat labelling Decline of ph soy

N.A. Canola Production Expands Omega-9 type canola oil is now a large part of NA production and processing 7 sites now processing high stability canola using about 35% of total capacity approx 2.5B lbs high stability canola oil supply

New York Times Feb 9,2012 …….As controversy grew, many food manufacturers and restaurants gave in to pressure to remove trans fats — also known as partially hydrogenated oils — and began using alternatives like canola or sunflower oil. CDC National Health and Nutrition Examination Survey Trans fat levels fell 58 percent by 2009 LDL “bad” cholesterol, fell ~10 units, to mg/dl from HDL “good” cholesterol rose to 55.8 milligrams from an average of 49.6 milligrams.

Monounsaturates Are Healthful

“Better-For-You” Products Driving Sales Growth At Leading CPG Companies* *Source: H. Cardello, Hudson Institute Neilson: Food, Drug & Mass Merchandise Sales Tracking

CPG’s With Above Average “BFY” Product Sales Had Superior Margins* *Source: H. Cardello, Hudson Institute Neilson Data and Company Annual Reports

Growers report yields by variety for Crop Insurance Yields are competitive with elite industry varieties 2011 Grower Reported Yields YearRisk AreasVariety/HybridReported AcresYieldUnits , 9, 12 Invigor L-series bu/ac , 9, 12 Nexera Hybrid RR Series bu/ac , 9, 12 Invigor bu/ac , 9, 12 Pioneer 45H bu/ac , 9, 12 Dekalb 73 Series Hybrids bu/ac Efficient Crop Production

Oilseed Innovation Crop / Oil Trait Market Drivers Market Drivers 1970’sSunflower, Soy Rapeseed and Palm Local\cheap vegetable oil 1980’sHydrogenated oilsTropical fat alternatives 1990’s Low linolenic Canola High oleic Sunflower Low saturate oils Consumer wellness trends 2000’sHigh Stability Oils No Saturate Oils DHA & Omega 3’s Structured TAG’s Trans-fats and CVD Obesity & Diabetes Good Fats Health and Vitality

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