1. 1 Informa Economics 2007 Agriculture Policy Roundtable Commodity Market Update By Jim Sullivan Informa Economics 2007 Agriculture Policy Roundtable Commodity Market Update By Jim Sullivan December 13, 2007

2. 2 Review of 2007 US Crops 2007 will be a very good year for US farmers. Higher income primarily result of high prices for grains, oilseeds and livestock. Strong demand from biofuel industry and exports pulling prices higher. Weak US dollar fosters greater effective demand for US exports. Net cash income projected by USDA at $85.7 billion (up 27% from 2006), only slightly below record 2005 level of $85.9 billion. New record levels for crop and livestock receipts.

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4. 4 Review of 2007 US Crops US 2007 growing season one of big corn acreage (93.6 mil ac, largest since 1944) poor global wheat harvest (5 major producers off combined 40 MMT). Corn stocks 2.1 bil bu. World grain and oilseed producers responded to higher prices by expanding crop area by over 30 million acres. Continued expansion expected in 2008 with Informa including a 38 million acre increase in our commodity outlook. US soybean acreage fell 15% from record plantings in 2006 to 63.7 million acres (smallest since 1996). Stocks tight (123 mil bu). Wheat acreage rose 5.5% to 60.4 million acres, largest since the 2003 crop. Stocks only 229 mil bu. US cotton acreage fell nearly 30% to 10.8 million acres, smallest since 1998 due to unfavorable planting weather and higher returns for alternative crops. Stocks adequate. Rice area declined 3.2% to 2.7 million acres as alternative crops offered better returns. Stocks less than 10% of use.

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27. 27 Looking Ahead to 2008 Crops Crop returns for 2008 implied by prevailing market prices suggest soybeans, wheat and cotton will reclaim acres from corn Market price signals for 2008 crops prevailing during early December imply corn acreage slipping to 4.7 million acres to 88.9 million. Soybean plantings are estimated to total 68.1 million acres, an increase of 4.4 million. Total wheat seedings are projected at 64.1 million acres, 3.7 million more than 2007. Winter wheat plantings are estimated to increase 3.8 million, but durum and other spring wheat acreage falling 171,000 acres. Farmers will be monitor changing market signals over the coming months adjusting planting ideas along with the spring weather developments. World grain and oilseed producers are expected to expand crop area. Two factors support the continued expansion. First, The EU reduced set-aside form 10 percent to zero for the 2008 growing season. This policy change could increase cropping area by more than 7 million acres. Second factor, the persistence of high prices which provides incentive to global producers.

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30. 30 Informa Economics 2007 Agriculture Policy Roundtable Commodity Market Update By Jim Sullivan Informa Economics 2007 Agriculture Policy Roundtable Commodity Market Update By Jim Sullivan December 13, 2007