2013 producer meeting

2013 Producer Meeting

Risk Management In An Uncertain Environment

January 25th 2013 HLC/ AgQuest Producer Meeting

Todays agenda includes: 8:50-9:00- Ben Fast-County Executive Director-Disaster Payment 9:00-9:25-Kurt Legred- CHS- broad range of markets 9:25-9:35-Dennis Schreier-General Manager 9:35-10:50-Kevin, Joel, Mark, Steve- Scenarios, Matrix, Marketing prices & local Yields-Bull, Neutral, & Bearish Scenarios 10:50-11:10- Lynn Button- Insurance Quoting Software continuing on from Joel’s examples & numbers on how insurance minimizes lost members including insurance cost, insurance indemnity during the bull, neutral, & bearish scenarios 11:10-11:40- Marty Bonnell- Petroleum- Brams Engineering LLC-Senior Civil Engineer 11:40-12:00-Tim Lewis-Agribusiness Farm Insurance Specialist, Certified Insurance Counselor, Master Farm Certified

Ben Fast-FSA County Executive Director (CED)

USDA Farm Service Agency

This material has been prepared by a sales or trading employee or agent of CHS Hedging Inc. and should be considered a solicitation. The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only. There is a risk of loss when trading commodity futures and options. CHS Hedging Inc. bases its recommendations solely on the judgment of CHS Hedging Inc. personnel.

CHS Hedging

January 25th, 2013

Harvest Land

Kurt Legred


Grain Trade has become a Global Exercise


CRB- old and new


Reuters CRB Index


Weekly Continuous Commodity Index


Weekly Baltic Dry Freight Index


Weekly U.S. Dollar Index


Monthly U.S. Dollar Index


Weekly Crude Oil Futures on CME


Monthly Crude Oil Futures on the CME


US Corn


• USDA raised the planted acres……lowered harvested acres slightly

• The yield was raised 1.1 bushel per acre…..

• Feed & Residual saw a healthy 300 million bushel increase while exports were reduced 200 million bushels

• 2012-13 exports are down 593 million bushels from 2011-12 marketing year

• Ending stocks are at 602 million bushels, down 45 million bushels

Corn Outlook


Estimate

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13

Planted Acres 79.6 75.7 78.9 78.6 80.9 81.8 78.3 93.5 86.0 86.4 88.2 91.9 97.2

Harvested Acres 72.4 68.8 69.3 70.9 73.6 75.1 70.6 86.5 78.6 79.5 81.4 84.0 87.4

Yield 136.9 138.2 129.3 142.2 160.4 148.0 149.1 150.7 153.9 164.7 152.8 147.2 123.4

Sep 1 Stocks 1,718 1,899 1,596 1,087 958 2,114 1,967 1,304 1,624 1,673 1,708 1,128 989

Production 9,915 9,503 8,967 10,089 11,807 11,114 10,535 13,038 12,092 13,092 12,447 12,360 10,780

Imports 7 10 14 14 11 9 12 20 14 8 28 29 100

Total Supply 11,639 11,412 10,578 11,190 12,776 13,237 12,514 14,362 13,729 14,774 14,182 13,516 11,869

Domestic Use 7,799 7,911 7,903 8,332 8,444 9,122 9,086 10,302 10,198 11,079 11,220 10,985 10,317

Exports 1,941 1,905 1,588 1,900 1,818 2,147 2,125 2,436 1,858 1,987 1,835 1,543 950

Ethanol 628 706 996 1,168 1,323 1,603 2,117 3,026 3,677 4,568 5,021 5,011 4,500

Total Use 9,740 9,815 9,491 10,232 10,662 11,270 11,210 12,737 12,056 13,066 13,055 12,527 11,267

Aug 31 Carryout 1,899 1,596 1,087 958 2,114 1,967 1,304 1,624 1,673 1,708 1,128 989 602

Stocks to Use 19.5% 16.3% 11.5% 9.4% 19.8% 17.5% 11.6% 12.8% 13.9% 13.1% 8.6% 7.9% 5.3%

US Corn Supply/Demand Balance Table


79.6 75.7

78.9 78.6 80.9 81.8

78.3

93.5

86.0 86.4 88.291.9

97.2

0.0

20.0

40.0

60.0

80.0

100.0

120.0

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10/11 11-12 12-13

Mil

ion

Ac

res

Year

US Corn Planted Acres


72.4 68.8 69.3 70.9

73.6 75.1 70.6

86.5

78.6 79.5

81.4 84.0

87.4

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10/11 11-12 12-13 E

Mil

lio

n A

cre

s

Year

US Corn Harvested Acres


136.9

138.2

129.3

142.2

160.4

148.0

149.1

150.7

153.9

164.7

152.8

147.2

123.4

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10/11 11-12 12-13 E

Bu

sh

els

Pe

r A

cre

Year

US Corn Yield


9915 9503 8967 10089

11807 11114

10535

13038

12092

13092 12447 12360

10780

0

2000

4000

6000

8000

10000

12000

14000

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10/11 11-12 12-13 E

Mil

lio

n B

us

he

ls

Year

US Corn Production


1957 2047 2340

2537 2686

2981

3488

4363

4953

5939

6428 6437

5867

0

1000

2000

3000

4000

5000

6000

7000

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10/11 11-12 12-13 E

Mil

lio

n B

us

he

ls

Year

US Corn FSI Usage


5842 5864 5563

5795 6158 6141

5598

5938

5246 5140 4793

4548 4450

0

1000

2000

3000

4000

5000

6000

7000

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10/11 11-12 12-13 E

Mil

lio

n B

us

he

ls

Year

US Corn Feed Usage


7799 7911 7903 8332

8844 9122 9086

10302 10198

11079 11220 10985

10317

0

2000

4000

6000

8000

10000

12000

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10/11 11-12 12-13 E

Mil

lio

n B

us

he

ls

Year

US Corn Domestic Use


1941 1905

1588

1900 1818

2147 2125

2436

1858 1987

1835

1543

950

0

500

1000

1500

2000

2500

3000

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10/11 11-12E 12-13 E

Mil

lio

n B

us

he

ls

Year

US Corn Exports


628 706

995 1168 1323

1603

2117

3026

3677

4568

5021 5011

4500

0

1000

2000

3000

4000

5000

6000

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10/11 11-12 12-13 E

Mil

lio

n B

us

he

ls

Year

US Corn Used For Ethanol


1899

1596

1087 958

2114

1967

1304

1624 1673 1708

1128

989

602

0

500

1000

1500

2000

2500

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10/11 11-12 12-13 E

Mil

lio

n B

us

he

ls

Year

US Corn Ending Stocks


19.5%

16.3%

11.5%

9.4%

19.8%

17.5%

11.6%12.8%

13.9%

13.1%

8.6%7.9%

5.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10/11 11-12 12-13 E

Pe

rce

nt

Year

US Corn Stocks To Use Ratio


• World production was increased 3.21 million tonnes to 852.30 million tonnes

• Brazil production was increased 1.0 million tonnes to 71.0 million tonnes

• FSU corn production was reduced ½ a million to 31.76 million tonnes

• World ending stocks were lowered 1.62 million tonnes

World Corn Outlook


589 599 602623

713 697 712

792 799819 832

884

852

171148

125104

131 125 109130 149 144 127 132 116

0

100

200

300

400

500

600

700

800

900

1000

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 E

Millio

n T

on

ne

s

Year

World Corn Production & Ending Stocks


19%

18%

15% 15%13%

0%

5%

10%

15%

20%

25%

08-09 09-10 10-11 11-12 12-13 E

World Corn Stocks to Use


106.0 114.0

121.3 115.8

130.3 139.4

151.6 152.3

165.9 164.0

177.3

192.8

208.0

7.3 8.6 15.2

7.6 7.6 3.7 5.3 0.6 0.2 0.2 0.1 0.1 0.2 0.0

50.0

100.0

150.0

200.0

250.0

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 E

Millio

n T

on

nes

Year

China Corn Production & Exports


15.4 14.7

15.5 15.0

20.5

15.8

22.5 22.0

15.5

23.3

25.2

21.0

28.0

9.7 10.8 11.2 10.9

14.6

9.5

15.3 14.8

10.3

16.5 16.4 17.5

19.5

0.0

5.0

10.0

15.0

20.0

25.0

30.0

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 E

Mil

lio

n T

on

ne

s

Year

Argentine Corn Production & Exports


41.5

35.5

47.6

42.8

35.0

41.7

51.0

58.6

51.0

56.1 57.4

73.0 71.0

6.5

1.9 5.2 4.1

0.7

4.5

10.8 7.8 7.1

11.6 8.4

21.5

17.5

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 E

Mil

lio

n T

on

ne

s

Year

Brazil Corn Production & Exports


8.0

10.1 9.7 9.7

11.7

6.9 7.3

13.2 12.6

13.4

10.9

12.4

13.5

1.3 1.1 1.1 0.7

2.1

0.6 0.5

2.2 1.7

2.1 2.5

2.0 2.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 E

Millio

n T

on

nes

Year

South Africa Corn Production & Exports


4420

4440

4460

4480

4500

4520

4540

4560

4580

4600

4620Se

p 0

7

Sep

14

Sep

21

Sep

28

Oct

05

Oct

12

Oct

19

Oct

26

No

v 0

2

No

v 0

9

No

v 1

6

No

v 2

3

No

v 3

0

De

c 0

7

De

c 1

4

De

c 2

1

De

c 2

8

Jan

04

mb

co

rn u

se

USDA est.

Annual Corn Use Implied by Weekly Ethanol Production

Cumulative average is at 4541 mb.


CBOT July 1996 Corn Futures versus CBOT December 1996 Corn Futures


CME July 2013 Corn Futures versus Dec. 2013 Corn Futures


CME Nearby Monthly Corn Futures


CME March 2013 Corn Futures


CME July 2013 Corn Futures


CME December 2013 Corn Futures


Soybeans

• WORLD SUPPLY/DEMAND

• US BALANCE SHEET

• PRICES


World Situation


Local Marketing Years

April 1, 2013

March 31, 2014

September 1, 2012

August 31, 2013

Feb. 1, 2013

Jan. 31, 2014

U.S.

Argentina

Brazil


World Soybean Stocks

0

10

20

30

40

50

60

70

80

mm

t

Exporter Stocks- LocalMarketing Years

World Stocks


Brazil & Argentina Ending Stocks Local Marketing Years

0

2

4

6

8

10

12

14

mm

t

Argentina

Brazil Local marketing years ending

early 2013


Stocks/Use

0%

5%

10%

15%

20%

25%

30%Exporters Stocks/Use- Local World Aggregate

MY ended fall 2013 U.S.,

and spring 2014 S.A.


Stocks-to-Use Ratio Local Marketing Year

Any additional production losses will come

out of use in Brazil; Argentina could maintain

current export projection without making a

new low in the ratio.

0%

2%

4%

6%

8%

10%

12%

14%

16%Argentina Brazil


Area Harvested

13.0 12.9 13.6 13.9

16.4

18.4

21.522.9 22.2

20.7 21.3 21.723.5 24.2

25.0

27.5

7.08.2 8.6

10.411.4

12.614.0 14.4

15.216.3 16.4 16.0

18.6 18.3 17.619.5

0

5

10

15

20

25

30

mill

ion

ha

Brazil Argentina


Soybean Yield

36.035.2

34.434.1

32.6

31.0

26.9

41.7

36.436.7

39.739.1

41.9

35.1

40.339.6

44.5

42.0

29.7

43.6

39.8

33.9

41.2

24.0

29.6

31.532.1

33.032.8

34.4

37.236.1

37.9

42.2

39.6

41.9

35.234.4

38.1

42.442.6

39.6

43.7

46.3

39.6

44.6

24

29

34

39

44

491

990

/91

19

91/9

2

19

92/9

3

19

93/9

4

19

94/9

5

19

95/9

6

19

96/9

7

19

97/9

8

19

98/9

9

19

99/0

0

20

00/0

1

20

01/0

2

20

02/0

3

20

03/0

4

20

04/0

5

20

05/0

6

20

06/0

7

20

07/0

8

20

08/0

9

20

09/1

0

20

10/1

1

20

11/1

2

20

12/1

3

bp

a

Argentina Brazil Linear (Argentina) Linear (Brazil)


Production: Brazil & Argentina

Crop estimates are coming in as low as

45 mmt for Argentina and 65 mmt for

Brazil.

39.5 43.5 52.0 51.0 53.0 57.0 59.0 61.0 57.869.0 75.3 66.5

82.527.8

30.035.5 33.0

39.0 40.548.8 46.2

32.0

54.5 49.0

40.1

54.0

0

20

40

60

80

100

120

140

160

mm

t

Brazil Argentina


World Import Demand

0

20

40

60

80

100

120

19

90/9

1

19

91/9

2

19

92/9

3

19

93/9

4

19

94/9

5

19

95/9

6

19

96/9

7

19

97/9

8

19

98/9

9

19

99/0

0

20

00/0

1

20

01/0

2

20

02/0

3

20

03/0

4

20

04/0

5

20

05/0

6

20

06/0

7

20

07/0

8

20

08/0

9

20

09/1

0

20

10/1

1

20

11/1

2

20

12/1

3

mm

tr

Rest of World China


Chinese Crush Margins

-1000

-800

-600

-400

-200

0

200

400

600

800

CN

Y/t

on

ne


Chinese Soybean Imports

0

1

2

3

4

5

6

7

mm

t

2007/08

2008/09

2009/10

2010/11

2011/12

2012/13


Brazil Soybean Exports

0

1

2

3

4

5

6

7

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

mm

t

2011

2012

2013


U.S. Balance Sheet


100

110

120

130

140

150

160

170m

b2009/10 2010/11

2011/12 2012/13

NOPA Crush

Unadjusted for April 2011

membership change

December was up 10% y/y.


Quarterly Crush

442459 467

420445 443

412

451

0

100

200

300

400

500

600

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13

mb

Q1 Q2 Q3 Q4

Y/Y Assumptions:

Q1 +10%

Q2+2%

Q3 -7%

Q4 -28%


0

200

400

600

800

1000

1200

1400

1600

1800

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

mill

ion

bu

she

ls

2008/09 2009/102010/11 2011/122012/13

U.S. Bean Export Commitments

12/13 exports were unchanged at

1,345 mb.


0%

20%

40%

60%

80%

100%

120%2012/13

5-yr average

Export Commitments: % of Final Soybeans

1,345 is consistent with the pace from

2010/11.


0%

20%

40%

60%

80%

100%

120%

2012/13 5-yr avg.

Export Commitments: % of Final Soybean Oil

Oil exports were raised by 350 million

pounds. Commitments are now 69% of

the projected total, ahead of the average

of 39% for this date.


0%

20%

40%

60%

80%

100%

120%

2012/13 5-yr avg

Export Commitments: % of Final Soybean Meal

Meal export s were unchanged on the

January report.


Source: U of Illinois


Source: U of Illinois, OPIS


0

1000

2000

3000

4000

5000

6000

mill

ion

po

un

ds

Soyoil use for biodiesel

Estimate of soyoil use required to meet RFS2 biodiesel mandate (calendaryear)

Soy Oil Use

If biodiesel production is 1.83

billion gallons, calendar 2013 soy

oil use is estimated at 6,241


Soy Oil 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13

Beginning Stocks 3009 3084 2485 2862 3406 2425 2542

Production 20490 20580 18746 19615 18887 19740 18700

Imports 37 66 90 104 159 150 351

Total Supply 23537 23731 21321 22580 22452 22315 21592

Exports 1876 2910 2194 3360 3232 1464 2150

Soyoil use for biodiesel 2762 3245 2022 1680 2736 4901 4901

Food Use 15814 15091 14244 14134 14059 13409 13001Total Domestic Use 18576 18336 16266 15814 16795 18309 17902

Ending Stocks 3084 2485 2862 3406 2425 2542 1541Stocks/Use 17% 14% 18% 22% 14% 14% 9%

Limited room for an 2000 million lb.

increase in bio. use


October to March Soybean/Corn Ratio

1.75

1.85

1.95

2.05

2.15

2.25

2.35

2.45

2.55

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013


New-Crop Soybean/Corn Ratio

1.9

2

2.1

2.2

2.3

2.4

2.5

2.6

October November December January February March

2012

2013

2008-2012 avg


Price and Acre Ratios

2004

2008

2006

2007

20052009

2010

2011

2012

2013

0.5

0.55

0.6

0.65

0.7

0.75

0.8

0.85

0.9

0.95

1

1.8 1.9 2 2.1 2.2 2.3 2.4 2.5

soy/

corn

acr

es

soy/corn price

2013 at 98 corn and

78 beans


U.S. Soybean Supply/Demand Jan. 11 USDA Jan. 11 USDA Jan. est. Jan. est.

2011/12 2012/13 2012/13 2013/14

Planted Acres 75.0 77.2 77.2 78.0

Harvested Acres 73.8 76.1 76.1 76.4

Yield 41.9 39.6 39.6 43.4

Beginning Stocks 215 169 169 135

Production 3,094 3,015 3,015 3,317

Imports 16 20 20 15

Total Supply 3,325 3,204 3,204 3,467

Crush 1,703 1,605 1,606 1,675

Exports 1,362 1,345 1,370 1,450

Seed 90 89 89 89

Residual 1 30 5 25

Total Usage 3,155 3,070 3,070 3,239

Ending Stocks 169 135 135 228

Stocks/Use Ratio 5.4% 4.4% 4.4% 7.0%


Prices


CME March 2013 Soybeans Weekly


CME Nov 2013 Soybeans Weekly


CME Nearby Monthly CME Soybean Futures


Dec. 1 Soybean Stocks % On-Farm

46%

48%

44%

47% 47%

51%52%

54%

53%

54% 54%55%

49%

56%

54% 54%

48%

52% 53%

48% 48%

46%

30%

35%

40%

45%

50%

55%

60%

Marketing Scenarios

• Kevin Deberg-Grain Manger

• Joel Heiling-Account Manager

• Steve Bach-Business Relationship Manger

• Mark Kubesh-Business Relationship Manger

• Lynn Button-VP of AgQuest Insurance

The following information is subject to change at anytime. Harvest Land Cooperative makes no representation or warranty regarding the correctness of any information contained herein, or the appropriateness of any transaction for any person. There is a risk of loss when trading commodity futures and options.

Jan 8, 2013

CORN YIELD AFFECT SOYBEANS YIELD AFFECT

Trend Below Above Trend Below Above

Planted Acres 100.0 100.0 100.0 Planted Acres 77.0 77.0 77.0

Harvested Acres 93.0 93.0 93.0 Harvested Acres 76.0 76.0 76.0

Yield 158 148 168 Yield 43 41 45

Total Crop 14694 13764 15624 Total Crop 3268 3116 3420

Carry In 602.0 602.0 602.0 Carry In 135.0 135.0 135.0

Total Supply 15296.0 14366.0 16226.0 Total Supply 3403.0 3251.0 3555.0

Usage 12750.0 12750.0 12750.0 Usage 3250.0 3250.0 3250.0

Carry Out 14 2546.0 1616.0 3476.0 Carry Out 14 153 1 305

ACRES PLANTED

CROP YEAR CORN BEANS TOTAL WHEAT C,B,&W COTTON C.B.W.& C.

2005 81.8 72.1 153.9 57.2 211.1

2006 78.3 75.5 153.8 57.3 211.1

2007 93.5 64.7 158.2 60.4 218.6

2008 86 75.7 161 63.2 224.2

2009 86.5 77.5 164 59.1 223.1 7.56 230.66

2010 88.2 77.4 165.6 53.6 219.2 10.7 229.9

2011 91.9 75 166.9 54.4 221.3 14.7 236

2012 96.9 77.2 174.1 55.7 229.8 12.4 242.2

2013 - est. 100 77 177 57 234 10 244

mailto:C.B.W.@ C.

mailto:C.B.W.@ C.

CORN ACRES 2013 CORN ACREAGE AFFECT

TREND BELOW ABOVE

• Planted Acres 100.0 100.0 100.0

• Harvested Acres 93.0 93.0 93.0

• Yield 158.0 148.0 168.0

• Total Crop 14694 13764 15624

• Carry In 602 602 602

• Total Supply 15296 14366 16226

• Usage 12750 12750 12750

• Carry Out 2014 2546 1616 3476

• Proj. $ / bu. 5.50 6.50 3.50

PLANTED ACRES 2013

SOYBEAN ACREAGE AFFECT

TREND BELOW ABOVE • Planted Acres 77.0 77.0 77.0

• Harvested Acres 76.0 76.0 76.0

• Yield 43.0 41.0 45.0

• Total Crop 3268 3116 3420

• Carry In 135 135 135

• Total Supply 3403 3251 3555

• Usage 3250 3250 3250

• Carry Out 2014 153 1 305 • Proj. $ / bu. 13.50 16.00 11.00

Cash price ranges for corn and soybeans

2007 2008 2009 2010 2011 2012

Cash Corn Price $2.80 - $4.37 $2.61 - $7.05 $2.76 - $4.12 $3.01 - $5.79 $5.45 - $7.57 $5.65 - $8.06

Range $1.57 $4.44 $1.36 $2.78 $2.12 $2.41

Cash Beans Price $5.94 - $11.50 $7.36 - $15.25 $8.09 - $11.96 $8.60 - $13.38 $10.50 - $13.87 $10.98 - $17.64

Range $5.56 $7.89 $3.87 $4.78 $3.37 $6.66

2013 Insurance Information

AgQuest Insurance is an Equal Opportunity Provider

Dry Pea/Dry Bean

New for 2013

Program Overview

• Revenue coverage for pulse crops will operate identically to the Revenue coverage available for other crops.

• The concept: • Use alternative methods to determine “projected”

and “harvest” prices. • Without a futures market for pulse crops, the prices

will be established using statistically tested data from industry stakeholders and governmental agencies to publish the projected and harvest

prices. • Otherwise, the product is identical to the coverage

offered by existing Combo Revenue plans.

Price Determination • To calculate the projected price:

• On or before February 15 of the crop year the offer price and expected contract volume will be

collected. • The volume and prices will be used to calculate a

weighted average projected price.

• To calculate the harvest price: • The dry pea harvest price will utilize an average

price from the USADPLC check-off assessment data set. The dry bean harvest price will use an average

price from AMS Bean Market News.

Dry Pea Pilot

• The Dry Pea Revenue Endorsement is available for the following types:

• Green/yellow peas • Lentils

• Large Kabuli Chickpeas • Small Kabuli Chickpeas

Pilot – Dry Pea Revenue - Availability

© 2

01

2 N

CIS

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98

Plans 01, 02, and 03

Coverage is offered to all counties where spring dry pea yield coverage is available in Idaho, Montana, North Dakota, and Washington.

Dry Bean Pilot

• The Dry Bean Revenue Endorsement is available for the following types:

• Black Beans • Dark Red Kidney Beans • Pea (Navy) Beans

• Pinto Beans

• Revenue Policy RP • HP Exclusion

• YP bushel guarantee

Coverage levels 50-75 % in 5% increments Optional and Basic units only -- No Enterprise units Quality adjustments limited to US#3 Establishing Prices for projected price and Harvest price Northarvest Bean Growers Association & AMS Bean market News Establish projected price by Feb 15 and will be out no later than March 3 Harvest Price – track sales from Sept 1 – date closest to November 30 and will be out no later than December 15 Harvest Price can be no greater than 1.5 higher than projected

Dry Bean

Dry Bean Pilot • Coverage is offered to all counties where spring dry bean

yield coverage is available in North Dakota and Minnesota.

Program Example • Identically to the Combo revenue product, start by

calculating the Expected Revenue:

• Exp Rev = Approved Yield * Projected Price

$448/ac = 14 cwt./ac * $32.00/cwt.

• The Guarantee is calculated as the product of the Expected Revenue, Coverage Level, and Share:

• Guarantee = Exp Revenue * Coverage Level* Share

$336/ac = $448/ac * 75% * 100%

• Assume the following:

• Actual yield: 11 cwt./ac

• Harvest price: $20/cwt.

Program Example

• Revenue to Count is calculated identical to Combo Revenue Protection program:

• Rev to Count = Actual Yield * Harvest Price

$220/ac = 11 cwt./ac * $20.00/cwt

• Indemnity is calculated as Guarantee less Revenue to Count:

• Indemnity = max (0, Guarantee – Rev to Count)

$116/ac = $336/ac - $220/ac

Please note: The producer would have received no indemnity at the 75% coverage level under Yield (APH) coverage plan.

Actual Production History (APH)

• Actual production history minimum 4 years up to 10 years for insured unit

• Added land will get the higher of the County T-yield or Simple average of the existing

• Added Land -

• less than 640 cropland acres

• Simple Average (SA) or T-Yield or Variable T-yield (whichever is higher)

• 640 and less than 2,000 cropland acres

• Variable T-yield or request to RO to use the Simple Average (SA) T-yield

• Greater than or equal to 2,000 cropland acres

• Variable T-yields apply only

•Eligibility:

• Must have at least 1 actual yield in 1 of most recent 4 crop years.

• If database contains < 4 actual yields in the 12 most recent crop years the trend adjustments are prorated as follows:

• 4 years = 100% of TA



• 1 Year = 25% of TA

• Elect by Sales Closing Date

• Available on Buy-up policies only – excludes CAT policies

• Corn and Soybeans only

• Corn for Silage, Specialty Soybeans and Organic crops are excluded

Trend-Adjusted APH (TA)

TA Example

Unit Structure

• Optional – Subdivided basic unit

• Reporting and keeping production separate section by

section

• Enterprise – Crops

• All acres of the insured crop in the county in which insured

has a share

• 2 or more basic or optional units of crop located in 2 or more section, 20 Acres or 20% of insured crop acreage

Optional/Enterprise Unit Example

TA 190

2 3 TA 190 TA 190

# 1 $12,960 @ 85% = $77,760 # 2 $12,960 @ 85% = $77,760 # 3 $12,960 @ 85% = $77,760

OU = 3 insurance guarantees Subsidy @ 85% $33.00 Insured Cost $53.84 / ac

EU = All crop/county = 1 Guar. Subsidy @ 85% $37.50 Insured Cost $33.28 / ac

#1, #2, and #3 = $38,800 bu Guar. @ $6.00 = $232,800 Rev. Guar.

80 acres 80 acres 80 acres

1

Enterprise Plus Example

1

TA 190

2 3

TA 190 TA 190

# 1 $12,960 @ 85% = $77,760 # 2 $12,960 @ 85% = $77,760 # 3 $12,960 @ 85% = $77,760

$38,800 bu. Guar. $232,800 rev. guarantee

80 acres 80 acres 80 acres

2 3 1 190 190 190

@ 80% E+

$72,960 $72,960 $72,960

152 bu. Gty. 152 bu. Gty. 152 bu. Gty.

Enterprise Plus Example

• 140 Harvest Bushels

• X 7.50 Harvest Price

• 152 – 140 = 12 bu.

12 X $7.50 = $90 Claim

• Up to 10 on E+ Optional Units

• Cannot have Enterprise policy loss

• If, EU policy has payout then NO E+ payout

• 5% less Coverage on E +

2013 Subsidy Levels

Reduced Premium Rates

• 5 – 10% Corn reduction / level based

• 4 – 10 % Soybean reduction / level based

• Moved to a 20 year rating instead 30-36 year

• Adjustment of pre 1995 losses agronomic differences

• Use of weather data adjust premium rates

• Higher factor based on last 5 years closer to current crop

Producer:

Crop: CORN

Year: 2013

County:

Underwriting Company: NAU

228 Modified APH

APH 190

Coverage level 85%

Bushel gty 161.5

Coverage Price $6.00 (See Spring Prices below)

Coverage $969.00

190 APH

Production Hail Plan 1.2 (1.0 or 1.1, 1.15, 1.2)

Modified APH 228

less guaranteed bu 161.5

Hail bushels covered 66.5

RP, YP price $6.00

Dollars of Hail Coverage $399.00 161.5 MPCI Bushel Gty

Production Plan Rate $3.40 (See "Rate Factors" tab)

Cost of Hail (Coverage/Acre) $13.57

Total Acres Covered

Total Cost Per Crop $0.00

0

Spring Base Prices: (RP)

Corn $6.00

Soybeans $13.00

PROGRAM HIGHLIGHTS:

1) Losses are based on the harvested bushels vs. the adjusted % loss (spot losses)

Loss Example:

Agreed percentage of loss = 10% (Attributed to hail)

Modified APH (from above) = 228 x 10% = 22.8 Adjusted bu/acre loss

Assuming a harvested yield of 205.2 or less, the loss payment will be -------->####

If, however, harvested bushels = 216.6 The amount of loss payment =68.40$ (Modified APH minus harvested bu. times spring price)

Production Hail Coverage-NAU

Production Hail Coverage-NAU Producer:

Crop: SOYBEANS

Year: 2013

County:

Underwriting Company: NAU

62.4 Modified APH

APH 52

Coverage level 85%

Bushel gty 44.2

Coverage Price $13.00 (See Spring Prices below)

Coverage $574.60

52 APH

Production Hail Plan 1.2 (1.0 or 1.1, 1.15 or 1.2)

Modified APH 62.4

less guaranteed bu 44.2

Hail bushels covered 18.2

RP, YP price $13.00

Dollars of Hail Coverage $236.60 44.2 MPCI Bushel Gty

Production Plan Rate $7.45 (See "Rate Factors" tab)

Cost of Hail (Coverage/Acre) $17.63

Total Acres Covered

Total Cost Per Crop $0.00

0

Spring Base Prices: (RP)

Corn $6.00

Soybeans $13.00

PROGRAM HIGHLIGHTS:

1) Losses are based on the harvested bushels vs. the adjusted % loss (spot losses)

Loss Example:

Agreed percentage of loss = 10% (Attributed to hail)

Modified APH (from above) = 62.4 x 10% = 6.24 Adjusted bu/acre loss

Assuming a harvested yield of 56.16 or less, the loss payment will be -------->####

If, however, harvested bushels = 59.28 The amount of loss payment =40.56$ (Modified APH minus harvested bu. times spring price)

Wind, Freeze – Sugar Beets

•Wind, Freeze and Soil Crusting Coverage • Endorsement to the Hail Policy with a 5% deductible

• Provides growers to start planting April 1st or initial planting of April 10th

• Purchase Dollar coverage same as hail.

• Wind Freeze Stages

April 1 – April 28 Stage 1 33.3%

April 29 – May 25 Stage 2 66.7%

May 26 – August 15 Stage 3 100 %

August 16 - September 10 Stage 4 66.7%

September 11 – September 30 Stage 5 33.3%

Spill Prevention Control Countermeasure

Regulation 40 CFR 112

Presented by Martin Bonnell, PE

January 25, 2013

PRESENTATION

OVERVIEW • Introductions

• Who needs a SPCC Plan & what is covered?

• State and Federal Regulations

• How is a SPCC Plan used and maintained?

• What to do in the event of a product spill

• Questions & Discussion

Who Needs a SPCC Plan

• Owners or operators of petroleum facilities that have

discharged or, due to their location, could reasonably be

expected to discharge oil in harmful quantities into or upon

the navigable waters of the United States or adjoining

shorelines to prepare, in writing, an SPCC Plan.

SPCC REQUIREMENTS

• If the facility total aboveground storage in tanks or

containers is > 1,320 gallons and/or > 42K gal underground

storage (not 280/281 exempt)

• It’s a non-transportation related facility (see 40 CFR Part

112 Appendices A & B)

• And there is a reasonable chance of a discharge to waters

of the U.S. or adjoining shorelines

DEFINITIONS

• Oil

• Includes oil of any kind or in any form including, but not limited

to:

• Petroleum and fuel oils (gasoline, diesel, lube oils, aviation

gasoline, naphtha, mineral spirits, etc.)

• Sludge

• Synthetic oils

• Created by chemical synthesis

DEFINITIONS

• Oil (cont’d)

• Oil refuse

• Oil mixed with wastes other than dredged spoil

• Animal fats, oils & greases

• Vegetable oils

• Mineral oils

DENATURED ETHANOL

• Denatured ethanol tanks are considered oil storage

containers if the denaturant is an oil such as refined gasoline

or natural gasoline

• Shell capacity of tank used as storage capacity

• These facilities may be subject to the SPCC & FRP

requirements

NON-TRANSPORTATION-

RELATED FACILITIES

• Industrial, commercial, agricultural, or public facilities which

use, store, drill for, produce, gather, process, refine or

consumer oil or oil products

• Waste treatment facilities or part thereof

• Pipeline systems, highway vehicles & railroad cars used to

transport oil exclusively within a facility

EPA Regulates:

• Railroad cars after the transportation process ends and

when they are operated as non-transportation-related

storage at an SPCC regulated facility

DOT Regulates:

• Railroad cars from the time the oil is offered for

transportation to a carrier until the time it reaches its

destination and is accepted by the consignee

“REASONAL EXPECTATION” OF

DISCHARGE • The determination must be based solely upon consideration

of the geographical & locational aspects of the facility

• Exclude manmade features such as dikes, equipment or

other features which would restrain, hinder, contain or

otherwise prevent a discharge as described in §112.1(b)

“REASONAL EXPECTATION”

(CONT.) • Factors to consider:

• Whether a past discharge of oil reached a navigable water or

adjoining shoreline;

• Whether the facility is adjacent to navigable waters or adjoining

shoreline;

• On-site conduits, such as sewer lines, storm sewers, certain

underground features (e.g., power or cable lines, or

groundwater);

“REASONAL EXPECTATION”

(CONT.) • Factors to consider:

• Unique geological or geographic features;

• Whether the facility is near a watercourse & intervening natural

drainage;

• Whether precipitation runoff could transport oil into navigable

waters;

• The quantity & nature of oil stored

STORAGE CAPACITY

THRESHOLDS

• IF it meets the other applicable criteria set forth in §112.1,

the SPCC rule applies to a facility with:

• > 1,320 gallons of aggregate aboveground oil storage capacity,

or

• > 42,000 gallons of completely buried oil storage capacity

STORAGE CAPACITY

Included in storage capacity

• Capacity of containers (e.g., bulk storage containers, oil-filled equipment, mobile/portable containers, etc.) with a capacity of 55 gallons or greater

Excluded from storage capacity

• Capacity of completely buried tanks & associated underground piping, ancillary equipment & containment systems that are subject to all technical requirements of 40 CFR part 280 or 281

• Capacity of tanks used exclusively for wastewater treatment

• Capacity of containers that are permanently closed

• Motive power containers

DEFINITION OF STORAGE

CAPACITY

• “Storage capacity” is defined in §112.2 as the shell capacity of

a container

• Generally, the shell capacity is the rated design capacity

rather than the working/operational capacity

DEFINITION OF “PERMANENTLY

CLOSED” • For a tank to be “permanently closed”, the facility must do

the following:

• Remove all liquid & sludge from each container & connecting

line

• Disconnect & blank off all connecting lines & piping

• Close & lock all valves (except ventilation valves)

• Pose a conspicuous sign on each container stating it is

permanently closed with the date of closing

• Tanks can remain on site, but they are not included in the

total storage capacity

SPCC Plan Basics

SECONDARY CONTAINMENT

REQUIREMENTS

• Tank secondary containment requires 110 percent of the volume

of the largest tank contained within the dike with the displacement

volumes of the tanks accounted for.

• Secondary containment needs to allows for additional freeboard

for containment of precipitation in the containment dikes.

Secondary Containment

Drum Containment

RACK SPILL PAD CONTAINMENT

• If transport truck makes hard connect to tank –

the tank has a “Rack” and must have spill pad

containment.

• Spill Pad containment must be large enough to

contain the largest compartment of the truck

unloading at the petroleum facility.

Spill Pad Containment

§112.3 PREPARE &

IMPLEMENT A PLAN

• The facility owner/operator must prepare a SPCC Plan:

• In writing

• In accordance with §112.7 & any other applicable

sections of 40 CFR part 112

§112.3(c) MOBILE

FACILITIES • Onshore & offshore mobile facilities must prepare,

implement & maintain a Plan as required by the rule

• Amend & implement a Plan, if necessary to ensure compliance

with the rule, on or before 11/20/09

• Can be a general Plan; a new Plan is not required each time a

facilities moves to a new site

§112.3(d) PE

CERTIFICATION

• A licensed PE must review & certify a Plan & technical

amendments

• The certification does not relieve the owner/operator of his

duty to prepare & fully implement a Plan

PE “ATTESTATION”

• With certification, the PE attests that:

• PE is familiar with the rule requirements

• PE or his agent visited & examined the facility

• The Plan has been prepared in accordance with good

engineering practice, including the consideration of applicable

industry standards, & with the requirements of 40 CFR part 112

• PE allow flexibility in meeting many rules provisions by

providing equivalent environmental protection or developing

contingency plans.

• Procedures for required inspections & testing have been

established

• The Plan is adequate for the facility

§112.3(e)(1) PLAN

REQUIREMENTS • Maintain a complete copy of the Plan:

• At the facility if it is attended at least 4 hours per day

• At the nearest field office if the facility is attended for less than 4

hours per day

• Have the Plan available to the RA for onsite review during

normal working hours

PLAN REVIEW &

EVALUATION • Complete once every 5 years from the date facility becomes

subject to the rule

• If a facility was in operation on or before 8/16/2002, 5 years from

the date of your last review required by the rule

• Amend Plan within 6 months to include more effective

prevention & control technology

• Implement ASAP, but no later than 6 months of amendment

DOCUMENTING PLAN

REVIEW

• Must document Plan review & evaluation

• Sign statement at beginning or end of Plan or in a log or an

appendix

• “I have completed review & evaluation of the SPCC Plan for

(name of facility) on (date), and will (will not) amend the Plan as a

result.”

• PE must certify any technical amendment to Plan

• Qualified Facilities exception

Smaller Oil Storage Facilities

§112.6 QUALIFIED FACILITY

PLAN REQUIREMENTS • Smaller oil storage facility that is eligible for streamlined regulatory

requirements

• Self-certified SPCC Plan instead of one reviewed & certified by a Professional Engineer

• Streamlined integrity testing & facility security requirements

• Must meet eligibility criteria to use alternative option

• EPA’s recent amendment would divide this group of facilities into tiers

• Requirements described here would apply to “Tier I” facilities

§112.6 QUALIFIED FACILITY

PLAN REQUIREMENTS (CONT.)

• EPA’s recent amendment would divide this group

of facilities into tiers

• Requirements described here would apply to “Tier II”

facilities

• Additional relief would be provided to “Tier I”

SELF-CERTIFICATION OPTION

FOR QUALIFIED FACILITIES • Allow facility owners that store <=10K oil & meet other

“qualifying” criteria to self-certify their SPCC Plans, in lieu of

review & certification by a PE

• “Qualifying” criteria –

• NO discharges for 3 years prior or since becoming subject to the

requirements

• Under this approach, owners may not deviate from any

requirements under §112.7(a)(2) (can’t use EE) & may not

make impracticability determinations under §112.7(d)

REPORTABLE DISCHARGE

HISTORY • A single discharge of oil to navigable water or adjoining

shorelines exceeding 1,000 gallons OR,

• Two discharges to navigable water or adjoining shorelines

each exceeding 42 gallons within any 12 month period

• Count only the amount that reaches navigable water or

adjoining shorelines

REPORTABLE DISCHARGE

HISTORY (CONT.) • Oil discharges resulting from natural disasters, acts of war,

or terrorism are not included

• Sabotage & vandalism are not beyond facilities control

• Self-certifying facilities do not automatically lose eligibility if

they have a reportable spill, the RA has the authority to

require a Plan amendment

SELF-CERTIFICATION

• Owner/operator attests they are familiar with the rule & have

visited & examined the facility

• The Plan has been prepared in accordance with accepted &

sound industry practices & standards

• Procedures for required inspections & testing have been

established

• The facility meets the qualifying criteria

SELF-CERTIFICATION

(CONT.) • The Plan does not deviate from rule requirements except as

allowed & as certified by a PE

• The Plan & staff responsible for implementing it have the full

approval of management & the o/o has committed the

necessary resources to fully implement the Plan

• The Plan is being fully implemented

TECHNICAL AMENDMENTS

• May self-certify technical amendments as long as a PE has

not certified the portion being changed

• If a PE certified the affected portion of the Plan, then a PE

must certify the technical amendment

Drum Containment

Tank Containment

TIER I SUMMARY

And a facility… Then the owner/operator of the facility… If a facility…

…has 10,000 gallons or less in aggregate aboveground oil storage capacity

…meets the oil discharge history criteria

…may prepare a self-certified SPCC Plan instead of one reviewed & certified by a Professional Engineer (PE)

…may meet tailored facility security & tank integrity inspection requirements without PE certification

…may prepare a Plan which includes PE-certified environmentally equivalent measures or impracticability determinations that would require PE certifications for only the portions dealing with environmental equivalence & impracticability determinations. The remaining portions of the Plan could be self-certified by the facility owner/operator

ASSISTANCE, SERVICES &

PRODUCTS

• Brams Engineering Services– Assistance drafting SPCC plans

• Inspects and Prepares SPCC Plans

• Prepares Tier I SPCC Plans for Owner/Operator Self Certification

• Prepares Tier II SPCC Plans for Owner/Operators

• Designs Tank Containment Basins

• Responses to EPA Violation Letters

U.S. EPA – Penalties & Fines

What Does it take to fill out the Tier 1 Plan?

QUESTIONS & CONTACT INFO

Martin Bonnell, PE Senior Civil Engineer

Brams Engineering, LLC 172 Spruce Drive

Apple Valley, MN 55124 952-261-9351

[email protected]

Have you serviced your

Farm Policy for 2013

AgQuest Insurance is an Equal Opportunity Provider

Major Components of a Farm Insurance Contract/Policy

Declaration Page

Dwelling

Other Structure

Personal Property

Loss of Use

Scheduled Farm Property

Unscheduled Farm Property

Farm Structures

Farm Liability

Medical Coverage

Concerns of an Insurance Contract

Debris Removal

Custom Farming

CO-INSURANCE CLAUSE

Farms Becoming Corporations

Thank-you!

Contact Information Harvest Land: 800-245-5819

AgQuest: 877-626-7453

The full presentation will be available on HLC & AgQuest website’s.