Global Overview of AgriculturalCommodities As An Asset Class

Bruce A. ScherrChairman of the Board & Chief Executive Officer

Informa Economics, Inc.

901-766-4511

bruce.scherr@informaecon.com

March 12, 2013

Commodities As AnAsset Class

• Commodity Values Remain Strong

• Reiterating from Last Year

2013:

• Europe’s Impact On TheGlobal Macroeconomic SituationGlobal Macroeconomic Situation

• Asia: Better? Yes!

• U.S. Cliff Hopping

The Dollar:

Still Relatively WeakStill Relatively Weak

Good or Bad?

U.S. Economic Prospects

Slow Organic Growthwithwith

Less Government

The Transition Economy

Select Indicators:

Housing, Housing, Housing!Housing, Housing, Housing!

Annual %CH

2003 1.854

2004 1.950 5.2

2005 2.073 6.3

2006 1.812 -12.6

2007 1.342 -25.9

2008 0.900 -32.92008 0.900 -32.9

2009 0.554 -38.4

2010 0.586 5.7

2011 0.612 4.5

2012 0.781 27.5

2013 0.954 22.2

2014 0.987 3.5

%CH

2003 16.6

2004 16.9 1.3

2005 17.0 0.5

2006 16.5 -2.6

2007 16.1 -2.5

2008 13.2 -18.0

2009 10.4 -21.2

2010 11.6 11.1

2011 12.7 10.2

2012 14.4 13.1

2013 15.6 8.3

2014 16.5 5.8

Vehicle Sales

Liquidity Issues

Are Banks in Good Shape?Are Banks in Good Shape?

The Fed’s Policy Role?

The Fed:

Low Short Rates Long TermLow Short Rates Long Termand

Low Long Term Rates

Feeding 7-9 Billion People;

Demographic Pulls and Limitations:

The Graying of the PopulationThe Graying of the Population

“Constraints As We FollowThe Cold Chain”

Crop Yields?Crop Yields?

US Yield Growth Rate Over 4-Decades

3.5

4.0

4.5

5.0

AN

NU

AL

GR

OW

TH

RA

TE

(10

-yr

av

era

ge

of

15

-yr

AG

R)

Corn Soybeans Winter Wheat

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

19

70

19

80

19

90

20

00

20

10

AN

NU

AL

GR

OW

TH

RA

TE

(10

-yr

av

era

ge

of

15

-yr

AG

R)

Is Natural Gas America’s

MacroeconomicProductivity Feature

Is Natural Gas America’s“Ace In The Hole”?

A Game Changer:Driving Costs Lower!

Crude Oil and Natural GasPrice Relationships

•• Recent Divergence

• Energy Implications

• Implications For Renewable Fuels

10

12

14

16

100

120

140

160

Nat

Ga

s($

/MM

btu

)

Relationship BetweenWTI, Brent, and Henry Hub Natural Gas Spot Prices

WTI Spot FOB ($/Barrel)

Brent Spot FOB ($/Barrel)

Henry Hub Nat Gas Spot ($/Mmbtu)

0

2

4

6

8

10

0

20

40

60

80

100

Jan

-98

Ju

n-9

8

No

v-9

8

Ap

r-99

Sep

-99

Feb

-00

Ju

l-00

De

c-0

0

Ma

y-0

1

Oct-

01

Ma

r-0

2

Au

g-0

2

Jan

-03

Ju

n-0

3

No

v-0

3

Ap

r-04

Sep

-04

Feb

-05

Ju

l-05

De

c-0

5

Ma

y-0

6

Oct-

06

Ma

r-0

7

Au

g-0

7

Jan

-08

Ju

n-0

8

No

v-0

8

Ap

r-09

Sep

-09

Feb

-10

Ju

l-10

De

c-1

0

Ma

y-1

1

Oct-

11

Ma

r-1

2

Au

g-1

2

Jan

-13

Nat

Ga

s($

/MM

btu

)

Cru

de

Pri

ce

($/b

bl)

15.00

20.00

25.00

Do

lla

rsp

er

Mil

lio

nb

tu

Comparison of WTI Crude and Henry Hub Natural Gas Spot Price

WTI Price Henry Hub Price

1 barrel of Crude Oil contains 5.8 million btu.The current price (February 2013) of 1 barrel of Crude Oil is $95.84 per barrel.Cost per million btu in the form of Crude Oil = $95.84/5.8 = $16.52.Cost per million btu in the form of Natural Gas = $3.34.

0.00

5.00

10.00

Ja

n-9

8

Ju

n-9

8

No

v-9

8

Ap

r-9

9

Sep

-99

Fe

b-0

0

Jul-0

0

De

c-0

0

Ma

y-0

1

Oct

-01

Ma

r-02

Aug

-02

Ja

n-0

3

Ju

n-0

3

No

v-0

3

Ap

r-0

4

Sep

-04

Fe

b-0

5

Jul-0

5

De

c-0

5

Ma

y-0

6

Oct

-06

Ma

r-07

Aug

-07

Ja

n-0

8

Ju

n-0

8

No

v-0

8

Ap

r-0

9

Sep

-09

Fe

b-1

0

Jul-1

0

De

c-1

0

Ma

y-1

1

Oct

-11

Ma

r-12

Aug

-12

Ja

n-1

3

Do

lla

rsp

er

Mil

lio

nb

tu

40.00

50.00

60.00

Do

lla

rsp

er

Milli

on

btu

Ratio Between WTI Crude and Henry Hub Spot Price

WTI-Henry Hub Ratio

0.00

10.00

20.00

30.00

Jan

-98

Ju

l-98

Jan

-99

Ju

l-99

Jan

-00

Ju

l-00

Jan

-01

Ju

l-01

Jan

-02

Ju

l-02

Jan

-03

Ju

l-03

Jan

-04

Ju

l-04

Jan

-05

Ju

l-05

Jan

-06

Ju

l-06

Jan

-07

Ju

l-07

Jan

-08

Ju

l-08

Jan

-09

Ju

l-09

Jan

-10

Ju

l-10

Jan

-11

Ju

l-11

Jan

-12

Ju

l-12

Jan

-13

Do

lla

rsp

er

Milli

on

btu

Note: 1 barrel of Crude contains 5.8 million btu

U.S. Energy Independence?

• Global Socio-Political Issues• Global Socio-Political Issues

• Wither the Arab Spring?

• Friends or Foes?

• Wheat

• Corn

The Outlook For Crops

• Corn

• Soybeans

Rebounding from 2012’s Drought

2013A Battle Royal For AcresA Battle Royal For Acres

Corn Yields: What’s Next?

WheatWheat

CornCorn

SoybeansSoybeans

Summary and QuestionsSummary and Questions

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