0
Vital to the World




                         Corn Processing Business Review
                                          ...
Safety Moment




                2
Please Turn Off Cell Phones and Pagers




                                         3
Safe Harbor Statement
Some of our comments constitute forward-looking statements that
reflect management’s current views a...
Agenda for the Day
 8:00am Overview Presentation: Strategy and Execution;
                  Patricia Woertz - Chairman, CE...
Overview Presentation:
                              Strategy and Execution

Pat Woertz – Chairman, Chief Executive Office...
7
Our World-Class Asset Base Is Positioned
 for Global Growth




Sourcing facilities
Oilseed processing
Corn processing
Coc...
We Have Leveraged our Value Chain and
   Executed on our Strategy


                               The ADM Value Chain
   ...
We Have Diversified Feedstocks
           CORN                                                                     FOOD


...
We Have Expanded the Geographic Scope of
   our Core Model
           CORN                                                ...
We Have Grown our BioEnergy Business
           CORN                                                                     F...
We Have Reduced Water Consumption
           CORN                                                                         ...
We Are Building Efficient Cogen Plants
           CORN                                                                    ...
We Are Continuing Advanced Biofuels Research

           CORN                                                             ...
We Use Technology and Innovation to
   Meet Customer Needs
           CORN                                                ...
We Have Driven Improvements in Key
Priority Areas…
  • Safety                         • Continuous Learning
              ...
We Are Advancing the Understanding that
Agriculture Can and Will Meet Global Demands




                                 ...
Financial Performance and Capital Expenditures
Steve Mills - Executive Vice President and Chief Financial Officer
We Achieved Record Segment Operating
Profit in 2008
(Amounts in millions, except for per share data and percentages)




 ...
Our Diversified Portfolio Drives Earnings Growth

     FY06                             FY07                          FY08...
Our Diversified Portfolio Drives Earnings Growth

     FY06                             FY07                          FY08...
Our Balance Sheet Reflects the Impact of Increased
Commodity Prices and our Capital Construction Projects
                ...
Major Construction Projects Are on Schedule

                                                 Current Timeline*
          ...
Recent Trends Shaping Global
                     Grain Supply, Demand and Prices

John Rice - Executive Vice President, C...
World Meat and Grain Consumption Is Growing
(Amounts in millions of tons)



                                           20...
World Grain and Oilseeds Production Is Growing
Area                                    Production




                    ...
High Crude Oil Prices Impact Crop Prices
(Amounts in U.S. dollar/barrel)




                                           28
The Weak Dollar Impacts Crop Prices
(Amounts in Euro)




                                      29
Fund Investments Impact Crop Prices
(Amounts in billions of dollars)




                                      30
Increased Crop Production Is Projected for 08/09


 • Wheat production to increase by 65M tons


 • Oilseeds production to...
World Corn Production Grows to Meet Demands




Source: USDA


                                           32
ADM Is Positioned to Respond to a
Changing Marketplace
• Proprietary crop intelligence offering insight into world
  grain...
ADM Provides Alternatives to Optimize
Swine Feed Formulas




Corn               Amino Acids   Canola   Wheat           Ba...
ADM Provides Alternatives to Optimize
Poultry Feed Formulas




Corn               Amino Acids   Canola   Wheat           ...
ADM Provides Alternatives to Optimize
Dairy Cattle Feed Formulas




                                                     ...
Q&A
         ADM Strategy and Execution

Financial Performance and Capital Expenditures

               Crop Dynamics




...
BREAK




        38
Corn Processing Business Review

Ed Harjehausen - Senior Vice President, Corn
Corn Processing Business Review

• Fundamentals


• New Product Development


• Issues


• Strengths


                   ...
ADM’s Diversified Product Line
Maximizes Value
• 2.0 million bu/day
• 7 U.S. plant locations
• Maximize returns by
  alloc...
Joint Ventures Are Positioned for
International Opportunities




                                    Slovakia
           ...
Wet Corn Mills Deliver Lower Net Corn Costs
(BU = 56 lbs)


                                      Wet Mill        Dry Mill...
We Produce 24 Products from Corn

                 CORN SYRUP, HIGH FRUCTOSE CORN SYRUP

                 Dextrose (Liquid...
ADM Has Leading Positions in Key Markets
               1st         2nd             3rd

Total Grind               Cargill...
HFCS Remains an Attractive Alternative to Sugar


• U.S. market – 23.5 billion pounds, slightly declining volume

• Mexico...
U.S. Ethanol Demand and Supply Are Growing




                                             20
                           ...
Ethanol Demand Exceeds RFS Requirements




*Calendar Year
Source: Energy Information Administration


                   ...
The Ethanol Industry Sees Growing Demand
             2008                              2009                          2010...
Low Refining Margins Drive Ethanol Use




                                         50
Ethanol Has a Competitive Advantage
  • Ethanol                              = $ 1.8100 (net)   116 Octane
  • USGC RUL   ...
Brazilian Ethanol Export Capacity Is Limited
   (Amounts in millions of gallons, except for percentages)


  Import to U.S...
New Products Offer Opportunities to
Increase Value from Grind

Commercialization in progress

• Telles JV between ADM and ...
Industrial Chemicals Offer Growth
Potential for the Future
• Focus on direct chemical replacements
   - Based on ADM feeds...
Issues Affecting
  Corn Industry




                   55
HFCS Is the Same as Table Sugar
• “It's basically no different from table sugar. Table sugar is
  glucose and fructose stu...
Facts about HFCS Are a Sweet Surprise




                                        57
U.S. DDGS Demand Is Growing With Supply




Source: Informa


                                        58
DDGS Are an Effective Feed Ingredient
CHICKENS
• “I’m very enthusiastic about using DDGS in poultry diets. We use it just ...
Food Prices Are Driven by Energy Costs
• “During the first four months of 2008, the all food CPI increased
  by 4.8 percen...
Ethanol Is Keeping Down Gasoline Costs
• “Oil and gas prices would be 15% higher if biofuel
  producers weren’t increasing...
Global Agricultural Leaders Are
Responding to Concerns




       www.FoodAndEnergy.org


                                ...
ADM Has Competitive Advantages in
Corn Processing
• Diversification of product mix
• Advantages of combining wet and dry o...
Corn Operations Review

Randy Kampfe - Vice President, Corn Processing
Corn Plants Are Organized around Focus Areas

                                                                            ...
We’re Improving Safety Performance




                                     66
Each Kernel of Corn Contains
Multiple Value Streams
                                 Fiber: 8.75 lbs/bu

 Starch: 31.5 lbs...
Dry Milling Is Simpler but Less Flexible




                                           68
Wet Milling Is Flexible but Capital Intensive




                                                69
Increasing Grind Rates Maximize the
Value of Existing Assets




                                      70
Cost Control Is Critical to Success
• Cost control is a challenge – especially with the rising
  cost of energy
• Efficien...
We Are Improving Capital Project Management
 Enhancing and improving project management:
   - Safety is actively managed w...
Cedar Rapids, IA - Adding Ethanol Dry Mill
                            Dry Mill



                                       ...
Clinton, IA - Adding Cogen and PHA
                                                  PHA
                                 ...
Columbus, NE - Adding Ethanol Dry Mill and CoGen



      Dry Mill                                    Wet Mill




       ...
Decatur, IL - Our Largest Corn Plant

                                                     Propylene
                   We...
Marshall, MN




                    Wet Mill
                  Refinery
                                                 ...
Peoria, IL - Our Largest Dry Mill




                Ethanol

                                     Dry Mill



Process   ...
Walhalla, ND - Our Smallest Corn Plant



                        Ethanol




           Dry Mill
Process                P...
ADM Has Competitive Advantages in
Corn Processing
• Diversification of product mix
• Advantages of combining wet and dry o...
Q&A
Corn Processing Business

Corn Processing Operations




                             81
Plant Tour Video




                   82
Tour Security & Safety

1. Proper clothing is mandatory

2. Personal Protective Equipment (hard hats,
   safety glasses, e...
Tour Security & Safety

6. Be alert for railcars moving on the tracks
   (red light and audible horns are warnings)

7. So...
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  1. 1. Vital to the World Corn Processing Business Review And Plant Tour Patricia Woertz – Chairman, CEO and President Steve Mills – EVP & CFO October 7, 2008 John Rice – EVP, Commercial & Production Ed Harjehausen – SVP, Global Corn Randy Kampfe – VP, Corn Processing Dwight Grimestad - VP, Investor Relations
  2. 2. Safety Moment 2
  3. 3. Please Turn Off Cell Phones and Pagers 3
  4. 4. Safe Harbor Statement Some of our comments constitute forward-looking statements that reflect management’s current views and estimates of future economic circumstances, industry conditions, company performance and financial results. The statements are based on many assumptions and factors, including availability and prices of raw materials, market conditions, operating efficiencies, access to capital and actions of governments. Any changes in such assumptions or factors could produce significantly different results. To the extent permitted under applicable law, the Company assumes no obligation to update any forward-looking statements as a result of new information or future events. 4
  5. 5. Agenda for the Day 8:00am Overview Presentation: Strategy and Execution; Patricia Woertz - Chairman, CEO and President Financial Performance and Capital Expenditures; Steve Mills - EVP and CFO Recent Trends Shaping Global Grain Supply, Demand and Prices; John Rice - EVP, Commercial and Production **Q&A Break 8:55am Corn Processing Business Review; Ed Harjehausen - SVP, Global Corn Corn Operations Review; Randy Kampfe - VP, Corn Processing **Q&A 10:00am Cedar Rapids Plant Tour; Doug Brakhan - Plant Manager 12:00pm Wrap-up Q&A and Lunch; ADM Management Team 1:30pm Conclusion 5
  6. 6. Overview Presentation: Strategy and Execution Pat Woertz – Chairman, Chief Executive Officer and President
  7. 7. 7
  8. 8. Our World-Class Asset Base Is Positioned for Global Growth Sourcing facilities Oilseed processing Corn processing Cocoa & wheat processing Sourcing distribution Processing distribution 8
  9. 9. We Have Leveraged our Value Chain and Executed on our Strategy The ADM Value Chain CORN FOOD SOURCING TRANSPORTATION PROCESSING DISTRIBUTION SALES OILSEEDS FEED WHEAT FUEL COCOA INDUSTRIAL 9
  10. 10. We Have Diversified Feedstocks CORN FOOD SOURCING TRANSPORTATION PROCESSING DISTRIBUTION SALES OILSEEDS FEED WHEAT FUEL COCOA INDUSTRIAL Diversify Feedstocks • Palm • Sugar • Biomass 10
  11. 11. We Have Expanded the Geographic Scope of our Core Model CORN FOOD SOURCING TRANSPORTATION PROCESSING DISTRIBUTION SALES OILSEEDS FEED WHEAT FUEL COCOA INDUSTRIAL Expand Geographic Scope of Core Model Diversify •Rapeseed crushing in Germany Feedstocks •Cocoa plants in U.S. and Ghana •Origination, transportation network in U.S. 11
  12. 12. We Have Grown our BioEnergy Business CORN FOOD SOURCING TRANSPORTATION PROCESSING DISTRIBUTION SALES OILSEEDS FEED WHEAT FUEL COCOA INDUSTRIAL Grow BioEnergy Business Expand Geographic Diversify Scope of Core Model •Completing BioEnergy facilities Feedstocks •Pursuing innovative research with partners 12
  13. 13. We Have Reduced Water Consumption CORN FOOD SOURCING TRANSPORTATION PROCESSING DISTRIBUTION SALES OILSEEDS FEED WHEAT FUEL Diversify Expand Geographic Grow Feedstocks Scope of Core Model BioEnergy COCOA INDUSTRIAL Business Technology and Innovation Drive Growth Reduced Water Consumption 13
  14. 14. We Are Building Efficient Cogen Plants CORN FOOD SOURCING TRANSPORTATION PROCESSING DISTRIBUTION SALES OILSEEDS FEED WHEAT FUEL Diversify Expand Geographic Grow Feedstocks Scope of Core Model BioEnergy COCOA INDUSTRIAL Business Technology and Innovation Drive Growth Reduced Water Consumption Cogeneration 14
  15. 15. We Are Continuing Advanced Biofuels Research CORN FOOD SOURCING TRANSPORTATION PROCESSING DISTRIBUTION SALES OILSEEDS FEED WHEAT FUEL Diversify Expand Geographic Grow Feedstocks Scope of Core Model BioEnergy COCOA INDUSTRIAL Business Technology and Innovation Drive Growth Reduced Water Consumption Cogeneration Advanced Biofuels 15
  16. 16. We Use Technology and Innovation to Meet Customer Needs CORN FOOD SOURCING TRANSPORTATION PROCESSING DISTRIBUTION SALES OILSEEDS FEED WHEAT FUEL Diversify Expand Geographic Grow Feedstocks Scope of Core Model BioEnergy COCOA INDUSTRIAL Business Technology and Innovation Drive Growth Reduced Water Consumption Cogeneration Advanced Biofuels Customer Needs 16
  17. 17. We Have Driven Improvements in Key Priority Areas… • Safety • Continuous Learning • Leadership • Cost Management • Communication • Project & Capital Discipline • Metrics …and Set New Priorities • Safety • Cost Management • Performance • Sustainability 17
  18. 18. We Are Advancing the Understanding that Agriculture Can and Will Meet Global Demands 18
  19. 19. Financial Performance and Capital Expenditures Steve Mills - Executive Vice President and Chief Financial Officer
  20. 20. We Achieved Record Segment Operating Profit in 2008 (Amounts in millions, except for per share data and percentages) Year ended FY08 FY07 % Change Net sales and other operating income $ 69,816 $ 44,018 59% Segment Operating Profit 3,441 3,161 9% Net earnings 1,802 2,162 (17%) Diluted earnings per share $ 2.79 $ 3.30 (15%) 20
  21. 21. Our Diversified Portfolio Drives Earnings Growth FY06 FY07 FY08 Oilseed Processing Corn Processing Other Ag Services Sweeteners & Merchandising & Wheat, Cocoa, Malt Crushing & Origination Starches Handling Refining, Packaging, Financial Bioproducts Biodiesel & Other Transportation Asia 21
  22. 22. Our Diversified Portfolio Drives Earnings Growth FY06 FY07 FY08 Oilseed Processing Corn Processing Other Ag Services Sweeteners & Merchandising & Wheat, Cocoa, Malt Crushing & Origination Starches Handling Refining, Packaging, Financial Bioproducts Biodiesel & Other Transportation Asia 22
  23. 23. Our Balance Sheet Reflects the Impact of Increased Commodity Prices and our Capital Construction Projects June 30 June 30 2008 2007 Invested Capital W orking capital $ 14,189 $ 7,787 Net property, plant and equipment 7,125 6,010 Investment in affiliates 2,773 2,498 Long-term marketable securities 590 657 Other non-current assets 1,113 831 $ 25,790 $ 17,783 Financed By Short-term debt $ 3,123 $ 468 Long-term debt 7,922 4,817 Deferred liabilities 1,255 1,245 Equity 13,490 11,253 $ 25,790 $ 17,783 23
  24. 24. Major Construction Projects Are on Schedule Current Timeline* Project Plant Location – Project Phase I Completion Columbus, NE – Ethanol Q309 Cedar Rapids, IA – Ethanol Q110 Clinton, IA – Co-Generation On-line Q109 Columbus, NE – Co-Generation Q309 Q409 Clinton, IA – PHA Q209 Hazleton, PA – Cocoa On-line Q309 Decatur, IL – Propylene/Ethylene Glycol Q309 Total Projected Costs $2.6B *Calendar Year 24
  25. 25. Recent Trends Shaping Global Grain Supply, Demand and Prices John Rice - Executive Vice President, Commercial and Production
  26. 26. World Meat and Grain Consumption Is Growing (Amounts in millions of tons) 2007/08 1988/89 % Change Population 6.7B 5.2B 29% 26
  27. 27. World Grain and Oilseeds Production Is Growing Area Production 27
  28. 28. High Crude Oil Prices Impact Crop Prices (Amounts in U.S. dollar/barrel) 28
  29. 29. The Weak Dollar Impacts Crop Prices (Amounts in Euro) 29
  30. 30. Fund Investments Impact Crop Prices (Amounts in billions of dollars) 30
  31. 31. Increased Crop Production Is Projected for 08/09 • Wheat production to increase by 65M tons • Oilseeds production to rise by 27M tons • Coarse grains production to grow by 11M tons Source: USDA 31
  32. 32. World Corn Production Grows to Meet Demands Source: USDA 32
  33. 33. ADM Is Positioned to Respond to a Changing Marketplace • Proprietary crop intelligence offering insight into world grain markets and flows • Transportation network spanning five continents • Versatile, responsive processing facilities • Ability to reformulate rations to produce cost-effective feeds based on current commodities prices 33
  34. 34. ADM Provides Alternatives to Optimize Swine Feed Formulas Corn Amino Acids Canola Wheat Barley SBM Vit & Min Fat Wheat Midds Milo Meat & Bone Meal Bakery Meal DDGS Rapeseed Meal 34
  35. 35. ADM Provides Alternatives to Optimize Poultry Feed Formulas Corn Amino Acids Canola Wheat Barley SBM Vit & Min Fat Wheat Midds Milo Meat & Bone Meal Bakery Meal DDGS Rapeseed Meal 35
  36. 36. ADM Provides Alternatives to Optimize Dairy Cattle Feed Formulas Ration Without Ethanol Current Ration Based on Alternative Ration Based on Coproducts Available Coproducts Increased DDGS Availability Similar to 1990’s Protein Supplements Cottonseed Alfalfa Hay DDGS Soybean Hulls Corn Grain Wheat Midds Canola Meal Cottonseed Hulls Corn Silage CGFP Citrus Pulp 36
  37. 37. Q&A ADM Strategy and Execution Financial Performance and Capital Expenditures Crop Dynamics 37
  38. 38. BREAK 38
  39. 39. Corn Processing Business Review Ed Harjehausen - Senior Vice President, Corn
  40. 40. Corn Processing Business Review • Fundamentals • New Product Development • Issues • Strengths 40
  41. 41. ADM’s Diversified Product Line Maximizes Value • 2.0 million bu/day • 7 U.S. plant locations • Maximize returns by allocating grind to different products that make the most financial and strategic sense • Will continue to develop new value-added products that effect product mix 41
  42. 42. Joint Ventures Are Positioned for International Opportunities Slovakia Hungary Romania Bulgaria Turkey Guadalahara 42
  43. 43. Wet Corn Mills Deliver Lower Net Corn Costs (BU = 56 lbs) Wet Mill Dry Mill Cash Price $ 5.00/BU $ 5.00/BU Coproduct Credits 2.5 lbs of 60% corn gluten meal $ 470.00/ST 12.5 lbs 21% corn gluten feed $ 85.00/ST 1.5 lbs of corn oil $ 0.45/LB 18 lbs distilled dry grain $100.00/ST Net Corn $ 3.18/BU $ 4.00/BU (cost of starch 31.5 lbs/bu) Typical Coproduct Credit 35 - 45% 20 - 30% 43
  44. 44. We Produce 24 Products from Corn CORN SYRUP, HIGH FRUCTOSE CORN SYRUP Dextrose (Liquid and Crystalline), Maltodextrin Starch Xanthan Gum, Citric Acid, Lactic Acid, Yeast Sorbitol (Liquid and Crystalline) Propylene Glycol, Ethylene Glycol Lysine, Threonine, Astaxanthin FUEL ALCOHOL Corn Oil Food and Industrial Starches Gluten Feed Ethyl Lactate Gluten Meal PHA (biodegradable plastic) Additional Products 44
  45. 45. ADM Has Leading Positions in Key Markets 1st 2nd 3rd Total Grind Cargill Tate & Lyle HFCS Cargill Tate & Lyle Syrup Cargill Tate & Lyle National Starch Starch Tate & Lyle & Chemical Aventine Ethanol Poet Renewable Energy 45
  46. 46. HFCS Remains an Attractive Alternative to Sugar • U.S. market – 23.5 billion pounds, slightly declining volume • Mexico volumes – up over last year • ADM has approximately 30-35% market share • Beverages account for 70% of HFCS usage • Price differential between sugar and fructose has grown 46
  47. 47. U.S. Ethanol Demand and Supply Are Growing 20 Days *Calendar Year Source: Energy Information Administration 47
  48. 48. Ethanol Demand Exceeds RFS Requirements *Calendar Year Source: Energy Information Administration 48
  49. 49. The Ethanol Industry Sees Growing Demand 2008 2009 2010 - Florida 900 mmg - Michigan 350 mmg - California 700 mmg - Georgia 500 mmg - Oregon 120 mmg - Texas 800 mmg - Tennessee 350 mmg - Nevada 50 mmg - Arizona 160 mmg - Utah 115 mmg - N Carolina 450 mmg - Pennsylvania 350 mmg - Virginia 390 mmg - New York 290 mmg - Indiana 120 mmg - Washington 260 mmg - Illinois 170 mmg - Kentucky 175 mmg - Ohio 160 mmg - Mississippi 150 mmg - Iowa 40 mmg - Arkansas 125 mmg - Kansas 40 mmg - Oklahoma 200 mmg - Maryland 25 mmg - Louisiana 200 mmg - S Carolina 260 mmg - Alabama 200 mmg - W Virginia 80 mmg - Maine 80 mmg - N Hampshire 60 mmg - Vermont 35 mmg 2008: 3,405 mmg 2009: 2,725 mmg 2010: 1,775 mmg Three-year period: 7,905 mmg 49
  50. 50. Low Refining Margins Drive Ethanol Use 50
  51. 51. Ethanol Has a Competitive Advantage • Ethanol = $ 1.8100 (net) 116 Octane • USGC RUL = $ 2.8226 87 Octane • USGC PUL = $ 3.0226 93 Octane • MTBE = $ 2.8700 110 Octane • Alkylate = $ 3.3126 93 Octane • Iso-octane = $ 3.3426 98 Octane • Reformate = $ 3.6926 100 Octane • Toluene = $ 3.7900 101 Octane Ethanol = NYMEX RBOB $2.6651 - $.3451 = 2.3200 - .51 = 1.8100 Source: Platt’s Marketwire September 26, 2008 51
  52. 52. Brazilian Ethanol Export Capacity Is Limited (Amounts in millions of gallons, except for percentages) Import to U.S. 2007 2008 Est. 2009 Est. 2010 Est. Caribbean 354 495 675 740 Direct 85 46 0 0 TOTAL 439 541 675 740 US Market 6,600 9,000 10,500 12,000 % of US Market 6.65% 6.01% 6.43% 6.17% *Total export capacity 1.5 billion gallons/year *2008 estimates non-U.S. CBI exports - 475 mmg Source: F.O. Lichts , The Kingsman 52
  53. 53. New Products Offer Opportunities to Increase Value from Grind Commercialization in progress • Telles JV between ADM and Metabolix - Biodegrades in soil and marine environments - Heat resistant • Glycols 53
  54. 54. Industrial Chemicals Offer Growth Potential for the Future • Focus on direct chemical replacements - Based on ADM feedstocks - Low cost position possible - Initial focus on North America - High growth market or market support for bio-based - Increases speed-to-market • License external process technology where necessary • Develop partners for specialty chemicals where performance knowledge is required 54
  55. 55. Issues Affecting Corn Industry 55
  56. 56. HFCS Is the Same as Table Sugar • “It's basically no different from table sugar. Table sugar is glucose and fructose stuck together. Corn sweeteners are glucose and fructose separated. The body really can't tell them apart ...” - Dr. Marion Nestle, Paulette Goddard Professor of Nutrition, Food Studies, and Public Health, New York University • “If there was no high-fructose corn syrup, I don't think we would see a change in anything important.” - Dr. Walter Willett, Chairman of the Nutrition Department, Harvard School of Public Health 56
  57. 57. Facts about HFCS Are a Sweet Surprise 57
  58. 58. U.S. DDGS Demand Is Growing With Supply Source: Informa 58
  59. 59. DDGS Are an Effective Feed Ingredient CHICKENS • “I’m very enthusiastic about using DDGS in poultry diets. We use it just like other ingredients that are available. And as the ethanol Industry has grown, there are more and more tons of DDGS, and we’ll continue to use it” - Philip Smith, Poultry Nutritionist, Tyson Foods, Inc. TURKEYS • “Current feeding trials have examined the use of low and moderate levels of distillers dried grains with solubles in broiler and turkey diets. In market tom turkeys, up to 20% DDGS in grow/finish diets is possible in diets with normal protein content and when feed intake is not limited.” - Dr. Sally Knoll, Professor, University of Minnesota Extension Service SWINE • “The Maschhoffs Inc. feed DDGS at up to 30% in some swine rations. At current commodity prices DDGS is very competitive and allows for the replacement of corn, soybean meal, and monocalcium phosphate. ” - Aaron Gaines, The Maschhoffs Inc. 59
  60. 60. Food Prices Are Driven by Energy Costs • “During the first four months of 2008, the all food CPI increased by 4.8 percent, with increased ethanol and biodiesel consumption accounting for only about 4-5 percent of the total increase, while other factors accounted for 95-96 percent of the increase.” - U.S. Dept. of Energy, U.S. Dept. of Agriculture • Increasing petroleum prices have about twice the impact on consumer food prices as equivalent increases in corn prices. - USDA Economic Research Service • Food travels on average 1,500 miles before it gets to the retail establishment. - National Farmers Union 60
  61. 61. Ethanol Is Keeping Down Gasoline Costs • “Oil and gas prices would be 15% higher if biofuel producers weren’t increasing output.” - Merrill Lynch commodity strategist Francisco Blanch • “If we had not been blending ethanol into gasoline, gasoline prices would be between 20 cents and 35 cents per gallon higher.” - U.S. Dept. of Energy, U.S. Dept. of Agriculture 61
  62. 62. Global Agricultural Leaders Are Responding to Concerns www.FoodAndEnergy.org 62
  63. 63. ADM Has Competitive Advantages in Corn Processing • Diversification of product mix • Advantages of combining wet and dry operations • Cogeneration: steam and power from coal • Size: first in grind and first or second in major product lines • Logistics • Global markets for coproducts • Grain origination • Economies of scale 63
  64. 64. Corn Operations Review Randy Kampfe - Vice President, Corn Processing
  65. 65. Corn Plants Are Organized around Focus Areas Plant Manager Human Wet Mill Dry Mill Quality Environmental Purchasing Cost Analyst Engineering Safety Resources Superintendent Superintendent Const. Supvs. Dept 1 Dept 2 Dept N Maintenance Shift Supts. Dept 1 Dept 2 Dept N Co-Gen 1-N Supt. Supt. Supt. Supt. 4-5 Supt. Supt. Supt. Superintendent Shift Project Engineers Process Process Process Reliability Process Process Process Supervisor 1-N Engineer Engineer Engineer Engineer Engineer Engineer Engineer 4-5 Shift Supv. Shift Supv. Shift Supv. Shift Supv. Shift Supv. Shift Supv. Shift Supv. Engineering 4-5 4-5 4-5 4-5 4-5 4-5 4-5 Maintenance 65
  66. 66. We’re Improving Safety Performance 66
  67. 67. Each Kernel of Corn Contains Multiple Value Streams Fiber: 8.75 lbs/bu Starch: 31.5 lbs/bu Protein: 5.3 lbs/bu Oil: 1.75 lbs/bu 56 lbs/bu total, 15.5% H2O = 47.3 lbs/bu dry matter 67
  68. 68. Dry Milling Is Simpler but Less Flexible 68
  69. 69. Wet Milling Is Flexible but Capital Intensive 69
  70. 70. Increasing Grind Rates Maximize the Value of Existing Assets 70
  71. 71. Cost Control Is Critical to Success • Cost control is a challenge – especially with the rising cost of energy • Efficient use of energy is a key to success, and our investments in cogeneration are helping mitigate our costs for steam and electricity • An on-going Task Force explores projects that affect cost optimization • Improvements are being achieved through capital expenditures to improve efficiencies 71
  72. 72. We Are Improving Capital Project Management Enhancing and improving project management: - Safety is actively managed with on-site safety pros - Design once, build multiple times - Global sourcing used for equipment and materials - Maximize shop fabrication, minimize field fabrication - Best practices adopted and shared between projects - Coordinated management oversight across major projects - Collaboration between projects for development and training of production teams 72
  73. 73. Cedar Rapids, IA - Adding Ethanol Dry Mill Dry Mill Cogen Wet Mill Red Star Process Products Wet Dry 42 55 CS 97DE Sorb Starch Ethanol Other X CIP X X X X X X X 73
  74. 74. Clinton, IA - Adding Cogen and PHA PHA Cogen Feedhouse Wet Mill Process Products Wet Dry 42 55 CS 97DE Sorb Starch Ethanol Other X XX X X X X 74
  75. 75. Columbus, NE - Adding Ethanol Dry Mill and CoGen Dry Mill Wet Mill Cogen Process Products Wet Dry 42 55 CS 97DE Sorb Starch Ethanol Other X CIP X X X X 75
  76. 76. Decatur, IL - Our Largest Corn Plant Propylene Wet Mill Glycol Corp Cogen BioProducts Process Products Wet Dry 42 55 CS 97DE Sorb Starch Ethanol Other X XX X X X 76
  77. 77. Marshall, MN Wet Mill Refinery Ethanol Process Products Wet Dry 42 55 CS 97DE Sorb Starch Ethanol Other X X X X X 77
  78. 78. Peoria, IL - Our Largest Dry Mill Ethanol Dry Mill Process Products Wet Dry 42 55 CS 97DE Sorb Starch Ethanol Other X X 78
  79. 79. Walhalla, ND - Our Smallest Corn Plant Ethanol Dry Mill Process Products Wet Dry 42 55 CS 97DE Sorb Starch Ethanol Other X X 79
  80. 80. ADM Has Competitive Advantages in Corn Processing • Diversification of product mix • Advantages of combining wet and dry operations • Cogeneration: steam and power from coal • Size: first in grind and first or second in major product lines • Logistics • Global markets for coproducts • Grain origination • Economies of scale 80
  81. 81. Q&A Corn Processing Business Corn Processing Operations 81
  82. 82. Plant Tour Video 82
  83. 83. Tour Security & Safety 1. Proper clothing is mandatory 2. Personal Protective Equipment (hard hats, safety glasses, ear protection) provided by ADM 3. No cell phones, cameras, pagers, or any other electronic devices 4. You will be escorted by an ADM employee 5. Be aware of potential slip, trip, and fall hazards 83
  84. 84. Tour Security & Safety 6. Be alert for railcars moving on the tracks (red light and audible horns are warnings) 7. Some production areas have special requirements which are posted at their entrances 8. The facility is tobacco-free 9. In the event of an emergency your ADM escort will instruct you where to go 84
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