1. What’s the Value of Cooperatives?Farmer’s Cooperative ConferenceTropicana, Las Vegas Tom McKenna, President United Sugars Corporation October 30, 2001

2. Sugar Industry Model • Snapshot of Domestic Sugar Industry • Past & Current Trends • Competitive Positioning • Coops & Other Participants • Coops - Do they have an advantage? • Characteristics of Success for the Future

3. Changing Customer LandscapeIndustrial Market • Consolidation of Food Processing Industry • Top 5 users buy 20% of Industrial volume • Customer concentration increasing

4. Changing Customer LandscapeConsumer Market • Continued consolidation of retail grocery wholesalers and chains • 10 year trend • 12 down to 5 today represent 35% of total grocery sales • Retail grocery sugar sales continue to decline

5. Competitive EnvironmentRapidly Changing • Imperial bankruptcy • Imperial closes and offers to sell beet sugar assets • Tate & Lyle • selling all U.S. beet and cane sugar assets • Interest in Coop structure increasing • “processing” • “marketing”

6. Midwest Beet Sugar Price ComparisonNovember, 1999 - October, 2001 Source: Milling and Baking News

7. Industry Consolidation Estimated Sales Volume by Supplier 1978 28 199113 2002 8

8. Why Sugar Beet Coops? • Marketing Coop structure responds to: • slow growth opportunities • increasing buyer consolidation • need to reduce costs & increase productivity • Processing Coop structure responds to: • need for producers to preserve processing facilities or exit from market • View of future is positive

9. Characteristics of Success • Strategic Rational for existence • Fit with market realities • Vision beyond just producing raw material • Decisions made on creditable information • Sound Financing

10. Characteristics of Success • Coop owners/Board of Director’s ability to “Govern” • Ability to source Professional Management • Desire to be “Best in Class” Vs “investing up the value chain” • Commitment to go “all the way”