For the members of AGP andtheir farmer owners,

AminoPlus® continues to be a realsuccess story in the value-addedarena. Midway through Fiscal2003, sales of AGP's patentedproduct have increased 30 percentfrom a year ago.

The benefits to soybean produc-ers include new demand for soyproducts, replacing other non-soyby-pass sources used in dairyrations. This demand is seen bothdomestically and abroad.

"No one else has AminoPlus,which is a unique value-added nat-ural product made entirely fromAGP soybean meal," explained Dr.Wayne Stockland, Vice President,Nutrition and Technical Services."Expanding sales of AminoPlusbenefits our members and dairyproducers who use this product."

AminoPlus's success has madegreat strides during the past year.There are many promising devel-opments that point to a brightfuture:

* Expanded sales/technical teamand marketing program.

* Positive results from researchtrials.

* New testing procedure toenhance an already stringent quali-

Issue #4, 2003

Dairies in Arizona, where AGP has its greatest concentration of AminoPlus sales,leads the nation in milk production with over 23,000 lbs. of milk per cow annually.

AMINOPLUS® Earns an A+ Dairy and Soybean Producers, University Research Give AminoPlus Top Grade

ty control system.* Continued growth in key

domestic and export markets* Increased production at Mason

City, Iowa.

AAmmiinnooPPlluuss TTooppss UUnniivveerrssiittyy SSttuuddyyResearch from one of the

nation's leading dairy institutionsconfirms whatan increasingnumber ofdairy produc-ers alreadyknow about

by-pass soy protein sources:AminoPlus is at the top of the class.

AminoPlus out-performed com-petitive by-pass soy products on themarket in an independent studydesigned and conducted by theUniversity of Wisconsin, notedDave Gast, the newest member of

(continued on page 2)

2

a 3.6 lb. gain.”By-pass proteins must be digestible

in the intestine of the dairy cow to beof any benefit. Quality control mea-surements of AminoPlus consistentlyreport intestinal digestibility of 95 per-cent or greater.

A European study conducted in theNetherlands at the Institute for AnimalNutrition "De Schothorst" confirmedthe high intestinal digestibility of

AminoPlus, reporting 99percent of the protein to bedigestible.

QQuuaalliittyy AAssssuurraanncceeExtensive quality con-

trol measures already inplace for AminoPlus willsoon be enhanced with theimplementation of a newtesting procedure devel-oped by AGP's technicalstaff.

By utilizing HighPressure LiquidChromatography (HPLC),Rumen Undegraded Protein(RUP), a term for by-pass

protein, can be accurately predicted.The machine measures changes in cer-tain isoflavone peaks in soybean meal,which correlate very closely to RUP inAminoPlus.

"We have been doing HPLC analy-sis for the past year at a private lab anddetermined that it's an excellent pro-cedure to measure RUP inAminoPlus," said Stockland. "It's aquicker time measurement, allowingsame day results compared to tradi-tional ‘in situ’ testing used in theindustry."

The value of research and qualityassurance have allowed AGP to initiatean aggressive marketing program toget the word out to more dairy pro-ducers and industry professionalsabout the advantages of AminoPlus.

These advantages and familiaritywith AGP prompted Hamilton FarmBureau Cooperative, Inc., Hamilton,Michigan, to add AminoPlus to theirproduct line.

"Our dairy team was looking for abit of an edge, something to go to thecountry with that was a little differentand more cost-effective than the com-petitor's product," explained Art Nor,Hamilton Commodities, who isresponsible for feed ingredient pro-curement. "AGP sales and technicalstaff provided us and other area dairyconsultants and nutritionists with anoverview of AminoPlus and the bene-fits it offers. We brought it on boardabout a year ago and it has worked out

TABLE OF CONTENTS

AminoPlus Earns an A+ ............ 1 - 5Port Facility Nears Completion ...... 6Commodity Comments ................. 7Political Pod ............................... 8 - 9Naturally Soy Show ........................ 9Conversations with Managers 10 - 12Cooperative News ........................ 11

““AAmmiinnooPPlluuss EEaarrnnss aann AA++””((ccoonnttiinnuueedd ffrroomm ppaaggee 11))

the AminoPlus team. AminoPlus-fed cows produced 3.6

lbs. more milk than cows fed the soy-bean meal control, and out-performedthe competitive by-pass soybean mealproducts evaluated in the trial in termsof milk volume and milk revenue.

"The results will be reported at theAmerican Dairy Science Associationmeetings this June in Phoenix,Arizona, and will be available on ourwebsite when it reaches final publica-tion," said Gast, who is Director,Nutrition and Technical Services. Heholds a doctorate in animal nutritionand has extensive experience in thefeed industry including ConsolidatedNutrition.

"Replacing a typical soybean mealration with AminoPlus adds about 3.5to maybe 4 cents per day to the rationof that cow," explained Gast. "Evenwith milk prices in the range of 10cents a pound, we're still more thandoubling our money if we get onlyone extra pound of milk. TheWisconsin study, for example, showed

Dr. Dave Gast, Director, Nutrition/Technical Services,is the newest member of the AminoPlus team.

Dr. Wayne StocklandVice President

Nutrition and TechnicalServices

3

well for our customers and our coop-erative."

AGP ships AminoPlus to the coop-erative by rail from Mason City, Iowa,and product quality is "very consistentand free-flowing for ease of handling"said Nor. "AGP has provided qualitysoybean meal and good service to ourcooperative for many years and ismaintaining the same standards withAminoPlus.”

Hamilton markets a semi-load ofAminoPlus weekly to a large dairyoperation near Grand Rapids,Michigan, and mixes the product in aTMR (Total Mixed Ration) for othercustomers. The company also suppliesAminoPlus to neighboring farm sup-ply cooperatives.

Utilizing existing customers andAGP plant merchandisers to identifykey prospects is part of the marketingstrategy to grow volume.

"Working with industry and uni-versity staff such as we did at theUniversity of Wisconsin and having agreater presence at trade shows, educa-tional symposiums and seminars, aswell as a new brochure, targeted mail-ings and a revamped website are allpart of our plan," said Gast.

MMaarrkkeett GGrroowwtthh iinn TToouugghh TTiimmeessThese efforts are paying off, as

more nutritionists and dairy produc-ers are hearing about AminoPlusnoted Chris Schaffer, SeniorMerchandiser, Ag Products Division.

“They see AminoPlus's superiorspecifications, University trials, andbest yet, they see it in the parlor,” saidSchaffer. “That's where it counts.”

Even though milk prices continueat historically low prices, Schaffer saidit's not surprising AminoPlus salescontinue to expand.

"Milk prices have reached theselows before, but generally bounce out

of these valleys in a few months," saidSchaffer. "Even though this trough hasextended for an excruciating period,dairyman and their nutritionistsunderstand that revenues are nothelped by cheapening feed rations, butimproving the ration’s performance.That's where AminoPlus fits in. That'swhy Amino Plus sales are up 30 percent

year-to-date.”According to the AminoPlus mar-

keting team, it's no coincidence thatArizona, where AGP has a high con-centration of customers, has jumpedto number one in milk production percow in 2002 as reported by "Hoard'sDairyman" (see chart on page 4). In

(continued on page 4)

Hamilton Farm Bureau Cooperative, Inc., Hamilton, Michigan, delivers a 25-tonshipment of AminoPlus weekly (top photo) to a 3000-head dairy operation nearGrand Rapids, Michigan. In the photo below, Art Nor (left) who is responsible forfeed ingredient procurement at the cooperative, and Jim Scholten, HamiltonTrucking, agreed that product quality is very consistent and free-flowing for easeof handling.

4

““AAmmiinnooPPlluuss EEaarrnnss aann AA++””((ccoonnttiinnuueedd ffrroomm ppaaggee 33))

2002, Arizona’s milk production was 23,486 lbs per cow. This marks thefirst time any state has surpassed the23,000-lb. level.

"Arizona has great managers andnutritionists watching over someexcellent dairy herds, which are fedquality rations,” said Schaffer.“AminoPlus is included in theserations, providing bypass protein thatyields 5 to 7percent additional milk."

With AminoPlus sales up three-fold in California, Schaffer said theproduct is “definitely showing value tothe western dairy producer”.

He added that the western region isamong many bright spots includingthe northeast, which has increasednearly 40 percent this marketing year.

IInnccrreeaasseedd SSaalleess RReeqquuiirreess IInnccrreeaasseedd PPrroodduuccttiioonn

With demand continuing to growfor AminoPlus, AGP is expanding itsproduction capacity at Mason City.The project, which involves installa-

AminoPlus production capacity is being expanded at AGP’s Mason City, Iowa pro-cessing plant.

tion of a second separate system thathas twice the capacity of the currentsystem, is slated to be completed thisfall.

"With two production facilities atMason City and our existing facility atHastings, Nebraska, we have logisticaladvantages to supply customersthroughout the United States," saidGast.

More customers may be located inthe Midwest, which could be poised

for a rebound in dairy productiondepending on economic conditions.Gast said that a recent survey identi-fied two regions of particular interestfor dairy expansion: 1) westernNebraska, western Kansas and easternColorado, and 2) the I-29 corridornorth of Sioux City, Iowa towardFargo, North Dakota.

"A combination of land availability,feed supplies, positive regulatory envi-ronment relative to growth, and famil-

Leading Dairy States in 2002

Total Milk Cows Total Milk Production Production Per Cow

1 California 1,647,000 California 34.88 billion lbs. Arizona 23,486 lbs.2 Wisconsin 1,271,000 Wisconsin 22.07 billion lbs. Washington 22,753 lbs.3 New York 678,000 New York 12.22 billion lbs. Colorado 21,590 lbs.4 Pennsylvania 585,000 Pennsylvania 10.78 billion lbs. California 21,180 lbs.5 Minnesota 487,000 Minnesota 8.46 billion lbs. New Mexico 21,124 lbs.6 Idaho 388,000 Idaho 8.16 billion lbs. Idaho 21,018 lbs.7 Texas 309,000 New Mexico 6.32 billion lbs. Michigan 19,883 lbs.8 New Mexico 299,000 Michigan 5.95 billion lbs. Kansas 19,515 lbs.9 Michigan 299,000 Washington 5.62 billion lbs. Nevada 19,400 lbs.10 Ohio 262,000 Texas 5.30 billion lbs. Montana 18,944 lbs.SSoouurrccee:: HHooaarrdd’’ss DDaaiirryymmaann

5

AGP supplies AminoPlus and soybean meal to Hamilton Farm BureauCooperative, Inc., Hamilton, Michigan, a member cooperative. “AGP has provid-ed quality soybean meal and good service to our cooperative for many years and ismaintaining those standards with AminoPlus,” said Art Nor, HamiltonCommodities.

iarity of the area with animal agricul-ture makes these regions desirable forpotential expansion," said Gast. TheMason City expansion allows theAminoPlus marketing team toincrease truck sales into the I-29 corri-dor as well as additional new businessopportunities in the dairy-denseWisconsin market.

AminoPlus growth also continuesbeyond U.S. borders.

Masterfeeds, AGP's animal nutri-tion business in Canada, launched anew program last year emphasizingAminoPlus, which resulted in greatermarket penetration. The product ismoving south into Mexico, which alsohas a sizable dairy industry.

Completion of a new west coastvessel-loading facility at the Port ofGrays Harbor later this year will pro-vide opportunities to deliverAminoPlus more efficiently into Asianmarkets. "There is on-going interest inJapan which remains a good cus-tomer," said Gast.

The reshaping of Europe with newcountries joining the European Unionnext year may bring about changes infood production and opportunities fornew technology. "Food productionmay begin a gradual shift to the Eastinto highly productive rural areas ofHungary and Slovakia who are look-ing at improving their lifestyles withmore milk and more meat," said Gast.

AGP now has a greater presence inthis area with the creation of a newmerchandising office in Slovakia,which will market feed productsincluding AminoPlus.

AminoPlus is truly a success storyfor dairy producers, soybean growersand AGP. With growing demand, newproduction and expanded markets,AminoPlus expects to remain at thehead of the class when it comes tobypass protein.

Masterfeeds launched anaggressive marketing campaignto introduce AminoPlus toCanadian milk producers.

"Replacing a typical soybean meal ration with AminoPlus adds about 3.5 tomaybe 4 cents per day to the ration of a dairy cow. Even with milk prices in the rangeof 10 cents a pound, we're still more than doubling our money if we get only one extrapound of milk. The Wisconsin study, for example, showed a 3.6 lb. gain.”

Dr. Dave GastDirector, Nutrition and Technical ServicesAGPOmaha, Nebraska

6

New Port Facility Moving Towards Completion

AGP’s new vessel loading facility atthe Port of Grays Harbor,

Aberdeen, Washington, is progressingtowards completion early this fall.

The AGP international marketingteam met in late April to view the con-struction progress at the Port and par-ticipate in a tactical marketing semi-nar. Several merchandisers represent-ing AGP in Pacific Rim countries werein attendance.

The group also attended a dedica-tion ceremony of the new loop tracksystem operated by the Puget Soundand Pacific Railroad (PSAP) and a railtour of port facilities. Following thetour, an informational workshop washeld featuring maritime services avail-able at the Port of Grays Harbor.

CEO Marty Reagan, Cal Meyer,Group Vice President, Processing, andTerry Voss, Senior Vice President,Transportation, participated in thePSAP activities.

AGP’s international marketing team met at the Port of Grays Harbor in Aberdeen,Washington, in late April to view the progress of the new vessel loading facilitywhich is scheduled to be operational by this fall. The team included employeesfrom the corporate office in Omaha and AGP representatives from Pacific Rimcountries. Discussing the capabilities and advantages of this new facility are (left toright), Shari Duensing, Export Documentation Coordinator; Pete Mishek,Manager of International Trade and Business Development; Fadjar Setiawan,Indonesia; Carolyn Levy, Australia; Dominic Vanzella, Australia; and MarieMarte, Philippines. Not pictured, Robert Bruenn, a representative of Singapore.

Visit AGP’s Port of GraysHarbor Website

AGP has a new website that is liveand ready to assist in the market-

ing of the new vessel loading facilityunder construction in Aberdeen,Washington:

wwwwww..aaggppppoorrttooffggrraayysshhaarrbboorr..ccoommAdditionally, a new “Export” sec-

tion is being added to the “Productsand Services” area on the AGP homepage (www.agp.com), which will linkto the AGP Port of Grays Harbor web-site.

Another new feature on the AGPwebsite provides directions to the cor-porate office in Omaha as well as areahotel information. Simply click on the“Contacts” button on the left side ofthe home page and follow theprompts.

2003 Area Meeting ScheduleMonday, June 23

Chances R, York, Nebraska - 3:30 p.m.

Tuesday, June 24Oaks Hotel & Convention Center,

Sioux Falls, SD - 3:30 p.m.

Wednesday, June 25Mogies, Dawson, Minnesota - 9:45 a.m.

Kinbrae South, Sheldon, Iowa - 3:30 p.m.

Thursday, June 26Holiday Inn, Mason City, Iowa - 10:00 a.m.

Fort Dodge Country Club, Fort Dodge, Iowa - 3:30 p.m.

*AGP members should have received an information packet about the AreaMeetings. Please contact Mike Maranell, Senior Vice President, Corporateand Member Relations if you have questions: 800-247-1345, ext. 2279.

7

Ag Partners Helps Area Farmers Search For Oil

EEddiittoorr’’ss NNoottee:: FFoolllloowwiinngg iiss aa rreepprriinnttooff aann aarrttiiccllee ppuubblliisshheedd iinn tthhee““HHiiaawwaatthhaa DDaaiillyy WWoorrlldd””,, HHiiaawwaatthhaa,,KKaannssaass..

There is oil all over northeast Kansasand southeast Nebraska and Ag

Partners Co-op is paying a premium forit. Soybeans, one of the predominantcrops raised by farmers in the area, con-tain oil. The more oil, the greater valueto the producer and the cooperative sys-tem.

AGP, a regional cooperative head-quartered in Omaha, and Ag PartnersCo-op have teamed up to pay farmers apremium for soybeans that have a high-er oil content. The research has beengoing on for the past few years and thefocus has been on identifying soybeanvarieties that contain the highestamounts of oil and protein.

When these select varieties areprocessed, the higher protein yield isbeneficial to the processor and savesthem money. The savings are now beingpassed back through the cooperativesystem.

"This is one of the easiest, mostfarmer-friendly programs we've everoffered" said Dave Christiansen,President of Ag Partners Co-op.Christiansen went on to say, "This is thecooperative system at its finest; AGPbenefits from higher oil and proteinsoybeans and our members are beingrewarded for producing a product thatmeets those criteria."

"Over the past few years we havebeen successful in bringing cash premi-ums to our producers through identity-preserved programs," stated Bob Freese,grain division manager. "This is justanother example of our continuingcommitment to bring value to area pro-ducers."

The program is pretty simple. AgPartner's CCA Certified Agronomist,together with AGP, has compiled a listof soybean varieties that perform best inthe area. The agronomist works with

Dave ChristiansenPresident

Ag Partners Co-op

the farmer to develop a plan to deter-mine how many acres of specific vari-eties will work on their farm and anacreage contract is written up.

At harvest, the producer can thenkeep the soybeans at home in farm stor-age to be delivered at a later date; deliv-er them to an Ag Partners Co-op loca-tion; or deliver them directly to AGP inSt. Joseph, Missouri. For doing this, theproducer is guaranteed a minimum offive cents per bushel and the premium,depending on oil and protein levels, canpotentially go up to ten cents per bushel.

In a year with 40-50 bushel soybeanyields, this can potentially bring a pro-ducer an extra $5 dollars per acre. BryceBrobst, agronomist and seed divisioncoordinator for Ag Partners Co-op, said,"Our intent was to use varieties thathave been proven to have excellentyields in our area so we don't sacrificeany yield while we maximize oil andprotein content."

Christiansen said, "We have an excel-lent relationship with AGP, and byworking with them to drive value downto the farm level, we are adding strengthto the total system. Our Ag Partnersmembers have more than $2 millioninvested in AGP, and programs of thiskind that put money into area farmers'pockets only serve to strengthen thatalliance."

COMMODITY COMMENTS by Daryl Dahl

The May USDA Supply - DemandReport had no real surprises for

traders.They were expecting theUSDA analysts to tighten the alreadytight soybean carryout number by 10to 25 million bushels. The actual car-ryout number was reduced 10 millionbushels by increasing exports 15 mil-lion bushels and reducing crush by 5million bushels, leaving a carryoutnumber of 135 million bushels.

Some of the traders' attention hasbeen shifted to the planting season.Farmers started out in April with verygood planting progress, but have beenbogged down by frequent rains duringthe month of May. Soybean plantingthrough Sunday, May 18th was 25percent compared to a 5-year averageof 44 percent planted. It is the slowestplanting progress in 6 years. However,it is not late enough to be a real prob-lem yet. After last year's drought prob-lems, it's good to have the rainsreplenish the soil profiles.

The soybean market has been mak-ing new contract high prices duringthe month of May. The funds havebeen buying the soy complex for thepast few months. That has kept themarket from making new lows evenwhile South America harvests a recordsoybean crop.

The dollar has been weakeningagainst their currencies, which hasmade the South American farmerssoybeans worth less while the ChicagoBoard of Trade prices were workinghigher. South American farmers sold alarge portion of their new crop lastOctober and November when theircurrencies were very weak. They havebeen making windfall profits for thelast year, because their soybeans aresold into the export market and theyhave been paid in the strong dollar.

The lack of cash selling has allowed (continued on page 8)

8

are further evidence that there is morepotential for renewable resources ineverything from chain saw oil tohydraulic fluids.

While in New York, I took theopportunity to visit "ground zero". Idid not know what to expect otherthan the horrific images from 9/11.There has been a lot of news since thenabout selection of a new buildingdesign for the space. Jogging towardlower Manhattan, I kept wonderingwhen I would run into the site.Finally, I came upon what looked likethe largest urban construction site Ihave ever seen. Looking for burned outbuildings, wreck and ruin was virtuallyfruitless. The surrounding area is openfor business. Glass-fronted hotels areopen, Burger King was doing a littlepatch up, and a couple of buildingswere still shrouded. The only sign ofdisaster was the lone steel beam memo-rial cross. The cross was draped with aweather-beaten firefighters' coat.

Otherwise, what you see are thou-sands of men in hardhats, dozens ofmobile food caterers, hundreds of con-crete and supply trucks and a hole sodeep and so big that it looks like somesort of open-face coal mine inWyoming.

After walking around the outside ofthe site for about 45 minutes, I was leftwith the thought that countries areabout what we build. It seems thatAmerica is driven to build - sometimeswithout regard to other issues. We aregood at building. New York City isbuilding. Yes, New Yorkers rememberand yes, they still have hard economictimes but they are busy fixing, remod-eling, and rising out of ground. I leftthe City with a renewed sense that wereally do live in an amazing country.

Now for something more disturb-ing. Spring rains were an answer to ourprayers. One more year of drought andthe social landscape of many stateswould change dramatically. The rainscame persistently and in some cases

POLITICAL PODby John Campbell

AGP and our biodiesel friends pre-vailed in our efforts with USDA.

We appreciate all those who helped bysending comments to USDA. Addingto our pleasure is the tremendousresponse of farmers and their AGP -Member fuel suppliers. Soydiesel cov-erage in the Midwest farm market hasblossomed the last couple of years.After 10 years of struggle in this mar-ket, it is very rewarding to see suchwidespread acceptance - especially byfarmers.

I recently had the opportunity tovisit customers in New York City andto walk a lubricants trade show. It wasamazing to see all the vegetable oilbased offerings. These new products

severely. We have not had rains likethat for a few years.

As welcome as they were, they alsoexposed the soft underbelly of agricul-ture. Soil, herbicides, insecticides andfertilizers washed out of unprotectedfields at a sickening pace. Ugly gougesopened up in fields to the depth of thetools that worked it. Washouts wereevident everywhere.

Yet, some fields did not wash at all.No-till cornfields held firm. No-tillsoybean ground ran but not as bad asthe ground that had been worked.Those few fields with grass waterwaysand turnrows caught most of the sedi-ment and chemicals that wanted torun to the creeks and rivers.

I am baffled as to why we put upwith this kind of erosion. The benefitsof no-till have been known for 20years. We have known for 50 years theimportance of grass waterways, ter-races and the like. In the 1985 Farmbill - almost 20 years ago - we man-dated management plans for highlyerodable farm ground.

Riding in the jump seat with a no-till neighbor friend while he planted

(continued on page 9)

AGP Participates in NCFC Expo on Capitol Hill

AGP will be on display withother agricultural cooperatives

during the Farmer CooperativeLunch Reception and Expo onCapitol Hill. The event, which issponsored by the National Councilof Farmer Cooperatives (NCFC),aims to raise the profile of farmercooperatives among the nation’scongressional leaders.

AGP’s logo, company descriptionand contact information are includ-ed in the Expo, along with otherNCFC members. The event isscheduled for June 12, 2003.

““CCoommmmooddiittyy CCoommmmeennttss””((ccoonnttiinnuueedd ffrroomm ppaaggee 77))

the soybean market to work higherduring the last month. U.S. farmershave been reluctant sellers the entirecrop year, so they haven't pressuredthe futures market either. Theextremely tight carryout numbershould keep prices strong until themarket is sure of a new crop of soy-beans to harvest next fall. Any weath-er problem would cause a quickupward price reaction from soybeantraders. This will cause the soybeanmarket to be more volatile then nor-mal during this year's growing season.

9

““PPoolliittiiccaall PPoodd””((ccoonnttiinnuueedd ffrroomm ppaaggee 88))

24 rows behind 250 horsepower, Iasked why other farmers insisted onusing field cultivators and disks. Hegave a four-part answer: generational,agronomic, financial and cultural. Inone sentence it went something likethis: "The older generation can't fig-ure out that by spending $200/row ontheir planter they can get good seed tosoil contact and that saving moistureand soil is more important than hav-ing neat fields."

I know that sounds harsh and isnot a complete picture of a long con-versation. My own observations arethat young farmers happily stir up thedust in the spring and fall at about thesame rate as older farmers. Youngerfarmers just do it on more acres withlarger equipment.

I wonder how much of it really hasto do with spring fever, cows andsows. If every farmer had to look after50 cows and 100 sows, would there beenough time to get over all the groundtwo or three times? Thirty years ago,most producers did have cows andsows to look after and they still didmultiple tillage operations but not onas many acres. I may be all wet, but Iknow myself that need to get out anddo something in those months whenthe ground is not frozen.

Now it is your turn. It would bevery enlightening to hear from readerson this conservation topic. Why dowe see such a wide variety of tillagepractices on the same type of groundand why do we put up with continuedtop soil erosion and water pollution?

In the next issue I will summarizethe responses (but leave out the cusswords). Don't worry, your name willbe protected. Please e-mail me atjcampbell@agp.com or write to me atPO Box 2047, Omaha, NE 68103.

SoyGold Featured on “The Naturally Soy Show”

Blake Hendrix, Vice President, Technology - Marketing and Applications, displays soymethyl ester samples to Diane Cook, Producer of “The Naturally Soy Show” prior totaping a segment on soy biodiesel. Hendrix and John Campbell (background), VicePresident, Government Relations and Industrial Products, were filmed at AGP’smethyl ester plant in Sergeant Bluff, Iowa for the show which aired on RFD-TV.

Ethanol Use ImprovesAir Quality

According to the latest figures fromArgonne National Laboratory, the

use of ethanol-blended fuels reducedCO2 equivalent greenhouse gas emis-sions by approximately 4.3 million tonsin the U.S. during 2002, up from 3.6million tons in 2001. This reduction isequivalent to removing the annualgreenhouse gas emissions of more than636,000 cars from the roads.

The laboratory has determined thatfor every gallon of gasoline replaced byethanol, greenhouse gases are reducedby 30 percent. This reduction is due, inpart, to the “carbon cycle”, wherebymuch of the carbon dioxide releasedwhen ethanol-blended fuels are used isreabsorbed by biomass plants, likecorn, during growth. These biomassplants provide the feedstocks forethanol production.

Educators, StudentsVisit AGP

Recent visitors to AGP included agmarketing students at Iowa Western

Community College (IWCC), CouncilBluffs, Iowa, and agricultural represen-tatives from Iowa State University,Ames, Iowa.

The IWCC students were introducedto AGP by the Corporate and MemberRelations Department prior to a sessionon commodity hedging by Daryl Dahl,Vice President, Hedging. Greg Twist,Director of Marketing, and GlenHeitritter, Director of InternationalMarketing, were also on the program.

Ron Deiter, Professor of AgEconomics and Mike Gaul, Director ofAg Career Services at Iowa State,received an update on AGP from MikeMaranell, Senior Vice President,Corporate and Member Relations. Theyalso learned about human resourceneeds from Jim Seiler, HR Director.

10

The 2003 crop is off to a good start for farmers in the La Bolt,South Dakota area. In between slow, soaking rains that

occurred during Easter and early May, producers completed cornplanting and were about 25 percent done on soybeans. "Thewheat crop is looking good and corn is beginning to emerge,"reported Dennis Flemming, General Manager at La BoltFarmers Grain Company. "There's a long way to go before it's inthe bin but we're optimistic about this year's crop." Producers inNortheast South Dakota have turned to a crop rotation ofRoundup Ready soybeans and conventional corn, with springwheat thrown in the mix every third or fourth year. Buckwheatis also planted to serve a niche market in Japan, but acreage hasdecreased recently for this crop under a sluggish Japanese econ-omy.

Grain, agronomy and feed comprise the business units of LaBolt Farmers Grain Company, which has grown to include loca-tions in Waubay, Waverly and South Shore, as well as a feed storein Watertown, South Dakota. Dennis has 26 years of experiencein the grain business including nine years at La Bolt from 1980to 1989 before he became co-owner of the South Shore grainoperation. When the cooperative acquired South Shore in 2001,Dennis returned to La Bolt as General Manager. "It has workedout well," said Dennis.

Grain volume has grown steadily to approximately 4 millionbushels annually. Corn is utilized in local feed production or soldto nearby ethanol plants, with soybeans marketed to AGP's pro-cessing plant in Dawson, Minnesota. AGP's ComponentPremium Program is one tool the cooperative uses to compete inthe grain business. Dennis is working with AGP to exploreopportunities to possibly expand the list of approved seed vari-eties for the contracted acreage program.

Feed and agronomy have also contributed to solid earningsduring Fiscal 2002 and the current year. The company recentlydiscontinued handling anhydrous ammonia and is focusing thebusiness on dry fertilizer, chemicals and custom application.

(continued on back cover)

DennisFlemmingLa Bolt FarmersGrain CompanyLa Bolt,South Dakota

CONVERSATIONS WITH

George HohwielerAuroraCooperativeElevator Co.Aurora, Nebraska

George Hohwieler, a South Dakota State University grad-uate and 18-year veteran of the seed industry, brought

his skills and experience to Aurora, Nebraska this pastJanuary to manage one of Nebraska's largest cooperatives,Aurora Cooperative Elevator Company. "I am truly excitedabout the opportunity to serve at Aurora," said George, whoearned an MBA from the University of Nebraska in 1994.His background includes positions in seed marketing andmanagement, including the past 11 years managing theSyngenta production plant at Phillips, Nebraska.

The company that George and his team of 240 employeesoperate today looks much different than it did when it wasformed 95 years ago. Aurora Cooperative Elevator Companyhas grown to 26 locations in Nebraska and one in Kansas(Republic), with a trade territory encompassing roughly 110miles north to south and 65 miles east to west. Annual salesare on track to exceed $200 million. Grain is the largest busi-ness segment, followed by ag retail (feed and agronomy).Petroleum, convenience stores, tire centers, financing, and cropinsurance round out the company's products and services.

George noted that while a "phenomenal" wheat crop is onthe horizon, corn and soybean plantings are uneven. Farmersin the southern section of the trade area are making goodprogress but much-needed spring rains are causing northernproducers to fall behind schedule. With a short window toget corn in, more soybeans may be planted this spring.Farmers in this area generally follow a 2/3 corn, 1/3 soybeantype rotation, as George said government programs are pred-icated more to U.S. corn growers than the soybean side."AGP has created an excellent market for soybeans with theplant in Hastings, and producers are aware of how this crophelps them be better stewards of the land, so soybeans willcontinue to be important to our members," said George.

AGP's Approved Variety Program is also causing the mem-bers of Aurora Cooperative Elevator Co. to take a look at

(continued on back cover)

11

Manager Call Locations

MANAGERS

Rob JacobsCooperativeElevatorAssociationOcheyedan,Iowa

Although Rob Jacobs has only been on the job as GeneralManager at Cooperative Elevator Association,

Ocheyedan, Iowa since late March of this year, it's not exactlyunfamiliar territory. Rob, who has served as MarketingManager at Ocheyedan for the past two years, grew up on thefamily farm 7 miles from the cooperative where his fatherserved on the Board of Directors for 18 years. "I look forwardto working with the employee team, the Board, and membersto help our cooperative succeed," said Rob, who has severalyears of management experience in grain, feed and LP (liquidpropane) with Golden Sun Feeds, Hunting Elevator, Terra andAgro Distribution.

A good crop in 2003 would certainly help prospects for asuccessful year. After two years of production shortfalls -extremely dry weather last year and severe hail damage in 2001- farmers are cautiously optimistic for this year. "Producers arehaving a good spring, with corn planting complete (early May)and a good start on the soybeans," said Rob. "The ground is ingreat shape and when we catch some heat, this crop shouldreally get going."

Grain, agronomy and feed provide an even balance of thecooperative's annual sales which exceeded $40 million lastyear. Revenue from a growing lumberyard business also con-tributed to earnings. In addition to the main office inOcheyedan, branch locations are at Hartley and Sibley, Iowa.

The cooperative has a 75-car load-out at Ocheyedan, butsecuring competitive freight rates on the short line railroadthat serves the facility is a challenge. Cooperative ElevatorAssociation continues to be pro-active in value-added livestockand poultry production, such as assisting in the developmentof local swine and dairy operations. This has resulted in athriving feed business which utilizes about 2/3 of the compa-ny's annual corn handle of between 6 and 7 million bushels.Excess corn is marketed to a neighboring cooperative shuttleloader, and a new ethanol plant in the area offers a potential

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Cooperative NewsMMaannaaggeemmeenntt

* DDaallee LLoocckkeenn is CEO of South Dakota Wheat GrowersAssociation, Aberdeen, South Dakota. A native of Bath,South Dakota, Dale served as U.S. Director of Sales forBASF based in Raleigh, North Carolina, prior to joiningthe Wheat Growers last December.

* JJeerrrryy MMccCCaarrttyy is General Manager of Round LakeFarmers Cooperative, Round Lake, Minnesota. Jerry, whopreviously managed Larchwood Farmers CooperativeElevator, Larchwood, Iowa, replaces CCoouurrtt BBaauummggaarrdd,, whoretired from Round Lake in January.

MMeerrggeerrss//AAccqquuiissiittiioonnss

* Farmers Union Co-operative Company, Blue Springs,Nebraska, merged with Farmers Cooperative, Dorchester,Nebraska, on January 1, 2003. RRoonn VVeellddeerr is the GeneralManager at Farmers Cooperative.

* Farmers Cooperative Exchange, Rock Rapids, Iowa,merged with Farmers Elevator Company, Rock Valley,Iowa, on January 1, 2003. ZZoomm ZZoommeerrmmaaaanndd is theGeneral Manager of Farmers Elevator Company.

* The members of Tri-Valley Cooperative, St. Edward,Nebraska, and Agland Cooperative, Oakland, Nebraska,voted to merge their cooperatives with Central FarmersCooperative, O’Neill, Nebraska, effective September 1,2003. DDoouugg DDeerrsscchheeiidd,, General Manager of CentralFarmers Cooperative, will serve in that capacity of themerged company.

* Hills-Beaver Creek Cooperative, Hills, Minnesota,merged with New Vision Cooperative, Worthington,Minnesota, on March 1, 2003. FFrraannkk MMccDDoowweellll is theGeneral Manager of New Vision Cooperative.

““DDeennnniiss FFlleemmmmiinngg””((ccoonnttiinnuueedd ffrroomm ppaaggee 1100))

Although La Bolt Farmers GrainCompany does not market petroleum, itdoes use SoyGold® soy biodiesel pur-chased from a distributor in Watertownfor its diesel-powered equipment. "Wehave been impressed with the perfor-mance of soydiesel, and the product is agreat opportunity for agriculture to helpitself and the environment," saidDennis.

La Bolt Farmers Grain Companyenjoys working with the staff atDawson. "The facility improvementsare also appreciated,” he added.

““GGeeoorrggee HHoohhwwiieelleerr””((ccoonnttiinnuueedd ffrroomm ppaaggee 1100))

increasing their soybean acreage. "Ithink programs of this type are thefuture of IP (Identity Preserved)," saidGeorge. "What we've learned from ourpast experience with biotechnology isthat if at all possible, we want to beinvolved with an IP product that won'truin the big pile if it would happen toget into the mainstream. This programthat Aurora Cooperative and AGP aredoing together makes a lot of sense,creating a value-added crop for pro-ducers that ends up in the big pile atthe processing plant."

““RRoobb JJaaccoobbss””((ccoonnttiinnuueedd ffrroomm ppaaggee 1111))

new outlet. The bulk of the soybeansare sold to AGP's processing plant inSheldon, Iowa, which also serves as theprimarily soybean meal supplier toOcheyedan. "The facility upgrades atSheldon are great improvements formembers," said Rob. "We particularlyappreciate the faster unloading time."

He also commended AGP for inno-vations such as the ComponentPremium Program. "Developing pro-grams like this enhances the value ofthe cooperative system," said Rob.

AGP Wishes You a Great Summer!