Global Wheat

Outlook

February 2014

1

3

Feeding The World

Population By 2050

9.6 Billion

WHEAT FEEDS THE WORLD

Planning and investment

in global agriculture

has become

critically

important The rate of technology

development and adoption

continues to accelerate Food Price Index, FAO 2014.

Food Prices are Trending Upward

0

50

100

150

200

'61 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '14

Deflated Price Index Index (2002-2004=100) An extra

billion

tonnes of

cereals will

be needed

by 2030 FAO, 2002. World agriculture 2030:

Main findings

The caloric needs of the planet

are expected to soar by 50% in

the next 40 years Feeding The World

Population By 2050

9.6 Billion

4

Presentation Outline 4

Global Wheat Outlook

Wheat Market Attractiveness

Technology Developments for Wheat

Value Capture Challenges & Opportunities

5 5

GLOBAL WHEAT OUTLOOK

“WHEAT – MEETING

THE DEMANDS”

6

Sub-Saharan Africa is cause for serious concern, because the number of

chronically undernourished people will only decrease from 194 to 183 million.

An extra

billion

tonnes of

cereals will

be needed

by 2030

FAO, 2002. World agriculture 2030:

Main findings

Cereals prices have

risen by an average of

6% per year since 2000

2014 2000

FAO Cereals Price Index

1 in 8 people in the world

(868 million) are undernourished

The world needs wheat

7 World cereal markets expected to stay tight amid rising

production

0

100

200

300

400

500

600

1800

1900

2000

2100

2200

2300

2400

2500

Mill

ion T

onnes

Mill

ion T

onnes

Stocks (right axis) Production (left axis) Utilization (left axis)

Source: FAO “World Food Situation”, Jun. 2014

8

China and the EU are the top wheat consumers globally

Selected Wheat Consuming Regions (MM MT)

Source: March 2014 USDA FAS World Agricultural Production: 2012/13 values

125

120

84

38

34

24

19

18

16

12

11

10

9

8

8

China

EU-28

India

US

Russia

Pakistan

Egypt

Turkey

Iran

Ukraine

Brazil

Canada

Algeria

Morocco

Uzbekistan

9 Though the EU collectively produces the highest volume,

China is the top wheat producing country.

Top 15 Wheat Producing Regions (MM MT)

Source: FAO Worldstat, 2012

8

9

10

13

14

16

20

23

27

30

38

62

95

121

136

Argentina

Egypt

Kazakhstan

UK

Iran

Ukraine

Turkey

Pakistan

Canada

Australia

Russia

US

India

China

EU-28

11 11

GLOBAL WHEAT OUTLOOK

“ATTRACTIVE

COMMERCIAL WHEAT

MARKETS”

12

Regions were divided into categories of attractiveness

Attractiveness

Indicators:

Productivity

Commercial Support

Technology Adoption

>100,000

>50,000 <100,000

>10,000 <50,000

>1,000 <10,000

<1,000

1,000 Metric Tons

Source: USDA FAS 2014 Estimates

Production Volume

13

Portions of North and South America are highly attractive

North America

South America

Argentina

Productivity

Yield/ha

Technology

Adoption

Commercial

Support

US

Multinational Support

Potential Growth with technology

Argentina

Productivity trending up

>100,000

>50,000 <100,000

>10,000 <50,000

>1,000 <10,000

<1,000

1000 Metric Tons

United States

14

Productivity

Yield/ha

Technology

Adoption

Commercial

Support

Europe and Russia are both high producers

Europe

Former Soviet

Union

EU

Multinational Support

High productivity

Subsidies

Russia

High growth potential

>100,000

>50,000 <100,000

>10,000 <50,000

>1,000 <10,000

<1,000

1000 Metric Tons Russia

Europe: UK, France,

Germany,

Switzerland

15

Productivity

Yield/ha

Technology

Adoption

Commercial

Support

India and China should be attractive markets in the longer-

term

East Asia

Both are growing to meet

populations’ needs

Technology adoption could follow

success in cotton

India

China

Africa

Africa /

Southwest Asia

>100,000

>50,000 <100,000

>10,000 <50,000

>1,000 <10,000

<1,000

1000 Metric Tons

16 16

GLOBAL WHEAT OUTLOOK

“TECHNOLOGY

DEVELOPMENT IN

WHEAT”

17 Technological advancements could pave the way for

continuous improvement

Technology

Possibilities

Hybrids

MAB

Yield +

Stress

Traits

Input

Traits

CP

Enhance-

ments

18 Collaborations will lead to enhanced breeding and

technology development

Acquisitions

Wheat Breeding,

Yield , Drought Tolerance, NUE

Drought Tolerance

Various Crop Improvements

Exchange of Germplasm & Tech.

Water Efficiency, &

JV to develop wheat technologie

Ukrainian breeding Co.’s

SORT and EUROSORT.

Collaborations

2010

Selected

Collaboration

Announcements

2013

Selected

Collaboration

Announcements

Collaborations

Wheat Breeding: Environmental Stress

Hybrid Wheat Research

Drought Tolerant Tech. in Wheat Frontier Agri-

Science Inc.

Increase Productivity

General Crop Improvements

Heat Tolerant Wheat Varieties (2012)

Develop New Wheat Varieties

19

2013 2014 2015 2016 2017 2018 2019 Later

Commercialization Date

Source: Annual Organizational Reports via company websites

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Technology Development Highlights

R&D Company Trait

Monsanto Herbicide Tolerance

Monsanto Enhanced Yield + Stress Tol.

Monsanto + BASF Enhanced Yield + Stress Tol.

BASF + MPBCRC Fusarium & Drought Tol.

Arcadia BioSciences + Mahyco WUE, NUE and Salt Tolerance

Arcadia BioSciences + Vilmorin WUE and NUE

Arcadia BioSciences + Targeted Growth Herbicide Tolerance

Arcadia BioSciences + CSIRO Increased Yield and NUE

CSIRO Drought Tol. and Virus Res.

Syngenta Fusarium Resistance

Syngenta (deVGen) Insect Resistance

DuPont Pioneer Hi-Bred Increase Yield, & Fungal Res

Several technologies are being developed in wheat

over the next decade

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Continuous investment in crop protection products in cereals,

along with a push into plant health, will create / provide a huge

opportunity for growth in wheat value.

CP Technology

Over 20 new compounds / combinations

entered the Cereals Market from 2010 to 2013

Crop protection products continue to be developed for the

Cereals market

AI Co. Class Launch

Bixafen Bayer Fungicide 2011

Fluxapyroxad BASF Fungicide 2012

Sulfoxaflor DAS Insecticide 2013

Examples Only

21 21

GLOBAL WHEAT OUTLOOK

“HOW VALUE WILL BE

CAPTURED”

22

Companies are spending money on R&D

Overall Seed & Traits

R&D Trend

Wheat Seed & Traits

R&D Trend

23

Value capture enhances/enables technology investment

Higher

Value

Capture

Increased

ROI to

Developer

Increased

Developer

Investment

24

Little value is captured in wheat seed

In several major wheat producing countries less than

5% of wheat seed is proprietary.

Source: GfK Global Seed Market Database

0% to 5%

6% to 20%

21% to 35%

36% to 50%

51% to 100%

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How do the mechanisms prevent

saved seed and enhance value

capture?

• Provide a specific mechanism

to prevent saved seed OR pay

for technology improvement

• Incentive for grower to buy

new seed

• Patent and license protection

Any likely value capture mechanisms will likely revolve

around hybrid seed, new traits and/or new systems

Value Capture

Mechanisms

Hybrid Seed

New Systems

Traits

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SUMMARY

1. Wheat acreage AND value will trend up

2. Not all markets are equally attractive

3. Advanced wheat technologies are being developed

1.Value capture systems are essential to

achieving the full potential of Wheat as a crop

Value ≥ Volume

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WHEAT FEEDS THE WORLD

– bringing productivity to new places

– initiating where nothing was

– improving what is in place to provide better

– building infrastructure to make the most out of the crop

– employing the best tools and tactics of manual labor to and through precision technologies

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It all

comes

down to

productivity.

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Information,

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