BREAKING GROUND

New Soybean Processing Plant at Aberdeen, SD

A PUBLICATION OF Ag Processing Inc a cooperativeIssue #2, 2017

2 AGPNEWS Summer 2017

AGP proudly uses soy ink in all publications!

IN THIS ISSUE

A MESSAGE FROM THE CEO

As you can see from the cover photo, this edition of AGP News highlights a major accomplishment and milestone for AGP: the official beginning of construction of the Company’s tenth soybean processing facility in Aberdeen, SD on May 3rd. Participants in the ground breaking ceremony included the AGP Board of Directors, AGP management team, and AGP member/owner representatives, as well as the Governor of South Dakota, state and local economic development officials, Aberdeen governmental and civic leaders, and other county and area representatives. It was a great event and we appreciate all whom attended and participated.

I am pleased to report that the ground breaking for the new facility was the result of many months of planning and detailed project development work by the AGP team. To date, the project is progressing as planned. However, much work remains to be accomplished to meet our projected commencement of operations, scheduled for the fall of 2019. Look forward for more updates on this exciting project in upcoming issues.

In late July/early August, we will be hosting three Area Informational Meetings for the general managers/senior staff of our member/owners. We enjoy these opportunities to engage with our members and provide updates on the progress and success of AGP. For more information, please see the more detailed schedule inside.

Lastly, we know there is much uncertainty from Washington, DC regarding agricultural and trade policy. AGP is actively engaged in that conversation both directly and through our involvement and leadership in many organizations such as the National Council for Farm Cooperatives, the National Oilseed Processors Association, the National Biodiesel Board, and many others. As noted inside, there are many challenges and opportunities for success in Washington, and we must provide input in order to be heard.

We hope the growing season continues to progress well!

Best regards,

J. Keith Spackler

3 Project Updates

6 Member News

8 Industry Partners

10 Announcements

11 Political Pod

3 AGPNEWSSummer 2017

PROJECT UPDATES

AGP is on schedule for completion of the soy biodiesel expansion project at Sergeant Bluff, IA this summer. The ground view photo at right shows new processing equipment (reactors, acidulators, and methanol distillation column).

The aerial photo below shows a wider view of the expanded biodiesel facility. The areas that are visible through the steel will be enclosed during the final stages of the expansion project. AGP is doubling the production capacity at this facility from 30 million gallons to 60 million gallons annually.

AGP Sergeant BluffSoy Biodiesel Expansion

PROJECT UPDATES

It was a Chamber of Commerce day on May 3 in Aberdeen, SD for the Ground Breaking Ceremony for AGP’s new soybean processing facility. AGP CEO Keith Spackler acknowledged the many special guests in attendance including AGP cooper-ative members from the area, AGP Board members, South Dakota Governor Dennis Daugaard, South Dakota economic development officials, and Aberdeen community leaders.

“As agriculture is beginning to awaken in our fields across this area, this is an awakening as well of a great opportunity for the city of Aberdeen, for Brown County, and for the state of South Dakota, as well as for our cooperative owners, for AGP, and the farmers throughout the Midwest,” said Spackler. He noted that AGP has had their eye on the Dakotas for quite some time as that region has experienced the largest growth in soybean production of any area in the U.S. over the past several years. “AGP is owned by 150 farmer-owned cooperatives across the Midwest and views this opportunity as consistent with our mission of providing markets for producers’ soybeans, adding value to those soybeans, and generating competitive returns for our member-owners.”

“AGP views this opportunity as consistent with our mission of providing markets for producers’ soybeans, adding value to those soybeans, and generating competitive returns for our member-owners.”

Breaking Ground New Soybean Processing PlantAberdeen, SD

5 AGPNEWSSummer 2017

Lanny Kirsch, General Manager,Watertown Co-op Elevator Ass’n., Watertown, SD.

Hal Clemensen (right), Board Chairman, South Dakota Wheat Growers Ass’n., Aberdeen, SD and Chuck Schafer, AGP Board Member, General Manager, North Iowa Cooperative, Thornton, IA.

Mike Bultema (right), General Manager, South Dakota Hutterian Co-op, Aberdeen, SD and South Dakota Governor Dennis Daugaard.

Mike Nickolas (right), General Manager, North Central Farmers Elevator, Ipswich, SD and Mark Sandeen, AGP Vice President, Processing Marketing.

South Dakota Governor Dennis Daugaard.

Dale Locken (right), General Manager/CEO, South Dakota Wheat Growers Ass’n., Aberdeen, SD and Randy Robeson, AGP Board Member, General Manager, Frontier Cooperative Co., Brainard, NE.

Cal Meyer, AGP COO and Group Vice President.

Brad Davis, AGP Board Chairman, General Manager, Gold-Eagle Cooperative, Goldfield, IA.

South Dakota Governor Dennis Daugaard (left) and AGP CEO Keith Spackler.

Brad Davis, AGP Board Chairman, thanked local and state officials in attendance for their hospitality, support, and the opportunity to build a new soybean processing facility in Aberdeen. “The new plant will give AGP an opportunity to expand our Midwest footprint, to expand our membership, and to ultimately add value to more member soybeans,” said Davis.

“The Aberdeen facility will be a great addition to our value-added platform,” said Cal Meyer, AGP COO. “We will be buying a large volume of soybeans in the area, supplying soybean meal to regional feed mills, and directly supporting soybean prices along with livestock production – the net result is economic activity and jobs.” He explained that the facility, once completed, will be a state of the art processing facility designed to load unit trains of soybean meal destined for export markets in the Pacific Rim. “Trains of soybean meal will ship on the BNSF Railroad from Aberdeen, SD to Aberdeen, WA. This location will play an important part in the farm-to-market system supplying protein to a growing world population.”

South Dakota Governor Daugaard said that AGP’s business is strong enough and confidence in Aberdeen great enough that the facility is going to be larger than was foreseen originally. “AGP is scaling up the design even before it was built and that’s great news,” said Daugaard. “You are the kind of business we want here in South Dakota very much to help provide the strong foundation for the agriculture economy which is our foundation.”

“We could speculate that it won’t be very many years when the majority of people in South Dakota think of Aberdeen, they’re going to think of AGP’s big processing center,” said Mike Levson, Aberdeen Mayor. “We’re going to be Soybean City here and we couldn’t be happier about it. It’s such a massive project that it’s going to resonate across the entire state. We are thrilled to have you here and we look forward to the future of a great partnership.”

The new plant is anticipated to be operational in the fall of 2019.

6 AGPNEWS Summer 2017

The AGP Board of Directors approved the membership of Full Circle Ag, Britton, SD. In addition to Britton, the cooperative has South Dakota facilities in Amherst, Claremont, Doland, Groton, Hecla, Pierpont, and Wilmot, and two locations in North Dakota at Forman and Gwinner. Dave Andresen is the General Manager.

The AGP Board approved the membership of North Central Farmers Elevator, Ipswich, SD. In addition to Ipswich, the cooperative has South Dakota facilities in Bowdle, Craven, Faulkton, Herreid, Java, Lebanon, Leola, Northville, Onaka, Pollock, Warner, and Wecota and one location in North Dakota at Hague. Mike Nickolas is the General Manager.

Plains Equity Exchange and Cooperative Union, Plains, KS has been approved for membership by the AGP Board of Directors. They have facilities in Plains, Kismet, Hobart, and Liberal, KS. Mike Schlochtermeier is the General Manager.

Ottawa Cooperative Association, Ottawa, KS is a new member of AGP following approval by the AGP Board of Directors. Clark Wenger is the General Manager/CEO. The cooperative operates facilities in Ottawa, Edgerton, LeLoup, Overbrook, Lawrence, Burlingame, Pauline, Scranton, Burlington, Melvern, Midland, Waverly, and Vassar, KS.

The members of Coop Country Farmers Elevator, Renville, MN voted to merge with Harvest Land Cooperative, Morgan, MN effective September 1, 2017. The Boards of Directors collectively agreed to establish a new name (to be determined) for the unified company. Dave Stuk, current CEO of Harvest Land Cooperative, will be the CEO of the merged company. Craig Hebrink, current CEO of Coop Country Farmers Elevator, will hold a key leadership position in the new company.

Dale Locken, CEO and General Manager at South Dakota Wheat Growers Association, Aberdeen, SD has announced his retirement. Chris Pearson has been named the new CEO effective August 1. Chris is currently the COO and joined SDWG four years ago from Iowa where he previously spent 14 years in the cooperative system.

Gordy Elliott, General Manager at Farmers Cooperative Elevator, Rushford, MN retired February 13. Wayne Gordon is serving as Interim Manager.

Jim Magnuson, General Manager, Key Cooperative, Roland, IA retired with 40 years of service to cooperatives including nearly 20 years as General Manager of Key Cooperative. Boyd Brodie, Operations Manager, has been named Interim Manager for the next six months. The cooperative’s Board of Directors has conducted a formal succession planning process over the past year and plans on selecting a new General Manager at the beginning of the company’s new fiscal year on October 1.

Greenville Cooperative (non-member), Greenville, WI, merged into United Cooperative, Beaver Dam, WI. David Cramer is the President and CEO of United Cooperative.

Sean Cravens has succeeded Jerald Ratliff as General Manager at Central Plains Cooperative, Smith Center, KS. Jerald retired after a 42-year career at the cooperative. Sean has extensive agriculture experience including working at Frontier Ag, Inc., a cooperative in Bird City, KS.

Trent Sprecker has succeeded Jim Erickson as General Manager at Farmers Win Cooperative, Fredericksburg, IA. Jim retired on June 15 after having been with the cooperative since 1998. Trent has over 20 years of experience serving as General Manager at cooperatives in Plattsburg, MO and Missouri Valley, IA. He began his career in the feed business with Purina.

Member News

MEMBER NEWS

7 AGPNEWSSummer 2017New Vision Cooperative’s feed mill at Magnolia, MN.

8 AGPNEWS Summer 2017

Nebraska Soybean Leaders Tour AGP’s Port

Jodie Johnson (right), Merchandising Manager, AGP Hastings, NE accompanied a group of Nebraska soybean farmers and agribusiness professionals on a recent “See for Yourself International Marketing” mission to the Pacific Northwest (PNW).

AGP’s export terminal at the Port of Grays Harbor in Aberdeen, WA was featured on the tour. The mission gave farmers the opportunity to see firsthand how their soybean checkoff is working to increase their productivity,

demand for their crops, and profitability. Johnson spoke to the group about the connection between AGP Hastings and the Port of Grays Harbor as well as the

expansion of the soybean processing plant in Hastings that was recently completed.

IDEA Tours AGP Sergeant BluffDebi Durham, Director, Iowa Economic Development Authority, recently visited AGP’s facility at Sergeant Bluff, IA. Wayne Johnson, Regional Marketing Manager, and Brent German, Refinery Operations Manager, showed Durham the new soybean oil refinery at the facility. She also saw firsthand the progress of the expansion project at the soy biodiesel plant and other significant investments AGP has made at the Sergeant Bluff facility. In her role at IDEA, Durham led the efforts of state and local development officials to support these AGP expansion projects. Debi Durham, Director, Iowa Economic Development Authority, and

Wayne Johnson, Regional Merchandising Manager, Sergeant Bluff, IA

INDUSTRY PARTNERS

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Steve Censky (right), CEO, American Soybean Association (ASA) discusses industry topics with AGP management (left to right): Keith Spackler, CEO; Cal Meyer, COO and Group Vice President; Steve Nogel, Vice President, Renewable Fuels; and Matt Caswell, Vice Presi-dent, Member/Corporate Relations and Government Affairs.

Steve Censky, CEO, American Soybean Association (ASA), met with Keith Spackler, CEO, Cal Meyer, COO, and additional members of the management team at AGP’s corporate office in Omaha, NE recently. The group

discussed soybean industry challenges and opportunities including topics such as international market growth, biotechnology, and various policy issues, such as biodiesel and the Farm Bill.

AGP and ASA Discuss Soybean Industry

NBB CEO Visits AGPDonnell Rehagan, CEO, National Biodiesel Board (NBB), met with Keith Spackler, CEO, Cal Meyer, COO and Group Vice President, Steve Nogel, Vice President, Renewable Fuels, and additional members of the management team to discuss NBB activities and priorities. The discussion was very positive and covered a broad range of issues, including the RFS, tax credits, and state market initiatives. As the newly appointed CEO, it was Rehagan’s first visit to AGP in that role. AGP management team member Steve Nogel serves on the NBB Governing Board.

Donnell Rehagan (right), CEO National Biodiesel Board and Steve Nogel, Vice President, Renewable Fuels.

10 AGPNEWS Summer 2017

ANNOUNCEMENTS

Plant Merchandising Manager AnnouncementsAGP appointed Adam Piper as Merchandising Manager at AGP’s soybean processing facility in St. Joseph, MO. Piper previously served as Merchandising Manager at AGP’s soybean processing plant in Eagle Grove, IA. Replacing Piper at Eagle Grove is Shara Schmeling, who has been promoted to Merchandising Manager at the facility.

These moves came as a result of the recent retirement of Terry McClatchey, Merchandising Manager at St. Joseph. “Terry has been an invaluable part of AGP’s merchandising team for over 33 years,” said Mark Sandeen, Vice President, Processing Marketing. “We wish him the best in retirement.”

Sandeen explained that AGP merchandisers play an important role for the Company, as they often have the opportunity to work at multiple AGP locations and experience leadership opportunities with diverse and unique member relationships. “AGP merchandisers work directly with our members and the public and are a key component of AGP’s success,” said Sandeen. “We are excited to have Adam and Shara in these roles and look forward to new opportunities and success at each location.”

Adam PiperMerchandising Manager

St. Joseph, MO

Shara SchmelingMerchandising Manager

Eagle Grove, IA

AGP promoted Kyle Droescher to Vice President of Finance. Droescher most recently served as AGP’s Director of Corporate Finance and has previous experience in finance, accounting, and investor relations roles with privately-held and Fortune 500 companies. Droescher holds a bachelor’s degree in Business Administration with an emphasis in accounting from the University of Nebraska at Lincoln.

AGP also announced that Ernie Kiley has been promoted to Vice President of Operations. Kiley most recently served as AGP’s Director of Soy Operations and has held numerous positions within AGP Operations throughout his career. Kiley began his career with AGP’s predecessor company Boone Valley Cooperative in Eagle Grove, IA over 30 years ago.

Kyle Droescher

Ernie Kiley

AGP Promotes Droescher and Kiley

MARK YOUR CALENDAR AGP’s 2017 ANNUAL MEETING

January 18-19

2018

A LONG WAY TO GO... The political situation in Washington, DC is unlike anything we’ve ever experienced. It is becoming very difficult to sort out what is real and what is not. Here are some things to keep in mind as you make sense of all the news surrounding this Administration.

First and foremost, we are still very early in the process. To use a baseball analogy, we are still in the bottom of the 1st inning. There is a long way to go. External events, weather, global challenges and the likes will certainly confront U.S. policymakers over the next four years and the Administration’s response to each will likely be unique and informed by the particular circumstances. Many known and unknown events await us, but more or less this game is just underway and we should adjust for that.

Secondly, and again with the baseball analogy, we haven’t seen the entire team yet and we don’t even know who exactly is playing in what position. As of the time of this writing, of the 553 political appointments requiring Senate confirmation, there remained 441 unfilled positions. That’s a lot of team still left to join the game, and again, the Administration’s response to any issue or crisis will be shaped by those key personnel who have yet to officially join it. While we do have a long way to go, the headwinds we are facing in agriculture provide focus on the importance of the political system functioning at optimum capacity. Fortunately, we know that

increasing demand for our products and providing for a secure safety net for our producers are the paramount goals of our advocacy efforts. And many of our industry’s priorities are advancing, albeit at a slower pace than some would prefer. But slow progress is still progress, and I’ll take that at this point, especially given the uncertainties around the new Administration’s approach to trade and farm programs.

Luckily, we are not alone in this effort. Helping us move the ball forward on these policy issues are the many agricultural trade associations and allies on Capitol Hill. Their efforts to advocate and inform the new Administration and Congress about our priorities are critical to our success. In late June, AGP leaders participated in two of these Washington, DC-based trade associations: the National Biodiesel Board and National Council for Farm Cooperatives. Both organizations are hosting national fly-in’s to bring friends and allies together to advocate for our shared policy goals, such as advancing a new Farm Bill and providing for a robust renewable fuels policy. Events like these showcase what collective and organized action can do on behalf of our industry to help shape events in an ever-evolving policy space.

POLITICAL POD

Matt CaswellMember/Corporate

Relations andGovernment Affairs

“Many known and unknown events await us, but more or less this game is just underway and we should adjust for that.”

AGP’s soybean processing plant in Emmetsburg, IA celebrates its 20th year in operation this year. AGP built the new plant on a greenfield site in 1997.

To reach us, contact:Jim Rodenburg / Communications Manager / P. O. Box 2047 / Omaha, NE 68103-2047Phone: 402-496-6627 / Email: jrodenburg@agp.comwww.agp.com

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