Farmers Farmers Cooperative Cooperative ConferenceConference

November 18, 2008November 18, 2008

North American North American Bison CooperativeBison Cooperative

HistoryHistory

North American Bison North American Bison CooperativeCooperative

1993 formed in New Rockford, ND1993 formed in New Rockford, ND 1993-2000 Sold a total of 16,000 Delivery 1993-2000 Sold a total of 16,000 Delivery

Shares with requirement to deliver one bison Shares with requirement to deliver one bison for each share owned. for each share owned.

1994 built 12,000 sq. ft harvesting, 1994 built 12,000 sq. ft harvesting, processing and distribution plant in New processing and distribution plant in New Rockford, NDRockford, ND• Capacity: 10,000 head per yearCapacity: 10,000 head per year

2000-2003 did not pay members for animals 2000-2003 did not pay members for animals delivered. Member received a deferred delivered. Member received a deferred payment certificate. payment certificate.

2002-Purchased New West Foods 2002-Purchased New West Foods 2003-Purchased Great Plains Game2003-Purchased Great Plains Game 2004-Hired new management2004-Hired new management 2005-Declared Chapter 112005-Declared Chapter 11 2006-Emerged from Chapter 112006-Emerged from Chapter 11 2007-Paid first patronage ($.10/lb) ever to 2007-Paid first patronage ($.10/lb) ever to

membership who delivered animalsmembership who delivered animals 2008-Will pay higher patronage rate than 2008-Will pay higher patronage rate than

20072007

North American Bison North American Bison CooperativeCooperative

North American North American Bison CooperativeBison Cooperative

TenderBisonTenderBison

ProductsProducts

North Dakota North Dakota Natural Beef, Natural Beef,

LLCLLC

North Dakota North Dakota Natural Beef, Natural Beef,

LLCLLC 2005: October the company was formed 2005: October the company was formed

by NABCby NABC 2005-06: Raised capital2005-06: Raised capital 2006: Purchased John Morrell building in 2006: Purchased John Morrell building in

Fargo and received neighboring building Fargo and received neighboring building as an equity contributionas an equity contribution

2007: 2007: • April: Started sales effortApril: Started sales effort• July: Started constructionJuly: Started construction

North Dakota North Dakota Natural Beef, Natural Beef,

LLCLLC 20082008

• September: Occupied office portion of September: Occupied office portion of facilityfacility

• October: Started warehousing and October: Started warehousing and distributiondistribution

• November-December: Add fabrication and November-December: Add fabrication and further processingfurther processing

20092009• Full occupancyFull occupancy• New Rockford becomes solely a harvest New Rockford becomes solely a harvest

facilityfacility

North Dakota North Dakota Natural Beef, LLCNatural Beef, LLC

Dakota Farms BrandDakota Farms Brand

ProductsProducts

Why ?Why ? NABC/NDNBNABC/NDNB

• SynergySynergy AdministrationAdministration SalesSales MarketingMarketing OperationsOperations

• Lower overhead for both companiesLower overhead for both companies Shared expensesShared expenses Increased probability of success for NDNBIncreased probability of success for NDNB Win-WinWin-Win

Key PersonnelKey Personnel Dr. Ken Odde: North Dakota State UniversityDr. Ken Odde: North Dakota State University Lt Gov. Jack DalrympleLt Gov. Jack Dalrymple NABC Board and MembershipNABC Board and Membership North Dakota State University AdministrationNorth Dakota State University Administration

• Dr. Chapman: PresidentDr. Chapman: President• Dr. Coston: Vice PresidentDr. Coston: Vice President

Rod SatherRod Sather Rick BurgumRick Burgum Farmers UnionFarmers Union

FunctionalityFunctionality 2 separate companies2 separate companies

• NDNB has 2 NABC Board members as NDNB has 2 NABC Board members as representativesrepresentatives

Act as investors representativesAct as investors representatives

NDSU Strategic AllianceNDSU Strategic Alliance• Arms length by necessityArms length by necessity• Key differentiation for NDNB in Key differentiation for NDNB in

marketplacemarketplace• Provides NDNB with resources only very Provides NDNB with resources only very

large companies have access tolarge companies have access to

KnowledgeKnowledge What have we learned that is applicable What have we learned that is applicable

to other businesses?to other businesses?• Competition today is internationalCompetition today is international• Continuing reduction of operating expenses Continuing reduction of operating expenses

while increasing quality and consistency a while increasing quality and consistency a requirement to competerequirement to compete

• Leveraging assets provides opportunityLeveraging assets provides opportunity• Competitors may be customers and vendorsCompetitors may be customers and vendors• Scientific credibility of a program provided Scientific credibility of a program provided

through NDSU is a critical differentiation for through NDSU is a critical differentiation for new market entrantnew market entrant

North Dakota Natural North Dakota Natural Beef, LLCBeef, LLC

North American Bison North American Bison CooperativeCooperative