The Soy 20/20 Project

Second Annual Report

September 22nd, 2004

Soy Soy 20/2020/20

Overview

The Soy 20/20 Project Market Analysis and options for the future Working towards a prize Summary

Soy Soy 20/2020/20

Soy 20/20 Vision

OMAF U. ofGuelph

OSG AAFC

Soy 20/20

•Analyze markets•Identify objectives•Facilitate vision

Soy Soy 20/2020/20

Soy 20/20 Activities

MarketAnalysis

Assist Opportunity Development

Stimulate ResearchDirections

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Options for the future

1. Inaction

2. Existing channels

3. Alternative markets

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1. Status quo

0

20

40

60

80

100

120

140

160

180

1970 1975 1980 1985 1990 1995 2000 2005

Pu

rch

asin

g p

ow

er

(197

1 $/

acre

)

Purchasing power

Regressed value

Soybean production valuein real dollars is declining.

Soy Soy 20/2020/20

2. Stimulate growth in existing channels Soy food Soy protein as a food ingredient Soy flour for export

Soy Soy 20/2020/20

Soy Food

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

1997 1998 1999 2000 2001 2002 2003

So

y b

ever

age

sold

(L

itre

s)

3,000 acres ofsoybean

Soy Soy 20/2020/20

We have a geographic advantage

02468

10121416

Driving time (hours)

Toronto Chicago

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Soy protein as a food ingredient

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

2000 2005 2010 2015 2020

Val

ue

of

soy

flo

ur

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Opportunity for soy flour export

0 20 40 60 80 100 120

Kg wheat flour/person/year

U.K.

France

U.S.

Canada

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Soy protein value chain in Canada

Variety development

Grainhandlers

Crushingplants

Soy foodcompanies

Consumers

RetailersFood

companies

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3. Alternative markets

Food is not the only game in town.

$0$5

$10$15$20$25

GDP ($B)

Agricultural substitution

market

AgriculturalGrowthMarkets

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Opportunity value must make sense

0%

20%

40%

60%

80%

100%

Mar

ket

pen

etra

tio

n

-50%0%50%100%150%200%250%300%350%

Market penetration Incremental cost

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Soy based bio-diesel is not quite there

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

Jan-

96

Jan-

97

Jan-

98

Jan-

99

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Cd

n $

/L

Bio-diesel price Diesel price

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Imagine an Industrial Soybean

Protein40%

Oil19%

Other41%

Existing commodity soybean

40 bushels/acre

Protein35%

Oil23%

Other42%

Industrial soybean

43 bushels/acre

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Can we change the value equation?

15.00%

18.00%

21.00%

24.00%

27.00%

30.00%

30%32%34%36%38%40%

Protein content (% w/w)

Oil

co

nte

nt

(% w

/w)

39

40

41

42

43

44

45

46

47

30%32%34%36%38%40%

Protein content (% w/w)

Yie

ld (

bu

/acr

e)

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We can make soybeans an attractive feedstock option for industrial applications

$0.40$0.42$0.44$0.46$0.48$0.50$0.52$0.54$0.56$0.58$0.60

30%35%40%

Percent protein

Pri

ce/L

bio

die

sel

35% protein means $0.07 decrease in cost/litre

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$25,000 prize for first pilot to cross the AtlanticStimulated the growth of the air transport industry

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Working towards a prize

The soybean industry in Ontario was created by early generation genetics.

The premium market food grade soybean export market was created with genetics.

Now is the time for the next step.

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Announcement

The Soy 20/20 Project is committed to working together with industry to develop a prize for the first to commercialize an industrial soybean.

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Proposed specifications Industrial soybean commercialized on 10,000

acres. Yield 10% higher than best yielding commodity

varieties. Protein no lower than 35% Oil content equal or greater than 24% Oil composition

Significant increase in oxidative stability Continuing to work with industry to define criteria

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Summary

Opportunities to increase profit/acre for soybean production in Canada exist Existing Channels

Soy protein as a food ingredient Soy flour for export

New Channels Industrial markets

The Soy 20/20 Project is actively engaged in developing these opportunities

Soy Soy 20/2020/20

Not the cry, but the flight of the wild duck,leads the flock to fly and follow.        Chinese proverb