GrainLink C R E A T I N G

P A R T N E R S H I P S

I N

A G R I C U L T U R E

this issue P.1 Improving Customer

Service

P.1 American Ag

P.2 American Ag cont.

P.2 CGB Rejects

Duracade

** Regional Insert

P.3 Market Update with

Dan Zwicker

P.4 Building Global Sales

P.4 Premium Grains S M

P.5 Grain Contamination

P.5 Monitoring Quality

of Stored Grain

P.6 Stored Grain cont.

P.6 CGB-AGRIfinancial

P.7 Farm Bill

P.7 Grain Bin Safety

P.7 Career Corner

P.7 Survey Invitation

I S S U E

M A R C H

2 0 1 4

04

Page 1 | CGB GrainLink | March 2014

Stay Connected!

CGB’s Commitment to Improving Customer Service Jason Selking, Manager of Business Development

Hello again from Business Development! We have been very busy the last

couple months working on improvement and expansion opportunities. Since

the last newsletter, CGB has been working on projects that will, again,

significantly improve our existing facilities and expand our geographic footprint.

CGB has been on a mission to continually re-invest capital in key areas of our

existing facilities that positively affect our customers’ grain transacting and

delivery experience. Those key areas include faster receiving and shipping

capabilities, increased storage volume, as well as larger and more efficient grain drying capacity. In

time for next harvest, we are planning to complete receiving and shipping improvements at 20

facilities, increase storage volume at four, and at another four locations we will be expanding drying

capacity.

In addition to improving our existing locations,

CGB is actively working to expand and diversify

the footprint of its grain origination facilities. In

the near future, we plan to announce several

acquisitions and greenfield site developments,

but considerable work is still ahead of us at this

time.

We are continually developing additional capital

projects that will improve our level of customer

service and expand CGB’s grain origination

footprint. Stay tuned for more exciting details in

the months ahead!

As the global population continues to grow, farmers are tasked with producing more food with fewer

resources and less environmental impact. A tall order indeed, and one that you, our producers, have

managed to achieve with excellence! (continued next page)

Productivity in American Agriculture Kelly Buchanan, Marketing & Communications Manager, Grain Division

CGB Jeffersonville, IN facility

Page 2 | CGB GrainLink | March 2014

Productivity in American Agriculture (continued) The statistics below showcase how productivity and agricultural methods have changed over the last several decades:

In 1930:

One farmer fed 10 people

25% of income spent on food

22% of the U.S. workforce in Ag

Since 1960, U.S.:

Corn yields have tripled

Wheat yields have tripled

Soybean yields are up 70%

The most populated countries in 2020 are projected to be China, India, U.S.,

Indonesia, Brazil, Pakistan, Bangladesh, Nigeria, Russia, and Japan, with an

anticipated 7.6 billion people total. Nearly half of that is expected to be in the

10 countries listed above! Food production demand is expected to soar over the next 50 years; adoption of modern business/

production management practices coupled with the application of safe and proven technologies will drive that initiative.

The story of American agriculture is a phenomenal one, and our sincerest thanks to you, the producer, for feeding a growing world!

Source: Land O’Lakes, Inc. Industry Outlook/NGFA Convention March 2013

Today:

One farmer feeds 155 people

10% of income spent on food

2% of the U.S. workforce in Ag

From 1930-2010:

650% more corn on 13% fewer

acres

Slide from Land O’ Lakes Industry Outlook/NGFA Convention Presentation

CGB Rejects Corn Trait Duracade Kelly Buchanan, Marketing & Communications Manager, Grain Division

Due to the lack of approvals from major export markets, CGB is not accepting crops that are not

approved for trade in the EU or China. Specifically, we are referring to the new genetically modified

Syngenta AG corn trait, Agrisure Duracade, as well as Synegenta’s MIR 162, also know as VipteraTM

.

The new corn trait is planned for release by Syngenta to be planted this spring in several corn belt states.

Duracade has yet to receive approval from China which is a major importer of U.S. grains, and the EU.

Ongoing trade issues and rejections have been and continue occurring with China from another

unapproved Syngenta trait, VipteraTM

, known as MIR 162. This caused extreme cost and harm to U.S.

exporters in vessel demurrage and relocation of rejected Chinese shipments. These rejections have caused concern that U.S. grains

will be, economically, too risky for exporters to contract to countries who have not approved specific traits.

Planting, harvesting, and marketing non-approved traits raises the risk of contamination of the U.S. grain inventories and the likely

disruption of U.S. trade to China and other countries who have yet to approve. The risk of losing over 14% of U.S. corn exports

would have a significant impact on U.S. corn stocks build up and have a negative impact on farm prices. The trade issue goes

beyond corn to the by-products from U.S. processors such as DDGS and Corn Gluten Meal.

“CGB is committed and heavily invested in marketing U.S. grains to the world market. In today’s fast changing genetic technology,

the need for responsible introduction of traits to all markets is essential,” said Greg Beck, VP Grain Division. “U.S. producers are

facing increased competition for their products, and it is vital to be able to maintain and supply grains that meet our customers’

needs overseas,” he added.

For a list of approved traits, please visit http://www.ncga.com/for-farmers/know-before-you-grow/individual-event-table or contact

your local CGB office.

Greg Beck, VP Grain Division

Naples IL | CGB GrainLink | March 2014

Merchandisers

Naples, IL

Brett Rohlk-Ext. 212

Matt Hubbert-Ext. 256

Chris Vogler-Ext. 228

Kody Mefford-Ext. 213

Phone 800.252.7711 or 217.754.3331

Greenfield, IL

Stuart Twitchell, Manager

Christy Ford

Phone 217.368.3031

Farmersville, IL

Larry Lucas, Manager

Phone 217.227.3272

Smithshire, IL

John Twomey

Phone 309.325.7200

Colusa, IL

Burnside 217-746-3221

Ferris 217-746-3771

Colusa 217-755-4221

Wever 319-372-7852

Nauvoo 217-453-2216

Dallas City 217-755-4221

Gladstone, IL

Austin Twomey, ext. 4808

Brian Steele, ext. 4813

Jay Day, ext. 4812

Ken Quinn, ext. 4809

Ryan Horsfield, ext. 4806

Phone 855.643.6477 or 309.457.4800

Contact Us!

Naples, IL Region Round-Up

Record Low Temps Make River Navigation Difficult Christy Ford, Grain Merchandiser

Record low temperatures continue to harass the Midwest,

making river transportation challenging. Typically, the

Mississippi River closes every year north of the Port of Saint

Louis, and The Army Corps of Engineers takes this opportunity

to repair any locks. The Illinois River usually remains open

from Saint Louis to Chicago, but not this year. Certain areas

north of Peoria have had to close where the ice has made it too

dangerous. The river at Naples, IL has remained open even

with ice being 18 to 20 inches thick.

What does this mean for barges? An Illinois River tow is usually made up of 15 barges.

With ice narrowing the channel in the river, only tows of 4-6 barges can make it through.

Ice can have sharp edges that can

tear into the side of a barge and is

extremely hard on boats and

equipment. And, frigid tempera-

tures make it hard for the barges to

get repaired and cleaned properly

so they can be loaded again. "Barge

lines will need several weeks to get

caught up, which could mean most

of March," said Aaron Appel, a

Southbound Barge Freight Trader, “The cost of barge freight has increased due to tight

supply.”

In any given year, one billion bushels of grain, or 60% of bulk agricultural exports, are

moved to world ports by the Upper Mississippi and Illinois Rivers. The river system

makes it possible to import/export coal, salt, fertilizer, pig iron, oil, ethanol, and grain.

The forecast has rising temperatures and sunny days ahead, which sounds like good

news but does bring with it the risk of flooding and ice gorging. “The best thing would

be for temperatures to warm up and include rain which helps melt the ice” said Appel.

Christy Ford, Grain Merchandiser

View from top of bin deck in Naples, IL

Employee Spotlight Chris Vogler, Grain Merchandiser

I’m from Rural Schuyler County, IL and attended Greenville College where I earned a degree in Business Management. I began

my career with CGB as a grain merchandiser and have since added freight trader and trading of truck house grain to my resume.

When I was younger I wanted to be a farmer, so my career path has been a natural fit with what has always been my interest. I

currently work at the Naples, IL facility, and really enjoy the challenging environment that also promotes individual growth.

My wife, Andrea, and I have three children, Josey age 9, Katelyn age 7, and Devin age 5. Away from work, I enjoy playing sports,

hunting, and reading.

Page 3 | CGB GrainLink | March 2014

Market Update: Where Do We Go from Here? Dan Zwicker, Market Analyst

While the frost line is

deep in many areas of

the Midwest growing

region, time is running

out for old man winter

and it won’t be long

before field work begins

across the highly

productive soils of the

central U.S. The

uncertainty for the trade to sort out is what the actual

planting numbers will look like when it is all said and done.

USDA’s Ag Forum numbers put the four major crop

plantings at 238.5 million acres versus 238.3 million last

year. It broke down to 92 million acres of corn, 79.5 million

acres of soybeans, 55.5 million acres of wheat, and 11.5

million acres of cotton. For the most part, the Ag Forum

acreage numbers are nothing more than a starting point.

Prices, weather, and the four to five million missing acres

between now and the end of May will likely change the mix

and level.

USDA’s Ag Forum supply and demand projections put corn

demand for the coming year at 13.380 billion bushels,

slightly higher than the current year. However, their

production estimate of 13.980 billion bushels and this year’s

carry in level of 1.4 billion bushels results in an ending

stocks number of 2.1 billion bushels. That is what the trade

is focusing in on to give the corn market its bearish tilt. My

concern with USDA’s forum estimate is the 165 bushel per

acre yield they used in tracing out their balance table. Using

trend line yields to map out a supply and demand table

hasn’t worked out so well for USDA over the past several

years, so when one uses a more practical yield the balance

table doesn’t look that burdensome well ahead of the

growing season.

As I write this article in early March, the excitement for the

coming year appears to be the soybean complex. This year’s

strong export demand from China for protein has soybeans

sales 100 million bushels above USDA’s 1510 projection.

Without some big sales cancelations and/or shifting of sales

to the 2014/15 crop year fairly soon, it will be the function of

the soybean market to reach a price level that will get the job

done. If one just subtracts the over sales number of 100

million from the current ending stocks projection of 150 mil-

lion, the carryout sinks below pipeline at 50 million bushels.

Personally, I believe larger soybean acreage is going to result

as I look for the 4 to 5 million missing acres to show in soy-

beans. In fact, I would not be surprised to see corn acres drop

depending on how prices trade over the planting season. A

move in the corn/soybean ratio to 2.75:1 will move corn acres

to soybeans.

Click here, or visit us on facebook, to view charts that include

the corn/soybean ratio for new crop futures, how December

14 futures are following a 25-year price pattern, and how

November 14 futures are following a 25-year average price

pattern. Both December corn and November soybeans have

done a decent job of following the average season pattern of

price strength through February. Whether this continues into

March remains to be seen, but take notice that the markets

have a tendency to break prior to the March Stocks and Plant-

ing Intentions report. This would suggest one should have

downside price protection on a solid increment of new crop

production before the break begins in March.

Our Grain Origination team has many different contracts

available that will allow producers to manage downside price

risk and still keep the door open for better pricing

opportunities if they materialize during the growing season or

at delivery. I encourage you to visit with your local CGB staff

over the next couple of weeks to discuss.

Screenshot of Dan Zwicker, Market Analyst, per-

forming daily Midday Market Update on CGB’s

youtube channel (link below):

www.youtube.com/cgbmarketinfo

Page 4 | CGB GrainLink | March 2014

CGB’s Premium GrainsSM

programs are designed to match the appropriate grains with the end users’ needs, and our expertise

provides the desired products and systems to customize programs that deliver results. Below are the expectations with Premium

GrainsSM

during seed selection, planting, and chemical application along with some recommended practices.

Seed Selection

Select/confirm Non-GMO seed hybrids/varieties with CGB or seed company representative.

Verify the seed delivered matches your Non-GMO seed order. Extra letters after seed name/number can indicate delivery of

GMO seed by mistake.

There is ZERO tolerance for the presence of unapproved hybrids/varieties.

Retain planting records. This includes seed receipts, seed tags, planting dates, hybrids/varieties, and fields.

Prepare for harvest bin decisions. Traceability of hybrids/varieties should be included in this decision.

Planting

To minimize risks of cross pollination, do not plant Non-GMO corn within 50 feet of GMO corn hybrids.

Non-GMO seeds need to be kept separate from GMO hybrids/varieties, and planter boxes must be cleaned.

Establish border rows per contract requirements, and use field markers to differentiate crops.

Whenever possible, plant Non-GMO first to minimize cleaning.

Scout fields for emergence, weed control, insect problems, and volunteer corn.

Chemical Use

Only use chemicals that are approved for use on that crop and always at label rates or lower.

Follow all directions, precautions, and restrictions that are listed on the product label.

Keep chemical records including chemical names, dates, fields, rates used, and applicator.

No chemicals to be used in storage units or applied to the grain after harvest, use

diatomaceous earth products like Protect-It® or INSECTO instead.

Premium GrainsSM Program Highlights Stefani Hasselbring, Market Development Logistics

The U.S. Grains Council sponsored a conference held in Doha, Qatar, which is put

together as an informational session for buyers of corn and wheat in the Middle East

and focuses on demand for both bread and animal feed.

It was interesting to learn that, in this part of the world, nearly 20% of a person’s

calories comes from bread. That is far higher than anywhere else in the world and

makes this region a dominant importer of wheat. But also, consider that these

economies are growing very rapidly and that means incomes are growing. With this

growing affluence, people are eating more meat every day. Because the populations

are so much smaller than China and India, this economic growth doesn’t have such a dramatic impact on world grain demand, but

in our view as an exporter, the Middle East is a very important destination for U.S. grains.

I attended this conference mainly to meet with one of our corn customers. They are a huge dairy company in Saudi Arabia that has

around 75,000 dairy cows and produces about one billion liters of milk each year. It is an amazing sight to see a single operation

containing 25,000 cows in the middle of the desert. This customer also produces broilers and bakery products for grocery

stores. Their products are dominant on the shelves of grocery stores anywhere you visit in Saudi Arabia, Qatar or the UAE.

One of the things that we like best about this particular customer is that they only buy U.S. corn. After last year’s short corn crop,

this company was the only importer in the Middle East and N. Africa that bought any U.S. corn. The softer dent corn is easier for

them to turn into flakes for their feeding operations, and they appreciate the consistent quality that they get from vessel to vessel!

Dairy Farm in the Middle East

Building Global Sales - My Visit to Doha, Qatar Andre Gauger, Global Feedgrains Originator, Zen-Noh Grain Corp.

Page 5 | CGB GrainLink | March 2014

Monitoring Quality of Stored Grain Scott Lawson, GM of Operations

As we leave the winter months and move into spring and summer, it will be important to have

a plan in place to monitor and maintain the quality of grain if you’ve stored portions of your

crop on the farm. If quality problems are encountered this spring or summer, it will be equally

important to have a plan in place to deal with those problems.

The monitoring and maintaining plan should include the following:

Prior to filling the bins, the old grain should be removed from floors, walls and aeration

channels. That, along with pre-treating the empty bin with some form of approved fumigant,

will help combat infestation later on.

Also prior to filling, the roof and walls should be inspected for holes/leaks. Any holes should be patched, thus keeping rain/

moisture out of the bin.

After filling the bin, the core (fines accumulated in the center of the bin) should be removed/pulled out in order to allow the

air to flow evenly throughout the mass of grain.

Keep the grain temperature within 10-20 degrees of the average daily ambient temperature. Temperature cables in the bin are

a very helpful tool in achieving this. Also, an aeration system that will provide 1/10 to 1/7 cfm should be adequate in changing the

temperature on the mass of grain. Cooling the grain down in the fall and winter is important as well as warming it back up in the

spring and summer. Try to stay away from getting the grain too cold in the winter (below 30-40 degrees) or getting it to warm in the

summer (over 60-65 degrees).

Once the grain is cooled down in the early winter months, reading temperature cables once per week should be adequate. As

spring approaches, temperature cables should be read at a minimum of twice per week. If you do not have temperature cables, run

the fans to see if you notice any sour odors coming from the grain. Those odors are a good indication of quality problems.

As you move into the spring and summer and you start to warm the grain, it’s important to know that once the grain temps are

50 degrees and above, bugs will come out of dormancy and infestation can occur. Infestation will cause kernel damage which can

create hotspots in the grain. Once heating starts, grain degradation follows. There are different tools available to monitor bug

activity (i.e. pheromone traps). Utilizing these tools along with a sound fumigation plan will help minimize this risk. (cont. next page)

Grain Contamination Greg Beck, VP Grain Division

U.S. exports have seen increased competition due to the past several years’ higher corn prices. Pricing from South America and the

Black Sea region has been very competitive with U.S. origins, if not cheaper over the past year and a half. One thing we can do to

keep our exports as strong as possible is to ship uncontaminated grain. Foreign buyers appreciate the U.S. for its generally better

quality corn. Even if our exports aren’t price competitive, they will look at U.S. corn for quality reasons. Grain contamination and

our efforts to control the induction of metal products is just one way to help exporters make more grain sales, which helps all of us.

Following are several photos of our daily barge/rail unload at our export elevator. We’re always looking for ways to reduce this

contamination, but some inevitably gets through. We sincerely appreciate your due diligence to ensure the highest quality grain for

our export operations, and we will continue with innovative, creative ideas to improve our processes!

Page 6 | CGB GrainLink | March 2014

Dah, could’ve had a V-8!

It’s a familiar line from an old TV

commercial we know. Sometimes,

we all have those moments and

many producers are beginning to feel

a bit like that regarding the end of

bonus depreciation.

They’re now thinking forward, and

one of the new realities is that there

may be fewer tax deductions at the

end of 2014. With crop prices being softer, some suggest it’s

not going to be a problem. But most producers are still

focused on farming for a profit this year, and when it’s done,

the aspect of giving more of that income back to the

government isn’t their first choice.

What can be done about it? One area that might be

considered are investments in farm buildings where a Lease

financing structure could end up providing significant tax

savings. That’s because a Lease is a fully deductible farm

expense ... it’s a rental payment. By comparison, paying cash

or taking a loan on that same building leaves you with a 20-

year depreciable life (under IRS rules). And that translates to a

lessor deduction.

Let’s keep with this old TV commercial theme. Here’s

another: “It’s two, two, two mints in one.” Ah, the advent of

Some Money Thoughts as 2014 Moves Down the Pike Bill Medley, National Sales Manager, CGB-AGRIfinancial Services

Certs! That little candy with the breath freshening power. Now

let’s look at the financing equivalent.

A long term, fully fixed rate of 15 or even 25 years is

appealing to most producers. But many farmers back up a bit

when they learn the price for that kind of rate protection.

Moreover, they also see the attractiveness of shorter term 5-

year rates. So, can you have two, two, two loans in one? The

answer is an emphatic “yes you can”. Oftentimes on a

mortgage, we can mix a 10, 15 or 20-year fixed rate with a

shorter 3- or 5-year strip of debt. The resulting loan offers a

lower blended rate (think savings) but it also protects the bulk

of your investment from interest rate volatility.

With this kind of funding you can do 2 things:

1. Buy into a lower long term rate because you can opt for

things like a 5-year restriction on early prepayment.

2. This doesn’t prevent you from paying down the loan –

you simply apply extra payments on the short piece.

If we do see interest rates heat up

later this year, a strategy like this

could be a very effective manage-

ment tool. Rates jumped 150 basis points last year. It’s cer-

tainly possible that we could see rises like that again in 2014.

If you’re using a 5-year ARM today, think about that. Within

just two years, there’d be enough rate volatility to almost dou-

ble your cost when that loan re-prices in a few years.

William “Bill” Medley, National

Sales Manager

Most quality problems in the spring and summer will revolve around hotspots in the grain mass showing up. If these quality

problems start to occur, running the fans to cool the hotspot down would be one of the first steps in remediating the problem.

One important thing to remember is that once degradation starts to occur, the shelf life of the grain gets shorter. If the quality

problem continues, along with running the air, the plan should involve moving the grain. Depending on where the problem is in

the bin, all the grain in the bin may not need to be moved. If the hotspot is in the top of the bin, you may be able to remove the

heating area of grain without having to move the rest of the grain in the bin.

If nothing is done when quality problems are observed, the value of the grain deteriorates along with the quality. Keep a close eye

on things and take safe precautions to ensure the best quality grain for your farming operation.

Caution: For years, people have been going into the tops of grain bins to check on the quality of the grain or attempt to remedy a

quality issue. It is very important to know that there is a tremendous amount of risk, including entrapment and suffocation,

associated with entering the bin from the top into a mass of grain.

Monitoring Quality of Stored Grain (continued)

Page 7 | CGB GrainLink | March 2014

Please take a quick survey and let us know your thoughts

regarding our service and what you’d like to see in the

future editions! Click here, or copy and paste the web

address below.

https://www.surveymonkey.com/s/grainlinksurvey

Happy Easter to you

and your family!

We Want to Hear from YOU!

With the passage of the 2014 Farm Bill,

farmers need solid crop insurance knowledge

now more than ever before. Congress has

placed its confidence in the crop insurance program. They eliminated many programs

that cost the taxpayers millions of dollars, encouraging farmers to take more responsibility

for their operations.

The new farm bill favors those who are good record keepers and good managers.

Growers need to make many choices, not just what policy to buy, but also what coverage

level, use of optional units, revenue, whole farm, and a magnitude of additional items to

consider.

Crop Insurance is not for the weak at heart. In order to prepare a risk management plan

that allows you to take less risk and make more profit, you need to speak with someone

who KNOWS crop insurance. You need an agent who will take the time to listen to what

your unique needs are and provide a plan for you to follow that works best for your

situation.

Don’t assume that reading information on-line or in a brochure will be enough to

understand your policy. Attorney Kenneth Ackerman blogged recently, “Making good

choices demands knowledge.” Diversified Crop Insurance Agents have been and

continue to be provided training and education on how to properly understand the

various aspects of the new farm bill and how it affects farmers and their operation.

Growers have new options this year and with prices hovering low, this is a good time for

farmers to spend some time really listening to their agents.

We encourage you to contact your local DCIS agent as soon as possible to consider your

options for 2014 and beyond. Crop Insurance policies are complicated. There are rules,

regulations, and strict deadlines that must be adhered to. Your DCIS agent will guide you

through the process and provide the support you need to ensure that you are preparing

the best risk management options for your business. Let our experience team put our

experience and tools to work for you. To find an agent near you, call 217-479-6068 or

email info@diversifiedservices.com.

Grain bin hazards pose a serious risk if

not handled properly, and it’s of the

utmost importance to identify and

understand these hazards to minimize

risk to as low as reasonably possible and

avoid injury.

Below is a list that includes some of the

more common hazards that can occur:

Flowing Grain (click here to

n o m i n a t e y o u r l o c a l f i r e

department to win grain bin rescue

training and tube)

Bridged Grain

Crusted Grain

Augers

Bin Collapses

Fires and Explosions

Toxic Atmospheres

Electrical Components

Ladders

For further details on avoiding these

hazardous situations, please visit the

Grain Bin Safety Week website at the

link below:

http://www.grainbinsafetyweek.com

Grain Bin Safety

Career Corner We offer a diverse set of business units/divisions and are seeking

individuals that have a strong set of core values and possess a

strong desire to succeed.

A few of our current openings include:

General Laborer, Grain / Jeffersonville, IN & Uniontown, KY

Staff Accountant / Jeffersonville, IN & Burlington, IA

Maintenance, Grain / Louisville, KY & Jeffersonville, IN

Maintenance, CTLC / Traveling

Visit us online at www.cgb.com/careers to apply!

We Have a Farm Bill! Diversified Crop Insurance Services Marketing Department