April 15, 2008Kansas City, MO

Global Agriculture and Transportation Price

Trends and the Relation to Food Security

Presented byKen Eriksen

Senior Vice President

Global Agriculture and Transportation Price

Trends and the Relation to Food Security

Presented byKen Eriksen

Senior Vice President

Transportation and Food Security Slide 2

Global Environment

The Global Age is Readily Apparent The world is shrinking Shipping options expanding

• Transportation transformation underway

The U.S. is not as pivotal

Developing Countries Slowly Coming of Age – The Awakening of Asia Continues Expanding infrastructure Port developments Still a ways to go however

Economy Driving Infrastructure Issues

Transportation and Food Security Slide 3

Weakened Currency

US$ vs. Selected Foreign Currencies

60

70

80

90

100

110

120

130

140

150

160

Au

g-9

6

Jan

-97

Jun

-97

No

v-97

Ap

r-98

Sep

-98

Feb

-99

Jul-

99

Dec

-99

Ma

y-00

Oct

-00

Ma

r-01

Au

g-0

1

Jan

-02

Jun

-02

No

v-02

Ap

r-03

Sep

-03

Feb

-04

Jul-

04

Dec

-04

Ma

y-05

Oct

-05

Ma

r-06

Au

g-0

6

Jan

-07

Jun

-07

No

v-07

Pe

rce

nta

ge

(J

an

1, 1

99

6 =

10

0)

China Yuan Canada $ Japan Yen ECU Euro Australia $

Transportation and Food Security Slide 4

Freight Trend Reversal?

Freight Transportation Services Index and Real GDP ($ billion)

60

70

80

90

100

110

120

Ja

n-9

0J

ul-

90

Ja

n-9

1J

ul-

91

Ja

n-9

2J

ul-

92

Ja

n-9

3J

ul-

93

Ja

n-9

4J

ul-

94

Ja

n-9

5J

ul-

95

Ja

n-9

6J

ul-

96

Ja

n-9

7J

ul-

97

Ja

n-9

8J

ul-

98

Ja

n-9

9J

ul-

99

Ja

n-0

0J

ul-

00

Ja

n-0

1J

ul-

01

Ja

n-0

2J

ul-

02

Ja

n-0

3J

ul-

03

Ja

n-0

4J

ul-

04

Ja

n-0

5J

ul-

05

Ja

n-0

6J

ul-

06

Ja

n-0

7J

ul-

07

Ja

n-0

8

Month

Fre

igh

t In

dex

200

0=10

0

6,000

7,000

8,000

9,000

10,000

11,000

12,000

Rea

l G

DP

($

bil

lio

n)

Freight Index

Real GDP

Transportation and Food Security Slide 5

Freight Costs and the Economy

Rail PPI & All Items CPI Relationship

2008

198519861987

1988

1989

1990

19911992

19931994199519961997

19981999

20002001

20022003

2004

2005

2006

2007

90

110

130

150

170

190

210

230

90 100 110 120 130 140 150 160 170 180

Line-Haul, PPI

All

Ite

ms,

CP

I

Transportation and Food Security Slide 6

The Current Framework

Infrastructure Problems = Inefficiencies

Inefficiencies = Lower Effective Transport Capacity

Lower Effective Transport Capacity = Higher Rates

Transportation and Food Security Slide 7

Ocean Freight Rolling Along

Monthly Average Baltic Dry Index

0

2,000

4,000

6,000

8,000

10,000

12,000

Ja

n-0

0

May

-00

Se

p-0

0

Ja

n-0

1

May

-01

Se

p-0

1

Ja

n-0

2

May

-02

Se

p-0

2

Ja

n-0

3

May

-03

Se

p-0

3

Ja

n-0

4

May

-04

Se

p-0

4

Ja

n-0

5

May

-05

Se

p-0

5

Ja

n-0

6

May

-06

Se

p-0

6

Ja

n-0

7

May

-07

Se

p-0

7

Ja

n-0

8

Month and Year

Ind

ex

Transportation and Food Security Slide 8

Transportation Transformation

Monthly Grain and Oilseed Exports by Container

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Ja

n-0

3

Mar

-03

May

-03

Ju

l-0

3

Se

p-0

3

No

v-0

3

Ja

n-0

4

Mar

-04

May

-04

Ju

l-0

4

Se

p-0

4

No

v-0

4

Ja

n-0

5

Mar

-05

May

-05

Ju

l-0

5

Se

p-0

5

No

v-0

5

Ja

n-0

6

Mar

-06

May

-06

Ju

l-0

6

Se

p-0

6

No

v-0

6

Ja

n-0

7

Mar

-07

May

-07

Ju

l-0

7

Se

p-0

7

No

v-0

7

Ja

n-0

8

Month

Nu

mb

er C

on

tain

ers

Transportation and Food Security Slide 9

Transportation Transformation

Share of Grains and Soybean Exports by Container

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008

Year

Sh

are

(%)

NOTE: ThroughMarch 27

Transportation and Food Security Slide 10

Container Rates Holding Water

Ocean Container IndexAverage of Container Vessel Charters, 520 teu to 4,500 teu

1,000

1,050

1,100

1,150

1,200

1,250

1,300

1,350

1,400

1,450

4-J

an

-06

3-F

eb

-06

5-M

ar-

06

4-A

pr-

06

4-M

ay-

06

3-J

un

-06

3-J

ul-

06

2-A

ug

-06

1-S

ep

-06

1-O

ct-

06

31

-Oc

t-0

6

30

-No

v-0

6

30

-De

c-0

6

29

-Ja

n-0

7

28

-Fe

b-0

7

30

-Mar

-07

29

-Ap

r-0

7

29

-May

-07

28

-Ju

n-0

7

28

-Ju

l-0

7

27

-Au

g-0

7

26

-Se

p-0

7

26

-Oc

t-0

7

25

-No

v-0

7

25

-De

c-0

7

24

-Ja

n-0

8

23

-Fe

b-0

8

24

-Mar

-08

Date

Ind

ex

Transportation and Food Security Slide 11

Fuel Costs Rising

Weekly Retail On-Higway Diesel Prices

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

Jan

-00

May

-00

Sep

-00

Jan

-01

May

-01

Sep

-01

Jan

-02

May

-02

Sep

-02

Jan

-03

May

-03

Sep

-03

Jan

-04

May

-04

Sep

-04

Jan

-05

May

-05

Sep

-05

Jan

-06

May

-06

Sep

-06

Jan

-07

May

-07

Sep

-07

Jan

-08

Date

Do

llar

s p

er G

allo

n

Source: EIA

Transportation and Food Security Slide 12

The Current Framework

Infrastructure Problems = Inefficiencies

Inefficiencies = Lower Effective Transport Capacity

Lower Effective Transport Capacity = Higher Rates

April 15, 2008Kansas City, MO

Global Agriculture and Transportation Price

Trends and the Relation to Food Security

Presented byKen Eriksen

Senior Vice President

Global Agriculture and Transportation Price

Trends and the Relation to Food Security

Presented byKen Eriksen

Senior Vice President