Bioenergy: Opportunities for
Cooperatives in Marketing
Ethanol, Biodiesel and
Byproducts
“The Role of Regional Cooperatives”
CHS Inc.
Business Solutions
Processing
Ag Business
Energy
Member Services
Oilseed Processing
Grain Marketing
Refined Fuels
Mktg Communications
Horizon Milling
Country Operations
Sales
Public & Gov't Affairs
Ventura Foods
Agriliance
Propane
Ag States Agency
Renewable Fuels
Lubricants
Country Hedging
Controller
Cofina Financial LLC
Laurel Refinery
Raw Material Supply
Cenex Retail Brand
CHS Energy
Gallons sold
in FY2006
• Refined Fuels
• Propane
• Lube Oil
2,714,722,993
716,233,756
20,199,317
Ethanol Production
• A bushel of corn yields
– 17 pounds (2.8 gal) of ethanol
– Dried Distillers Grain
– CO2
Biodiesel Production
• A bushel of soybeans yields
– 7.35 pounds (1.5 Gal) of soy methyl ester
– Soy Meal
– Glycerin
CHS’s Role
Logistics
And
Marketing
Existing Ethanol Production Capacity By
State
Ethanol
PricingLogistics
Mechanisms
Ethanol
Northeast
China
Midwest
Southern
California
Gulf Coast
Caribbean
Brazil
Refined Product Pipeline Map
Cherry Point
Ferndale
Anacortes
Seattle
n
n
n
Renton
n
n
Tacoma
n
Moses Lake
n
n
n
Vancouver
n
n
Pasco
n
Hillyard
n
n
n
nn
Umatilla
n
Bozeman
Portland
n
n
=
Aberdeen
n
SD
Sheridan
n
n
Boise
nn
Pocatello
OR
n
n
n
n nn
Wrenshall
Superior
Alexandria
Sauk Centre
n
MinneapolisChippewa Falls
Pine Bend
n
Wausau
n
n
n
nn
Traverse City
Green Bay
nn
St. Paul Parkn
Junction City
Mankato
Waupun
Rock Rapids
Mitchell
n
Bay City
n
n
Milwaukee
n
Madison
Alma
n
n
Milford Clear Lake
n Muskegon
n
nn
n
Yankton
n
n
nnn
McFarland
n
Ferrysburg
Ft. Dodge Waterloo
n
Lansing
n
LeMars
Dubuque
n
n
n
n
Sioux City
Jackson
Rockford
n
Cedar
Rapids
n
Niles
Norfolkn
n
Romulus
Pleasant Hill
Lemont
n
Iowa City
Amboy
Columbus
n
Omaha
South Bend
n
n
n
n
n
Osceolan
Des Moines
Sidney
Willow
Springs
nn
Bettendorf
n
n
N.
Platte
Bryan
Lincoln
n
Council Bluffs
Doniphan
n
n
n
Ft. Madison
Heyworth
n
Geneva
n
Champaign
Petersburg n
n
Clermont
Palmyra
Wathena
n
n
n
Phillipsburg
Speedway
n
n
Forsyth
Carrollton
Concordia
n
Indianapolis
Effingham
n
Topeka n n Riverside
Columbia
n
Robinson
n
Salina nOlathe
n
Wood River
Great Bendn
n
Kansas City
n
McPherson
n
n
Scott City
n
East St. Louis
=
Princeton
Hutchinson
n
n
Wichita
El Dorado
n
Carthage
n
Scott City
Turpin
n
n
n
Springfield
Coffeyville
n
=
Ponca City
n
Cape Girardeau
n
n
LaverneEnid
n
Tulsa
nn
Wolseyn
n
Sioux Falls
Marshall
n
MI
WI
n
Newcastle
WY
Watertown
n
Rapid City
Eugene
Rochester
MN
Fargo
Laurel
n
ID
n
nn
Moorhead
Jamestown
Mandan
n
MT
n
Wilma
ND
Glendive
n
Missoula
n
n
Grand Forks
n
Great Falls
n
Spokane
WA
n
Roseau
n
Pembina
n
Minot
n
Casper
NE
Burley
Sinclair
n
Cheyenne
n
n
IN
IA
Commerce City
n
Denver
n
n
n
Auroran
Dupont
CO
Bloomfield
IL
KS
MO
KY
AR
Ciniza
n
n
Del City
Sherrin
Amarillo
n
OK
NM
OH
n
Oklahoma City
n
Wynnewood
Ardmore
n
Wichita
Falls
TN
Fort Smith
West Memphis
North Little Rock
n
Helena
n
Little Rock
n n
n
Lubbock
n
Stephens
Greenville
n
n
n
Tye
n
Big Springs
n
LA
Waco
n
TX
Austin
n
AL
MS
Euless
n
n
Vicksburg
Meridian
Collins
Krotz Springs
Lake Charles
San Antonio
Victoria
n
Placedo
n
n
n
Corpus Christi
Harlingen
Brownsville
Ethanol Logistics
•
•
•
•
•
•
Trucking
Rail
Barge
Storage
Terminal Blending
Future Pipeline?
Biodiesel Logistics
•
•
•
•
Heated Trucks
Heated Rail
Heated Storage
Terminal Injection
Cenex Biodiesel Involvement
•
•
•
•
•
•
•
•
1997 Tested low blends of biodiesel at 9 cooperative distributors, all of which
offered blends of .25%.
1999 Introduction of Soymaster Premium Diesel, containing .25% soy biodiesel,
terminally injected at 9 Midwest terminals.
2000 Began offering packaged soy methyl ester in 55 gallon drums and 5 gallon
buckets through our lubricants division.
2001 Enhancement of Premium Diesel package to be “soy enhanced” (inclusion of
soy methyl ester in the additive packages used in all Cenex premium diesels
including Ruby Fieldmaster)
2002 Facilitated the opening of 11 “off site” loading terminals for B100 to increase
economical distribution of biodiesel blends. Sales of B100 as well as estimates of
2% or higher blends increase dramatically from previous year.
2003 Introduced the Ruby Fieldmaster B2 Brand (Ruby Fieldmaster splash blended
with 2% soy biodiesel). Sales explode to nearly 4 times previous year to date.
2004 Installation of 2% and 5% biodiesel injection systems in McPherson KS,
McFarland WI, and Council Bluffs IA. First in the nation to offer finished, terminally
injected biodiesel products at a petroleum terminal
2006 Installation of Biodiesel terminal in Denver, Colorado
Ethanol Marketing
•Began in late 1970’s
•Clean Air Act 1990
• Marketed ethanol blended gas through Cenex
branded sites since 1978
• Supply over 500 million gallons of ethanol
blended gasoline to marketplace.
Marketing Materials
Ethanol Industry Today
• Production Boom driven by
Renewable Fuels Standard Mandate
• MTBE Phase Out
• E85 Market Development
Ethanol Production Growth
Total Plants (US)
–
–
–
–
–
–
Jan 2002 61 (2.1 bgy)
Jan 2003 68 (2.7)
Jan 2004 72 (3.1)
Jan 2005 81 (3.6)
Jan 2006 96 (4.3)
Current Estimate:
• 103 (4.8)
• 46 U.C. (approx 3.5)
Current Construction
Capacity = 2 bgy!
RFS vs. Ethanol Production
8000
7000
6000
5000
RFS
4000
Ethanol
Production
3000
2000
1000
0
2006
2008
2010
2012
• E-85 Growing in Popularity/Demand
• GM and Ford marketing efforts have created
increased awareness
• E-85 supply is dependent on available ethanol
and will be affected by strong demand on the
coasts/MTBE phase out
FLEX FUEL (E85) VEHICLES
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
2000
2002
2004
2006 Proj
2008 Proj
and E-85
•
•
•
•
1000 retail outlets offer E85 nationwide
500 of these are within CHS’ core trade area
Over 200, or 40%, are affiliated with CHS
CHS currently offers blended E85 at 29
terminals across the midwest
• CHS and GM promotion ($1000 fuel card offer
in MN)
• Complete marketing kit available
U.S. Absorption of Ethanol Supply
1400
1200
1000
800
MB/D
E85
600
400
Gasoline
200
0
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
E-85 – Future Brand Position
• Position E-85 within the Cenex Branded Motor
Fuel Umbrella of Products
US BioEnergy
• CHS owns 25.6 percent
of U.S. BioEnergy of
Brookings, S.D.
• Acquisition based on:
– Size and scale
– Marketing ability
– Risk Management
tools
– Plant Management
Geographic Diversification
US BioEnergy Corporate
Brookings, SD
US BioEnergy Operations
St. Paul, MN
UBE Services
Wichita, KS
US Bio Albert City 
(100 MGY Plant) Albert City, IA
US Bio Woodbury 
(45 MGY Plant) Lake Odessa, MI
US Bio Janesville 
(100 MGY Plant) Janesville, MN
Platte Valley Fuel Ethanol 
(48 MGY Plant) Central City, NE
Val-E Fuel Ethanol 
(45 MGY Plant) Ord, NE
US Bio Hankinson 
(100 MGY Plant) Hankinson, ND
US Bio Springfield 
(100 MGY Plant) Springfield, MN
US Bio / Big River Resources Joint Venture
(100 MGY Plant) Grinnell, IA

 Construction has mobilized
 Under Development
 In Production

Entered into a letter of intent, there are no assurances that
these acquisitions or projects will be successfully completed.
50/50 Joint Venture between
US BioEnergy and CHS
Our Growth and Vision…
Ethanol Sales Volume
1500
1000
500
0
(mmgallons)
'05 '06 '07 '08
• One billion gallons of ethanol under
contract by 2009
• Maintain a balanced portfolio of US Bio
Energy and non-US Bio Energy plants
• Grow into Biodiesel marketing
CHS Renewable Fuels Participation
• Ethanol Production via US
BioEnergy, with 700 million
gallons of production by
2008
• Wholesale marketing of
ethanol and biodiesel
through Provista Renewable
Fuels Marketing 50/50 joint
venture
• Retail marketing and
distribution of ethanol and
biodiesel blended products
under the strength of the
Cenex brand!
Thank You!