Presentation for the

Kennedy and Coe Leaders’ Summit: Ethanol

Development Strategies Greg Krissek

December 10, 2014

Kansas Corn Commission’s Financial Commitment to Ethanol

• Last 6 fiscal years combined > $2.1 million • Prime the Pump • American Ethanol • Ethanol Expansion + Promotion • Flex Pumps • Research Projects/Regulatory Support

National Corn Growers Association

48 Organizations: 25 Grower-Affiliated

State Associations 23 Checkoff Boards

Representing:

300,000+ Checkoff Investors

42,000+ Members Nationwide

Membership record of 42,100 in July 2014

State Organizations and Grower Members

Grower Members

Ethanol Development Strategies

• Short Term v. Medium/Long Term • Industry Producers (w/Corn) – Prime the Pump • Corn States – Fueling A Better America

• Equipment Manufacturer Dialogue (w/help from …) • American Ethanol Branding • Renewable Fuels Standard – Fuels America

• The annual volume obligations (RVO) – 2014 +2015 • Higher Octane Fuels - CAFÉ support to OEM’s • Tier 3 – E30 Status • Urban Air and MOVES Model

Funding Industry need for coherent plan with marketing and communication

Autos • Push for FFV demand • Publish on MLEB efficiency gains • 2012 FFV peak production • “INFRASTRUCTURE –

INFRASTRUCTURE – INFRASTRUCTURE”

• Dislike E15

Consumer ‘mis-attitudes’ • Ethanol hurts my car • Ethanol starves people • Corn and ethanol are

subsidized • ETC……

P2+, FABA (med-long term) • Requested by corn • E25 standardization • Target FFVs • Align and amplify state work in

infrastructure and marketing communication

PtP (short-term) • E15 as the new E10

(and E85) • Can’t make margins

work for E85

EPA • RFS? • RFS not align with CAFE • F-factor; Tier 3 (no

MLEB cert fuel; no R-factor enhancement)

Oil Explorers Oil Refiners Oil Distributors ‘How will they push back?’

Prime the Pump

E15

centric

Fueling a Better America E25-E85 centric

Consumer Demand

7

Comparison of PtP and P2+ Prime the Pump Padd II Plus

Objective Increase ethanol through -->

E15 (and blender) pumps 1) E25 2) Target FFVs with E25-E85 2) Regional/national consistent and targeted marketing campaign and brand

Funders Ethanol, Corn, TBD Ethanol, Corn, Ag, TBD

Funding to Date $20 million + In progress

Award Criteria Must be canopy, 5 year commitment, high volumes, street ads, public announcement

Same as PtP plus….. -increase E25 infrastructure -increase FFV usage of E85 -marketing campaign to increase consumer demand

Ethanol Committee: Motion March 2014 NCGA should pursue participating in the Poet/ADM E15 infrastructure plan. The Committee highly recommends a board seat but not necessarily at the multi-million dollar level. The Committee supports NCGA staff negotiating the details of the board seat. The Committee feels that an additional long-term plan should also be simultaneously pursued. Motion Passed. July, 2014: Recommendation from the EC The EC recommends that PtP and P2+ work together if possible and communicate frequently to dovetail efforts for optimum synergy. Corn Board echoed the same motions from the Ethanol Committee

Two-part program (Longer-term plan]

Two-pronged Approach

1). Infrastructure to ensure availability and access -E25 standardization (prioritized) -Strategically target E85

2). Marketing communication to drive consumer demand for increased volumes of ethanol

State Corn associations infrastructure Examples

State Number of E85 Stations* State Specific Activities

Minnesota >300 • $ Millions invested • American Lung partnerships • Yellow hose program • American Lung • Grant programs • Marketing communication

programs (fairs, retailers, FFV owners, etc.)

• IL Pilot Program with Gilbarco • NASCAR • History of working with RFA, GE,

funding Blend Your Own (BYO, RFA/ACE)

Illinois 225

Michigan 197

Iowa 185

Indiana 176

Wisconsin 131

Ohio 113

Missouri 103

*Fuels Institute (2014) E85 A Market Performance Analysis and Forecast

Marketing communication plan

• Overview: • Extensive work done by states in the past (have held 1:1 meetings

with MN, IA, WI) • Goal is to build and coordinate to ALIGN and AMPLIFY • 5-year program • First-year launch in test markets, tentatively identified (needs to be

discussed with IDG): • Detroit • Minneapolis • Dallas (or some other southern city)

Current Status

Ethanol Communications Group (ECG) Work on the day-to-day details of the marketing communication piece. Members include: • Consulting Agency (Les and Craig) • IA Corn, Shannon Textor • WI Corn, Tom Thieding • NE Corn, Kim Clark • MN Corn, Mitch Coulter • NCGA, Mark Lambert, Ken Colombini, Pam

Keck 1:1 interviews with 3 states by Les/Craig on best practices Budget development with 3 pilot sites in progress

Infrastructure Development Group (IDG) Work on the day-to-day details of the infrastructure piece. Members include: • Deere, Chuck Studer • Monsanto, Kevin Coffman • MO Corn, Bradley Schad • OH Corn, Tadd Nicholson • IL Corn, Dave Loos • NCGA, Pam Keck • American Lung of UMW, Kelly Marczak

E25: Gilbarco discussions underway; Wayne in progress FFV targets: Need to determine targeted locations and link with marketing communication plans

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American Ethanol

#3 Austin Dillon, Richard Childress Racing

Benzene, Toluene, Xylene, Hexadiene, Dimethylhexene, Nonene, Octane,

Decalin, 1,3-pentadiene, Tetrafluoroethane,

Trimethylcyclohexane, Ethylidenebis-benzene, Trimethylnaphthalene,

Dimethylcyclohexane, Isobenzofurandione, Pentadiene, Dinitronaphthalene,

Dimethylphenanthrene, Hopane, Butane, Isobutene, Methylfluroene, Benzofuran,

Dimethyl-1-hexene, Trimethylhexane, Dinitrophenol, Ethylcyclopentane, Trimethyltridecane, Dinitrofluroene,

Ethylbutene, Hexanone, Methyl-phenyl-propene, Ethyloctane, Ethylheptane, Abietic acid, Acetic acid,

Acetophenone, Ammonia, Azelaic acid, Sterane, Terpane, Cis-decalin, Cis-pinonic acid, Decanal, Decanoic acid,

Decyclclohexane, Diethayl phthalate, Dimethyl dodecane, Docosane, Elaidic acid, Ethyl dimethyl benzene, Carbon tetrachloride, Cerium, Ethyl hexanol, Eugenol, Fluride, Formic acid, Furfural, Glutaric acid,

Guaiacol, Henicosane, Heptanal, Heptanedioic acid, Heptylcyclohexane, Hexadecanoic acid, Hexadecane, Hexanoic acid, Icosane, Indanone,

Isoamylbenzene, Isoeugenol, Lauric acid, Limonene, Maleic acid, Malonic acid, Methyl chloride, Methy dodecane, Octanal, Octanedioic acid, Octylcyclohexane,

Oleic acid, Cresol, Pentachlorophenol, Pentylcyclohexane, Perinaphthenone, Phosphates, Phthalic acid, Phytane, Picolinic acid, Pinacolin, Pristine, Propyltoluene,

Sitostane, Sitosterol, Stearic acid, Syringol

What's in Ethanol? What's in gasoline?

579

11131517192123

Bil

lion

Bu

shel

s

Aggressive NCGA Strat Plan

Source: NCGA

Corn Supply Potential (83 M Acres Harvested)

Questions?

Greg Krissek Kansas Corn

gkrissek@ksgrains.com

Kansas Corn Mission – Creating opportunities for Kansas corn producers

Then and Now: Corn Uses

5.3

4.7

1.1 3.9 1.4

1.6

1.9

1.3

2013

1993

Feed Distillers Grains Ethanol Other Domestic Exported

Source: USDA/PRX

Billion Bushels

U.S. Biotech Corn Acreage, 2000-2013

0

10

20

30

40

50

60

70

80

90

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

% c

orn

acre

age

Bt Herb Tol Stacked

Source: USDA, NASS

What Uses More Corn?

• USDA estimates 5.3 billion bushels of corn will be used for feed and residual.

• Ethanol production will create the equivalence of 1.1 billion bushels more corn feed, as distillers grains.

• Of 1.6 billion bushels exported, about 1.1 billion bushels (80%) will be used as feed.

Feed total: 7.5 billion bushels

• USDA estimates 5 billion bushels will be used to produce nearly 14 billion gallons of ethanol.

• This process will also produce distillers grains, the equivalence of 1.1 billion bushels of corn for livestock and poultry feed.

Ethanol total: 3.9 billion bushels

Source: USDA, PRX

Land Use Soil Loss Irrigation Energy Climate

Amount of land to produce one bushel of corn

Soil loss per bushel, above a tolerable level

Irrigation water use per bushel

Energy used to produce one

bushel

GHG emissions per bushel

30% 67% 53% 43% 36%

Fewer Inputs, Impacts: 1980-2011

Source: Field to Market