In Business to Exceed Customer Expectations

About Us

West Central was incorporated in 1933 in Ralston, Iowa, which is still its headquarters

West Central is governed by 9 elected board members and 2 appointed associate board members

3,198 Class A Stockholders and 90 Class B Stockholders

Stockholders have invested $38 Million in the company

Ownership is determined by volume of business done

Stock is allocated yearly based on profitability

Annual Operations

West Central employs 228 people

Grain – markets 60 million bushels

Agronomy - Seed, fertilizer and chemicals sales: $18,089,718

Feed - processes over 128,000 tons

Soy Processing - processes 7.5 million bushels of soybeans and processes 65 million pounds of soy oil into methyl esters

Core Values

QUALITY

Providing superiorproducts and services

QUALITY

Providing superiorproducts and services

PROFESSIONALISM

Employees assisting customers

PROFESSIONALISM

Employees assisting customers

INNOVATIONResearch, new products,

new solutions

INNOVATIONResearch, new products,

new solutions

INTEGRITY

Honesty, trust, partnerships

INTEGRITY

Honesty, trust, partnerships

CUSTOMER CUSTOMER FOCUSFOCUS

CUSTOMER CUSTOMER FOCUSFOCUS

Sales History (millions)

$253.5

$219.0

$187.6

$169.9$163.7

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

2000 2001 2002 2003 2004

www.westcentral.coop

Sales

57%

7%

8%

28%

Grain

Soy Center

Feed

Agronomy

History of Cash Returned to Members

$914,128

$1,586,146

$1,237,668

$1,506,314

$1,810,101

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

2000 2001 2002 2003 2004

Board of Directors

Management Team

Most Traditional Cooperatives are built on a business model that evolved from 1890 to 1920

In that 30 year period 12,000 Farmer Owned Cooperatives were created

Karl Nolin

The Traditional Agriculture Cooperative is characterized by:

Growth Financed Growth Financed

by Earnings or Debtby Earnings or Debt

No Market No Market

for Equityfor Equity

Open MembershipOpen Membership

No Supply ControlNo Supply Control

The Essential Elements necessary for long-term viability:

Profitability is a Must

Membership Must Remain Interested

Investors Must Want to be Investors

Profitability

Liquidate “Legacy” Locations

Establish Return on Asset Benchmarks

Cooperative’s may be different from Investor Owned Firms

in having a lower ROA Requirement

Membership Must Remain Interested

The Owners are the Customers

Interest of Cooperative and

Customers Must Align

Function of Cooperative Must Be to Continually Re-align Goods & Services to

Match the Needs of Customers

Membership Must Remain Interested

Membership Must Remain Interested

Is this any different than any other Is this any different than any other form of business?form of business?

Farmer Cooperatives usually appeal to a smaller universe of customers

– its stockholders.

Membership Must Remain Interested

Investors want to be Investors

Cooperatives need a mechanism Cooperatives need a mechanism

to allow certain groups to allow certain groups

of investors to exit.of investors to exit.

Investors Exit Strategies

1.1. Aggressive Payout of EstatesAggressive Payout of Estates

2.2. Significant Classes of Equities have <10 Year PayoutSignificant Classes of Equities have <10 Year Payout

3.3. Base Capital PlansBase Capital Plans

4.4. Preferred Stock with Characteristics that Reflect Preferred Stock with Characteristics that Reflect LiquidityLiquidity

a)a) Payout by Age, i.e. 65Payout by Age, i.e. 65

b)b) Dividend – Voluntary OwnershipDividend – Voluntary Ownership

c)c) Non-qualified with Separate Payout ScheduleNon-qualified with Separate Payout Schedule

Public Policy

FASB 150

Dividend Allocation Rule

Limit of Return to Capital 8%

If Traditional Cooperatives are able to:

Remain Profitable

Align the interest of cooperative and membership

Maintain an Investors Group that wants to be Investors

Then . . .

I believe there is an

opportunity

for traditional cooperatives

to serve a membership base

for years to come.

Are there any questions?

Thank you!