Energy Sources for Animal Feed

Sept. 12, 09
Pritiranjan Rath Monsanto

Key Demand Drivers Animal Feed: Growing

population & Increasing Purchase power
180 160 140 120 100 80 60 40 20 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Demand In India.

Br. Meat(Lakh MT)

Eggs (Billion)

Milk (Mil. MT)

Global demand for meat products increasing at a pace of 2.3% p.a., Meat consumption by >3% Global Milk consumption will be at 700 million tons by 2020. Growth of meat & milk consumption in the developing world is predicted to be 2.8 percent and 3.3 percent annually from 1990 to 2020 1000 MMT of animal feed is produced globally every year, including 600 MMT of compound feed.

Feed Composition- Cost Factors affecting the composition

Zone Wise Composition
South- broiler ration contains 60-65% corn, 28-30 % soybean meal, and 2-3% oil.. West. Strictly a corn and soybean meal ration. Rice polish is sometimes substituted, but has the impact of raising the FCR. East- 55-60 % corn, rice polish, sorghum, or feed grade wheat (5-10%) may be substituted for corn depending on the least-cost combination. North - In the Haryana-Punjab region, the typical feed composition includes 50-60 % corn, 25 % soybean meal, and 5 % fish or meat meal.

Cost Factors
Global energy costs- have direct influence on feed ingredient, manufacturing, and delivery costs. Availability of feed protein and energy sourcessupply/demand relationship of animal by-products changes. Feed ingredient quality changes in nutrient variability and digestibility of feedstuffs. Choice of feed additives

Strong Demand for Corn Grains, Stable Price

DEMAND
Seed Starch
10000

Corn Price Trends (INR per MT)

1%
9500 9000

SUPPLY

13%
Poultry feed
Human consum25% ption

8500 8000 7500 7000 6500 6000 5500

49%

12%
Livestock feed

5000

> 80% hybrid < 25% hybrid

FY 06 FY 07

Feed demand expected to grow at 15% Starch industry growth at 4 6%

Demand Supply Deficit in MT

50.00 40.00 30.00 20.00 10.00 2001 2006 2011 2016 2021 2026

Opportunity drivers

# Source: US Grain Council, India

Demand

Supply

Corn acreage: 7M hectares, 46% hybrids; 60% rain dependence Corn Acreage static over past 3 years 73% wet season; 24% dry season; 3% spring

Elite hybrid introduction, genetic up-gradation; Conversion of OPV to hybrids & Trait introduction 4

Demand by Industry & Supply

M MT
35.00 30.00

25.00

20.00

15.00

10.00

5.00

0.00 2005 2006 2007 Brewery 2008 2009 2010 Livestock 2011 2012 2013 Poultry 2014 2015 2016 2017 2018 2019 2020

Starch

Human

Demand MMT

Production MMT

Deficit will drive hybridization & Superior genetics

Increased domestic deficit, Stable grain price would lead to positive sentiments for corn. Domestic production would have to increase to meet the demand. This is possible by;
Increase in area under cultivation: Less probability as competing crops like Soybean & cotton are also expected to grow/stable , Shift from Rice and wheat due to water deficit Increase in Hybrid acres: High probability Hybrid acreage would grow by >1 M Ha Up-gradation to superior genetics: Better genetics in each segment would drive productivity increase.

India Corn Potential Yield to more than triple from 2000 base
Cumulative yield gains
4820 kg/ha 7157

2005 kg/ha BIOTECH

1446 kg/ha AGRON

2337

1370 kg/ha Breeding

Hybridization Projects
Upgrade OPV to Dekalb Corn Hybrids through Partnership.

Challenges & Key Drivers in OPV Segments

Low Rainfall, Poor Agronomic Practices Appropriate Product Initial Investment Critical Mass Generating Economic Surplus Upward & Downward linkages

Project Rainbow: demonstrated 100% productivity increase in 2007 9

Project Sunshine
Sunshine FY08 2 Districts, 7 Talukas, 535 villages, approx. 30 K Farmers Free seed & fertilizer distribution 5 NGOs helped in hybrid seed distribution & adoption. 46 K MT grains Sunshine FY09 5 Districts, 11 Talukas, 1700 villages, approx. 1,50 K farmers Farmer payment Rs.500 for 10Kg seed & Fertilizer free Project Partners (12)

200K MT grains expected by Oct/Nov

Monsanto Sustainable Yield Initiative

Our global commitment to help farmers produce more and conserve more.

Produce More We will work to double yield in our three core crops of corn, soybeans and cotton by 2030, compared to a base year of 2000. Conserve More Monsanto will develop seeds that will reduce by one-third the amount of key resources required to grow crops by the year 2030. Improve Farmers Lives Our company is committed to help improve the lives of farmers, including an additional five million people in resource-poor farm families by 2030

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SYI: Project SHARE

Sustainable Harvest Agriculture, Resources, Environment
Small and marginal farmers; Rain dependent; Cotton & Corn belt; poor market linkages

Project premise
Low yield due to
Lack of technical and management know how Lack of access to resources Lack of access to technology Lack of awareness and access to government schemes

Project outputs
Increased yield Reduction in resources utilized Improved technical practices Improved linkages: Market Finance Technical know-how Technology Improved socio-economic level

Project highlights
Pilot project 10,000 households Farmer groups Increased awareness Field level demonstrations Capacity building Multi stakeholder linkages Query redressal service

Formation of groups

Imparting technical know-how

Forward and backward linkages

Infrastructural development and back-up

FARMERS GROUPS as AGENTS of CHANGE

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Developing Superior Genetics

Superior Genetics will Play a Key Role

US average 3.75MT/ac India average 1.0MT/ac
Hybrids: 1.5 2.0 MT/ac OPV: 0.4 0.6 MT/ac Increased Yield Disease Resistance Stress Tolerance Grain Quality / Added Value Build on strength of current germplasm as well as Molecular Breeding and Crop Analytics Capabilities

Segments
Elite : 4.0 6.0 MT/ ac Premium: 2.5 4.0 MT/ac Mid: 1.5 2.5 MT/ac Low: 1.0 1.5MT/ac

Magnetic Resonance Imaging (MRI) for Composition Analysis

Corn Traits Biotechnology will contribute significantly to productivity increase

TRAIT PIPELINE
CROPS PHASE I

Year of Launch

Corn

YieldGard RRC2 Drought Tolerance

2012 2014-05

Nitrogen Use Efficiency Yield booster - IY

2017 2018-09

BRL 1 DS YGVTP X RRC2

HIGHLIGHTS: Dry Season BRL-1 First Season Completed at three locations KEY OUTCOMES: Low target insect pressure across locations, data generated through artificial infestation Excellent weed pressure Data generated on non target organisms and bio-safety aspects Residue data generated for k-salt Significant yield gains of transgenic entries over non transgenic entries across locations