Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Changes in the weather or general economic conditions impacting the availability and price of soybeans and natural gas
• Global, national and regional agricultural, economic, financial and commodities market, political, social, and health conditions
• Fluctuations in U.S. oil consumption and petroleum prices
• Changes in perception of food quality and safety
• Damage to or loss of our facilities due to casualty, weather, mechanical failure or any extended or extraordinary maintenance or inspection that may be required
• Changes in business strategy, capital improvements or development plans
• Changes in the availability of credit and interest rates
• The availability of additional capital to support capital improvements, development and projects

Mitigation Strategies

• Employ forward contracting to offset some of the risk of adverse price fluctuations in the natural gas market
• Maintain hedged positions within limits to reduce price change risks associated with holding fixed price commodity positions

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• The effect of weather conditions and the impact of crop and animal disease on our business
• General economic conditions impacting the availability and price of soybeans and natural gas
• The impact of global and regional economic, agricultural, financial and commodities market, political, social and health conditions
• Fluctuations in U.S. oil consumption and petroleum prices
• Changes in perception of food quality and safety
• Damage to or loss of our facilities due to casualty, weather, mechanical failure or any extended or extraordinary maintenance or inspection that may be required
• Changes in business strategy, capital improvements or development plans
• Changes in the availability of credit and interest rates
• The availability of additional capital to support capital improvements, development and projects
• Higher than anticipated operating costs, including but not limited to increased prices for soybeans
• Inadequate local supply of soybeans and a resulting price increase which is not accompanied by an increase in the price for soybean meal and oil
• Increased labor costs
• Adequacy and cost of electric and natural gas utilities
• Changes in price, operation and availability of truck and rail transportation
• Inflation
• It may become more difficult to sell our soybean oil for human consumption due to trans-fat regulations
• Increased production of soybean meal or oil could result in lower prices
• Legislative, legal or regulatory developments could adversely affect our profitability
• Industry-specific risks that could adversely affect our operating results (product quality or contamination; shifting consumer preferences; federal, state, and local food processing regulations; socially unacceptable farming practices; environmental, health and safety regulations; and customer product liability claims)
• Risks associated with the outbreak of disease in livestock and poultry
• Increased operating costs if required to segregate genetically modified soybeans

Mitigation Strategies

• Generally take opposite and offsetting positions by entering into commodity futures contracts (either a straight futures contract or an options futures contract) for soybeans, soybean meal and crude soybean oil on the Chicago Board of Trade to reduce price change risks
• Employ forward contracting to offset risk of adverse price fluctuations in the natural gas market
• Maintain hedged positions within limits

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Adverse weather conditions, such as heavy snow or rainfall and any flooding that results, may cause delays in or prevent soybeans from being planted which could affect our ability to procure soybeans for production and increase costs
• Changes in weather patterns and conditions, including changes in rainfall and storm patterns and intensities, water shortages, and temperature levels, could adversely impact our costs and business operations; the location, cost and competitiveness of commodity agricultural production, related storage and processing facilities; and demand for agricultural commodities

Transition Risks

• New federal or state legislation or regulatory programs that restrict emissions of GHGs in areas where we conduct business could adversely affect our operations and demand for our products

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Shortage of soybeans due to lower-than-average production in the state during the preceding growing season.
• Inflationary pressures on costs such as soybeans, materials, labor, natural gas, and electricity.
• Risk of nonperformance and nonpayment by counterparties.
• Adverse weather conditions affecting soybean planting and production.
• Potential difficulty in selling soybean oil for human consumption due to trans-fat regulations.
• Increased competition from other soybean processing companies.
• Increased energy prices.
• Increased transportation costs.
• Potential for increased production of soybean meal or oil leading to lower prices.
• Legislative, legal, or regulatory developments affecting profitability.
• Risks associated with the outbreak of disease in livestock and poultry.
• Potential need to segregate genetically modified soybeans.
• Risks associated with the oilseed processing plant near Mitchell, South Dakota, including cost overruns, construction delays, and operational issues.
• Cybersecurity threats.

Mitigation Strategies

• Employing forward contracting to offset natural gas price fluctuations.
• Analyzing new methods of vertical integration and adding value to products.
• Investing into value-add projects and companies.
• Using commodity futures contracts to reduce price change risks.
• Using variable rate loan agreements with fixed rate options to manage interest rate risk.
• Implementing processes to oversee and manage cybersecurity risks, including annual security awareness training for employees, mechanisms to detect and monitor unusual network activity, and containment and incident response tools.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Adverse weather conditions, such as heavy snow or rainfall and any flooding that results, may cause delays in or prevent soybeans from being planted which could affect our ability to procure soybeans for production and increase costs.
• Changes in weather patterns and conditions, including changes in rainfall and storm patterns and intensities, water shortages, and temperature levels, could adversely impact our costs and business operations

Transition Risks

• New federal or state legislation or regulatory programs that restrict emissions of GHGs in areas where we conduct business could adversely affect our operations and demand for our products.