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LeaderSHIP matterS

ISa SucceSS rePort 2014-15

Funded by the Illinois Soybean Checkoff and Illinois Soybean Growers

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add up the AdvantagesIllinois soybean farmers work in a numbers-oriented profession. We market to lock in favorable prices, we budget to cover costs efficiently, and we calculate ways to increase bushels per acre.

The Illinois Soybean Association (ISA), with funding from the soybean checkoff, is no different. The board of directors annually monitors Illinois soybean production prospects to estimate the amount of checkoff dollars that will be available to invest in efforts that enhance profitability.

As we reflect on the 2014-15 fiscal year, here are some of the numbers that I believe kept Illinois soybean farmers on track and on top:

1 Illinois’ rank as the top soybean production state in the nation again.

60 Approximate percent of soybeans exported annually.

74 Percent of survey participants who adopted best management practices to reduce nutrient losses on farms. Another 13 percent are willing to do so in the future.

86 Percent of checkoff-funded survey respondents that believe expanding soybean markets is the program most associated with ISA.

88 Percent of survey respondents who agree or strongly agree that consumer support of farming is essential to long-term farmer success.

The soybean checkoff allows ISA to help expand the influence of Illinois soybean farmers. We can produce and market high-quality soybeans, meet with and grow our customer base, and generate industry-leading programs and projects that other states seek to emulate. Add up the advantages. The numbers show we are in a strong position to lead our industry to further success.

Daryl Cates 2015-16 Chairman

The numbers show we are in a strong position to lead our industry to further success.

Positioning for Long-term SuccessPreparing for the unknown is challenging to any organization. Having a plan to navigate through obstacles and to capitalize on opportunities is what ISA strives to achieve.

The last five years have been some of the best in our industry’s history. We know the next few years will be more challenging, but also will offer huge potential for development. Rethinking the strategies and goals of the ISA organization was top of mind for our leadership during the last year. Developing the next five-year strategic plan has been a number one priority.

We are very cognizant of the successes of our efforts this past year, which we have outlined in this annual report. But continuous improvement is a mainstay in our planning and implementation efforts. This is a fundamental tenet of any successful enterprise.

Through numerous outreach efforts and engagements with customers, key stakeholders, influencers and soybean producers, we are confident that we will continue to positively impact Illinois soybean producer competitiveness and prosperity. Now more than ever, the incorporation of data and new technologies in business and operations planning are integral to successful and economically sustainable operations. Diligence in effective financial management and business planning strategies, as well as the efficient execution of those strategies, are traits of profitable and impactful enterprises.

We are only one part of the very large Illinois and global soybean value chain team. With perseverance and commitment, our demand, supply, advocacy and leadership efforts will set the standard of performance and expectations others will follow. I want to thank you all for the opportunity to lead and serve this organization and the industry.

Craig Ratajczyk ISA CEO

Continuous improvement

is a mainstay in our planning

and implementation efforts.

fInancIaLS

STATEMENT OF FINANCIAL POSITIONAugust 31, 2015, and 2014 ASSETS 2015 2014Current Assets

Cash and cash equivalents $ 1,350,165 $ 217,998 Short-term investments 11,497,731 12,333,609 Accounts receivable

Related party 31,432 66,225 Other 59,594 18,602

Accrued interest receivable 677 546 Prepaid expenses 33,838 27,076

Total current assets $ 12,973,437 $ 12,664,056 Property & Equipment

Land $ 239,015 $ 239,015 Building and building improvements 1,269,211 1,195,697 Office furniture and equipment 859,488 780,662 Vehicles 185,999 139,087 $ 2,553,713 $ 2,354,461 Less accumulated depreciation 1,070,476 850,167 $ 1,483,237 $ 1,504,294

$ 14,456,674 $ 14,168,350

LIABILITIES AND NET ASSETSCurrent Liabilities

Funding payable $ 2,249,730 $ 1,890,627Expenses accrued and payable 423,225 587,576Due to related party — 177,035Due to United Soybean Board 33,856 33,348Funds held in trust — 58,184

Total current liabilities $ 2,706,811 $ 2,746,770Long-Term Liabilities

Accrued post-retirement benefits $ 658,838 $ 594,526Net Assets

Unrestricted — undesignated $ 8,361,974 $ 8,099,162Unrestricted — board designated reserve 2,500,000 2,500,000 Unrestricted — pre-sparc funds 229,051 227,892

Total net assets $ 11,091,025 $ 10,827,054 $ 14,456,674 $ 14,168,350

STATEMENT OF ACTIvITIESYears Ended August 31, 2015, and 2014

CHANGES IN UNRESTRICTED NET ASSETS 2015 2014Operating revenue and other support: Checkoff receipts from first purchasers $ 27,139,021 $ 32,005,180

Checkoff receipts from other soybean boards 1,815,180 2,111,318Less: National checkoff to United Soybean Board 13,421,342 16,266,048

Checkoff to other soybean boards 2,080,633 1,782,158Total checkoff receipts $ 13,452,226 $ 16,068,292

Less collection expenses 45,643 54,725 Net checkoff receipts $ 13,406,583 $ 16,013,5670

USB grant funds and sponsorships $ 97,497 $ 43,319Investment return 7,666 6,025Miscellaneous income and sponsorships 33,389 35,923

Total other revenue $ 138,552 $ 85,267 Total unrestricted operating

revenue and other support $ 13,545,135 $ 16,098,834Operating expenses:

Production funding $ 6,048,952 $ 4,849,995 Marketing funding 5,423,836 5,108,857 Executive funding 1,894,013 2,140,625 Management and administrative expenses 133,786 134,903 Prior year project (write-offs) expenses (219,423) (383,872)

Total expenses $ 13,281,164 $ 11,850,508

Increase in net assets $ 263,971 $ 4,248,326Net assets at beginning of year 10,827,054 6,578,728Net assets at end of year $ 11,091,025 $ 10,827,054

ILLINOIS SOYBEAN BOARD

2,000anImaL agrIcuLture

Monetizing Manure project builds awarenessNumber of Illinois hog farms that can benefit from checkoff-funded environmental education and manure management assistance provided by ag engineering consultant Ted Funk. The Illinois soybean checkoff also has developed tools to promote manure value and use in crop production. The Monetizing Manure project builds awareness among Illinois soybean farmers about the benefits of adding livestock, including opportunities for the next generation to come home and farm.

85%U.S. Meat and Poultry Export Promotion 85 percent of soybean meal fed in Illinois that goes into hog rations. Through continued partnerships with the U.S. Meat Export Federation (USMEF) and the U.S.A. Poultry and Egg Export Council (USAPEEC), the soybean checkoff helps increase worldwide demand for U.S. pork, beef, poultry and eggs to keep the animal agriculture industry growing, and soybean meal demand strong.

funded by the Illinois soybean checkoff

anImaL agrIcuLture

International Trade Teams

Average number of trade teams Illinois soybean farmers host from around the world annually, including high-quality teams from

China, Japan, South Korea, the Philippines and

European countries. A Taiwan purchase mission this

year included participation from Illinois Gov. Bruce Rauner and Illinois Ag Director Phil Nelson. Through the trade teams program, Illinois soybeans are differentiated with a message of quality, sustainability and customer service.

30 160 million bushelsUSAPEEC 160 million bushels of soybean equivalent that went into feed for U.S. poultry and egg exports in 2014 for a value of $5.8 billion. USA Poultry and Egg Export Council (USAPEEC) and the soybean checkoff have collaborated for nearly 20 years. One of the primary projects the soybean checkoff annually supports is the Gulfood trade show held in Dubai – one of the world’s fastest-growing food and beverage expositions with more than 4,800 exhibitors and 85,000 visitors from 170 countries last year.

30 YearsUSMEF Number of years ISA has partnered with U.S. Meat Export Federation (USMEF). Soybean checkoff dollars have been invested in Mexico promotions the last three years. Mexico’s per capita pork consumption has risen an average 3.3 percent each of those years. Mexico in 2014 set U.S. pork records with a nine percent increase in volume and 27 percent increase in value purchased.

tranSPortatIon

Container Logistics Initiatives The year soybean checkoff-funded container-on-barge (COB) work will expand from groundwork completed in 2014-15. ISA has developed relationships with possible shippers, container trucking companies and others to fuel business development efforts in the future. The goal is to create and launch a commercially competitive, sustainable COB soybean circuit in the coming months.2016

Diesel Tech Training ProgramNumber of diesel technician students who have received Automotive Service Excellence accredited training with biodiesel during the last five years. Eight trainings were held during 2014-15, and a diesel mechanic has been selected to conduct trainings in FY16 and beyond.

>400

B20 Club Number of Illinois-based fleets and fuel distributors who joined the B20 Club this fiscal year, along with two associate members.

The B20 Club promotes clear air in member communities and

supports Illinois farmers by running on biodiesel,

which is America’s first advanced biofuel. Other state checkoff programs are considering creating similar programs.

tranSPortatIon

87%Aging Infrastructure AwarenessPercent of farmers responding to a soybean checkoff-funded survey who find poorly maintained roads are their biggest transportation challenge. ISA continues to raise awareness of these aging transportation infrastructure issues and seeks collaboration with other groups to find solutions. Another checkoff-funded study finds local economies could see a net return of $10 for every $1 they invest in rural bridges.

PPP3Public-Private PartnershipsNumber of Ps in public-private partnerships that bring interested parties together to foster collaboration for transportation infrastructure development, especially focused in rural areas that support soybean movement throughout Illinois. ISA is working closely with public and private partners to facilitate infrastructure improvements on the Illinois Waterway through a P3 that will be a pilot project (P5) under the Water Resources Reform and Development Act.

9funded by the Illinois soybean checkoff

YIeLd, comPoSItIon, ProfItabILItY

Crop Sciences Scholarships

Number of college juniors who received checkoff-funded crop

science scholarships for the 2015-16 school year – the sixth year

of the program. Six of the recipients are enrolled at the

University of Illinois, one at Southern Illinois University

Carbondale and one at Illinois State University. Students at

Western Illinois University also are eligible for the program.

HY+QTotal number of seed companies participating in the High Yield Plus Quality (HY+Q) program this fiscal year. Only four seed companies were identified for recruiting into the program initially. HY+Q seed protein and oil sampling done in Illinois now has reached into 10 states. The goal is to showcase commitment to unsurpassed soybean yield and quality.

11

Yield ChallengeRecord soybean yield verified as part of the checkoff-funded Yield Challenge and 100-Bushel Challenge from the 2014 crop year. LaSalle County farmer Dan Arkels achieved the yield on his 30-acre test plot near Peru, Ill. Five other Yield Challenge participants had yields exceeding the 70- and 80-bushel-per-acre thresholds.

Soy CCA EnvoysNumber of Illinois Certified Crop Advisers (CCAs) from the nine state reporting districts who served as Soy CCA Envoys during the production season. The team of dedicated professionals provided Illinois soybean farmers with timely crop updates and recommendations.

9

103.95SoybeanPremiums.orgPercent of Illinois soybean production in 2014 which was non-GMO. The ISA website, SoybeanPremiums.

org, is the place where Illinois farmers can get information about identity-preserved soybean programs along with contract offers from buyers.

9%

YIeLd, comPoSItIon, ProfItabILItY

Profitability MattersNumber of Illinois soybean farmers reached with Profitability Matters radio spots that helped Illinois farmers take action to

improve financial performance of operations. In addition to six radio spots highlighting actionable farmer advice, the overall Profitability Matters campaign was accompanied by six emails, six blog posts and three Illinois Field & Bean articles communicating profitability tips throughout the winter encouraging farmers to take action.

29,483

Double-Crop Soybean InitiativeNumber of crops for ISA’s effort to explore and expand double-crop production in the state with wheat and soybeans. A demonstration plot at the Farm Progress Show attracted farmers and industry representatives. Farmers also were able to pick up double-crop production tips during several farm shows this summer, including ILSoyAdvisor.com Field Days.2

22,943ILSoyAdvisorNumber of website users during fiscal year 2015 who took advantage of the soybean production advice found on ILSoyAdvisor.com. The checkoff-funded site provides timely information throughout the growing season, useful tools and best management practices to help farmers increase yield and profitability. The number of unique site visitors rose 249 percent.

Soybean SummitMore than 600 participants attended the Soybean Summit in 2015 – a 30 percent increase from 2014. The checkoff-funded event was held in two locations – Effingham and Peoria, Ill. With concerns about soybean profitability prevalent, a record number of participants attended to learn new management strategies and innovative practices to boost yields and maximize profits.

funded by the Illinois soybean checkoff

freedom to oPerate

Soy from IllinoisPosition the checkoff-funded “Soy from Illinois” program hopes to hold among soy buyers, especially foreign purchasers. Soy from Illinois differentiates beans from Illinois to hopefully create a preference for Illinois beans and add value for Illinois soybean farmers.

Chicago Initiative Task ForcePercent of Illinois soybean farmers surveyed in 2015 who agree or strongly agree that farm organizations should work to positively influence urban business leaders. ISA is evaluating the costs and benefits of creating a stronger presence in Chicago. This effort would focus on engaging influential leaders and public opinions, as well as on meeting with buyers and partners.

Nutrient Loss Reduction StrategyYear the Nutrient Loss Reduction Strategy (NLRS) came into play. With funding from the checkoff, ISA provided a solid understanding about what the strategy would mean for Illinois soybean farmers. ISA was positioned as a leader in farmer sustainability and in sharing how nutrient management planning can improve yields, profitability and Illinois water quality.

1no.

84

2015

funded by the Illinois soybean checkoff

DelMarVa Watershed Tour The number of states in the DelMarVa Peninsula visited by a group of ISA directors, staff and media. Participants learned about the events that led to the mandatory nutrient management regulations there, how the regulations have been implemented differently in Delaware and Maryland and how area farmers have adapted farming practices to stay in compliance. The tour positioned ISA as a leading voice for nutrient management with farmer audiences.

2

freedom to oPerate

Indian Creek WatershedPercent of farmed acreage in the Indian Creek Watershed that the Conservation Technology Information Center (CTIC) set as a project goal to determine if voluntary adoption of conservation practices and systems could improve water quality. With funding from the Illinois soybean checkoff, the project covers education, outreach and cost-sharing to encourage voluntary adoption of those practices known to improve on-farm nutrient use efficiency.

Illinois Farm Families Percent of Illinois Farm Families (IFF) City Moms who say experiences in the partially checkoff-funded program have affected the way they choose food for their family. After hearing about current farming practices first hand, IFF City Moms feel better about the Illinois farmers who

grow their food. An associated partnership with Ultra Foods in Chicago reached more than one million consumers through in-store signage, a flier in the circular ad and social media.

92

50

Pod to Plate Teacher ResourcesNumber of lesson plans for third through eighth grades that are found on the Pod to Plate website funded through the checkoff. Teachers and other users can download and share fact sheets, play interactive games, explore soybean photo galleries, access and print lesson plans for various subjects and grade levels and order additional materials.

> 20

organIzatIonaL exceLLence

ISU Hall of Fame AwardISA was honored as a corporate inductee into the Illinois State University College of Applied Science and Technology (CAST) Alumni Hall of Fame. ISA partners with Illinois State University’s Department of Agriculture and College of Applied Science and Technology to enrich higher education and enhance the future of Illinois agriculture.

2015

Illinois Field & Bean Percent of Illinois farmers surveyed who believe Illinois Field & Bean is a useful publication for their businesses. Results from ISA’s annual attitude survey conducted in spring 2015 also found the percentage of respondents at least somewhat familiar with the magazine were 86 percent and the number who find the information timely at 76 percent.

83%

Loss of Long-time Soybean LeaderDwain Ford from Kinmundy, Ill., passed away Aug. 10, 2015. Ford raised soybeans, corn and wheat for more than 41 years. He co-owned the family farm and M&D Seed Company with his wife. Ford served on the Land of Lincoln Soybean Association from 1991-2000, and was chairman from 1997-1998. He was president of the American Soybean Association (ASA) from 2002-2003. He was appointed by the Secretary of Agriculture to serve on the Agricultural Policy Advisory Committee. Ford also served six years on the United Soybean Board as aquaculture chairman and was on the marketing and strategic management committees.

New Strategic DirectionYear ISA targets for 600 million bushels of Illinois soybeans to be used. The goal is to achieve maximum profitability and global competitive positioning for Soy from Illinois. ISA leaders drafted revised strategic direction during the fiscal year to be more relevant and invest in projects with measurable outcomes and a focus on target audiences rather than target areas.

organIzatIonaL exceLLence

ISA Corporate PartnersEXECUTIVE ADM Monsanto BioAgPRINCIPAL Beck’s Hybrids Cargill Dow AgroSciences DuPont PioneerCORE Bunge Monsanto/AsgrowASSOCIATE Consolidated Grain & Barge Co.

AFFILIATE Rumbold & Kuhn Syngenta U.S. Soybean Export CouncilSUPPORT Akron Services Big River Resources LLC Helena Stoller USA The Andersons Inc. URSA Farmers Co-op

funded by the Illinois soybean checkoff

ISA Communications AwardsThe number of major agricultural communications events where ISA’s work was honored in 2015. ISA communications received several awards during the National Agri-Marketing Association (NAMA) annual meeting and during the Ag Media Summit (AMS). NAMA awards included the Illinois Farm Families program, which also was a runner-up for Best in Show in public relations, the Biotechnology Round Table held in Washington D.C. and ISA’s 50th Anniversary Celebration. The ISA communications team placed in every award category at the AMS, including single-page magazine editorial design, advertorial, technical writing, special projects, blogs, websites, webinars and photography.

2

advocacY

Major Issues in 2014-15

Voice for SoyPromotion and use of Voice for Soy continued to expand in 2014-15. The Illinois Soy Action Network is managed by Illinois Soybean Growers, and allows members to easily connect with legislators to take action and advocate for Illinois agriculture, as well as track key issues and share information. The interactive website is funded by membership dues.

CubaNumber of visits ISG has made since 2012. ISG continued to lead statewide efforts to expand trade with Cuba. ISG supports lifting the trade embargo and has been active in efforts to open trade by visiting and meeting with top officials on a regular basis, promoting Illinois quality soybeans at the annual trade show in Cuba and educating Illinois legislative and business leaders about the economic value of trade with Cuba.

Trade Promotion Authority (TPA)ISG supported Congress approving TPA, which defines U.S. negotiating terms and sets requirements for the president to follow during trade negotiations. Congress gets a final “yes or no” vote in any trade agreements but cannot amend any of the negotiations.

yesno

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advocacY

Renewable Fuel StandardThe U.S. Environmental Protection Agency (EPA) proposed Renewable Fuel Standard (RFS) volume for its 2014-2017 biomass-based diesel targets that were lower than those sought by ISG. Much work was spent urging higher limits and waiting for the final announcement in 2015.

Waters of the United States (WOTUS)EPA released its final ruling in May 2015, broadening the Clean Water Act (CWA) interpretations further than expected. ISG believed the rule would limit economic growth. A subsequent Interpretive Rule to ensure some conservation practices would be exempt also was a concern. Efforts to block WOTUS are still underway, and ISG is monitoring court action.

funded by membership dollars

Trans-Pacific Partnership (TPP)ISG backed TPP negotiations, so long as it significantly improved access to global markets for U.S. soybean and livestock products.

The agreement, still in negotiations, is between the U.S. and Australia, Brunei, Canada, Chile,

Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

District 4Sharon Covert Tiskilwa, IL

District 5Stan Born Dunlap, IL

District 7Mike Marron Fithian, IL

District 8Dale Asher Sutter, IL

District 6Rob Shaffer El Paso, IL

District 9Carrie Winkelmann Tallula, IL

2014-15 ISa dIrectorS

District 1Paul Rasmussen Genoa, IL

District 2Duane Dahlman Marengo, IL

District 3John Longley Aledo, IL

District 10Jered Hooker Clinton, IL

District 11Doug Schroeder Mahomet, IL

District 12Roberta Simpson-Dolbeare Nebo, IL

District 13Gary Berg St. Elmo, IL

District 14Donald E. Guinnip Marshall, IL

District 15Daryl Cates Columbia, IL

District 16Tim Scates Carmi, IL

District 17David Droste Nashville, IL

District 18Bill Raben Ridgway, IL

At-LargeJeff Lynn Oakford, IL

At-LargeLynn Rohrscheib Fairmount, IL

At-LargeAustin Rincker Moweaqua, IL

At-LargeJenny Mennenga Le Roy, IL

At-LargeC. W. Gaffner Greenville, IL

At-LargeJohn Hagenbuch Utica, IL