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American Crystal’s Pre-Pile Program is designed to:

• Maximize factory run time and sugar produced
• Allow shareholders to maximize their on-farm profits by maximizing acres and tons the Company can process
• Permit the early production of sugar to meet customer demand
• Provide for the gradual startup of factories

During Pre-pile, we typically we take in 15 -18% of the total tons we believe are available for processing. Investments in factories have been made to increase slice capacities. This increases the need to have a larger supply of sugarbeets pre-piled to avoid slowing down factory slice rates or preventing a shutdown. In general, we need to have a 3-4-day supply of sugarbeets on hand throughout pre-pile harvest. On occasion, more tons may need to be piled in a time period in preparation of forecasted rain events that could limit deliveries.

Storage losses on pre-pile beets is typically minimal because they are not stored for long periods, which is a positive for sugar recovery. However, on very warm days, deliveries may be limited or shut down to avoid losses from piling hot beets.

A Pre-pile Premium has been established by the Company to reasonably compensate shareholders for the lost opportunity for growth and quality of beets delivered in Pre-Pile Harvest.

• The Pre-Pile Premium is not known at the time of harvest.
• It is developed after harvest by using actual sugar growth observed from that year to determine the premium percentages
• The Pre-Pile Premium Percentage is the same for everyone for any ton delivered on the same day of pre-pile
• The premium percentage decreases for each day closer to stockpile harvest
• The Pre-Pile Premium Percentage is taken times the base payment/ton based on the quality of the beets a grower delivers and then added back on to that base payment for the total per ton payment for beets delivered on a contract for that day in Pre-Pile.

Below is an actual example from 2018 of two growers delivering on the same day of Pre-Pile.

Strategies to Maximize the Pre-Pile Payment

1. Focus on Pre-Piling fields that are least likely to improve, this captures growth in tons and sugar that is figured into the Pre-Pile Premium that would not occur at the same pace on these fields.

• Focus on your best field (high sugar and/or tons) or your worst field (low tons and/or sugar) due to disease pressure.
• Focus only on one or a couple fields.
  • Makes harvest & delivery more efficient with not as much moving between fields.
• Determine what fields to focus on.
  • Take samples from fields prior to Pre-Piling to run at the Quality Lab. Get bags & tags from your Agriculturist.
  • Use satellite imagery to evaluate areas of the field with yellower canopy color where there is typically higher sugar content than in greener areas.
• Leave fields until stockpile harvest that have low sugar content / high N, low plant populations, or are replants to allow more time for their quality to improve.

2. Focus on fields farther away from a piling site or at higher freight rate stations.

• Hauling less tons helps save on freight costs, both on-farm and company freight costs, as tonnage is lower while still capturing the Pre-Pile growth premium.
  • This requires less time and people as well.

3. Focus on fields that can be difficult to harvest in adverse conditions.

• Weather can be more cooperative during the Pre-Pile time frame.
• Take advantage of that time to avoid higher harvest costs in case Mother Nature doesn’t cooperate during stockpile.
• Harvesting during day light hours is a benefit as well.

 Another Pre-Pile Option

4. Pre-Piling only field headlands and splits.

• This is a management choice and may not give the best Pre-Pile payment but adds convenience at full harvest.
• Headlands typically have poorer sugar and less tons.
  • If all that was harvested at stockpile were headlands it wouldn’t provide the best payment either.
• A way to meet in the middle may be to only harvest the middle 12 rows off of a headland allowing a place to stage equipment at stockpile.
• Then move on to other fields to focus on the other strategies above.