Update of Poultry Fundamentals April 18

Update of Poultry Fundamentals April 18 Contact us: 402.898.9458 www.advancedeconomicsolutions.com knox@aesresearch.com Visit our updated website Follow us on Twitter @AES_Research 4/13/2018 AdvancedEconomicSolutions 1

Discussion Broiler producers are cutting back on the size of the broiler supply flock, presumably in an effort to combat smaller profits. Protein prices are under immense bearish pressure, and recent developments in Argentinian soybean crop have caused soymeal prices to surge. A decline in production potential is reassuring, but producers were already holding chicken output to levels only modestly ahead of YA levels. That trend continues, with recent production growth falling short of 1%. Weak production growth will likely persist throughout most of 2018. Producers are probably aware that waiting for beef and pork producers to move into a dire margin situation is the best time to ramp up production. Given the amount of beef and pork expected during this year, it may be reasonable to anticipate more substantial chicken production growth in 2019. The price outlook for 2018, given weak production trends, is moderately bullish. Turkey producers are facing negative margins, with whole bird prices remaining weak despite relatively strong export activity. Producers have taken decisive action, slashing poult numbers in an effort to curb output, which is already below YA levels. The price outlook is quite bullish as prices have surged recently. Only minor AI outbreaks have been reported in the US so far this year, and no substantial disease spread has occurred. The cases have been low pathogenic, and have failed to make headlines. The risk is present through June. Chicken production was up -0.2% over the past 90 days The broiler supply flock was up 3.1% YOY as of March 1st Chicken exports were up 1.2% YOY during February Total chicken in cold storage was up 15% YOY on March 1 st ; Wing inventories approaching YA levels Turkey production was down 1.3% over the past 90 days Turkey hatchery data shows poult placements down 3.3% YOY during February Turkey exports were up 9.9% YOY in February Total turkey in cold storage was up 13% YOY on Mar 1 st, with breast meat inventories up 16% YOY 4/13/2018 AdvancedEconomicSolutions 2

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Lbs $/Lb Executive Summary: Major Proteins Producer margins vary, but production of major proteins is mostly higher regardless Exports have been strengthening, but risk of weaker exports looms as trade disputes heat up Meat supplies are expected to exceed YA by more than 2% this year Cattle, Hog, Broiler, & Turkey Producer Spot Margins 0.40 0.30 0.20 0.10 - (0.10) (0.20) (0.30) 2012 2013 2014 2015 2016 2017 2018 Forecast Cattle Margins Hog Margins Broiler Margins Turkey Margins 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 Total US Meat Trade (Million Lbs) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 11.2% -6.1% 3.2% 14.6% 8.6% -17.0% 12.9% 1.6% 3.9% -1.3%-0.9% 28.1% -6.0% 3.5% -8.8% 6.3%5.7% 4.4%-2.0% 14.1% -2.9% -10.7%-0.6%-15.2%2.4%-7.4%-8.9% 5.1%4.1% 24.6%13.5% -7.6%0.2%0.1% 225 220 215 210 205 200 195 190-2.6% Per Capita Meat Supplies Beef, Pork, Chicken, & Turkey -2.5% -0.9% -1.9% -1.1% 0.7% -0.6% 4.4% 1.6% 1.1% 2.1% Imports Exports 4/13/2018 AdvancedEconomicSolutions 3

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 000 Head Executive Summary: Chicken The broiler supply flock is still much larger than YA, but is shrinking counter-seasonally as producer margins erode On a 13-week basis, chicken production growth is actually negative vs YA Per capita chicken supplies are expected to be up fractionally during 2018 59,000 58,000 57,000 56,000 55,000 54,000 53,000 52,000 4.4% 3.5% 3.1% Broiler Supply Flock W/ YOY Change 2.0% 0.5% -0.6% -0.9% -1.2% -1.6% -1.1% -0.8% -1.0% 10% 8% 6% 4% 2% 0% Live Weight Chicken Production: YOY % Change 13-Wk Avg -2% 2014 2015 2016 2017 2018 4/13/2018 AdvancedEconomicSolutions 4 93.0 91.0 89.0 87.0 85.0 83.0 81.0 79.0-2.1% -4.4% 5-Yr Avg 2016 2017 2018F 2018 Per Capita Chicken Supplies 3.3% 0.7% -3.0% 1.9% 1.8% 6.6% 0.9% 1.6% 0.5% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

$/lb Executive Summary: Turkey Turkey producer margins have tanked on lower whole bird prices Production growth has been mostly negative over the past 6 months Weak production growth will likely drive negative turkey supply growth this year 0.40 0.30 0.20 0.10 0.00 Estimated Turkey Producer Margins -0.03 (0.10) (0.20) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 12-Month Avg Forecast Actual Current 0.5 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 15% 10% 5% 0% -5% -10% Live Weight Turkey Production: YOY % Change 13-Wk Avg -15% 2014 2015 2016 2017 2018 4/13/2018 AdvancedEconomicSolutions 5 18.0 17.5 17.0 16.5 16.0 15.5 15.0 0.6% -4.0% Per Capita Turkey Supplies -3.0% -1.8% -0.6% 0.0% -1.3% 1.3% 3.8% -1.2% -1.2% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Chicken Fundamentals 4/13/2018 AdvancedEconomicSolutions 6

cents/lb Millions of Dollars - Sanderson Millions of Dollars - Pilgrim's Broiler Producer Margins >Broiler margins are positive with positive outlook >Major producer net income is positive by weakening unlikely to move negative for long 35 Estimated Broiler Producer Margins 1 120 Major Producers: Quarterly Net Income 360 30 0.9 100 300 25 0.8 80 240 20 15 10 5 4.29 0.7 0.6 0.5 0.4 60 40 20 180 120 60 0 0.3 - - (5) 0.2 (20) (60) (10) 0.1 (40) (120) (15) 2012 2013 2014 2015 2016 2017 2018 2019 0 (60) 2010 2011 2012 2013 2014 2015 2016 2017 2018 (180) 6-Month Avg Forecast Weekly Current Sanderson Pilgrims % YA 4/13/2018 AdvancedEconomicSolutions 7

Index (Jan 2007 = 100) Broiler Feed Price Index >Feed costs expected to remain relatively low this year and next >South American soybean crop issues more than offsetting Chinese soybean import duties 255 235 215 Pro Forma Index of Broiler Feed Prices w/ Forecast 195 175 155 135 115 95 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 4/13/2018 AdvancedEconomicSolutions 8

Broiler Supply Flock & Hatchery >Mar 1 supply flock 56.3 million hens, up 3.1% YOY >Growth expected to slow and turn negative by midyear 4/13/2018 AdvancedEconomicSolutions 9

Production by Size Total Production Broiler Production >Total broiler production YoY: 4-week +0.9% 13-week -0.2% 52-week +1.3% YTD +0.1% >Slaughter YoY: YTD -0.6%, 13-week -0.9% Weights YoY: YTD +0.6%, 13-week +0.36% 22.0% Chicken Production Growth by Size (52-Week Moving Average) Weekly Liveweight Chicken Production (52-Week Moving Average Thousands of Lbs) 340,000 1,000,000 20.0% 18.0% 16.0% 320,000 300,000 980,000 14.0% 12.0% 280,000 960,000 10.0% 260,000 8.0% 6.0% 240,000 940,000 4.0% 2.0% 0.0% 220,000 200,000 920,000-2.0% 180,000 900,000-4.0% -6.0% -8.0% 160,000 140,000 880,000-10.0% -12.0% 2014 2015 2016 2017 2018 120,000 860,000 Small Bird Production Growth Large Bird Production Growth Small-Med Prod Growth Med-Large Prod Growth Total Small Bird Production Total Production Large Bird Production 4/13/2018 AdvancedEconomicSolutions 10

Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015 Q2-2015 Q3-2015 Q4-2015 Q1-2016 Q2-2016 Q3-2016 Q4-2016 Q1-2017 Q2-2017 Q3-2017 Q4-2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018 Broiler Production >2018 production: 41.9 billion lbs, +0.5-1.0% YoY (AES Forecast) 10,700 Quarterly U.S. Broiler Production w/ AES Forecasts 10,200 9,700 9,200 8,700 Q1 Q2 Q3 Q4 5-Yr Avg 2015 2016 2017 2018 Chicken Production w/ AES Forecasts YOY % Change 6% 5% 4% 3% 2% 1% 0% -1% -2% 1.5% 1.6% 1.6% 3.1% 4.7% 4.2% 5.5% 1.1% 3.3% 2.3% -0.3% 1.3% 1.9% 1.5% 2.1% 4.0% 1.6% 1.1% 1.7% -1.6% 4/13/2018 AdvancedEconomicSolutions 11

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 000 lbs 000 lbs Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 000 lbs 000 lbs Chicken in Cold Storage >March 1st Total inventories: +15% YoY >Breasts +6.5% LQs -25% Wings -2% Chicken in Cold Storage ("FOM") LQs in Cold Storage ("FOM") 950,000 900,000 850,000 800,000 750,000 700,000 650,000 160,000 140,000 120,000 100,000 80,000 2017 2018 5-Yr 2017 2018 5-Yr Breast Meat in Cold Storage ("FOM") Wings in Cold Storage ("FOM") 220,000 90,000 200,000 180,000 160,000 140,000 80,000 70,000 60,000 120,000 50,000 2017 2018 5-Yr 2017 2018 5-Yr 4/13/2018 AdvancedEconomicSolutions 12

M Lbs Chicken Trade >The US exported 552 M lbs of chicken in February, up 1.2% YOY >USDA expects 2018 exports to exceed YA by 2.5% 660,000 610,000 560,000 510,000 460,000 YTD: -0.1% 6,650,000 6,450,000 6,250,000 Chicken Exports 2010 2011 2012 2013 2014 2015 Ann Exports % -1% -2% -3% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5-Yr 2017 2018 Y Ann Exports % 2000 4,918,354 2001 5,555,285 13% 2002 4,807,184-13% 2003 4,920,013 2% 2004 4,783,454-3% 2005 5,202,730 9% 2006 5,205,457 0% 2007 5,903,997 13% 2008 6,960,761 18% 2009 6,817,938-2% 2010 6,762,148-1% 2011 6,977,612 3% 2012 7,274,271 4.3% 2013 7,345,431 1.0% 2014 7,304,000-0.6% 2015 6,321,000-13.5% 2016 6,644,000 5.1% 2017 6,780,000 2.0% 2018 6,950,000 2.5% 4/13/2018 AdvancedEconomicSolutions 13

1/1/2013 3/1/2013 5/1/2013 7/1/2013 9/1/2013 11/1/2013 1/1/2014 3/1/2014 5/1/2014 7/1/2014 9/1/2014 11/1/2014 1/1/2015 3/1/2015 5/1/2015 7/1/2015 9/1/2015 11/1/2015 1/1/2016 3/1/2016 5/1/2016 7/1/2016 9/1/2016 11/1/2016 1/1/2017 3/1/2017 5/1/2017 7/1/2017 9/1/2017 11/1/2017 1/1/2018 3/1/2018 000 Lbs Chicken Trade Detail 700,000 Total US Chicken Exports by Trade Partner 600,000 500,000 400,000 300,000 200,000 100,000 - Mexico Russia Angola Canada Cuba Other 4/13/2018 AdvancedEconomicSolutions 14

B/S Chicken Breast 4/13/2018 AdvancedEconomicSolutions 15

Chicken Wings 4/13/2018 AdvancedEconomicSolutions 16

Cents/Lb Wings Continued 230 Wing Prices by Size 210 190 170 150 130 110 90 2013 2014 2015 2016 2017 2018 2019 Small Small Forecast Medium Medium Forecat Jumbo Jumbo Forecast Size This Wk Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann % YoY Jumbo Medium Small 149.00 2018 169.9 166.3 152.7 150.1 152.6 156.7 160.1 162.0 163.5 172.0 172.8 168.1 162.0 2019 179.3 182.4 179.2 177.0 165.2 165.0 166.7 165.2 166.9 178.8 175.1 174.0 172.7 6.6% 130.80 147.00 2018 2018 157.1 154.9 151.5 155.9 134.7 147.0 131.8 149.6 134.4 147.6 137.5 148.5 144.0 151.3 149.8 153.4 160.8 154.0 167.7 160.9 168.0 155.9 160.6 154.8 149.6 152.6-21.3% -11.8% 2019 2019 170.0 168.9 174.3 172.7 160.4 169.8 155.2 170.4 150.1 158.3 149.8 156.1 153.3 157.1 154.6 156.3 162.6 157.1 176.6 165.9 177.9 160.1 171.1 159.6 163.0 162.7 9.0% 6.6% 4/13/2018 AdvancedEconomicSolutions 17

Leg Quarters 4/13/2018 AdvancedEconomicSolutions 18

AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 210 2015 168 163 151 145 146 148 148 145 147 152 147 150 151 160 147 147 150 210 2016 175 180 165 169 150 139 139 143 166 176 177 178 163 7.9% 173 152 150 177 Wings (Jumbo) 210 2017 183 183 174 183 194 202 202 209 216 203 175 158 190 16.7% 180 193 209 179 210 2018 157 151 135 132 134 137 144 150 161 168 168 161 150-21.3% 148 135 152 165 210 2019 170 174 160 155 150 150 153 155 163 177 178 171 163 8.9% 168 152 157 175 AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 129 2015 0.29 0.29 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.29 0.30 0.30 0.30 129 MDC <15% 2016 0.30 0.30 0.30 0.29 0.29 0.29 0.29 0.29 0.29 0.29 0.29 0.29 0.29-2.0% 0.30 0.29 0.29 0.29 129 Fat, Fresh 2017 0.29 0.29 0.29 0.32 0.33 0.33 0.32 0.32 0.32 0.32 0.32 0.32 0.31 7.7% 0.29 0.33 0.32 0.32 129 2018 0.32 0.32 0.32 0.32 0.33 0.34 0.34 0.34 0.34 0.34 0.35 0.35 0.33 6.3% 0.32 0.33 0.34 0.34 129 2019 0.35 0.34 0.33 0.34 0.32 0.33 0.33 0.32 0.32 0.33 0.34 0.35 0.33-0.1% 0.34 0.33 0.32 0.34 AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 117 White Trim, 2015 1.20 1.23 1.21 1.21 1.17 1.06 0.89 0.88 0.89 0.79 0.63 0.62 0.98 1.21 1.14 0.89 0.68 117 2016 0.62 0.58 0.46 0.46 0.46 0.46 0.48 0.61 0.65 0.65 0.65 0.65 0.56-42.7% 0.55 0.46 0.58 0.65 <15% Fat, 117 2017 0.67 0.70 0.70 0.73 0.77 0.79 0.79 0.79 0.75 0.70 0.66 0.66 0.73 29.9% 0.69 0.77 0.78 0.67 117 Fresh 2018 0.66 0.66 0.66 0.68 0.75 0.80 0.81 0.83 0.84 0.84 0.80 0.76 0.76 4.1% 0.66 0.74 0.83 0.80 117 2019 0.80 0.83 0.83 0.86 0.87 0.89 0.86 0.87 0.86 0.84 0.80 0.78 0.84 10.7% 0.82 0.87 0.86 0.81 AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 118 2015 1.30 1.33 1.31 1.31 1.31 1.26 1.16 1.16 1.15 0.99 0.93 0.93 1.17 1.31 1.29 1.15 0.95 118 Chunk Meat 2016 0.93 0.91 0.79 0.79 0.79 0.79 0.79 0.80 0.80 0.80 0.80 0.80 0.81-30.7% 0.88 0.79 0.80 0.80 118 Chicken 2017 0.80 0.80 0.80 0.85 0.89 0.91 0.91 0.91 0.90 0.87 0.87 0.87 0.87 6.4% 0.80 0.88 0.91 0.87 118 2018 0.87 0.87 0.87 0.88 0.94 1.00 1.03 1.04 1.04 1.06 1.02 1.00 0.98 12.8% 0.87 0.94 1.04 1.03 118 2019 1.03 1.04 1.02 1.02 0.98 0.99 0.98 1.00 0.99 1.01 1.02 1.05 1.02 4.3% 1.03 0.99 0.99 1.03 AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 226 2015 1.54 1.65 1.77 1.96 1.93 1.77 1.67 1.48 1.41 1.14 1.01 1.12 1.53 1.65 1.89 1.52 1.09 226 Tenders, Line 2016 1.37 1.56 1.62 1.77 1.92 2.00 2.12 2.10 2.02 1.51 1.36 1.31 1.72 12.3% 1.51 1.90 2.08 1.39 226 Run, Clipped 2017 1.34 1.64 1.75 1.75 1.83 2.00 2.04 1.96 1.58 1.32 1.23 1.25 1.65-4.3% 1.58 1.86 1.86 1.27 226 2018 1.43 1.70 1.61 1.71 1.99 2.03 2.02 2.03 1.88 1.66 1.52 1.49 1.76 6.6% 1.58 1.91 1.98 1.55 226 2019 1.62 1.77 1.80 1.96 2.02 2.03 1.99 2.02 1.84 1.60 1.48 1.47 1.80 2.6% 1.73 2.00 1.95 1.51 AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 24 2015 200 211 223 242 239 222 209 190 183 156 143 146 197 211 234 194 149 24 2016 159 178 183 197 214 224 236 232 222 171 156 151 194-1.4% 173 212 230 159 Tenders, Small 24 2017 154 184 195 195 203 220 224 216 178 152 143 145 185-4.6% 178 206 206 147 24 2018 163 190 183 191 217 223 222 224 216 199 181 177 199 7.7% 179 210 221 186 24 2019 189 204 209 225 231 231 228 226 217 203 188 184 211 5.9% 201 229 223 192 AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 204 2015 57.4 55.4 54.0 53.0 53.0 53.0 46.6 41.0 39.1 30.1 28.4 28.0 44.7 55.6 53.0 42.2 28.8 204 2016 28.0 28.1 32.3 37.5 39.4 40.0 40.6 44.8 45.0 43.9 41.0 39.6 38.4-14.1% 29.5 39.0 43.4 41.5 Thighs 204 2017 39.0 39.3 50.6 57.0 58.0 59.0 59.9 62.7 55.9 42.3 35.0 36.0 49.7 29.5% 43.0 58.0 59.5 37.8 204 2018 39.7 43.0 43.5 46.4 51.3 52.5 52.6 53.7 50.0 46.1 43.1 42.5 47.1-5.3% 42.0 50.1 52.1 43.9 204 2019 45.5 46.6 50.0 53.1 53.6 54.0 53.1 52.0 48.4 45.0 43.5 43.1 49.0 4.0% 47.3 53.6 51.2 43.9 AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 128 2015 1.10 0.97 1.02 1.08 1.08 1.08 0.98 0.91 0.91 0.83 0.69 0.68 0.94 1.03 1.08 0.93 0.73 128 2016 0.68 0.71 0.85 1.00 1.01 1.07 1.10 1.17 1.21 1.24 1.16 1.00 1.02 7.8% 0.75 1.03 1.16 1.13 B/S Thigh 128 2017 0.90 0.90 1.07 1.25 1.31 1.31 1.37 1.42 1.43 1.31 1.10 1.09 1.21 18.5% 0.95 1.29 1.41 1.17 128 2018 1.11 1.13 1.13 1.20 1.33 1.36 1.37 1.36 1.30 1.28 1.26 1.18 1.26 4.1% 1.12 1.30 1.34 1.24 128 2019 1.17 1.13 1.17 1.25 1.25 1.26 1.27 1.24 1.20 1.23 1.19 1.17 1.21-3.4% 1.16 1.25 1.24 1.20 4/13/2018 AdvancedEconomicSolutions 19

AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 251 2015 0.98 0.88 0.92 0.94 0.87 0.81 0.78 0.78 0.78 0.70 0.60 0.60 0.80 0.93 0.87 0.78 0.63 251 Chicken Leg 2016 0.64 0.66 0.73 0.82 0.83 0.86 0.90 1.00 1.05 1.07 1.02 0.95 0.88 9.3% 0.67 0.84 0.98 1.01 251 Meat 2017 0.91 0.89 0.95 1.07 1.13 1.13 1.15 1.18 1.20 1.14 0.95 0.94 1.05 20.0% 0.92 1.11 1.18 1.01 251 2018 1.00 1.02 1.04 1.08 1.12 1.16 1.17 1.18 1.17 1.16 1.12 1.09 1.11 5.4% 1.02 1.12 1.17 1.13 251 2019 1.07 1.04 1.03 1.07 1.11 1.12 1.11 1.10 1.10 1.09 1.05 1.03 1.07-3.3% 1.05 1.10 1.10 1.06 AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 227 2015 0.40 0.40 0.38 0.34 0.33 0.32 0.27 0.25 0.25 0.21 0.21 0.21 0.30 0.39 0.33 0.26 0.21 227 Drumsticks, 2016 0.22 0.26 0.30 0.34 0.38 0.40 0.38 0.37 0.36 0.35 0.31 0.31 0.33 12.7% 0.26 0.38 0.37 0.32 227 Bulk 2017 0.31 0.32 0.38 0.40 0.40 0.40 0.40 0.40 0.40 0.38 0.37 0.37 0.38 13.9% 0.34 0.40 0.40 0.37 227 2018 0.37 0.37 0.37 0.38 0.43 0.45 0.44 0.43 0.40 0.38 0.37 0.37 0.40 4.8% 0.37 0.42 0.42 0.37 227 2019 0.38 0.38 0.39 0.41 0.41 0.42 0.42 0.40 0.38 0.38 0.36 0.36 0.39-1.4% 0.38 0.42 0.40 0.37 AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 28 2015 86.6 87.1 88.7 92.2 91.8 83.3 78.2 78.3 71.9 65.2 61.2 61.6 78.6 87.5 89.1 76.1 62.7 28 WBE/Broiler 2016 67.7 69.8 70.9 74.6 76.0 74.8 76.3 81.5 78.7 69.8 65.3 66.0 72.6-7.7% 69.5 75.1 78.8 67.0 28 Cutout 2017 67.1 72.3 80.6 82.6 91.1 95.0 93.1 89.9 81.9 74.0 68.6 67.4 80.6 10.9% 73.4 89.6 88.3 70.0 28 2018 69.3 71.9 76.8 82.0 90.0 92.0 92.0 92.1 87.6 81.7 78.1 76.6 82.6 2.5% 72.7 88.0 90.6 78.8 28 2019 79.9 81.8 84.1 89.5 90.2 90.6 89.8 89.7 86.5 82.8 78.5 76.2 84.9 2.8% 81.9 90.1 88.7 79.2 AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 208 2015 111 102 107 114 117 114 105 92.7 87.2 83.2 83.3 88.9 100 107 115 95.1 85.1 208 2016 94.0 90.2 94.2 97.8 103 108 99.0 89.0 87.6 82.0 88.8 91.8 93.9-6.6% 92.8 103 91.9 87.5 WOGs (Small) 208 2017 95.0 95.0 103 105 112 118 114 106 103 96.8 96.0 96.4 104 10.3% 97.6 112 108 96.4 208 2018 102 97.0 105 114 119 120 119 111 104 98.3 98.8 99.8 107 3.6% 101 118 111 99.0 208 2019 109 109 112 121 125 126 125 114 107 104 104 105 113 5.8% 110 124 116 104 AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 25 2015 142 142 146 160 164 145 136 148 130 111 110 109 136 143 156 138 110 25 2016 115 113 118 123 128 126 134 155 141 118 106 106 123-9.5% 115 126 143 110 B/S Breast 25 2017 106 115 132 135 160 167 156 145 129 113 103 103 131 6.0% 118 154 143 106 25 2018 103 103 126 142 163 168 168 169 157 135 127 123 141 7.6% 111 158 165 128 25 2019 127 129 136 151 157 160 159 162 155 138 128 120 144 2.0% 131 156 158 129 AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 26 2015 177 191 193 186 188 191 181 172 159 156 132 135 171 187 188 171 141 26 2016 159 159 145 146 128 120 122 124 134 135 136 145 138-19.7% 154 131 127 139 Wings (Small) 26 2017 154 157 165 174 183 190 190 190 182 178 160 152 173 25.8% 159 182 187 163 26 2018 155 156 147 150 148 148 151 153 154 161 156 155 153-11.8% 153 149 153 157 26 2019 169 173 170 170 158 156 157 156 157 166 160 160 163 6.5% 170 162 157 162 AES, Inc. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ann Avg % YA Q1 Q2 Q3 Q4 27 2015 39.7 36.0 35.1 34.0 30.7 24.3 22.6 21.0 21.0 21.0 21.0 21.0 27.3 36.9 29.7 21.5 21.0 27 2016 23.4 26.5 29.3 32.4 34.8 34.0 31.0 30.4 31.0 30.6 29.0 29.0 30.2 10.5% 26.4 33.7 30.8 29.5 Leg Quarters 27 2017 29.0 30.7 35.7 36.1 38.0 38.1 39.9 40.0 38.2 34.6 33.6 33.0 35.7 18.2% 31.8 37.4 39.4 33.7 27 2018 34.0 35.8 36.7 37.8 40.6 41.2 40.6 39.5 37.3 37.3 37.1 36.9 37.9 6.3% 35.5 39.9 39.2 37.1 27 2019 37.0 36.8 38.1 39.5 39.7 39.6 38.8 37.4 35.2 35.7 35.8 35.7 37.4-1.4% 37.3 39.6 37.1 35.7 4/13/2018 AdvancedEconomicSolutions 20

Price Inflation >Wholesale chicken prices: -5.1% YOY over the past 3 months >Retail chicken prices: +2.6% YOY over the past 3 months 40.0% Chicken PPI vs Chicken CPI (YoY % ) 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 End-User Margin Compression PPI Chicken CPI Chicken 4/13/2018 AdvancedEconomicSolutions 21

Turkey Fundamentals 4/13/2018 AdvancedEconomicSolutions 22

$/lb Turkey Producer Margins & Hatchery >Margins remain negative as producers struggle with sharply lower whole bird prices >Producers are responding with major cuts to poult production 0.40 0.30 0.20 0.10 0.00 (0.10) Estimated Turkey Producer Margins (0.20) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 12-Month Avg Forecast Actual Current -0.03 0.5 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 Turkey Poults Hatched Turkey Poults Placed 26,000,000 24,500,000 25,500,000 24,000,000 25,000,000 23,500,000 24,500,000 23,000,000 24,000,000 22,500,000 23,500,000 22,000,000 23,000,000 21,500,000 22,500,000 21,000,000 22,000,000 20,500,000 21,500,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 20,000,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5-Yr Avg 2017 2018 5-Yr 2017 2018 4/13/2018 AdvancedEconomicSolutions 23

Turkey Slaughter & Weights >During the past 13 weeks, turkey production was down 1.25% YoY >Weights are down 0.7% YoY during that time 15% 13-Week MA Turkey Production 33.00 13-Week MA Turkey Weights 32.50 10% 32.00 5% 31.50 0% 31.00 30.50-5% 30.00-10% 29.50-15% 2012 2013 2014 2015 2016 2017 2018 29.00 28.50 2014 2015 2016 2017 2018 4/13/2018 AdvancedEconomicSolutions 24

Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015 Q2-2015 Q3-2015 Q4-2015 Q1-2016 Q2-2016 Q3-2016 Q4-2016 Q1-2017 Q2-2017 Q3-2017 Q4-2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018 Turkey Production >2018 production (USDA): 5.95 billion lbs, down 0.6 YoY 1,650 1,600 1,550 1,500 1,450 1,400 1,350 1,300 Quarterly U.S. Turkey Production Q1 Q2 Q3 Q4 5-Yr Avg 2015 2016 2017 2018 Turkey Production YOY % Change 15% 12.1% 10% 6.9% 7.3% 9.4% 5% 0% 2.6% 0.4% 3.7% 3.7% 1.4% 0.4% 0.5% -5% -3.9% -2.7% -4.0% -2.5% -2.4% -1.5% -1.8% -10% -8.7% -8.5% 4/13/2018 AdvancedEconomicSolutions 25

Turkey in Cold Storage >March 1 st Total: +13% YoY >Whole bird +20% YoY Breasts +16% YoY MST +13% YoY 000 lbs 000 lbs Jan Jan Feb Feb Mar Mar Apr Apr May May Jun Jun Jul Jul Aug Aug Sep Sep Oct Oct Nov Nov Dec Dec 660,000 560,000 460,000 360,000 260,000 160,000 Turkey in Cold Storage 5-Yr 2017 2018 125,000 Turkey Breast in Cold Storage 75,000 25,000 5-Yr 2017 2018 4/13/2018 AdvancedEconomicSolutions 26

M Lbs Turkey Trade >US exports of turkey were 48 million lbs in February, up 9.9% YOY >Absent an AI outbreak, exports could be stronger on the year, supporting 6% prices 70,000 65,000 60,000 55,000 50,000 45,000 40,000 YTD: 12.2% 300,000 200,000 100,000 - Turkey Exports 2010 2011 2012 2013 2014 2015 Ann Exports % 3% 0% -3% -6% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5-Yr 2017 2018 Y Ann Exports % 2000 445,267 2001 486,999 9% 2002 438,579-10% 2003 483,714 10% 2004 442,500-9% 2005 569,550 29% 2006 546,608-4% 2007 546,522 0% 2008 675,252 24% 2009 533,834-21% 2010 582,800 9% 2011 703,307 21% 2012 797,187 13.3% 2013 759,000-4.8% 2014 804,000 5.9% 2015 533,000-33.7% 2016 569,000 6.8% 2017 621,000 9.1% 2018 645,000 3.9% 4/13/2018 AdvancedEconomicSolutions 27

Turkey Prices 4/13/2018 AdvancedEconomicSolutions 28

Update of Poultry Fundamentals April 18 Contact us: 402.898.9458 www.advancedeconomicsolutions.com knox@aesresearch.com Visit our updated website Follow us on Twitter @AES_Research 4/13/2018 AdvancedEconomicSolutions 29