supply at least 80% of the U.S. market, the egg industry has approximately 65 producers making up approximately 80% of production. Given the competitive nature of the egg industry, the Board of Directors and management believe that the business will require significant additional capital resources to fund on-going activities.allow the business to keep pace with the growth, consolidation and cost structure within the industry. If the business were to remain organized as a cooperative, it may need to look to its members for a portion of its capital requirements. In recent years, several attempts have been made to raise equity capital from the cooperative's current shareholders, with limited success.

        Discussions with other egg processors continued throughout the summer of 2003, but the Board remained unable to no material avail. We expect thatreach agreement on terms for any potential transactions, again in significant part due to restrictions on capital raising and business combinations faced by the cooperative. In October 2003, the Board held a meeting at which corporate structure alternatives were discussed and a strategic alternatives committee was formed to study matters such as business growth, access to capital and corporate structure. With the assistance of the Board Advisor, Mark Fisler, and the cooperative's legal counsel, Lindquist & Vennum P.L.L.P., and independent accounting firm, Moore Stephens Frost, the strategic alternatives committee and management studied available alternatives, including the tax implications of those alternatives, and decided to recommend the conversion to a limited liability company will affordcompany. In addition to maintaining the business greater access to capital markets, which we believe is necessary to allow the business to keep pace with the

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growth, consolidation and costcurrent cooperative structure within the industry. We also believe that the conversion from a cooperativeor converting to a limited liability company, the committee considered:

•

converting to a Subchapter C corporation, which could improveallow for increased marketability of equity over a limited liability company, but which would impose both entity-level and member-level taxation;



•

converting to a cooperative subject to the liquidityrecently-enacted Chapter 308B of your investment.

the Minnesota Statutes, which would allow for the business to continue to be designated a cooperative for state law purposes, but would subject the business to less flexible statutory governance and distribution provisions than available to a limited liability company; and



•

converting to a general or limited partnership, which would similarly be subject to less flexible statutory governance and distribution provisions and also would put at risk all assets of the general partners.

        The cooperative's Board gave consideration to these alternatives and concluded that conversion to a Delaware limited liability company would likely be the most advantageous structure for its business. In November 2003, determining that it is in the best interests of the cooperative and its members to effect the proposed conversion, the Board passed a resolution to authorize the filing of a registration statement with the Securities and Exchange Commission in order to effect the conversion. Ultimately, the cooperative's Board of Directors based its final decision as to whether to convert to a LLClimited liability company on a number of factors, including those summarized below.

•

If the conversion is completed, the LLC will be able to offer its units for sale to any potential investor, not just to agricultural producers who agree to deliver corn to the cooperative each year. As a result, we believe that there will be a broader range of potential investors who can be approached for capital investment into the business. As a value-added cooperative, the cooperative has two primary methods of obtaining equity capital for use in its business. First, the cooperative can issue shares of its common stock. However, those shares can only be offered to, and held by, agricultural producers who are willing to enter into a uniform marketing agreement to deliver corn to the cooperative each year. Those shares cannot be sold to investors who fall outside classification as an agricultural producer. (The cooperative could offer its preferred shares to non-producer investors; however, restrictions under applicable cooperative law severely restrict that option.) Second, the cooperative's Bylaws provide that all member patrons will, through their patronage, furnish capital to the cooperative. Such patronage may be furnished by per-unit retains or through the distribution of less than 100% of the cooperative's patronage. To

date, the cooperative has distributed a significant portion of its annual patronage-based earnings to its members in cash. If the conversion is not completed, the cooperative may need to modify its practices in regard to per-unit retains and cash distributions to meet capital requirements.



•

We believe that the conversion from a cooperative to a limited liability company could improve the liquidity of your investment because the limited liability company form, unlike the cooperative form, permits a broader range of potential investors. The current cooperative form currently requires the business to limit its membership to producers of agricultural products and associations of agricultural producers. These limitations make it difficult for members to sell their equity interests inproducers, while the cooperative. The Board of DirectorsLLC may have both producers and senior management believes that the liquidity of members' equity interests may be enhanced if ownership of the business is opened up to a broader range of investors, that is, non-producers. We believe it may be easier to sell your equity interests if the potential buyers can be either agricultural producers or non-producer investors.non-producers as members. However, we do not expect that there will be a significant improvement in liquidity immediately following the conversion to a LLC,limited liability company, and we cannot assure you that the conversion to a LLC will everlimited liability company may never improve your liquidity. Under the Limited Liability Company Agreement of the LLC, your Class A units will still be subject to various restrictions on transfer, including the need to obtain the consent of the Board of Managers.



•

The cooperative's Board of Directors and management have examined the impact of the corn delivery system, including the uniform marketing agreement, on the cooperative and its members during the period since the cooperative's inception. The cooperative's Board of Directors and management have come to the belief that the current corn delivery arrangement subjects the cooperative's members to certain costs and risks, including the risk of being required to deliver corn at a price below the then-current market price of the corn. As the cooperative's Board of Directors and management believe that the elimination of the corn delivery program will not have a material adverse impact on the cooperative's business, the ability to reduce the members' risks under the corn delivery program is attractive. If, however, corn prices were to rise to abnormally high levels following the completion of the conversion, the business would no longer have the contractual right to reduce cash outflows by unilaterally establishing below-market prices to be paid to its members for the required corn.



•

We believe that the conversion from a cooperative to a limited liability company may facilitate potential business combination transactions. One reason for this is, again, the fact that the current cooperative form requires the business to limit its membership to producers of agricultural products and associations of agricultural producers, while the LLC may have both producers and non-producers as members. In its current form, the cooperative cannot readily enter into a transaction to, for example, acquire another egg producer if the parties want to give shares in the cooperative to non-producer equityholders of the other egg producer. Another reason is that applicable Minnesota cooperative law simply does not provide a mechanism by which the cooperative can readily enter into a merger transaction unless the other party to the merger is itself operating as a cooperative.



•

The Board of Directors determined that the likely tax impact of the conversion itself, and of operating as a limited liability company post-conversion, upon the cooperative and its members is acceptable. In evaluating the tax consequences of the conversion itself, the Board of Directors has relied, in part, on the valuation opinion and report prepared by Greene Holcomb & Fisher LLC.LLC and described in "Valuation Opinion" below. (Greene Holcomb & Fisher, LLC, a firm with expertise in such financial matters, had previously performed valuation and advisory work for the cooperative.) In evaluating the consequences of operating as a limited liability company post-conversion, the Board of Directors considered the fact that the LLC would expect to pay no federal income tax on its taxable income and instead pass its taxable income or loss on to its members. The Board of Directors also noted that the LLC expects to make cash distributions sufficient to discharge its members' anticipated combined federal, state and local income tax liabilities arising from allocations to them of taxable income by the LLC.

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•

The Board of Directors determined that the other anticipated costs and expenses associated with the conversion are acceptable. These include direct transaction costs such as legal, accounting, advising and printing, and the use of management and other resources towards accomplishing the conversion. Similarly, on an ongoing basis following the conversion, the LLC will face additional accounting, legal and printing expenses because it expects to operate as a partnership for tax purposes and to prepare and file quarterly, annual and other reports with the Securities and Exchange Commission.



•

As part of the conversion, we intend to eliminate the corn delivery program governed by the cooperative's uniform marketing agreement with each of its members. Following that change, any allocations of tax attributes or distributions of cash from the LLC to its members will be received in the member's new role as a passive investor. Given that role, we believe that any amounts receivedtaxable income allocated by a member in the LLC to the members will not be subject to self-employment taxes.taxes, unless the member also is employed by the LLC. That result contrasts with the tax treatment of amounts received by a member from thepatronage dividends issued to cooperative in connection with the delivery of corn; such amounts aremembers which patronage typically is subject to self-employment tax in the case of individuals. Amounts paid for corn to LLC members who are individuals and who patronizecontinue to sell corn to the LLC will continue to be includable in their calculation of net earnings from self-employment.



•

Under Subchapter T of the Internal Revenue Code, the cooperative operates as a cooperative exempt from tax under Section 521 of the Internal Revenue Code. As an exempt cooperative, it is not taxed on amounts of patronage sourced income withheld from its members in the form of qualified per-unit retains or on amounts distributed to its members in the form of Qualified Written Notices of Allocation. Such amounts are instead taxed directly or throughto the members. If the cooperative was not entitled to be taxed under Subchapter T, its revenues would be taxed when earned by the cooperative and the members would be taxed when dividends are distributed. From time to time, the Internal Revenue Service challenges the tax status of various cooperatives, taking the position that the challenged entities are not operating on a partnership.cooperative basis and are therefore not entitled to the tax treatment described above. The effect of a successful challenge is that the cooperative would be taxed as a corporation, with taxation at both the entity level and the shareholder level. The Internal Revenue Service has not challenged the cooperative's tax status, and the cooperative would vigorously defend any such challenge. However, if the proposed conversion is not completed and the business instead continues as a cooperative, in addition to any risk of the Internal Revenue Service seeking to retroactively impose entity-level taxation for the operations of the business to date, the cooperative might be subject to the additional risk of being subjected to entity-level taxation for its operations going forward.

        This discussion of factors considered by the cooperative's Board of Directors and management is not intended to be exhaustive, but is believed to include the material factors considered by them. In reaching its determination to approve and recommend the conversion, the Board of Directors considered the above issues and factors collectively without quantifying or assigning a greater weight to any one factor.

Recommendation of the Cooperative's Board of Directors

        The Board of Directors believes that it is in the best interests of the cooperative and its members to convert from a Minnesota cooperative to a Delaware limited liability company. Accordingly, the Board of Directors has unanimously approved the Merger Agreement. The Board of Directors unanimously recommends that members of the cooperative vote "FOR" adoption of the Merger Agreement. If the conversion is not consummated for any reason, the Board of Directors intend to continue to operate the business in a cooperative form.

Regulatory Approval

        Other than as necessary to comply with federal and state securities laws, no regulatory approvals must be obtained in connection with the proposed conversion.

Absence of Dissenters' Rights

        Members who object to the merger of the cooperative with and into the LLC will have no appraisal or dissenters' rights under applicable Minnesota cooperative law.

Employee Benefit Plans

        Under the Merger Agreement, the LLC will honor all benefits accrued by the cooperative under any benefit plan, policy or arrangement in accordance with the respective terms of those benefit plans and to the extent required by law. All such benefit plans, policies or arrangements will continue to be in effect under the LLC.

Federal Securities Law Consequences

        Under the federal securities laws, units in the LLC received in the conversion by persons who are not affiliates of the LLC under the Securities Act of 1933, as amended (the "Securities Act"), of the LLC may be resold immediately in transactions not involving an issuer, underwriter or dealer. Units received in the conversion by "affiliates" of the LLC may be resold only in compliance with Rule 144 under the Securities Act, in transactions that are exempt from registration under the Securities Act, or pursuant to further registration under the Securities Act. These restrictions are expected to apply to the directors and executive officers of the LLC.

        This document cannot be used in connection with resales of Class A units in the LLC received in the conversion by any person who may be deemed to be an affiliate of the cooperative or the LLC under the Securities Act.

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Valuation Opinion

        The cooperative retained Greene Holcomb & Fisher LLC, pursuant to a letter agreement dated December 11, 2003, to render to the Board of Directors a valuation opinion as to (a) the fair market value of the equity of the cooperative immediately prior to the merger, or the "Company Equity Value," and (b) the fair market value of a Class A unit of the LLC immediately following the merger, or the "LLC Unit Value."

        Greene Holcomb & Fisher, as a customary part of its investment banking business, is engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, private placements and valuations for corporate and other purposes. Greene Holcomb & Fisher hasfocuses on providing corporate finance services to middle-market companies. Greene Holcomb & Fisher previously performed certain other unrelated valuation and advisory work for the cooperative earlier in 2003 in connection with a potential business combination transaction with another egg processor. See "—Background of and Reasons for customary fees.the Conversion." The cooperative paid Greene Holcomb & Fisher a fee of $37,500 for this prior work, plus approximately $1,700 in out-of-pocket expenses. The cooperative retained Greene Holcomb & Fisher in connection with the conversion because of their expertise and familiarity with the cooperative and its industry.

        Pursuant to the engagement letter, on January 9, 2004, Greene Holcomb & Fisher delivered to the Board of Directors its written valuation opinion dated January 9, 2004. Based upon and subject to the assumptions, factors and limitations set forth in the valuation opinion and described below, Greene Holcomb & Fisher opined on January 9, 2004 that the Company Equity Value was estimated by Greene Holcomb & Fisher to be $30.4 million and the LLC Unit Value, assuming the issuance of 4,581,832

Class A units upon consummation of the merger, was estimated by Greene Holcomb & Fisher to be $4.07 per Class A unit.

        Greene Holcomb & Fisher's valuation opinion is directed to the Board of Directors and is not intended to be and does not constitute a recommendation to any stockholder of the cooperative as to how to vote with respect to the merger. Greene Holcomb & Fisher conducted various analyses of the cooperative and the LLC, but was not asked to and did not opine as to the basic business decision to proceed with or effect the merger, the relative merits of the merger compared to any alternative business strategy or transaction in which the cooperative might engage, the process by which the merger was originated, negotiated, approved or consummated, or any other term, condition or aspect of the merger. Greene Holcomb & Fisher made no representation as to the sufficiency, legal or otherwise, of its valuation opinion for the cooperative's purposes.

        The valuation opinion opined as to the Company Equity Value and the LLC Unit Value as of its date only, and except as contemplated by the engagement letter, Greene Holcomb & Fisher is not obligated to update, revise or reaffirm its valuation opinion. Events could occur which could materially affect the assumptions used in preparing the valuation opinion. Greene Holcomb & Fisher assumed, with the consent of the Board of Directors of the cooperative that, for purposes of its valuation opinion concerning Company Equity Value and LLC Unit Value, the merger occurred as of January 9, 2004. In order to account for changes between the valuation date and the conversion date, the engagement letter contemplates that Greene Holcomb & Fisher will provide the Board of Directors with an update of the valuation opinion prior to completion of the conversion.

        A copy of the valuation opinion is attached to this document asAppendix D and is incorporated in this information statementdocument by reference. This summary of the valuation opinion is qualified in its entirety by reference to the full text of the valuation opinion. Stockholders of the cooperative should read the valuation opinion in its entirety. Greene Holcomb & Fisher has consented to the inclusion of its valuation opinion in this document. Members of the cooperative are encouraged to read the valuation opinion in its entirety.

        In arriving at the valuation opinion, Greene Holcomb & Fisher's review included:

•

a draft dated December 5, 2003 of a contemplated transaction agreement and the Agreement and Plan of Merger, each by and between the cooperative and the LLC;



•

a draft dated December 5, 2003 of the Limited Liability Company Agreement;



•

certain financial, operating and business information related to the cooperative on a stand-alone basis, including the cooperative's annual reports (with audited financial statements) for the fiscal years ended August 31, 1998-2002, the cooperative's audited financial statements for the fiscal year ended August 31, 2003, and the cooperative's unaudited financial statements for the three months ended November 30, 2003;2003, all prior to restatement for matters related to hedge accounting and SFAS 133;

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•

certain internal historical financial and other information of the cooperative and certain projected financial and other information of the cooperative and the LLC, prepared for financial planning purposes and furnished by the management of the cooperative, including the cooperative management's projections of the cooperative's and the LLC's financial performance for the fiscal years ending 2004-2008;



•

a visit to the cooperative's facility in Renville, Minnesota;



•

to the extent publicly available, financial data of selected public companies deemed comparable to the cooperative;



•

to the extent publicly available, financial data of selected transactions of companies deemed comparable to the cooperative;

•

a discounted cash flow analysis on the cooperative based on projections that were prepared by the cooperative's management; and



•

industry news relating to transactions in the poultry and egg processing marketplace and historical egg prices.

        In addition, Greene Holcomb & Fisher had discussions with members of the management of the cooperative concerning the financial condition, current operating results and business outlook for the cooperative and the LLC.

        In delivering its valuation opinion to the Board of Directors, Greene Holcomb & Fisher prepared and delivered to the Board of Directors a written valuation report containing material analyses relating to the valuation opinion. The following is a summary of the valuation opinion and these material analyses and other information that Greene Holcomb & Fisher included in its valuation report to the Board of Directors:analyses:

Company Equity Value

        The term "Company Equity Value" used in the valuation opinion is understood to mean an estimated amount based on the value of the equity of the cooperative as a whole as of January 9, 2004, on a going concern, as if sold basis, between a willing buyer and a willing seller, neither being under compulsion, each having a reasonable knowledge of all relevant facts.

        Management of the cooperative, based on advice of the cooperative's tax counsel, determined that the existing net operating loss carry forwards of the cooperative will not survive the merger and therefore are not assets for which taxable gain or loss must be determined in the context of the conversion. Accordingly, at the direction of the cooperative's management, Greene Holcomb & Fisher did not, for purposes of determining Company Equity Value, ascribe any value to the net operating loss carry forwards of the cooperative.

LLC Unit Value

        For purposes of the valuation opinion and with the consent of the Board of Directors, Greene Holcomb & Fisher estimated the LLC Unit Value by applying minority and lack of marketability discounts, as appropriate, to each holder's ratable interest in the Company Equity Value to which the LLC will succeed in the merger. Management furnished to Greene Holcomb & Fisher information concerning the number of LLC units to be outstanding following the merger.

        A minority discount accounts for the difference between the value of the cooperative's equity as a whole (which includes control) and the value of the minority interest represented by each LLC Class A unit. To measure the minority discount, Greene Holcomb & Fisher reviewed the control premium paid in 102 selected acquisitions over the prevailing public market price of target companies and selected 70 transactions which met the following criteria:

•

transactions with a transaction value of less than $1 billion;

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•

transactions completed between January 1, 2003 and December 10, 2003;



•

transactions where the targets were public companies; and



•

transactions with a positive premium of 70% or less. Greene Holcomb & Fisher has advised the cooperative that the 70% threshold was used because transactions with premiums in excess of 70% often involve unusual circumstances not present in typical merger and acquisition transactions.

        This analysis produced a 29.9% median premium paid over the target'sacquired company's stock price 30 days before the announcement of the acquisition. ThisGreene Holcomb & Fisher calculated that this 29.9% control premium equates to a 23.0% minority discount. For example, a stock trading at $100.00

per share would be worth $129.90 per share with a 29.9% control premium applied, which then requires a 23.0% discount whichto arrive back at the $100.00 trading price. The 23.0% minority discount was then applied to the results of Greene Holcomb & Fisher's discounted cash flow analysis and comparable transaction analysis described below.

        A lack of marketability discount accounts for an individual stockholder's inability to freely sell shares in the open market. Greene Holcomb & Fisher reviewed the results of approximately 15 studies conducted on the lack of marketability discount and arrived at thedetermined, in their judgment, based upon these studies and Greene Holcomb & Fisher's mergers and acquisitions experience, that a 20.0% discount appliedwould be appropriate to apply to the discounted cash flow analysis, the comparable transaction analysis and the comparable public company analysis.

        The financial planning data furnished by the cooperative indicated, and Greene Holcomb & Fisher assumed at the Board of Directors' direction and with the Board of Directors' consent and in accordance with the management of the cooperative's projections that, for purposes of the LLC Unit Value, immediately following the merger, no material change in the business, operations, cash flows or capital structure (including that the Class A units are entitled to the entire residual value of the LLC) of the cooperative will occur by reason of the merger.

        Greene Holcomb & Fisher expressed no opinion regarding any potential tax or accounting consequences of the merger. Greene Holcomb & Fisher was not furnished any information concerning, nor did its analyses account for, any potential financial impact of any such tax or accounting consequences of the merger, including any such consequences arising by reason of differences in taxation of income between cooperative corporations and limited liability companies.

Valuation Summary

        Greene Holcomb & Fisher used three generally accepted valuation approaches in estimating the Company Equity Value and the LLC Unit Value and assigned relative weights to each analysis:

•

Discounted Cash Flow Analysis (60% weight).



•

Comparable Transaction Analysis (25% weight).



•

Comparable Public Company Analysis (15% weight).

        During the twelve months prior to the date of the Greene Holcomb & Fisher opinion, egg prices rose to ten-year highs. Liquid egg prices were $0.56 per whole liquid egg pound on January 5, 2004, far above the $0.31 per whole liquid egg pound one year ago and their $0.367 10-year average, yet below their peak of $0.80 reached on December 1, 2003. Management's projections of future results of operations reflect its view that recent egg prices were not sustainable over the long term. In preparing its valuation analysis, Greene Holcomb & Fisher accounted for this expectation by placing a 60% weight on the discounted cash flow analysis, which estimates value based on future projected cash flows when egg prices are assumed to have stabilized, rather than recent historical performance. In contrast, the comparable transaction analysis and the comparable public company analysis methods both rely on historical financial performance to estimate value. Greene Holcomb & Fisher placed 25% and 15% weights on these analyses, respectively. For purposes of conducting the comparable public company analysis, Greene Holcomb & Fisher selected and reviewed data from four public companies deemed comparable to the cooperative, two of which did not have sufficient valuation information. The third comparable company demonstrated volatile pricing behavior over the three months prior to the date of

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its opinion. For these reasons, Greene Holcomb & Fisher placed a 25% weight on the comparable transaction analysis and a 15% weight on the comparable public company analysis.

        Each analysis is described in detailed below. The analyses yield the following results (dollars in millions, except per unit amounts):

Discounted Cash Flow Analysis

        Greene Holcomb & Fisher performed a discounted cash flow analysis for the cooperative in which it calculated the present value of the projected hypothetical future cash flows of the cooperative using internal financial planning data prepared by the cooperative's management. Greene Holcomb & Fisher estimated a range of theoretical values for the cooperative based on the net present value of the cooperative's projected annual cash flows from December 1, 2003 through August 31, 2008 and a terminal value for the cooperative in 2008 (calculated based on a multiple of 2008 operating cash flow). Greene Holcomb & Fisher applied a range of discount rates of 14% to 16% and a range of terminal value multiples of 4.0x to 5.0x forecasted 2008 earnings before interest, taxes, depreciation and amortization.

        Discount rates and multiples were determined by considering multiples from comparable transactions and trading multiples of comparable public companies. In addition, Greene Holcomb & Fisher also considered the commodity nature of the cooperative's business, the size of the cooperative's valuation relative to its competitors, its position in the industry, the inherent risk of improved performance in an increasingly competitive industry and Greene Holcomb & Fisher's recent experience in the mergers and acquisitions marketplace.

        This analysis resulted in the cooperative's company value ranging from a low of $45.8 million, a midpoint of $49.9 million (discount rate of 15% and terminal value multiple of 4.5x), and a high of $54.3 million.

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        Greene Holcomb & Fisher utilized the midpoint company value to derive the Company Equity Value and the adjusted LLC equity value (in millions).

Comparable Transaction Analysis

        Greene Holcomb & Fisher reviewed 52 transactions involving companies that it deemed comparable to the cooperative and which met the following criteria:

•

target companies with selected SIC codes;



•

transactions announced between January 1, 1990 and January 9, 2004;



•

transactions valued at less than $200 million; and



•

transactions in which the acquirer purchased 90% or more of the target.

        This analysis produced multiples of selected valuation data as follows:

(1)

Earnings before interest, taxes, depreciation and amortization for each target company's last twelve-month period prior to the transaction.

        Greene Holcomb & Fisher utilized the mean resulting multiple of company value to EBITDA (5.3x) and derived an average Company Equity Value and an average adjusted LLC equity value (in

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millions of dollars). References to latest twelve month's EBITDA of the cooperative are for the period ended November 30, 2003.

Comparable Public Company Analysis

        Greene Holcomb & Fisher compared financial information and valuation ratios relating to the cooperative to corresponding data and ratios from the following four publicly traded companies:

•

Cagle's, Inc.



•

Cal-Maine Foods, Inc.



•

Lucille Farms Inc.



•

Sanderson Farms, Inc.

        Greene Holcomb & Fisher selected these public companies through discussions with the cooperative's management, by conducting industry research and by reviewing companies operating in the egg and dairy processing industry. Greene Holcomb & Fisher also consulted with the cooperative's management to confirm that the comparable company choices of Greene Holcomb & Fisher, selected through individual company research, were indeed comparable to the cooperative's operations. Due to several factors, including these companies' revenue, market breadth, and diversification of product offerings, none of these companies is directly comparable to the cooperative and, in some cases, rendered available data inadequate or not meaningful for purposes of analysis. However, these companies are similar enough to the cooperative and sufficient data was available to conclude that a comparable public company analysis was an appropriate metric to use in the valuation of the cooperative.

        This analysis produced multiples of selected valuation data as follows:

(1)

Earnings before interest, taxes, depreciation and amortization for each company's last reported twelve-month period.

(2)

No EBITDA valuation multiple is available because Cagle's, Inc. is unprofitable.

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(3)

Not meaningful. Lucille Farms has a market capitalization under $5 million, yielding unreliable valuation information.

        Greene Holcomb & Fisher utilized the average resulting multiple of company value to EBITDA (4.9x) and derived an average Company Equity Value and an average adjusted LLC equity value (in millions of dollars). References to latest twelve month's EBITDA of the cooperative are for the period ended November 30, 2003.

        For purposes of the valuation opinion, Greene Holcomb & Fisher relied upon and assumed the accuracy and completeness of the projections, financial and other information made available to it and did not assume responsibility for independent verification of such information. Greene Holcomb & Fisher relied upon the assurances of the management of the cooperative that the information provided to Greene Holcomb & Fisher by the cooperative was prepared on a reasonable basis in accordance with industry practice and, with respect to financial planning data and other business outlook information, reflects the best currently available estimates and judgment of management, and that management was not aware of any information or facts that would make the information provided to Greene Holcomb & Fisher incomplete or misleading. Greene Holcomb & Fisher expressed no opinion as to such financial planning data and other business outlook information or the assumptions on which they are based.

        Greene Holcomb & Fisher assumed the merger will be consummated pursuant to the terms of the Merger Agreement without material modifications thereto and without waiver by any party of any material conditions or obligations thereunder. In addition, in arriving at its opinion, Greene Holcomb & Fisher assumed that, in the course of obtaining any necessary regulatory approvals for the merger, no restrictions, including any divestiture requirements, will be imposed that would have a material adverse effect on the contemplated benefits of the merger.

        In arriving at its opinion, Greene Holcomb & Fisher did not perform any appraisals or valuations of any specific assets or liabilities (contingent or other) of the cooperative, did not make any physical inspection of tangible assets, and was not furnished with any such appraisals or valuations.

        The summary of Greene Holcomb & Fisher's analyses set forth above does not purport to be a complete description of the analyses or factors underlying Greene Holcomb & Fisher's valuation opinion. The preparation of a valuation opinion is a complex process involving subjective judgments and is not necessarily susceptible to partial analysis or summary description. Greene Holcomb & Fisher believes that its analyses must be considered as a whole and that selecting portions of its analyses and

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the factors considered by it, without considering all analyses and factors, could create a misleading or incomplete view of the processes underlying such analyses and its opinion.

        With respect to the comparable public company analysis and the comparable transaction analysis summarized above, no company or transaction utilized as a comparison is identical to the merger, the cooperative or the LLC and such analyses necessarily involve complex considerations and judgments concerning the differences in financial and operating characteristics of the companies and other factors that could affect the acquisition or public trading values of the companies concerned. Similarly, complex considerations and judgments affect a discounted cash flow analysis. As a result, the estimated values set forth in the valuation opinion should not be considered equivalent to actual values that might be realized in the context of an actual transaction, which may be higher or lower.

        Under the terms of the engagement letter, the cooperative has agreed to pay Greene Holcomb & Fisher a customary fee of $30,000 for rendering its valuation opinion that is not contingent upon the merger. Whether or not the merger is consummated, the cooperative has agreed to pay the reasonable attorneys fees and other out-of-pocket expenses of Greene Holcomb & Fisher, estimated at approximately $10,700 to date, and to indemnify Greene Holcomb & Fisher, against liabilities incurred. These liabilities include liabilities under the federal securities laws in connection with the engagement of Greene Holcomb & Fisher by the Board of Directors.

Tax Treatment

        The conversion will be a taxable event to the cooperative and its members. Please see Federal Income Tax Considerations for a discussion of important tax matters.

Accounting Treatment

        For financial statement purposes, the conversion will be accounted for as a merger between entities under common control. Accordingly, the LLC will record the value of the assets and the liabilities transferred at their carrying amounts on the records of the cooperative, and will recognize no goodwill or intangible asset in connection with the transaction. This accounting is in accordance with Statement of Financial Accounting Standards 141, "Business Combinations," which states that the term "business combination" excludes transfers of net assets or exchanges of shares between entities under common control.

Effect Upon Loans Secured By Common Stock

        Upon the conversion to a limited liability company, members of the cooperative will receive Class A units in the LLC and will relinquish ownership of their shares of common stock of the cooperative. If a member of the cooperative has secured a loan with that common stock, the effect of the conversion upon that loan may vary depending on the terms of that loan and the nature and preference of the lender. Members who have secured loans using common stock may wish to consult with their lending institutions to determine if their lenders will require new assignments of security interest in the Class A units or other new collateral to support those loans.

THE MERGER AGREEMENT

        The following is a summary of the material terms of the Merger Agreement between the cooperative and the LLC.LLC, who are jointly referred to in this section as the "parties" to the agreement. The agreement is formally entitled the "Agreement"Amended and Restated Agreement and Plan of Merger." For more detailed information about these transactions, we encourage you to read the agreement which is included in Appendix A and incorporated by reference into this document.

Conditions to Consummation of the Merger

        The obligations of the parties to consummate the merger are subject to the satisfaction or waiver, where permissible, of the following conditions at or prior to the consummation of the merger:

•

Approval of the Merger Agreement by each of the parties, including the approval of the members of the cooperative at the special meeting;



•

Absence of any order enjoining the Merger Agreement;merger;



•

The effectiveness of the registration statement of which this document constitutes a part, and noabsence of Securities and Exchange Commission proceedings to stop the effectiveness are underway;effectiveness;



•

Receipt of all consents, approvals and waivers necessary in connection with the merger, including those from the cooperative's lenders;



•

All actions, proceedings and documents necessary to carry out the merger shall be reasonably satisfactory to the parties.

        Because the cooperative controls the LLC, the cooperative mayhas the ability to waive or cause to be waived any of the conditions precedent to the conversion.conversion, except as limited by law. However, the cooperative does not intend to waive or cause to be waived any condition if the failure of the condition would have a material adverse effect on the business or operations of the LLC post-conversion. For example, we do not intend to complete the conversion if the cooperative has not obtained the approval of its members, the registration statement has not been declared effective, or the cooperative has not obtained the consent of its senior lenders. Representatives of the cooperative's two largest lenders have already indicated orally that, subject to final review of the lenders at the time of the proposed conversion, they intend to consent to the conversion and amend applicable loan documents as appropriate.

Termination

        The Merger Agreement may be terminated and the merger may be abandoned at any time prior to its consummation by:

•

The cooperative or the LLCEither party if members of the cooperative fail to approve the merger of the cooperative with and into the LLC.LLC;



•

Written notice of termination delivered by either the cooperative or the LLC;party; or



•

AnyEither party if the conversion has not been consummated on or before December 31, 2004.

Amendment

        The terms of the Merger Agreement may be amended or supplemented at any time by mutual agreement, although consent would be a formality to the extent that the cooperative controls the LLC.

Effective TimeTiming

        The merger of the cooperative with and into the LLC will take effect on the date on whichbe completed once articles of merger are filed with the Minnesota Secretary of State and a certificate of merger is filed with the Delaware Secretary of State. If the merger is approved, we anticipate that the closing and the filing of these documents will take place as soon as practicable followingand the member vote.conversion will take effect August 31, 2004.

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Indemnification and Insurance

        From and after the consummation of the merger, the LLC has agreed to indemnify each present and former director, officer, employee or agent of the cooperative. The LLC has also agreed to indemnify each person who, while a director or officer of the cooperative and at the request of the cooperative, serves or has served another corporation, cooperative, partnership, joint venture, or other enterprise as a director, officer or partner. This indemnification obligation covers any losses, claims, damages, liabilities, or expenses arising out of or pertaining to matters existing or occurring at or before the consummation of the merger, whether asserted or claimed before or after the consummation of the merger, to the fullest extent permitted by law. The LLC may purchase insurance coverage against these losses, claims or expenses, but is not obligated to do so.

INTERESTS OF CERTAIN PERSONS IN THE CONVERSION

        In considering whether to approve the conversion, members of the cooperative should be aware that the directors, officers and certain members of management of the cooperative have interests in the conversion in addition to their interests solely as members of the cooperative, as described below.

Indemnification

        The Merger Agreement provides that the cooperative's directors and officers will have rights to indemnification for all acts or omissions occurring at or before the conversion to the fullest extent permitted by law. The LLC may maintain insurance for such acts or omissions. TheInsofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to these directors and officers pursuant to the foregoing, the cooperative has been informed that in the opinion of the Securities and Exchange Commission advises thatsuch indemnification for securities law violations is against public policy as expressed in the Securities Act and may beis therefore unenforceable.

Treatment of Member Equity

        Since Midwest Investors of Renville, Inc. is a cooperative with voting rights arising from membership, eachEach member of the cooperative has equal voting rights of one vote per member. Under the terms of the Merger Agreement, at the time the merger is completed, each outstanding share of common stock of the cooperative (in combination with the patronage equities associated with each such share) will be converted into one Class A unit in the LLC. The Limited Liability Company Agreement of the LLC provides that each member of the LLC will have voting rights in proportion to the number of Class A units held. As a result, members holding a greater number of shares of common stock of the cooperative prior to the conversion will have proportionately greater voting control in the LLC following the conversion.

        As of the ,[                        ], 2004 record date for the determination of members of the cooperative eligible to vote, there were 706698 voting members of the cooperative. The seven directorsDirectors and their related parties and the chief executive officer of the cooperative as a group represent 1.1%comprise nine of those members, representing 1.3% of the cooperative's voting members andmembers. That group beneficially own 143,056owns a total of 149,920 shares of common stock, or approximately 3.1%3.3% of the cooperative's total issued and outstanding common stock. As a result, if the conversion had been completed on that date, these persons would beneficially own 143,056149,920 Class A units in the LLC, or approximately 3.1%3.3% of the LLC's total issued and outstanding Class A units. Because of this, these persons will have greater influence over matters submitted to a vote of the membership of the LLC than they had over matters voted upon by the membership of the cooperative. No director or executive officer owns beneficially more than 1.3% of the cooperative's issued and outstanding common stock.

Board Representation and Management

        The individuals serving on the Board of Directors of the cooperative and management are expected to continue to serve in substantially the same capacities for the LLC following the conversion.

PRO FORMA FINANCIAL INFORMATION OF THE LLC

        Pursuant to the Merger Agreement, the cooperative would merge with and into the LLC if the conversion is completed. The following table presents summary historical financial information of the cooperative and unaudited pro forma financial information of the LLC. The historical information presented as of and for the fiscal years ended August 31, 2000, 2001, 2002 and 2003 is derived from the cooperative's financial statements, which have been audited by Moore Stephens Frost, independent auditors. The historical information presented as of and for the fiscal year ended August 31, 1999 and the threenine months ended November 30, 2002 and 2003May 31, 2004 is unaudited. The unaudited pro forma income statement information is computed as if the conversion from a cooperative to a limited liability company had been consummated on September 1, 1998.2000. The unaudited pro forma balance sheet information is computed as if the transaction had been consummated on November 30, 2003.May 31, 2004. We encourage you to read the financial information presented below along with "Management's Discussion and Analysis of Financial Condition and Results of Operations," as well as the financial statements and related notes included at the end of this document.

        For financial statement purposes, the conversion will be accounted for as a merger of entities under common control. Accordingly, the LLC will record the value of the assets and the liabilities transferred at their carrying amounts on the records of the cooperative, and will recognize no goodwill or intangible asset in connection with the transaction. The unaudited pro forma financial information presented below reflects related required preliminary pro forma adjustments, and is based on available information and various assumptions which management of the cooperative believes are reasonable. Significant assumptions made in deriving the pro forma information presented below include the following:

•

The cooperative would have utilized operating loss carryforwards and patronage dividends to eliminate tax expense and liability for the threenine month period ended November 30, 2003.May 31, 2004.



•

The deferred tax asset would have been utilized fully in the conversion, and would not be transferable to the LLC.



•

As the LLC will be treated as a partnership for federal income tax purposes, no provision for income taxes would have been recognized for the periods presented.



•

Because the cooperative has historically paid market price for the purchase of corn under its corn delivery program, the termination of that program will have a negligible impact on prices paid by the business to procure corn.

        The unaudited pro forma financial information is provided for illustrative purposes only and does not necessarily reflect what the results of operations or financial position of the LLC would have been if the conversion had actually occurred on the dates specified. For the periods presented, no adjustments to the historical data in the income statement information are required. Therefore, the historical and pro forma presentations for the income statement information are identical for all periods presented.

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Pro Forma Financial Information Of The LLC
(in thousands, except share, per share, unit and per shareunit data)