AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 9,MAY 5, 2004

REGISTRATION NO. 333-112533

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Pre-Effective
Amendment No. 34
to
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

GOLDEN OVAL EGGS, LLC
(Exact name of registrant as specified in its charter)

        Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective and all other conditions to the conversion pursuant to the Agreement and Plan of Merger described herein have been satisfied or waived.

        If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

The information in this InformationDisclosure Statement-Prospectus is not complete and may be changed. The securities to be issued in the conversion may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This InformationDisclosure Statement-Prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities, in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION. DATED APRIL 9,MAY 5, 2004.

PROPOSED CONVERSION
of Midwest Investors of Renville, Inc., a Minnesota cooperative
(d.b.a. "Golden Oval Eggs")
to a Delaware limited liability company

Dear Member:

        Over the past several years, and particularly in recent months, the Board of Directors of Midwest Investors of Renville, Inc., a Minnesota cooperative (d.b.a. "Golden Oval Eggs") and its management have carefully analyzed Golden Oval's business and structure. As a result of that analysis, it became apparent that significant structural changes were appropriate. After carefully exploring alternatives, the Board of Directors has determined 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 by merging the cooperative into a newly-formed Delaware limited liability company. We believe that the proposed conversion may create opportunities to enhance the value and improve the liquidity of members' equity interests.

        We cannot consummate the merger to effect the conversion without our members' approval. As described in the attached notice of special meeting, we will be holding a special meeting of members at [       ].m. on [                        ], 2004 at [                                    ], Minnesota for the purpose of approving the conversion. To vote, please complete and return the enclosed ballot in the envelope provided. Although we encourage you to vote by mail, you are invited to attend the special meeting and submit your ballot at that time.Your vote is very important. Our Board of Directors has approved the conversion and unanimously recommends that you vote "FOR" approval of the conversion. The affirmative vote of a majority of the votes cast, in person or by mail, at the special meeting is required to approve the conversion.

        In the conversion, each member would obtain limited liability company "units" issued by the newly-formed Delaware limited liability company, or "LLC". Specifically, the combination of each share of common stock of Golden Oval and a proportionate amount of the patronage equities to be issued by the cooperative would be converted into a Class A unit in the LLC. This will result in an initial offering of the LLC's Class A units, with each member receiving one Class A unit for each share currently held. No public market currently exists for these securities. As part of the conversion, Golden Oval intends to terminate the corn delivery program that has been in place since the cooperative's inception. To that end, each member is also being asked as a separate matter to voluntarily agree to terminate his or her uniform marketing agreement with the cooperative. In anticipation of the completion of the conversion, the cooperative, pursuant to its rights under the uniform marketing agreements, is planning to suspendhas suspended all delivery requirements under the uniform marketing agreements beginning May 2004. If the conversion is not approved by the cooperative's members, the cooperative will plan to resume the corn delivery program in September 2004. Following the conversion, the LLC will also take steps to terminate any remaining uniform marketing agreements.

        Attached is an Informationa Disclosure Statement of the cooperative and Prospectus of the LLC which provides detailed information about the proposed conversion and the new limited liability company. We encourage you to carefully review the entire InformationDisclosure Statement—Prospectus.Please see "Risk Factors" beginning on page 11 to read about important factors you should consider before voting. Neither the cooperative nor the LLC has authorized anyone to provide you with information that is different from the information contained in the InformationDisclosure Statement—Prospectus. Information on our web site is not part of the InformationDisclosure Statement—Prospectus.

        We look forward to seeing many of you at the special meeting. Regardless of the proposed conversion, you should know that our mission remains the same: "To provide our farmer producers, who are owners of the company, a competitive return on their investment."

        NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES TO BE ISSUED IN THE MERGER OR DETERMINED IF THIS INFORMATIONDISCLOSURE STATEMENT—PROSPECTUS IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

        The InformationDisclosure Statement—Prospectus is dated [                        ], 2004, and is first being mailed to members on or about [                        ], 2004.

MIDWEST INVESTORS OF RENVILLE, INC.
(D.B.A. "GOLDEN OVAL EGGS")

340 DUPONT AVENUE NE
RENVILLE, MINNESOTA 56284

NOTICE OF SPECIAL MEETING OF MEMBERS
TO BE HELD ON [                        ], 2004

To the Members:

        This is a notice of a special meeting of members of Midwest Investors of Renville, Inc., a Minnesota cooperative (d.b.a. "Golden Oval Eggs"), to be held on [                        ], 2004 at [        ].m., local time, at [                        ], [            ], Minnesota, for the following purposes:

        To vote upon a proposal to approve and ratify an Agreement and Plan of Merger by and between Midwest Investors of Renville, Inc., a Minnesota cooperative, and Golden Oval Eggs, LLC, a newly-formed Delaware limited liability company (the "LLC"), pursuant to which the cooperative will be merged with and into the LLC, with the LLC as the surviving entity. The members of the cooperative will become members of the LLC and receive one Class A unit of the LLC for the combination of each share of the cooperative's common stock they hold as of the effective date of the merger and the patronage associated with the delivery of corn in connection with ownership of that share prior to the merger. If the proposal is approved, closing is expected to take place as soon as practicable following the member vote.

        The close of business on [                        ], 2004 has been fixed as the record date for determining those members of the cooperative entitled to vote at the special meeting and any adjournments or postponements of the meeting.

        As part of the conversion, the cooperative also intends to terminate the corn delivery program that has been in place since the cooperative's inception. To that end, each member is also being asked as a separate matter to voluntarily agree to terminate his or her uniform marketing agreement with the cooperative, with the termination to become effective when and if conversion is completed. Following the conversion, the LLC will also take steps to formally terminate any remaining uniform marketing agreements.

        To vote, please complete and return the enclosed ballot to the cooperative in the envelope provided. If you vote by mail, your ballot will not be counted unless it is received by the cooperative by [                ].m. local (Minnesota) time on [                        ], 2004, or prior to any applicable adjournment or postponement of the meeting. Although you are encouraged to vote by mail, you may vote in person by attending the special meeting (and any adjournments or postponements of the meeting) and submitting your vote on the enclosed ballot at that time. You may vote on the proposed conversion by using the enclosed ballot whether you vote by mail or in person.

[                        ], 2004
Renville, Minnesota

        The Board of Directors of the cooperative unanimously recommends that members vote for approval of the merger which will effect the proposed conversion. As of the [                        ], 2004 record date for the determination of members of the cooperative eligible to vote, there were 706 voting members. Directors, their related parties and the chief executive officer of the cooperative comprise nine of those members, representing approximately 1.3% of the total number of members and votes entitled to be cast. All of these persons have indicated that, as members, they will vote in favor of the conversion. The affirmative vote of a majority of the votes cast, in person or by mail, at the special meeting is required to approve the conversion.

INFORMATIONDISCLOSURE STATEMENT—PROSPECTUS

TABLE OF CONTENTS

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QUESTIONS AND ANSWERS ABOUT THE CONVERSION

        Below are answers to questions that we anticipate will be frequently asked by members of Midwest Investors of Renville, Inc., a Minnesota cooperative (d.b.a. "Golden Oval Eggs"), in connection with making their decision on whether to approve the conversion to a Delaware limited liability company. We encourage you to read this entire document to obtain a more complete answer to these questions.

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SUMMARY

        The following summary highlights selected information from this document and, in conjunction with the preceding "Questions and Answers About the Conversion", is intended to provide an overview of the proposed conversion. The Summary does not contain all of the information that you should consider before deciding how to vote at the special meeting. To understand the transaction fully and for a more complete description of the legal terms of the conversion, we encourage you to read this entire document, including the section entitled "Risk Factors," the appendices and the financial statements and related notes to those statements included in this document.

        Midwest Investors of Renville, Inc. (d.b.a. "Golden Oval Eggs") is a Minnesota member-owned cooperative association incorporated in March 1994 for the purpose of producing and processing egg products. The cooperative is exempt from federal income taxation under Section 521 of the Internal Revenue Code of 1986, as amended, to the extent permitted under the Internal Revenue Code.

        Golden Oval Eggs, LLC is a limited liability company organized under the laws of the State of Delaware in November 2003. The LLC is a wholly-owned subsidiary of the cooperative and was formed for the specific purpose of consummating the cooperative's conversion to a limited liability company. The conversion will be effected by merging the cooperative into the LLC. Following the merger, the LLC will operate as the cooperative's successor. As such, its operations will be a continuance of the operations of the cooperative.

        The cooperative's and the LLC's principal offices are located at 340 Dupont Avenue NE, Renville, Minnesota 56284, and their telephone number is (320) 329-8182.

The conversion		The securities being registered by this document are being issued in connection with the conversion of the cooperative to a Delaware limited liability company.
How the conversion will be completed		The cooperative has formed the LLC as a wholly-owned subsidiary.
		The Board of Directors of the cooperative has already approved the merger on behalf of the cooperative as the sole member of the LLC. The following diagram shows the structure of the two entities relative to one another.

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		To effect the conversion, the cooperative will be merged into the LLC. The LLC will be the surviving entity and the cooperative will cease to exist.
		We have attached the agreement which describes the legal terms of the conversion asAppendix A to this document. We encourage you to read the agreement and the discussion of the conversion and the agreement under "The Conversion" and "The Merger Agreement" in this document.
Who can vote		You can vote if you were a voting member of the cooperative as of the close of business on [                        ], 2004. Each voting member will have one vote, regardless of the number of shares of common stock owned.
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.
Regulatory approval		Other than as necessary to comply with federal and state securities laws, no federal or state regulatory requirements must be complied with or approvals must be obtained in connection with the proposed conversion.
No dissenters' rights		Applicable Minnesota cooperative law does not provide a right to dissent from the conversion vote and demand an appraisal of and cash payment for the fair value of your common stock in connection with the conversion.
Valuation		For purposes of evaluating the potential gain or loss for tax reporting to the cooperative and its members arising in the conversion, the Board of Directors requested and considered the valuation opinion of Greene Holcomb & Fisher LLC that, as of January 9, 2004, (a) the fair market value of the equity of the cooperative was estimated to be $30.4 million, and (b) after applying minority and lack of marketability discounts, as appropriate, the fair market value of a Class A unit of the LLC immediately following the merger, assuming the issuance of 4,581,832 Class A units upon consummation of the merger, was estimated to be $4.07 per Class A unit. See "The Conversion—Valuation Opinion."

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SUMMARY FINANCIAL INFORMATION

        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 years ended August 31, 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 six months ended February 29, 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, 2000. The unaudited pro forma balance sheet information is computed as if the transaction had been consummated on February 29, 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, and the unaudited pro forma financial information presented below reflects related required preliminary pro forma adjustments. The unaudited pro forma financial information presented below is based on available information and various assumptions which management of the cooperative believes are reasonable. 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. See "Pro Forma Financial Information of the LLC" for a more detailed explanation of this analysis.

Summary Historical Financial Information of the Cooperative and
Pro Forma Financial Information of the LLC
(in thousands, except share, per share, unit and per unit data)

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RISK FACTORS

        You should carefully consider the risks described below before making a decision on whether or not to approve the merger. In addition to the risks described below, the operations of the cooperative and your current investment in that entity are already subject to a number of existing risks not described below. To the extent that the LLC will be the successor of the cooperative and will continue to operate the business of that entity, those existing risks will also generally be equally applicable to the LLC. In addition, unless indicated otherwise, those risks that are described below that apply to the cooperative are equally applicable to the LLC, and vice versa.

Tax Risks

The merger of the cooperative with and into the LLC will be a taxable event for both the cooperative and its members

        The merger of the cooperative into the LLC will be a taxable event for both the cooperative and its members. The tax consequence to the cooperative depends on the value of its assets and apportionment of the value among specific assets, both of which involve risks described in the following risk factors. The cooperative expects to have taxable gain after deducting its net operating loss carryover. In addition, current year operating earnings will be taxed to the cooperative or to the members, depending on the amount of deductible patronage dividends declared by the Board of Directors.

        The members will recognize gain, loss or ordinary income on the conversion depending on when and how their shares in the cooperative were acquired. The amount will depend on the value of the cooperative's assets, net of liabilities, and customary discounts allowed, both of which involve valuation risks described in the following risk factor, as well your patronage dividends for the current year. If you acquired any of the shares that were issued in 2000 in exchange for qualified per unit retains, you will be required to report as ordinary income, subject to self-employment tax if applicable, the entire value of the Class A units that you receive for those shares. The taxable gain or loss that you will recognize on your other shares will depend on whether the value of your Class A units received in the conversion for those shares is greater or less than the tax basis in your common stock of the cooperative. If you purchased your shares in any of the cooperative's stock offerings, you are expected to have a capital loss on this portion of the conversion. However, these tax implications are subject to conversion date adjustments and the possibility of future challenges by the Internal Revenue Service. To review tax consequences in more detail, please see "Federal Income Tax Considerations."

The Board of Directors of the cooperative is relying on a valuation that is not binding on the Internal Revenue Service

        In evaluating the tax consequences of the conversion, the Board of Directors of the cooperative has relied, in part, on the January 9, 2003 valuation prepared by Greene Holcomb & Fisher LLC. In order to account for changes between the valuation date and the conversion date, Greene Holcomb & Fisher is to provide the Board of Directors with an update of the valuation opinion prior to completion of the conversion. The updated valuation will not be binding on the Internal Revenue Service. Accordingly, the Internal Revenue Service may challenge the valuation as not being an accurate determination of the equity value of the cooperative, and determine that the cooperative or its members must recognize additional taxable income or gain for federal income tax purposes.

The Internal Revenue Service could also challenge other aspects of the conversion transaction that could materially adversely affect the cooperative

        In addition to challenging the overall valuation of the cooperative and the LLC units received in the conversion, the Internal Revenue Service might also challenge other aspects of the transaction. The

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cooperative and its members could be subjected to additional tax liability if the Internal Revenue Service challenges:

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The apportionment of values to specific assets and the treatment of the resulting gains or losses as capital gain or loss or ordinary income or loss; or



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Treatment of the merger as a constructive distribution of specific assets rather than as a distribution of interests in the LLC.

        There are anti-netting rules that may become operative if these challenges are mounted by the IRS. Specifically, corporate capital losses cannot be offset against any income other than capital gains and, likewise, patronage losses, cannot be offset against nonpatronage income or gain. Please see "Federal Income Tax Considerations—Tax Consequences of the Conversion to the Cooperative—Potential Challenges by the Internal Revenue Service."

The Internal Revenue Service could also challenge post-conversion tax reporting positions to be taken by the LLC that could materially adversely affect the LLC Unitholders

        We expect and intend that the LLC will be treated as a partnership for federal income tax purposes. This means that the LLC will pay no federal or state income tax and members will pay tax on their share of the LLC's net income. However, the LLC would become taxable as a corporation if it elects corporate tax status or if it is treated as a publicly traded partnership because of the manner in which Units are transferred.

        The LLC's taxable income each year will depend in part on the depreciation, amortization and other cost recovery of the tax basis of its assets. The LLC's initial aggregate basis will be based on the fair market value of assets deemed received by the members in the conversion. However, the method of apportioning basis to specific LLC assets is uncertain, and the IRS could challenge the apportionment of basis to specific assets so as to increase the allocation to longer lived assets or assets that cannot be depreciated or amortized such as land and investments. This generally would defer the timing of some of the LLC's depreciation, amortization and other cost recovery deductions, including the expected first year writedown of the basis of the LLC's inventory. See "Federal Income Tax Considerations—Summary of Tax Treatment of Members" and "Federal Income Tax Considerations—The LLC's Basis in Assets."

Your tax liability from your share of the LLC's taxable income may exceed any cash distributions you receive, which means that you may have to satisfy this tax liability using your personal funds

        As described above, the LLC does not expect to pay any federal tax, and all of its profits and losses will "pass through" to its unit holders. You must pay tax on your allocated share of the LLC's taxable income every year. You may not receive cash distributions from the LLC sufficient to satisfy these tax liabilities. This may occur because of various factors, including accounting methodology, lending covenants that restrict the LLC's ability to pay cash distributions, or if the LLC decides to retain cash generated by the business to fund its activities or other obligations. Accordingly, you may be required to satisfy these tax liabilities out of your personal funds.

You may not be able to fully deduct your share of the LLC's losses or your interest expense

        It is likely that a member's interest in the LLC will be treated as a "passive activity" for most unit holders. In the case of unit holders who are individuals or personal services corporations, this means that a unit holder's share of any loss incurred by the LLC will be deductible only against the holder's income or gains from other passive activities, e.g., S corporations and partnerships that conduct a business in which the holder is not a material participant. Some closely held C corporations have more favorable passive loss limitations. Passive activity losses that are disallowed in any taxable year are

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suspended and may be carried forward and used as an offset against passive activity income in future years. Upon disposition of a taxpayer's entire interest in a passive activity to an unrelated person in a taxable transaction, suspended losses with respect to that activity may then be deducted.

        Many members have borrowed to purchase their equity interest in the cooperative and have been deducting the interest expense. After the conversion, part or all of their interest expense may not be deductible in the same manner because it must be aggregated with other items of income and loss that the member has independently experienced from passive activities and subjected to the passive activity loss limitation.

Any audit of the LLC's tax returns resulting in adjustments could cause the Internal Revenue Service to audit your tax returns, which could result in additional tax liability to you.

        The Internal Revenue Service may audit the LLC's tax returns and may disagree with the positions taken on those returns. The rules regarding partnership taxation are complex. If challenged by the Internal Revenue Service, the courts may not sustain the position taken on the LLC's tax returns. An audit of the LLC's tax returns could lead to separate audits of your tax returns, especially if adjustments are required. This could result in adjustments on your tax returns and in additional tax liabilities, penalties and interest to you.

Other Risks Relating to the Conversion

The units to be issued by the LLC have no public market and no public market is expected to develop

        There is no established public trading market for the Class A units in the LLC, and we do not expect one to develop in the foreseeable future. To maintain its partnership tax status, the LLC does not intend to list the units on any stock exchange or automatic quotation system such as the Nasdaq Stock Market. As a result, you may have to hold your units for an indefinite period of time because you may not be able to readily resell your units.

The units to be issued by the LLC are subject to significant restrictions on transfer

        The ability to transfer Class A units in the LLC is restricted by the Limited Liability Company Agreement. You will be required to obtain the prior consent of the Board of Managers of the LLC before you make any transfers of your units. Certain transfersTransferability of units is restricted in part to ensure that would violate federal or state securities laws or that would have an adverse tax impact on the LLC are completely prohibited.is not deemed a "publicly traded partnership" and thus taxed as a corporation. See "Federal Income Tax Consequences—Publicly Traded Partnership Rules." As a result, you may have to hold your units for an indefinite period of time because you may not be able to readily resell your units.

The voting structure of the LLC could allow one or more members to exercise control over significant company matters

        One or more members could purchase a majority or other controlling interest in the LLC. Because members of the LLC are entitled to one vote for every Class A unit held, such member or members could exercise control over all matters requiring member approval, including election of managers and approval of significant business transactions, which may have adverse consequences to the other holders of Class A units. If such a concentration of ownership were held by the Board of Managers or management, it may also have the effect of delaying or preventing a change in control of the LLC, even if such change in control would be beneficial to the other holders of Class A units.

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The ability of the LLC to issue additional Class A units or other classes of units may dilute or otherwise limit your voting or economic rights in the LLC or have the effect of preventing a change in control

        The Board of Managers of the LLC has the ability to issue an unlimited number of additional Class A units or units of other classes. The Board of Managers also has the ability to establish the designations, powers, preferences, rights, qualifications, limitations or restrictions of any additional class of units. Such rights, powers, preferences and privileges may be greater than those associated with the Class A units. Issuances of additional units may have the effect of diluting or otherwise limiting your voting or economic rights in the LLC, particularly if the units are issued on more favorable terms than the Class A units. Issuance of additional classes of units may also have the effect of preventing changes in control of the LLC, even if such change in control would be beneficial to holders of Class A units.

Because we intend to terminate the corn delivery program as part of the conversion, the LLC will be required to acquire substantial quantities of corn in the marketplace.

        As part of the conversion, we intend to terminate the corn delivery program that has been in place since the cooperative's inception. At the current time, the corn purchased and used in the operations is obtained primarily through the delivery of corn pursuant to uniform marketing agreements between the cooperative and its members. Each member of the cooperative must enter into a marketing agreement with the cooperative. Under the marketing agreement, the member is obligated to deliver each year to the cooperative up to one bushel of No. 2 yellow corn for each share of the cooperative's common stock owned. The Board of Directors of the cooperative, in its sole discretion, establishes the purchase price to be paid for each bushel of corn delivered. Following the conversion, the LLC will continue to require the same quantities of corn for processing as are currently required. In order to fulfill those requirements, the LLC will be required to acquire substantial quantities of corn in the marketplace, based upon the then-prevailing market price of corn. If the supplies of corn available in the vicinity of each of the cooperative's primary facilities are not adequate, the LLC may not be able to procure adequate supplies of corn at reasonable prices.

Procedural Risks Relating to the Vote

You will not be entitled to assert dissenters' rights, regardless of how you vote on the proposed conversion

        Under applicable Minnesota cooperative law, members of the cooperative who oppose the conversion are not entitled to demand an appraisal of and cash payment for the fair value of their membership interests in the transaction. Therefore, if the conversion is completed, you will be required to accept Class A units issued by the LLC rather than seek cash payment for your common stock of the cooperative.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

        This document contains forward-looking statements based on assumptions by the management of the cooperative and its successor, the LLC, as of the date of this document, including assumptions about risks and uncertainties faced by the cooperative and the LLC. When used in this document, the words "believe," "expect," "anticipate," "intend," "will" and similar verbs or expressions are intended to identify such forward-looking statements.

        If management's assumptions prove incorrect or should unanticipated circumstances arise, the cooperative's and the LLC's actual results could differ materially from those anticipated. These differences could be caused by a number of factors or combination of factors including, but not limited to, those factors described under the heading "Risk Factors." Readers are urged to consider such factors when evaluating any forward-looking statement, and the cooperative and the LLC caution you not to put undue reliance on any forward-looking statements. Neither the cooperative nor the LLC undertakes an obligation to update any forward-looking statements in this report to reflect future events or developments.

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COMPARISON OF RIGHTS OF MEMBERS

        The rights of members of the cooperative are currently governed by Minnesota law, the Articles of Incorporation and Bylaws of the cooperative, and the Uniform Marketing Agreement entered into between the cooperative and each of its members. Upon completion of the conversion, the rights of members of the LLC will be governed by Delaware law and the Certificate of Formation and Limited Liability Company Agreement of the LLC. The rights of holders of Class A units in the LLC will be different in several respects from the rights of holders of common stock of the cooperative.

        The following is a summary of the material differences between the LLC's membership interests and the cooperative's membership interests. This summary is not intended to be a complete discussion of, and is qualified in its entirety by reference to, Minnesota laws governing cooperatives and Delaware laws governing limited liability companies, and the Articles of Incorporation, Bylaws and Uniform Marketing Agreement of the cooperative and the Certificate of Formation and Limited Liability Company Agreement of the LLC. Copies of the Certificate of Formation and Limited Liability Company Agreement of the LLC are attached asAppendices B and C to this document. The Articles of Incorporation, Bylaws and Uniform Marketing Agreement of the cooperative have been previously provided to all of its members. You may obtain additional copies of these documents from the cooperative, without charge, by contacting Marie Staley, Vice President of Shareholder Relations, at the cooperative's offices.

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THE SPECIAL MEETING

Date, Time, Place and Purpose

        This document is being furnished to members of the cooperative in connection with the distribution of ballots by the Board of Directors of the cooperative for use at the special meeting of the members to be held on [            ], 2004 at [            ].m., local time, at [                        ], [            ], Minnesota, and any adjournments or postponements of the special meeting. At the special meeting, members of the cooperative as of the close of business on [            ], 2004 will be eligible to vote on a proposal to approve the conversion. In the conversion, each member would obtain limited liability company "units" issued by the newly-formed Delaware limited liability company, or "LLC". Specifically, the combination of each share of common stock of the cooperative and a proportionate amount of the patronage equities to be issued by the cooperative would be converted into a Class A unit in the LLC. This will result in an initial offering of the LLC's Class A units. No public market currently exists for these securities. Each member is also being asked to voluntarily agree to terminate his or her uniform marketing agreement with the cooperative.

        This document and the enclosed ballot form are first being mailed to members on or about [            ], 2004.

Matters To Be Considered

        The sole purpose of the special meeting will be to consider and vote upon a proposal to approve and ratify an Amended and Restated Agreement and Plan of Merger between the cooperative and the LLC, pursuant to which the cooperative will be merged with and into the LLC, with the LLC as the surviving entity. The shareholders of the cooperative will become unitholders of the LLC and receive one Class A unit of the LLC for the combination of each share of the cooperative's common stock they hold as of the effective date of the merger and the patronage equities associated with such share. A copy of the Amended and Restated Agreement and Plan of Merger between the cooperative and the LLC is attached asAppendix A.

How You Can Vote

        You can vote on the proposed merger by completing and returning the enclosed ballot to the cooperative in the envelope provided. If you vote by mail, your ballot will not be counted unless it is received by the cooperative by [            ].m. local (Minnesota) time on [            ], 2004, or prior to any applicable adjournment or postponement of the meeting. Although you are encouraged to vote by mail, you may vote in person by attending the special meeting (and any adjournments or postponements of the meeting) and submitting your vote on the enclosed ballot at that time. You may vote on the proposed conversion by using the enclosed ballot whether you vote by mail or in person. You may revoke your ballot at any time before the vote is called at the special meeting.

Quorum; Who Can Vote; Vote Required

        A quorum of members must exist at the special meeting for the transaction of business including approval of the conversion. If at least 50 members are present or are represented by mail ballot at the special meeting, a quorum will exist. Abstentions will be counted as present for the purposes of determining the presence of a quorum at the special meeting.

        Members of the cooperative of record at the close of business on [            ], 2004 are entitled to notice of and may vote at the special meeting. Each member has one vote. The affirmative vote of a majority of the votes cast, in person or by mail, at the special meeting is required to approve the conversion. Abstentions will not be counted as votes cast.

        As of the [            ], 2004 record date for the determination of members of the cooperative eligible to vote, there were 706 voting members. Directors and their related parties and the chief executive officer of the cooperative comprise nine of those members, representing approximately 1.3% of the total number of members and votes entitled to be cast. All of these persons have indicated that, as members, they will vote in favor of the conversion.

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THE CONVERSION

General

        The LLC is a wholly-owned subsidiary of the cooperative. Subject to the terms and conditions of the Merger Agreement, the cooperative will merge with and into the LLC. The LLC will be the surviving entity. After this merger, the separate corporate existence of the cooperative will cease. All shares of common stock of the cooperative will be automatically cancelled. Upon the conversion, the directors and officers of the cooperative will become the managers and officers of the LLC.

Conversion of Common Stock

        Upon completion of the merger of the cooperative with and into the LLC, each member of the cooperative will be a member of the LLC and will cease to be a member of the cooperative. All outstanding shares of the cooperative's common stock will be converted automatically into Class A units issued by the LLC with the combination of each share of common stock in the cooperative and a proportionate amount of the patronage equities to be issued by the cooperative being converted into a Class A unit in the LLC.

Termination of Uniform Marketing Agreements

        As part of the conversion, we also intend to terminate the corn delivery program that has been in place since the cooperative's inception. In anticipation of the completion of the conversion, the cooperative, pursuant to its rights under the uniform marketing agreements, is planning to suspendhas suspended all deliveries under the uniform marketing agreements beginning May 2004. Each member is also being asked as a separate matter to voluntarily agree to terminate his or her uniform marketing agreement with the cooperative, with such termination to become effective if and when the conversion becomes effective. Any members who fail to so agree will have their agreements survive the conversion, although all corn deliveries under those agreements will continue to be suspended, and the LLC will proceed to formally terminate those remaining agreements as soon as practicable. If the conversion is not approved by the cooperative's members, none of the uniform marketing agreements will not be terminatedterminate and the cooperative will plan to resume the corn delivery program in September 2004.

Background of and Reasons for the Conversion

        Over the past several years, and particularly in recent months, the Board of Directors and its management have carefully analyzed the cooperative's business and structure. The structure and terms of the conversion from a Minnesota cooperative to a Delaware limited liability company were determined by the cooperative's Board of Directors and senior management after extensive investigation of the anticipated business, tax and other impacts on the cooperative and its members of either converting to another form of entity or remaining a cooperative. As discussed below, the

        The decision to effect the conversion is a result of extensive internal discussion among the members of the Board of Directors of the cooperative.

        Over the past several years, and particularly in recent months, the Board of Directors and its management have carefully analyzed the cooperative's business and structure. Discussions begancooperative regarding the possibility of a change in corporate formform. This discussion began in conjunction with the consideration of several potential strategic business combination transactions with other egg processors in early 2002. However, theThe cooperative and the potential transaction partners were unable to agree upon terms for any of those potential transactions, in significant part due to restrictions on capital raising and business combinations faced by the cooperative due to its present structure. Detailed discussions of corporate structure were engaged in at a long range planning session held by the Board of Directors and management in March 2003. At that planning session, the Board and management discussed the future of the egg industry, which the Board and management believe will likely continue to follow the beef, pork and poultry industries and experience further consolidation within and between the production and processing segments of the industry. In contrast with those comparable industries, in each of which the

22

top five producers typically

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 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 reach agreement on terms for any potential transactions.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. TheWith the assistance of the Board Advisor and the cooperative's legal counsel and independent accounting firm, the strategic alternatives committee and management studied available alternatives, including the tax implications of those alternatives, and its advisors camedecided to recommend the Board in November 2003 withconversion to a recommendationlimited liability company. In addition to convertmaintaining the current cooperative structure or converting to a limited liability company, after study of other available alternatives such as the committee considered:

•

converting to ana Subchapter C corporation, orwhich could allow 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 recently-enacted Chapter 308B of the Minnesota Statutes.

        AsStatutes, which would allow for the business to continue to be designated a resultcooperative 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 above analysis, the cooperative's Board and management determined that significant structural changes were appropriate.general partners.

        The cooperative's Board and management gave consideration to otherthese alternatives and concluded that conversion to a Delaware limited liability company would likely be the most advantageous structure for its business. In OctoberNovember 2003, determining that it is in the Board passed a resolutionbest interests of the cooperative and its members to begineffect the process of converting to a limited liability company. In November 2003,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.

        Accordingly, the Board of Directors has determined that it is in the best interests of the cooperative and its members to effect the proposed conversion. Ultimately, the cooperative's Board of Directors based its final decision as to whether to convert to a limited 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 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. However, we do not expect that there will be a significant improvement in liquidity immediately following the conversion to a limited liability company,

23

and the conversion to a limited 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 and described in "Valuation Opinion" below. (Greene Holcomb & Fisher, 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.



•

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 taxable income allocated by the LLC to the members will not be subject to self-employment taxes, unless the member also is employed by the LLC. That result contrasts with the tax treatment of patronage dividends issued to cooperative members 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 continue 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

24

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 to 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 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") may be resold immediately in transactions not involving an issuer, underwriter or dealer. Units received in the

25

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.

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 focuses 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. 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.

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        A copy of the valuation opinion is attached to this document asAppendix D and is incorporated in this information statementdocument by reference. 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;



•

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:

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

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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;



•

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 acquired company's stock price 30 days before the announcement of the acquisition. Greene 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 to 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 determined, in their judgment, based upon these studies and Greene Holcomb & Fisher's mergers and acquisitions experience, that a 20.0% discount would 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.

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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 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

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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.

        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 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.

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(2)

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

(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 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.

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THE MERGER AGREEMENT

        The following is a summary of the material terms of the Merger Agreement between the cooperative and the LLC, who are jointly referred to in this section as the "parties" to the agreement. The agreement is formally entitled the "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;



•

The effectiveness of the registration statement of which this document constitutes a part, and absence of Securities and Exchange Commission proceedings to stop the 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 has the ability to waive or cause to be waived any of the conditions precedent to the 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 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:

•

Either party if members of the cooperative fail to approve the merger of the cooperative with and into the LLC;



•

Written notice of termination delivered by either party; or



•

Either 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 Time

        The merger of the cooperative with and into the LLC will take effect on the date on which 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 and the completion of the conversion will take place as soon as practicable following the member vote.

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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. Insofar 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 such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Treatment of Member Equity

        Each 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 706 voting members of the cooperative. Directors and their related parties and the chief executive officer of the cooperative comprise nine of those members, representing 1.3% of the cooperative's voting members. That group beneficially owns a total of 149,920 shares of common stock, or approximately 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 149,920 Class A units in the LLC, or approximately 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, 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 six months ended February 29, 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, 2000. The unaudited pro forma balance sheet information is computed as if the transaction had been consummated on February 29, 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 six month period ended February 29, 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 unit data)

(1)

The deferred tax asset of $236 was adjusted to zero in accordance with the second assumption above.

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SELECTED FINANCIAL DATA OF THE COOPERATIVE

        The following table sets forth selected financial data of Midwest Investors of Renville, Inc. (d.b.a. "Golden Oval Eggs"), which will be the predecessor of Golden Oval Eggs, LLC if the conversion is consummated. The 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 information presented as of and for the fiscal year ended August 31, 1999 and the six months ended February 28, 2003 and February 29, 2004 is unaudited. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included in the unaudited information. Interim results are not necessarily indicative of results for a full year.

        We encourage you to read the financial data 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.

Selected Financial Data of the Cooperative
(in thousands, except share and per share data)

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

        We encourage you to read the following discussion in conjunction with the cooperative's financial statements, the notes thereto and the other financial data included elsewhere in this document. The following discussion contains forward-looking statements. Such statements are based on assumptions by the cooperative's management as of the date of this document and are subject to risks and uncertainties, including those under the heading entitled "Risk Factors," that could cause actual results to differ materially from those anticipated. Because the LLC will be the successor of the cooperative, the following discussion will generally be equally applicable to the LLC on a going-forward basis. The cooperative and the LLC caution readers not to place undue reliance on such forward-looking statements.

Overview

        The cooperative is engaged in the production, breaking, and sale of non-pasteurized liquid whole eggs, liquid whites, and liquid yolks. The cooperative's operations are integrated from the production of eggs, processing of those eggs into liquid eggs, and the transportation of the liquid eggs. The cooperative currently ranks in the top 15 in the nation for production of shell eggs. The cooperative also obtains a relatively small portion of its eggs from third parties for processing, which amount has ranged from 9.1% to 11.8% of total eggs processed for each of the last three fiscal years. The cooperative primarily markets its liquid eggs to further processors of egg products.

        The cooperative's operating income or loss is significantly affected by wholesale liquid egg prices, which can fluctuate widely and are outside of the cooperative's control. Liquid eggs are a commodity product and prices fluctuate in response to supply /demand factors.

        The cooperative's cost of production is materially affected by feed costs, which average approximately 40% of the cooperative's total costs. Changes inApproximately 60% of these feed costs result in changesare incurred in the cooperative's costsprocurement of goods sold.corn and soybeans. The cost of feedthese ingredients is affected by a number of supply and demand factors such as crop production and weather, and other factors, such as the level of grain exports, over which the cooperative has little or no control. The ratio of pounds of feed purchased to pounds of egg product processed from eggs produced "in-line" by the cooperative, or "feed efficiency," has ranged from 2.42 to 2.57 for each of the last three fiscal years.

        One of the primary inputs for feed is corn. Presently, the corn purchased and used in operations is obtained primarily through the delivery of corn pursuant to uniform marketing agreements between the cooperative and each of its members. The Board of Directors of the cooperative, in its sole discretion, establishes the purchase price to be paid for each bushel of corn delivered. The cooperative has historically followed a policy of paying average market prices as posted at local elevators for all corn so purchased. As part of the conversion, we intend to terminate the corn delivery program. Following the conversion, the LLC will continue to require the same quantities of corn for processing as are currently required by the cooperative. In order to fulfill those requirements, the LLC will be required to acquire substantial quantities of corn in the marketplace, based upon the then-prevailing market price of corn. Because the cooperative has always paid average market prices for corn purchased in the corn delivery program, we do not expect to experience any material change in corn procurement costs as a results of the termination of the program.

        Following several years of attractive profits (from fiscal 1996 to fiscal 1999), the cooperative experienced a period of low earnings from fiscal 2000 to fiscal 2002. The primary reason for these results was an industry wide overproduction of eggs in North America ahead of retail and food service demand. This supply/demand imbalance caused egg prices to fall to levels that made most egg producers and processors marginally profitable to unprofitable during this period.

        Since the middle of 2003, however, egg prices have dramatically increased to record levels.risen dramatically. This increase is due to several factors, including: (1) shutdown of several egg production facilities for economic reasons; (2) reduction in the number of laying hens (layers) due to the implementation of animal welfare standards; (3) reduction in layers due to the outbreak of Exotic Newcastle Disease, a contagious and fatal viral disease in birds, in the Southwest and on the West Coast; and (4) increased demand for eggs and egg products due to the number of Americans switching to some form of high protein/low carbohydrate diets.

        Presently, the egg market continues to hover around record high prices, which has sustained a high profit margin for the cooperative in the first half of fiscal 2004. These profit margins far outstrip historical profit margins of the cooperative since inception. The cooperative's management believesBased on management's expertise and experience in the egg business, we believe that these profit margins are not sustainable over the long term and that over time, barring new impacts on the industry from unforeseen circumstances, prices for eggs will return to a level closer to historical averages. The anticipated price adjustments are likely to come primarily from increases in egg

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production, a commodity product that is fairly easy to produce, as producers seek to capture the excess profits. Or, if supply increases are insufficient, consumer demand for eggs may begin to subside in response to continued high prices. The cooperative is at or near its current production and processing capacities. In response to the current favorable market, the cooperative has begun construction of additional production facilities at its site in Thompson, Iowa, including additional layer barns and a feed mill and a shell dryer.mill. In addition, the cooperative will continue to tightly manage its risk management profile by seeking ways to minimize volatility in its operating margins.

        The cooperative expects that cash flow from operations and proceeds from its existing credit lines will be sufficient to fund operations, to provide adequate capital expenditures (excluding major expansions beyond the current expansion), and to make distributions to its members for the foreseeable future. However, given the competitive nature of the egg industry, the Board of Managers and management believe that the business will require significant additional capital resources to allow the business to keep pace with the growth, consolidation and cost structure within the industry.

Results Of Operations

        The following table presents the amounts sold and weighted average prices of those sales for liquid whole eggs, liquid egg whites and liquid egg yolks for the periods presented.

Six Months Ended February 29, 2004 Compared To Six Months Ended February 28, 2003

        Revenues.    Revenues for the first six months of fiscal 2004 were $40.9 million, an increase of $16.9 million or 70.8% as compared to the first six months of fiscal 2003. The increase in revenues was

due primarily to the increase in total pounds of egg products sold and egg product selling prices during the first six months of fiscal 2004 as compared with the first six months of fiscal 2003. Pounds sold for the first six months of fiscal 2004 were 75.6 million, an increase of 4.1 million or 5.7% as compared to the first six months of fiscal 2003. While the number of layers in production was virtually unchanged between the two periods, the increase in pounds sold resulted primarily from changes in the amount and composition of feed used. Domestic demand for eggs is strong, which has resulted in higher selling prices during the first six months of fiscal 2004. The cooperative's average selling price per pound for the first six months of fiscal 2004 was $.5412, compared to $.335 for the first six months of fiscal 2003, an increase of 61.5%. The cooperative's average selling price is the blended price for liquid whole eggs, liquid egg whites and liquid egg yolks. The factors relating to the increase in sales prices are discussed in the overview above.

        Cost of goods sold.    Cost of goods sold for the first six months of fiscal 2004 was $23.8 million, an increase of $3.0 million or 14.4% as compared to the first six months of fiscal 2003. The increase is due to an increase in the cost of eggs purchased from third parties for the cooperative's off-line production and an increase in the cost of feed. The cooperative buys a significant number of shell eggs from third parties for processing at its Renville egg breaking facility. The cost of these eggs for the first six months of fiscal 2004 increased $1.9 million or 95.0% as compared to the first six months of fiscal 2003. This

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increase is due primarily to the overall rise in prices in the egg industry. Over this same period, feed costs increased by $1.0 million or 11.6%. Approximately $0.5 million of the increase in feed costs is due to increased feed prices due primarily to increases in the price of soy, and approximately $0.5 million due to an increase in the amount of feed used.

        Operating expenses.    Operating expenses for the first six months of fiscal 2004 were $3.2 million, an increase of $1.6 million or 103.5% as compared to the first six months of fiscal 2003. Increased bonus compensation due primarily to record profitability accounts for approximately $1.0 million of the increase. Professional services relating primarily to the potential limited liability company conversion account for approximately $.5 million of the increase.

        Total other expense.    Total other expense for the first six months of fiscal 2004 was $1.3 million, a decrease of $.2 million or 15.6% as compared to the first six months of fiscal 2003. This reduction was the result of lower interest expense due to lower debt balances.

Fiscal Year Ended August 31, 2003 Compared To Fiscal Year Ended August 31, 2002

        Revenues.    For the fiscal year ended August 31, 2003, revenues were $53.1 million, an increase of $6.9 million or 14.9% as compared to the fiscal year ended August 31, 2002. While liquid pounds sold by the cooperative remained virtually unchanged between the two years, the average selling price for the eggs was $.3635 per pound for fiscal 2003, an increase of $.0473 per pound or 15% compared to an average price of $.3162 in fiscal 2002. The increase in revenues was due to the increased market price for liquid whole eggs, liquid egg whites and liquid egg yolks sold by the cooperative.

        Cost of goods sold.    Cost of goods sold for fiscal 2003 was $42.4 million, an increase of $1.9 million or 4.7% as compared to fiscal 2002. Feed costs accounted for most of the change with a $1.1 million or 2.5% increase from fiscal 2002 to fiscal 2003. Approximately $.7 million of the increase in feed costs was due to an increase in the amount of feed used, and approximately $.4 million due to increased feed prices. The remaining increase in costscost of goods sold came from a variety of other factors, with no one factor accounting for a meaningful component of the remaining increase.

        Operating expenses.    Operating expenses for fiscal 2003 were $3.2 million, an decrease of $.1 million or 3.9% as compared to fiscal 2002. No one factor accounted for a meaningful amount of the decrease.

        Total other expense.    Total other expense for fiscal 2003 was $3.0 million, a decrease of $70,000 or 2.3%, as compared to fiscal 2002. An increase of $120,000 from litter and inedible egg sales was partially offset by an increase of $50,000 in interest expense.

Fiscal Year Ended August 31, 2002 Compared To Fiscal Year Ended August 31, 2001

        Revenues.    Revenues for fiscal 2002 were $46.2 million, an increase of $11.0 million or 31.1% as compared to fiscal 2001. Liquid pounds sold by the cooperative in fiscal 2002 were 146 million pounds, an increase of 40 million pounds, or 37.7%, compared to 106 million pounds sold in fiscal 2001. This increase in pounds sold was the result of the cooperative finishingbringing the first phase of the Thompson facility.facility online in stages during fiscal 2001 and the beginning of fiscal 2002. The cooperative's average selling price in fiscal 2002 was $.3162 per pound, a decrease of $.0161, or 4.8%, as compared to $.3323 per pound in fiscal 2001. The increase in pounds sold was offset by the reduction in selling price to account for the increased revenues.

        Cost of goods sold.    Cost of goods sold for fiscal 2002 was $40.5 million, an increase of $9.9 million or 32.2% as compared to fiscal 2001. Feed costs for fiscal 2002 were $16.7 million, an increase of $4.9 million or 41% as compared with fiscal 2001. Production costs at the Thompson, Iowa facility increased $4.2 million in fiscal 2002 as compared with fiscal 2001. Both the increase in feed costs and the increase in production costs in Thompson were primarily the result of the increased production referenced above. The remaining increase in costs came from a variety of other factors, with no one factor accounting for a meaningful component of the remaining increase.

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        Operating expenses.    Operating expenses for fiscal 2002 were $3.3 million, an increase of $0.8 million, or 33.8%, as compared fiscal 2001. The increase in operating costs were primarily the result of the increase in production referenced above.

        Total other expense.    Total other expense for fiscal 2002 was $3.1 million, an increase of $1.4 million, or 85.2%, as compared to fiscal 2001. Interest expense accounted for $1.2 million of the increase. The increase in interest was due to the increase in debt taken on to complete the build out of the Thompson production and processing facility.

Liquidity and Capital Resources

        The cooperative's working capital at February 29, 2004 was $21.7 million compared to $6.4 million at February 28, 2003. The cooperative's current ratio was 4.2 at February 29, 2004 compared to 1.9 at February 28, 2003. The cooperative has established a $5.5 million working capital line of credit with US Bank. Currently, there is no amount outstanding under the line of credit. This credit line, which protects the cooperative from seasonal cash fluctuations, terminates on December 31, 2004. The cooperative expects that cash flow from operations and proceeds from its existing credit lines will be sufficient to fund operations, to provide adequate capital expenditures (excluding major expansions beyond the current expansion), and to make distributions to its members for the foreseeable future. However, given the competitive nature of the egg industry, the Board of Managers and management believe that the business will require significant additional capital resources to allow the business to keep pace with the growth, consolidation and cost structure within the industry.

        The production and processing plants were built over the course of the last ten years with completion of the Renville production and processing facility in 1996 and the phase one production and processing completed at Thompson in 2001. Capital expenditures totaled $.3 million in 2003 and $1.3 million in 2002. Capital expenditures for current projects are expected to total approximately $17 million, including approximately $15.5 million for the initial step of the phase two expansion at the Thompson facility (the three layer barns and feed mill and related facilities, as discussed in "Business" below) and approximately $1.5 million to purchase and upgrade the wastewater treatment facilities at Renville. As of February 29, 2004, the cooperative has committed to contracts on the construction projects totaling approximately $10 million, with approximately $6 million remaining to be paid under those contracts.contracts in fiscal 2004. In addition, the cooperative's expansion will necessitate increases in

inventory of approximately $2 million, which would be financed by trade credit and amounts available for borrowing under the cooperative's credit lines. Potential future expansions include the completion of the second phase of the Thompson facilities (the remaining barns needed to mirror phase one, and related improvements necessary to accommodate the constructionincreased egg production and processing) at an estimated additional cost of further processing facilities at either or both Renville and Thompson. Theapproximately $21.7 million. If the cooperative can make suitable arrangements for the sale of the additional product, the cooperative intends to proceed with these future expansions as its capital resources permit and as product demand dictates.permit.

        The cooperative's long-term debt at February 29, 2004, including current maturities, was $35.1 million compared to $37.5 million at February 28, 2003. Substantially all trade receivables and inventories collateralize the cooperative's line of credit and property, plant and equipment collateralize the cooperative's long-term debt under its loan agreements. The cooperative is required by certain provisions of its loan agreements to maintain (1) a minimum tangible net worth of not less than $16.5 million; (2) total liabilities to tangible net worth ratio of no more than 3:1; (3) working capital of no less than $3.5 million; (4) an interest coverage ratio of no less than 2:1; (5) a fixed charge coverage ratio no greater than 1:1; (6) capital expenditures not to exceed $.6 million or the amount that will create a fixed charge coverage ratio greater than 1:1; and (7) a debt to net worth ratio of no more than 2:1. In addition, these provisions restrict the cooperative's ability to make distributions, create liens, incur indebtedness and sell assets and properties. As of February 29, 2004, the cooperative was in compliance with these covenants.

        Net cash flow from operations was $14.7 million for the first six months of fiscal 2004. This level of cash flow was the result of high profit margins resulting from the record high egg sales prices. Despite the increased levels of sales revenue, outstanding accounts receivable only increased $.5 million, which allowed the days sales in receivables ratio to remain unchanged. Increase in corn and soybean prices resulted in an increase in inventory levels of $1.2 million. Overall the changes in net non-cash working capital were not material. This

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cash flow has allowed the cooperative to (1) pay $4.4 million towards the Thompson expansion, (2) make a $1.8 million distribution to its shareholders, (3) to set aside $1.5 million to a restricted cash account to be used to pay the 2001 bond debt and (4) to increase its cash on hand to $9.1 million.

        Management believes that non-cash working capital levels are appropriate in the current business environment and does not expect a significant increase or reduction of non-cash working capital in the next 12 months.

        Net cash flow from operations improved to $6.3 million in fiscal 2003 from $3.2 million in fiscal 2002. This improvement was a result of improved gross margins. The benefit of increased cash flows from operations and flat capital expenditure requirements in fiscal 2003 allowed the cooperative to pay down the revolving line of credit by $3.0 million and to reduce long-term debt by $2.4 million.

Hedging Activities

        The cooperative follows a policy of managing its risk of future grain price and finished margin fluctuations by hedging in established commodities markets through the use of futures and options. As grain is used in the feed manufacturing process, realized gains or losses and option premiums on these positions are recognized as a component of that cost. Hedges are generally tied to corn and soy meal related sales contracts to establish a fixed margin on these sales contracts.

Critical Accounting Estimates

        The cooperative prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. The cooperative's significant accounting policies are discussed in detail in Note 1 to the financial statements included at the end of this document. Certain of these accounting policies as discussed below require management to make estimates and

assumptions about future events that could materially affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. Accounting estimates and assumptions discussed in this section are those that we consider to be the most critical to an understanding of the cooperative's financial statements because they inherently involve significant judgments and uncertainties. For all of these estimates, we caution that future events rarely develop exactly as forecast, and estimates routinely require adjustment.

        Allowance for Doubtful Accounts.    In the normal course of business, the cooperative extends credit to its customers on a short-term basis. Although credit risks associated with its customers are considered minimal, the cooperative routinely reviews its accounts receivable balances and makes provisions for probable doubtful accounts. In circumstances where management is aware of a specific customer's inability to meet its financial obligations to the cooperative (e.g. bankruptcy filings), a specific reserve is recorded to reduce the receivable to the amount expected to be collected. For all other customers, the cooperative recognizes reserves for bad debts based on management's experience and the length of time the receivables are past due, generally the entire balance for amounts more than 90 days past due. However, due to favorable collection results during 2003, 2002,As of February 29, 2004, the cooperative had never written off any accounts receivable and 2001,had no such reserves were considered necessary.bad debt reserves.

        Inventories.    Inventories of eggs, feed and supplies are valued principally at the lower of cost (first-in, first-out method) or market. If market prices for eggs and feed grains move substantially lower, the cooperative would record adjustments to write-down the carrying values of eggs and feed inventories to fair market value.

        The cost associated with flock inventories, consisting principally of chick costs, feed, labor, and overhead costs, are accumulated during the growing period of approximately 18 weeks. Capitalized flock costs are then amortized over the productive lives of the flocks, generally 18 to 24 months. High mortality from disease or extreme temperatures would result in abnormal adjustments to write-down flock inventories. As of February 29, 2004, the cooperative had only one abnormal adjustment due to high mortality. The results of this adjustment were non-material to the financial statements. Management continually monitors each flock and attempts to take appropriate actions to minimize the risk of mortality loss.

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        Long-Lived Assets.    Depreciable long-lived assets are primarily comprised of buildings and improvements and machinery and equipment. Depreciation is provided by the straight-line method over the estimated useful lives based on management's experience, which are 7 to 39 years for buildings and improvements and 3 to 15 years for machinery and equipment. An increase or decrease in the estimated useful lives would result in changes to depreciation expense. As of February 29, 2004, the cooperative had never experienced any changes to asset useful lives.

        The cooperative continually reevaluates the carrying value of its long-lived assets, for events or changes in circumstances, which indicate that the carrying value may not be recoverable. As part of this reevaluation, if impairment indicators are present, the cooperative estimates the future cash flows expected to result from the use of the asset and its eventual disposal. IfAs of February 29, 2004, the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, ancooperative had never found impairment loss is recognizedindicators to reduce the carrying value of the long-lived asset to the estimated fair value of the asset.be present in its reevaluation processes.

Recent Accounting Pronouncements

        In August 2001, the Financial Accounting Standards Board issued Statement No. 143, "Accounting for Asset Retirement Obligations." This statement applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development or normal operation of a long-lived asset, except for certain obligations of lessees. The liability would be recognized in the period in which it is incurred and can be reasonably estimated. The cooperative

adopted Statement No. 143 effective September 1, 2002. The cooperative has reviewed its assets and believes it has no assets which will require funds to retire in the future.

        In April 2003, the Financial Accounting Standards Board issued Statement No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." This statement amends Statement of Financial Accounting Standards No. 133 to provide clarification on the financial accounting and reporting of derivative instruments and hedging activities and requires that contracts with similar characteristics be accounted for on a comparable basis. The standard is effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003. The cooperative's adoption of Statement No. 149 did not have a material impact on its financial position or results of operations.

        In May 2003, the Financial Accounting Standards Board issued Statement No. 150, "Accounting for Certain Instruments with Characteristics of Both Liabilities and Equity." This statement establishes how an issuer classifies and measures certain freestanding financial instruments with characteristics of liabilities and equity and requires that such instruments be classified as liabilities. The standard is effective for financial instruments entered into or modified after May 31, 2003. The cooperative's adoption of Statement No. 150 did not have a material impact on its financial position or results of operations.

        In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46, "Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51." This interpretation requires the consolidation of entities in which an enterprise absorbs a majority of the entity's expected losses, receives a majority of the entity's expected residual returns, or both, as a result of ownership, contractual or other financial interests in the entity. A variable interest entity results from interests in an entity through ownership, contractual relationships, or other pecuniary interest. Under current accounting guidance, entities are generally consolidated by an enterprise only when it has a controlling financial interest through ownership of a majority voting interest in the entity. The cooperative has interests in various affiliates established for the purpose of finished feed production, technology services and rental of real estate. The creditors of the entities do not have recourse to the cooperative. The cooperative is currently evaluating the effects of the issuance of Interpretation No. 46 on the accounting for its ownership interests in these entities.

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Quantitative and Qualitative Disclosures About Market Risk

        Market risk is the risk of loss to future earnings, to fair values or to future cash flows that may result from changes in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, commodity prices, exchange rates, equity prices and other market changes. Market risk is attributed to all market-risk sensitive financial instruments, including long-term debt.

        The cooperative does not believe it is subject to any material market risk exposure with respect to interest rates, commodity prices, exchange rates, equity prices, or other market changes that would require disclosure.

        The cooperative utilizes commodity options in its approach to risk management of its most significant inputs, corn and soybeans. The strategy is optimized when price volatility exists in the marketplace by offsetting the risk of higher feed prices. The goal of the cooperative's hedging policy is to capture potential adverse price moves for a projected nine to twelve months by a corresponding gain in the hedging account. The cooperative anticipates effectively hedging these as cash flow hedges, and has accounted for these hedges in accordance with SFAS 133, Accounting for Derivative Instruments and Hedging Activities.

Contractual Obligations

        The following table presents various known contractual obligations of the cooperative as of August 31, 2003:

        The data presented in the preceding table does not include any expected interest payments. The cooperative had no material purchase obligations as of August 31, 2003.

BUSINESS

        To the extent that the LLC will be the successor of the cooperative and will continue to operate the business of the cooperative, unless indicated otherwise, the following discussion of the business, as it applies to the cooperative, is equally applicable to the LLC, and vice versa.

Overview

        The cooperative is a member-owned Minnesota cooperative that is primarily engaged in the business of producing and processing egg products. The cooperative was incorporated on March 17, 1994. The cooperative's fiscal year is from September 1 to August 31. Its principal office is located at 340 Dupont Avenue NE, Renville, Minnesota 56284. The telephone number is 320-329-8182.

        The cooperative's output consists of liquid whole egg, liquid egg white and liquid egg yolk. The egg products produced by the cooperative are sold on a direct basis to companies who further process the raw liquid egg into various finished egg products such as dried eggs, frozen, hard cooked, extended shelf-life liquid, pre-cooked egg patties, specialty egg products, etc. Institutional, food service, restaurants, and food manufacturers in turn purchase these further processed products.

        The cooperative has seen its production increase from approximately 7 million liquid pounds in 1995 to approximately 146 million in 2003. Assuming the current construction of additional layer barns at the Thompson facility is complete, the cooperative expects to have the capacity to produce approximately 175 million liquid pounds of products annually. When the second phase of the Thompson facility is completed, the cooperative expects to reach an annual production capacity of approximately 225 million pounds. The egg industry has been consolidating as producers and processors try to meet the needs of their large customers. We believe that these large customers are looking for a reduced number of reliable suppliers that can give them the high quality product that they need.

        The cooperative had revenues of approximately $53.0 million during fiscal 2003 (ending August 31, 2003), approximately $46.2 million during fiscal year 2002 (ending August 31, 2002) and approximately $35.2 million during fiscal 2001 (ending August 31, 2001).

Facilities and Production

        The cooperative maintains production and processing facilities at both its original 60-acre site in Renville, Minnesota and a second 240-acre site northeast of Thompson, Iowa. The land on which the Thompson facilities are located is leased from Midwest Investors of Iowa, Cooperative. At each location, the cooperative maintains a large layer flock for "in-line" production of eggs.

        The laying barns are equipped with high-rise turbo ventilation systems which are designed to promote better bird health, improved pest control, uniform temperatures and a purer environment for employees working at the facility. The turbo ventilation system dries poultry litter to approximately 15% moisture, which greatly reduces any odor. The dried poultry litter also results in less tonnage being transported to area farm fields for application. The dried poultry litter is marketed to local farmers for its nutrient value to be applied as a soil amendment to farm fields located in the vicinity of the facility.

        After the eggs are produced, they are processed into liquid egg products at one of the cooperative's two egg breaking facilities. The in-line processing facility receives the shell eggs via a conveyor belt directly from the layer barns. At the Renville site, supplementary equipment also allows procurement of "off-line" produced shell eggs from third parties for processing. The egg breaking facilities process the eggs by washing, rinsing, sanitizing and candling the eggs prior to removing the shells. The process then extracts any inedible substances and separates the liquid into whites, yolks or whole eggs. The liquid eggs are then filtered, cooled and pumped into liquid storage tanks. The liquid egg products are then shipped via tanker trucks to customers. The egg shells are currently land applied

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as crop plant food but, with construction underway on an egg shell recovery facility at the Thompson site, the cooperative expects to be able to begin drying a portion of the shells for utilization as a feed ingredient.

Renville, Minnesota

        Construction of an in-line production and processing layer complex in Renville, Minnesota, began in June 1994, with construction being completed and all 16 barns housed with approximately 2.0 million birds by October 1996. The Renville processing facility presently operates near its current production capacity of approximately 70 million pounds of liquid egg per year.

        The cooperative acquires all of its baby chicks from third-party sources. The cooperative has an exclusive contract pullet growing arrangement for its needs at the Renville operation with The Pullet Connection. The Pullet Connection receives day-old birds, provides housing, labor, and utilities and delivers the pullets to the layer sight at approximately sixteen weeks of age. The cooperative owns the birds, provides all feed and supplies, and pays The Pullet Connection a fixed fee per delivered pullet along with performance incentives determined by certain quality standards. The Pullet Connection's facility has the capacity to house approximately 520,000 pullets.

        Feed for the laying hens at the Renville facility and the pullet growing operations is manufactured at a feed mill owned and operated on a cost basis by United Mills. United Mills is a cooperative venture owned one-third each by Coop Country Farmers Elevator of Renville, Minnesota, Christensen Family Farms and the cooperative. The feed mill is capable of producing 250,000 tons of feed annually. The cooperative uses approximately 65% of the feed manufactured by United Mills. The cooperative believes that it is able to leverage United Mills' volume purchasing power and production capacity to achieve lower feed costs than the cooperative would face if it manufactured feed at its own facilities.

Thompson, Iowa

        In August 1999, construction of a second in-line production and processing layer complex began on the site located near Thompson, Iowa. The project is divided into two phases. Construction of phase one, the east side of the complex, which houses approximately 2.7 million layers and 650,000 pullets, was completed in December 2001. Phase one consists of eleven high-rise barns, segmented by one brooder barn, one starter barn, nine layer barns, an egg processing facility and an operations office. Phase two is the west side of the complex and is planned as a duplicate of the east side brooder, starter and layer barns.barns, as well as a feed mill and related facilities, as described below. As an initial stagephase two step, the cooperative has begunis in the construction onprocess of constructing both the feed mill and related facilities and three additional layer barns that are expected to house an additional anticipated .9 million producing hens by September 2004. If adequate resources are available,the cooperative can make suitable arrangements for the sale of the additional product, the cooperative intends to continue building out in the future as its capital resources permit in order to reach its permitted level of 5.4 million layers and 1.3 million pullets. The Thompson processing facility presently operates near its current production capacity of approximately 76 million pounds of liquid egg per year.

        As with the Renville operations, the cooperative acquires all of its baby chicks for production at the Thompson site from third-party sources. However, the cooperative raises the baby chicks to pullets itself at the Thompson facility.

        Feed for the laying hens at the Thompson facility is currently manufactured by and purchased from a third party, State Line Coop. However,Because the cooperative believes that the existing local feed manufacturing capacity would be insufficient to meet the requirements of the Thompson operations when the three additional layer barns are housed with birds, the cooperative is in the process of constructing a 400,000 ton annual production capacity feed mill and related egg shell recovery and grain receiving facilities on the Thompson site that aresite. The new mill is expected to be operational by July 2004. Once the new Thompson feed mill is operational,2004,

at which time the cooperative expects to discontinue its purchases from State Line Coop. The cooperative intends to utilize approximately half of the capacity of the feed mill for its own purposes and sellcontract out the remainder of the capacity to outside users. Currently, the cooperative is in

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negotiations with a local cooperative to sell 100,000 tons of annual production on a long term take or pay basis.

Sales, Marketing and Customers

        Currently, a majority of the cooperative's egg products are sold at open market prices, although the cooperative has set up a variety of contract arrangements in an effort to reduce price and product sales risk. The cooperative has enteredregularly enters into short-term written contracts and verbal agreements that are based on formula pricing, fixed price toll milling, and open market. The cooperative expects these agreements to continue, but due to unforeseen circumstances, customers may terminate the purchase agreements. Currently, egg products that are priced on a "non-market" basis account for approximately 30% of total sales volume.

        As is typical in the egg products industry, the cooperative isalso a party to several multi-year written contracts to supply different customers, including some of its largest clients.clients, based on formula pricing, fixed price and toll milling. Those contracts typically involve the customer's agreement to purchase a specified quantity of egg products each year during the term of the applicable agreement, but also typically include a provision allowingand allow either party to terminate the agreementcontract upon specified notice to the other party. Currently, egg products that are priced on a "non-market" basis under these long-term contracts account for approximately 30% of total sales volume, although this percentage tends to fluctuate over time depending on the availability of and interest of the cooperative's management in entering into these types of sales arrangements. Depending upon market circumstances, the prices generated by these non-market volume sales tend to be either less or more than what the prevailing open market prices would generate. For the six months ended February 29, 2004, the cooperative's long-term non-market contracts produced sales at overall prices significantly below then current open market prices. The current contracts expire at various times over the next five years, subject to termination by either party on from six to 24 months' notice. In the event that any such contractual arrangements were terminated, the cooperative would plan to sell the available products into the commodity markets for such products.

        The cooperative has expanded its customer base with the additional production from the Thompson expansion. The cooperative delivers to over twenty different customers, representing a significant portion of the further processing capacity in the U.S. and Canada. Theywhich customers regularly serve markets in Minnesota, Wisconsin, California, Iowa, Oregon, Alabama, Missouri and Canada.

        Customers of the cooperative include the following:

•

Abbotsford Produce



•

Ballas Egg Products Corporation (Division of Wabash Valley Produce, Inc.)



•

Brown Produce (Division of Wabash Valley Produce, Inc.)



•

Canadian Inovatech (Division of Michael Foods, Inc.)



•

Cutler Egg Products (Division of MOARK, LLC)



•

Deb-El Foods Corporation



•

Echo Lake Farm Produce



•

Estherville Foods



•

Henningson Foods, Inc.



•

Mentone Egg Products



•

MG Waldbaum (Division of Michael Foods)



•

National Foods



•

Norco Ranch, Inc. (Division of MOARK, LLC)



•

Nulaid Foods, Inc.

•

Oskaloosa Foods



•

Papetti's Hygrade Egg (Division of Michael Foods)



•

Papetti's of Iowa (Division of Michael Foods)

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•

Primera Foods



•

Rose Acre Farms



•

Sunny Fresh Foods



•

USDA



•

Wabash Valley Produce, Inc.



•

Wenk Produce



•

Willamette Egg Company

        In the cooperative's most recent fiscal year, there were a number of customers who each represented more than 10% of the cooperative's total sales. Those customers include Primera Foods, Sunny Fresh Foods, Michael Foods and MOARK. Some of the cooperative's sales are made to customers in Canada. In 2001, non-U.S. sales totaled approximately $2,444,000, with sales in 2002 and 2003 increasing to approximately $3,980,000 and $4,798,000, respectively.

Egg Industry and Markets

Production

        Total U.S. egg production during 20022003 was 73.1873.93 billion table eggs.

        In 2003, the average number of egg-type laying hens in the U.S. was 276.1 million. Flock size on January 1, 2004 was 280 million layers, an increase of 1.0 million from a year earlier. Rate of lay per day on that same date averaged 71.0 eggs per 100 layers, up 2 percent from a year earlier.

Market Segmentation

        Of the 206.9 million cases of shell eggs produced in 2003:

•

60.9 million cases (29%) were further processed into other commodity products such as fresh liquid, pasteurized liquid, frozen, frozen and salted, frozen and sugared and dried eggs;



•

125.8 million cases (61%) went to retail;



•

18.6 million cases (9%) went for foodservice use; and



•

1.6 million cases (1%) were exported.

        The cooperative participates in the 60.9 million cases that are further processed into various types of egg product. This equates to production of approximately 2,400 million pounds of liquid eggs.

Per Capita Consumption

        The following table provides "per capita consumption" data on a national basis. Note that per capita consumption is a measure of total egg production divided by the total population. It does not represent demand.

        Source: U.S. Department of Agriculture (USDA has recently adjusted data to reflect 2000 Census figures)

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Competition

        Currently, there are approximately 260 egg producing companies nationally with flocks of 75,000 hens or more, representing approximately 95% of all the layers in the U.S. Of these, there are approximately 65 egg producing companies with 1 million plus layers, representing about 80% of all the layers in the U.S. And, of these, there are approximately 9 companies with greater than 5 million layers.

        Egg Industry Magazine ranked the cooperative as the 14th largest producer nationally as of December 31, 2003. The top twenty producers represented 57.3% of the national flock.

Top U.S. Egg Producers
(by millions of layers in production)

        Source: January 2004 Egg Industry Magazine

     ��  As stated previously, the industry converted 60.9 million cases into approximately 2,400 million pounds of liquid eggs in 2003. In its most recent fiscal year, the cooperative sold 146 million pounds of liquid egg supplying approximately 6% of the market. Some of the cooperative's customers listed above break a number of their own eggs to fulfill their needs while others source all of their liquid egg from outside providers.

Corn Procurement

        One of the primary inputs for feed is corn. Presently, the corn purchased and used in operations is obtained primarily through the delivery of corn pursuant to uniform marketing agreements between the cooperative and each of its members. Under the marketing agreement, the member is obligated to deliver each year to the cooperative up to one bushel of No. 2 yellow corn for each share of the

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cooperative's common stock owned. The agreement specifies the quality standards and delivery schedule. Under the Uniform Marketing Agreement, the Board of Directors has the discretion to call for deliveries at a rate of less than one bushel of corn for each share of common stock, by providing notice of the reduced delivery requirement prior to August 1 of the applicable year. The Board of Directors of the cooperative, in its sole discretion, establishes the purchase price to be paid for each bushel of corn delivered. The term of the agreement is one year. At the end of each year, the agreement is automatically renewed for a successive one-year term, until timely notice of termination is given.

        Currently, the cooperative has approximately 4.6 million shares of common stock issued and outstanding, representing obligations of the members to deliver up to approximately 4.6 million bushels of corn annually. In fiscal 2003, the Board of Directors called on its members to deliver a total of approximately 4.1 million bushels out of a total of approximately 4.3 million bushels used in the cooperative's operations. In fiscal 2002, approximately 3.7 million bushels were provided by members, also out of a total of approximately 4.3 million bushels used. Prior to fiscal 2002, the cooperative procured 100% of corn used from its members. The cooperative has historically followed a policy of paying average market prices as posted at local elevators for all corn so purchased.

        As part of the conversion, we intend to terminate the corn delivery program. In anticipation of the completion of the conversion, the cooperative, is planningpursuant to suspendits rights under the uniform marketing agreements, has suspended all delivery requirements under the uniform marketing agreements beginning May 2004. If the conversion is not approved by the cooperative's members, the cooperative will plan to resume the corn delivery program in September 2004. Following the conversion, the LLC will continue to require the same quantities of corn for processing as are currently required by the cooperative. In order to fulfill those requirements, the LLC will be required to acquire substantial quantities of corn in the marketplace, based upon the then-prevailing market price of corn. The cooperative's management believes that there are supplies of corn available in the vicinity of each of the cooperative's primary facilities adequate to continue to meet the needs of the business at reasonable prices following the conversion. Because the cooperative has always paid average market prices for corn purchased in the corn delivery program, we do not expect to experience any material change in corn procurement costs as a result of the termination of the program. 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.

Governmental Regulation

        The cooperative is subject to federal and state regulations relating to grading, quality control, labeling, sanitary control and waste disposal. The cooperative's egg processing facilities are subject to regulation by both the U.S. Department of Agriculture and the U.S. Food and Drug Administration. The cooperative believes that it is in material compliance with the applicable regulatory requirements.

The cooperative maintains its own inspection program to assure compliance with applicable regulatory requirements, the cooperative's standards and customer specifications.

Environmental Matters

        The cooperative is subject to several federal and state environmental regulations. The federal environmental regulations with which it must comply were promulgated by the U.S. Environmental Protection Agency pursuant to the Clean Air Act, Clean Water Act and Resource Conservation and Recovery Act. The Environmental Protection Agency has delegated permitting and enforcement authority under each of these acts to Minnesota and Iowa, where the cooperative has facilities. Thus, the cooperative is required to comply with the provisions of regulations promulgated by the Minnesota Pollution Control Agency, as well as the Iowa Department of Natural Resources, pursuant to these federal acts.

        In Minnesota, the cooperative has obtained the following permits related to environmental regulations:

•

The cooperative has a National Pollutant Discharge Elimination System permit from the Minnesota Pollution Control Agency that addresses the requirements of the Clean Water Act.

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This permit will need to be renewed in 2006. The cooperative does not anticipate the cost of renewing this permit to be material.





•

The cooperative has a permit to discharge wastewater from its Minnesota processing operations into the City of Renville's sewer system. The cooperative and the City are currently negotiating a new permit, to be effective January 1, 2005. The cost to this permit renewal is not expected to be material. In the future, the cooperative may elect to own and operate the wastewater treatment facilities necessary for the treatment of waste effluent. If it chooses to do this, the permitting costs are not expected to be material.

        In Iowa, the cooperative has obtained or applied for the following permits related to environmental regulations:

•

The cooperative has an Animal Feeding Operation construction permit issued in compliance with the Iowa Department of Natural Resources' Animal Feeding Operation regulations, which were promulgated pursuant to the Clean Water Act. The construction permit does not expire unless significant changes in the size or operation of the facility are anticipated. The cooperative is not currently planning any such changes.



•

The cooperative has a National Pollutant Discharge Elimination System Permit from the Iowa Department of Natural Resources for its wastewater treatment operations at the Iowa facility. This permit expires in April 2005, and the cooperative does not expect the cost of permit renewal to be material.



•

The cooperative has air construction permits from the Iowa Department of Natural Resources for two backup generators, a mobile generator and boilers at the Iowa facility. These permits have no expiration date, but must be modified if emissions from the equipment are anticipated to change. The cooperative is not currently planning any such changes.



•

The cooperative, in March 2004, submitted air permit applications related to planned construction of a feed mill, grain elevator and eggshell drying facility at the Iowa facility. Construction of these facilities and installation of this equipment cannot occur until such permits are granted by the Iowa Department of Natural Resources. The cooperative does not foresee any problems in obtaining such permits and does not believe the costs of obtaining the permits will be material.

        The cooperative also manages any solid waste, such as deceased hens and waste egg shells, pursuant to Minnesota Pollution Control Agency and Iowa Department of Natural Resources solid waste regulations

        The cooperative is also subject to the federal Comprehensive Environmental Response Compensation and Liability Act, also known as the federal "Superfund" law. This law establishes liability for releases of hazardous substances to the environment. Under the law, current and former owners and operators of facilities where hazardous substance releases occur are jointly and severally liable for response costs and damages to natural resources caused by the releases. Because both the Minnesota and Iowa facilities were constructed on previously undeveloped agricultural land, and because any hazardous substances utilized by the cooperative are managed according to regulations promulgated by Minnesota and Iowa pursuant to the Resource Conservation and Recovery Act, and any releases of hazardous substances are within permitted or regulatory limits, the cooperative does not believe it has any significant potential liability under the Comprehensive Environmental Response Compensation and Liability Act.

        The cooperative believes that it is currently in compliance with applicable environmental laws and regulations and has all necessary permits for existing operations. As the cooperative expands its operations, it will need to continue to obtain necessary permits and maintain compliance with regulatory reporting requirements. The cooperative maintains an on-going program designed to ensure compliance with environmental laws and regulations. The cooperative cannot predict whether future changes in environmental laws or regulations might increase the cost of operating its facilities and

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conducting its business. Any such changes could have material financial consequences for the cooperative and its members.

        As noted above, the cooperative has permits to discharge wastewater from its Renville processing operations into the City of Renville's sewer system, and maintain ponds for storm water runoff. In the future, the cooperative may elect to own and operate the wastewater treatment facilities necessary for the treatment of waste effluent. The Thompson site is a totally self-contained operation, complete with its own water wells and water tower, processing wastewater treatment facilities and electrical generating equipment.

Intellectual Property Rights

        The cooperative does not hold any patents and generally uses industry-standard equipment and processing lines in its business. To the extent it develops proprietary uses of such systems, the cooperative relies on a combination of trade secrets, trademarks, nondisclosure agreements and technical measures to establish and protect its proprietary rights.

Research and Development

        As a commodity-based business, the cooperative does not conduct any research and development activities associated with either the development of new products or the development of new technologies for use in producing those products. Instead, as described above, the cooperative relies upon industry-standard processing and related equipment.

Employees

        As of the [                        ], 2004 record date for the special meeting, the cooperative had approximately 185 full-time employees, none of which are covered by collective bargaining agreements. Management considers its employee relations to be good.

Legal Proceedings

        From time to time and in the ordinary course of its business, the cooperative is named as a defendant in legal proceedings related to various issues, including worker's compensation claims, tort claims and contractual disputes. Other than such routine litigation, the cooperative is not currently involved in any material legal proceedings. In addition, the cooperative is not aware of other potential claims that could result in the commencement of legal proceedings. The cooperative carries insurance that provides protection against certain types of claims, up to the policy limits of the cooperative's insurance.

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MANAGEMENT

Directors of the Cooperative and Managers of the LLC

        The cooperative is managed by a Board of Directors. Under the cooperative's Bylaws, the number of directors is currently set at seven. The number of directors may be changed, but may not be less than five. A director must either be a member or a duly elected or appointed representative of a member. Approximately one-third of the directors are elected each year to serve for a three-year term. Members are currently represented by a director elected in each of seven districts. District boundaries are determined by the Board of Directors to provide fair representation for members.

        The LLC will be managed by a Board of Managers, all of whom will be elected on an at-large basis. Under the Limited Liability Company Agreement, the number of managers is to be set by the Board of Managers, but may not be less than five. The initial Board of Managers of the LLC will consist of the same seven individuals who are currently serving as members of the Board of Directors of the cooperative, who will serve for the same terms for which they would otherwise have served as directors of the cooperative. The Board of Managers will be divided into three classes for election purposes. One class of managers will be elected at each annual meeting of members to serve for a three-year term.

        The names, addresses, ages and terms of the current directors of the cooperative and the initial managers of the LLC are as follows:

        Marvin Breitkreutz.    Mr. Breitkreutz has served as a director of the cooperative since its formation in 1994, serving as its Chairman since April 2002. He has served on the board for Southern Minnesota Sugar Beet Cooperative, is Chairman of the Red River Valley Farmers Insurance Pool, and is a past

55

township supervisor and chairman of the Renville County Farm Bureau. He has owned and operated his farm since 1962. He raises sugar beets, corn and soybeans.

        Mark Chan.    Mr. Chan has served as a director of the cooperative since its formation in 1994, serving as its Secretary/Treasurer since April 2002. He is a past director of Co-op Country Farmers Elevator and ValAdCo. He has been farming since 1982. He is an owner and manager of a family farm corporation, raising corn, soybeans, sugar beets and green peas.

        Chris Edgington.    Mr. Edgington has served as a director of the cooperative since February 2000, serving as its Vice Chairman since April 2002. He currently serves on the board for Ag Ventures Alliance, and has served on the Iowa Extension Council. He is a member of the Iowa Pork Producers and served on the producer leadership committee. He has been farming since 1984. He is the owner and manager of a farrow to finish hog operation with his brother and they raise corn, soybeans, millet and alfalfa.

        Thomas Jacobs.    Mr. Jacobs has served as a director of the cooperative since its formation in 1994. He is a past board member of the Sheep Producers. He has owned and managed his farm since 1976 where he raises sheep, corn, soybeans, peas, sweet corn and sugar beets.

        Brad Petersburg.    Mr. Petersburg has served as a director of the cooperative since February 2000. He has been active in many farmer-owned organizations and is a member and past county board director for the Iowa Farm Bureau, director of Ag Ventures Alliance, director and past president of Exol ethanol cooperative, director of Midwest Grain Processors Cooperative and chairman of U.S. Ag Producers Alliance. He has owned and managed his farm since 1979, raising corn and soybeans.

        Randy Tauer.    Mr. Tauer has served as a director of the cooperative since March 2003. He is currently serving as a board member of the Prairie Farmers Coop and a member of the Corn and Soybean Producers and Pork Producers. He has been farming since 1980. He owns and manages a farrow to finish hog operation and raises corn, soybeans, sweet corn and peas.

        Jeff Woodley.    Mr. Woodley has served as a director of the cooperative since February 2000. He is chairman of Winnebago County Soil and Water Conservation District, director of Hancock and Winnebago County Cattlemen's Association and a member of Ag Ventures Alliance. He has owned and managed his farm since 1988, where he raises corn, soybeans, hay and cattle.

Board Advisor

        The Board of Directors of the cooperative has appointed Mark Fisler to serve the Board of Directors in an advisory capacity, attending Board meetings and providing input as appropriate, particularly on matters relating to business growth, access to capital and corporate structure. Mr. Fisler has served the cooperative in this role since January 2001.2001, and is expected to serve the Board of Managers of the LLC in substantially the same capacity after the conversion. He is President of Accretio Advisors Inc., a corporate financial advisory firm formed in early 2004. Prior to forming Accretio, Mr Fisler was a Senior Vice President in the Investment Banking group atCorporate Finance Department of Northland Securities, Inc. He joined that company insince March 2003 and is an investment banker within the corporate finance department of the firm.2003. Prior to joining Northland, Mr. Fisler was a Managing Director of US Bancorp Piper Jaffray Inc. and was employed by it and its predecessors for a span of 18 years. Mr. Fisler currently serves on the Board of Managers of Greenway Consulting, a wholly owned subsidiary of DENCO, LLC. Mr. Fisler is expected to serve the Board of Managers of the LLC in substantially the same capacity after the conversion.

Committees of the Board of Managers of the LLC

        In connection with the conversion, the Board of Managers of the LLC will appoint a compensation committee, an audit committee, a nomination committee and a strategic alternatives committee.

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        The compensation committee will make recommendations to the Board of Managers of the LLC regarding stock and compensation plans, approve transactions of certain officers and grant stock

options. We expect that Messrs. Breitkreutz, Edgington and Petersburg will serve as the initial members of the compensation committee.

        The audit committee will make recommendations to the Board of Managers of the LLC regarding the selection of independent auditors, review the scope of audit and other services by the independent auditors, review the accounting principles and auditing practices and procedures to be used for the LLC's financial statements and review the results of those audits. We expect that Messrs. Breitkreutz, Chan and Edgington will serve as the initial members of the audit committee.

        The nomination committee will recommend nominees to the Board of Managers of the LLC. We expect that Messrs. Jacobs, Tauer and Woodley will serve as the initial members of the nomination committee.

        The strategic alternatives committee will review potential strategic alternatives for the LLC to pursue with regard to significant business transactions such as potential outside equity investments, and make recommendations to the Board of Managers of the LLC regarding these strategic alternatives. We expect that Messrs. Breitkreutz, Chan and Petersburg will serve as the initial members of the strategic alternatives committee.

Compensation of Managers

        The LLC will provide its managers with a per diem payment of $200 for any day on which a manager undertakes activities on the LLC's behalf, including board meetings and other functions of the LLC. The LLC will also pay each manager a monthly fee of $200, except for the Chairman and Secretary who will be paid monthly fees of $400 and $250, respectively. The LLC will also reimburse its managers for out-of-pocket expenses incurred on behalf of the LLC.

Executive Officers

        Upon completion of the conversion, the current executive officers of the cooperative will hold comparable offices of the LLC on a full-time basis. The table below sets forth information concerning the current executive officers of the cooperative.

        Dana Persson.    Mr. Persson has served as President and Chief Executive Officer of the cooperative since its formation in 1994. He has served on a committee for United Egg Producers since 2001, and has been a member of the Board of Directors for United Mills since 1994, serving as its Chairman of the Board since 2001. Prior to 1994, he served as President/CEO of Co-op Country Farmers Elevator of Renville, Minnesota, and general manager of a number of grain marketing and farm supply cooperatives in Minnesota.

        Terrance Heying.    Mr. Heying has served as Vice President and Chief Operations Manager of the cooperative since its formation in 1994. He is responsible for the day-to-day operation of the egg production complex, and also develops and implements egg production programs, plans, objectives and policies consistent with goals and objectives established in the annual business plan. Prior to joining the

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cooperative, he owned and managed pullet rearing operations, egg production, shell egg processing, egg breaking, and further processed products. As an entrepreneur in value-added egg products, he

developed a technique to freeze cooked egg products. He has designed and built special equipment required to process value-added products in addition to designing and constructing all supporting equipment and facilities.

        Doug Leifermann.    Mr. Leifermann has served as Vice President and Chief Financial Officer for the cooperative since October 2000. He is responsible for the design and implementation of financial controls, along with providing timely information that accurately portrays the financial status of the cooperative. He also provides managerial leadership for the accounting, financial, data processing and budgeting functions of the cooperative. From 1997 to October 2000, he was employed as the Chief Financial Officer for Phenix Biocomposites, a company incorporated to develop and commercialize new biocomposite technology for the construction, furniture, cabinet and design industries.

        Marie Staley.    Ms. Staley has served as Vice President of Shareholder Relations for the cooperative since its formation in 1994. In addition to coordinating the functions of management and the Board of Directors, she is responsible for member relations, communications, shareholder relations, and provides management leadership for the human resources department. She also administers the corn delivery program and share transfer process. She has served as a board member for the Broiler & Egg Association of Minnesota since 2002. Prior to joining the cooperative, she was employed by the St. Paul Bank for Cooperatives.

Executive Compensation

        Upon completion of the conversion, the current executive officers of the cooperative will hold the comparable offices in the LLC on a full-time basis. The following table shows the compensation paid by the cooperative in the years indicated to its President and Chief Executive Officer (to be the President and Chief Executive Officer of the LLC following the conversion) and the three other individuals who were serving as executive officers of the cooperative at the end of its fiscal year 2003.

Summary Compensation Table