Soybean prices were volatile during the first three quarters of 2004. Soybean prices began increasing in the third quarter of 2003 because of a poor U.S. crop and a 2004 South American soybean harvest that was unchanged compared to the prior year. However, the soybean market made a rapid transition from a period of shortage to one of ample supply during the third quarter of 2004 in response to the record 2004 soybean crop in the United States and forecasts of larger 2005 South American harvests compared to 2004. As a result, during the third quarter of 2004, soybean prices declined significantly to more normalized levels.

Our agribusiness earnings are not directly tied to commodity prices, as segment operating profit is primarily determined by the relative difference between the price at which we buy commodities and the price at which we sell the derived commodity products, such as soybean meal and soybean oil, among other factors. We also minimize our exposure to price fluctuations through hedging transactions.

Our agribusiness volumes in 2004 increased only 2% over 2003 as demand was hampered by record high commodity prices. However, the USDA is projecting an 8% increase in global soybean meal consumption in 2005. In addition, increased demand for biofuels in Europe, North America and Brazil should further stimulate demand for vegetable oil.

Our fertilizer results in 2004 benefited from higher average selling prices for fertilizers. International selling prices for imported fertilizers and raw materials were higher than 2003, which helped to increase margins on locally produced fertilizer as it is priced to import parity.

In our edible oil business, excluding the 2003 results of Lesieur which we sold in July 2003, our 2004 sales volumes increased primarily in North America and our operating profit increased in our softseed businesses in Eastern Europe.

segment results In 2004, we reclassified certain consumer product lines from the agribusiness segment to the edible oil products segment. As a result, amounts for the year ended December 31, 2003 have been reclassified to conform to the current presentation.

In the second quarter of 2003, we sold our Brazilian soy ingredients business to The Solae Company, our joint venture with DuPont. As a result, our "other (soy ingredients)" segment now reflects only the historical results of the soy ingredients business.