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Section 6
Market Research and Market Share

To determine marketing opportunities for future growth, JL White International conducted
four national market evaluations and a review of Monterey, Imperial, and Yuma Counties.

Evaluation One: Crop Services in the US Industry Code 11511

The Crop Services industry consists of companies that assist in a variety of planting,
harvesting and treatment activities for crop producers. The industry provides services for
all types of crops, including handpicking fruit, crop dusting and cotton ginning. Therefore,
industry performance is the aggregate result of many different types of industry operators.
Despite slow growth in the industry's largest market segment, fruit and vegetable farming,
revenue has increased an estimated 0.7% per year on average in the five years to 2016 to
$16.3 billion.

Grains such as corn and wheat, as well as oilseed crops such as soybeans, have become
more significant in providing for an increasing global population. A string of floods and
droughts damaged a large number of fields in Russia, India, and other large crop-producing
countries in 2011, boosting prices for crops like corn, wheat and cotton. As a result,
industry revenue grew 7.3% in 2011. Corn production in particular, which requires
industry services such as crop dusting, has become important as US renewable energy
quotas have pushed for the crop's use in ethanol production, increasing revenue generated
from this segment. Favorable weather conditions are expected to produce a strong yield in
most crops in 2016; however, an oversupply of many US crops has led prices to fall, as
indicated by a drop in the agricultural price index in 2015 and 2016. Crop services revenue
has fallen in turn, declining an estimated 5.2% in 2015. However, revenue is expected to
recover in 2016, increasing 2.4%.

The well-established nature of US farming guarantees demand for crop services. Demand
for fresh fruit and vegetables calls for specialized operators to plant and pick these crops.
Similarly, continued international demand for US cotton will ensure a place for cotton
ginners, another industry segment. Due to the specialized nature of most industry services,
profit margins tend to be strong, weighing in at 6.4% in 2016.

Due to falling crop prices and decreasing planted acreage, crop production is expected to
decrease in the five years to 2021, loosening demand for crop services. However, as
interest rates increase, farmers will be less inclined to invest in their own machinery,
preferring to outsource to industry operators. As a result, industry revenue is expected to
rise at an annualized rate of 1.5% to $17.5 billion in the five years to 2021.

Prepared for Growers Ice Company, Inc.
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Jim White, PhD --- JL White International