Veblen West Dairy State Hwy 25 Veblen, SD 57270

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1 Veblen West Dairy State Hwy 25 Veblen, SD October 15, 2010 Dear Prospective Buyer: Veblen West Dairy, one of the largest dairy operations in South Dakota, will be offered for sale at 9 a.m., Monday, November 1, 2010 at the Federal Court House, in Sioux Falls. The property will be sold by the court under a sale pursuant to Section 363 of the bankruptcy code, enabling immediate transfer of the title, free and clear. The Veblen West complex consists of 126 acres of land with 4,165 stalls, a 48-head rotary parlor and Double 24 (D24) milking center. The innovative building design, with its curtain sidewalls, expanded ridge vents, free stalls, rapid exit stalls, well planned flow patterns and improved employee comfort levels has attracted regional attention. Summary information regarding Veblen West Dairy is included below for your review. The information is believed to be accurate but there is no guarantee to that effect. General Information Veblen West Dairy, located in northeastern South Dakota, is one of the largest dairy complexes in the state. Veblen West is approximately 30 miles west of Minnesota and 10 miles south of North Dakota. It consists of three sites with a total of 126-acres of land, all within a few miles of each other. The property includes: An 80-acre tract of land with two connected dairy units which together have nearly 2,200 free stalls, a 48-head rotary parlor and a Double 24, located one mile west of Veblen, South Dakota A 40-acre tract ½ mile west of the dairy site with two dry cow barns containing a total of 640 free stalls Six acres located on the east side of the Village of Veblen, population 281, which holds the feed complex for the dairy, with bunkers, feed pads, hay storage, commodity storage, a shop/office building, a few city lots for employee housing and a community meeting center. The dairy facility is arranged in an "H" configuration with two free stall barns standing parallel to each other, a 48-stall rotary parlor and ICU barn perpendicular between the free stall barns. Free Stall Barn #1 has 940 free stalls with mattresses. Free Stall Barn #2 is a six row barn with 875 stalls bedded with sand. The Special Needs Barn has 220 free stalls bedded with sand, sick pens and maternity pens. There is an 80x100 holding area, and 80x110 parlor and milking center. The original facility has a total of 2,035 free stalls. The 48-stall rotary parlor reportedly turned about 7 times per hour. There are few if any physical limitations on the property. The soils are generally well drained, slopes range from 0 20% and the majority is well suited for agriculture or development. The parcel has an average amount of road frontage. Total Deeded Acres: Woods: Pasture: Site: Roads: Total: 8.00 acres acres acres 2.00 acres acres Site Improvements include wells, septic, electrical service, driveways, storm water region basin, etc.

2 Dairy Center Information: Milking Center: Built in 1998, 2000, and 2002, the Milking Center is an 80x110 building with 14' sidewalls, primarily steel frame construction, metal siding and concrete foundation. The parlor area is steel frame construction; metal sided with steel and glazed tile interior lining. The parlor holds a 48-head rotary parlor milking system. The Milking Center includes a 30x30 office area, 18x38 employee break area, 5x34 conference room, and utility areas on the main level. The upper floor houses an 18x40 observation room, 15x34 boardroom and 18x38 employee locker room. Interior finish is drywall, vinyl and carpet flooring and wood trim finish. There is a 3 bay milk load out area for tankers. Holding Area: The Holding Area is modern and efficient. It contains an 80x area with curtain sidewalls, 14x30 herdsman office, cattle working area, return lanes, crowd gate, and fans. Special Needs Barn: Attached to the milking center, the Special Needs Barn is a 100x row barn. With an insulated roof and end walls and four 18x14 insulated overhead doors, this barn has 220 free stalls with lockups on each feed rail. Stalls are bedded with sand, 36 fans plus end wall fans, sand free stalls, maternity and sick pens, and curtain sidewalls. Free Stall Barn #1: Originally built as a curtain sidewall barn, naturally ventilated, this 6 row barn, stands 110x700-14, containing 940 free stalls with chopped straw bedded mattresses, center drive through feeding with 2' tile manger floor, 24" open ridge vent, insulated roof and end walls and tunnel ventilation with fans on the north end and cool cells on the south end. There are two 24x80-14 connecting links between the two free stall barns and the holding area and Special Needs Barn. Free Stall Barn #2: This structure was initially constructed as a carbon copy of Barn #1 but was remodeled to change stalls over to sand bedding, widen crossovers and convert to tunnel ventilation instead of naturally ventilated with curtain sidewalls. The barn is 110x with 875 free stalls in 6 rows, lockups on each feed rail, center drive through feeding with 2' tile manger floor, 24" open ridge vent, insulated roof and end walls, and tunnel ventilation from the north end, cool cells on the south end. Dairy Equipment (Fixtures): The facility equipment includes all milking equipment: WestfaliaSurge 48 stall External AutoRotor Parlor, all milking units, metatron milk meters, pulsation system, manual takeoffs, vacuum system, Crowd Gate, plate cooler, Chiller five 5Hp condensing units, Sanitation system. Cross Vent Barn (Barn #3): Built in 2006, this Barn is a steel frame, 210 x row barn with cross power ventilation. This barn is designed to have more bunk space than a conventional 6 row barn. It has sprayed insulation with an R-12 value on the metal roof. The east wall is comprised of a solid bank of 5' fans, capable of completely changing the air within the barn in 32 seconds. The west wall has cool cells. The barn is built with air baffles that force the air to move across the cow pens rather than up in the roof. It holds 1,280 free stalls with sand bedding and 1,400 lockup spaces along the length of both sides of the two feed alleys. The feed mangers are 2' ceramic tile. Cross Vent Barn (Barn #4): Built in 2006 and attached to the new parlor, this barn was built like Barn #3. It is used to transition calves from this dairy to the calf raising facility. Barn #4 has power cross ventilation, sand bedding, maternity and sick pens (also sand bedded), 850 free stalls and 1,000 space lockups. It is steel frame insulated. The cross alley includes a calf transition area with two pens, each sand bedded with in- floor heat. D24 Milking Center: This 80x steel frame insulated and heated building was also built in It contains the holding area, a double 24 parallel parlor, office area, employee areas, as well as a single 10 parallel treatment parlor, 3 spot tanker bay for milk load out.

3 Manure System: Barns are scraped with skid loaders to reception pit and then manure flows to a sand separator. This system includes a 40x80-18 sand separating and pumping building, manure flumes and reception pit. The manure building is metal frame with 4' concrete walls, with metal sidewalls on top of the concrete. It contains concrete flooring, reception pit and houses the McLanahan sand separators and pumping equipment. The system four manure lagoons, each with a 15 million gallon capacity and a storm water retention basin. Equipment: Westfalia-Surge D 24 parlor with all milk meters, vac pumps, compressors, plate cooler and chiller, 10 stall single parallel treatment parlor, 2 McLanahan manure separators, manure pumps, also including 80' new grain leg, and 100Hp feed grinder, and eight 30 Ton bulk feed bins at the Feed Site, KatoLight Generator Dry Cow Barns: Located 1/4 mile west of the dairy facility are two dry cow barns, the West Barn, which is an 80x447pole type barn and the East Barn which is a 80x460 barn. Set up as a four row barn with a feed lane on the north side and locking headgates and outside feeding on the south side of the barns, the west barns have a total of 640 free stalls. The barns show signs of deferred maintenance: some doors missing, curtains in poor condition, and some stalls need repair. Feed Center Information: (located on the east side of Veblen, 2 miles to the east of Veblen West Dairy) Feed Center: Hay Shed: 80x200 steel frame open and on all sides Feed Pad: Approximately 300x420 Bunker Silo: Approximately 180x450 Commodity Sheds: 30x90 and 30x110, steel frame with concrete dividers Eight 30 ton feed bins, 10x80 truck scale 80' leg and 100 hp grinder Commodity Sheds: There are two commodity sheds on this property. A 30x30-22 commodity shed has 3 bays for storing bulk feed commodities and a 30x commodity shed with 7 bays for commodity storage. The bays are separated by 12' concrete containment walls. The sheds have exterior 12' concrete sidewalls with 12' metal pole type walls above the concrete, metal roof and sides, open to the south and steel frame construction. Feed Shed: The 36x40 feed shed is a steel frame shed with metal clad, concrete flooring. It houses roller mill and next to leg. Feed Equipment: The Feed Equipment includes an 80' grain leg, at 3,500 BPH and roller mill. Feed Bunker: The Feed Bunker is approximately 180' x 425' with 12' concrete sidewalls. Office/Shop: This is an old creamery building with several additions constructed over the years. The walls are a combination of concrete block, and pole type metal siding. The interior has been remodeled to accommodate truck repair. The shop area is heated and has two large doors to allow trucks to drive through the building. There is a total of 17,560 square feet of space. The office area occupies the first and second floors of the western portion of the building.

4 Zoning: The current zoning of the property is agriculture, which allows most ag uses, but limits commercial businesses. The area is predominantly agricultural with few other uses. All commercial and development is generally confined to village or city limits. There are no subdivisions in the neighborhood, nor any pending. If you are interested in learning more about the bidding process on this dairy operation, please contact Trustee, Forrest Allred at Please feel free to contact me if you have any questions regarding this upcoming sale; I d be very happy to assist you.

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