Winnipeg, Manitoba
September 19, 2002

Agricore United today announced that it recorded a net profit of $39 million for the quarter ended July 31, 2002. For the 12 months ended July 31, 2002, consolidated net profit was $10 million with cash flow from operations of $70 million.

"Considering the operating environment we've had to deal with, I think we can take pride in the bottom line results", said Brian Hayward, Chief Executive Officer. "Those things we can manage -- market share, margins and expenses -- we've managed well, but the impact of the severe drought in Western Canada on the size of the grain and crop inputs market is beyond our control".

The merger business plan adopted in the fall of 2001 indicated Agricore United would achieve $12.2 million of synergies by July 31, 2002. That amount was expected to grow to approximately $50 million by July 31, 2003. Actual cost reductions from November1, 2001 (the merger date) to July 31, 2002 totaled $66 million. These cumulative synergies are expected to grow further as other efficiencies are realized - such as the recent move to a single computer system. Rather than being a temporary response to current market conditions, these expense reductions represent a permanently lower cost structure arising from improved efficiencies. Consequently, the company expects to realize more than $80 million in cost reductions by July 31, 2003.

The consolidated financial statements for the 12-month period ended July 31, 2002 now represent a more meaningful reflection of activity as Agricore United -- consisting of nine months of operating results for the combined entity and three months pre-merger operating results for UGG. However, to facilitate year-over-year comparisons, the quarterly materials include supplementary non-GAAP pro forma financial information prepared as if the merger had occurred August 1, 2000.

The fourth quarter is typically Agricore United's strongest quarter due to the seasonal nature of the company's largest business -- the sale of farm supplies through Crop Production Services ("CPS"). CPS sales totaled $527 million for the quarter, accounting for 75% of annual crop inputs activity. Sales were down 11% from total CPS sales for the pro forma 12-month period ended July 31, 2001 - drought conditions were the key reason for the reduction. Nevertheless, Agricore United maintained its market share without significant deterioration in margins. Crop Production Services' operating income totaled $42 million for the 12 months ended July 31, 2002.

Agricore United's pro forma Grain Handling tonnes for the last 12 months declined by about the same percentage as western Canadian grain tonnes handled by the industry as a whole -- the company was able to sustain market share while maintaining margins per tonne. Grain Handling volumes dropped 36% in the quarter relative to pro forma grain volumes for the same period one year earlier, lowering
gross profit by about $27 million compared to pro forma gross profit for the fourth quarter of 2001, while cash operating expenses fell $11 million. For the three-month period, Grain Handling operating income was $8.3 million - for the 12 months ended July 31, 2002 operating income was $24.9 million.

Livestock Services' fourth quarter operating income fell $2.2 million compared to the same quarter last year because of increased ingredient prices (due to drought conditions) and reduced demand (due to herd liquidation). For the 12 months ended July 31, 2002, Livestock Services posted operating income of $10 million. Farm Business Communications reported operating income of $1.8 million for the 12-month period.

Since November 1, 2001, the company reduced its total net debt by $297 million (or 38%) from $772 million to $475 million.

"Our merger business plan also called for significant improvements in financial leverage with a target ratio between 45% and 50%," said Hayward. "We achieved that target with a financial leverage ratio at July 31, 2002 of 48%, down from 57% on the merger date."

Agricore United is one of Canada's leading agri-businesses. The prairie-based company is diversified into sales of crop inputs and services, grain merchandising, livestock production services and farm business communications. Agricore United's shares are publicly traded on the Toronto Stock Exchange under the symbol "UGG".

FOURTH QUARTER REPORT FOR THE TWELVE MONTHS ENDED JULY 31, 2002

Q4 Highlights

• Earnings for the quarter of $39.2 million or $0.86 per share and earnings for the 12 months ended July 31, 2002 of $10.2 million or $0.25 per share
• Cash flow for the quarter of $85.3 million or $1.88 per share and cash flow for the 12 months ended July 31, 2002 of $70.2 million or $1.86 per share
• Pro forma cash expense reductions for the nine months ended July 31, 2002 (post-merger) of $48?million from merger and related synergies. Pro forma cash expenses were $19 million lower for the quarter. 
• Pro forma interest expense and depreciation reductions of $19 million for the nine months ended July 31, 2002
• Quarterly and 12 month results adversely affected by the droughts of 2001 and 2002
• Pro forma grain shipments declined 21% compared with industry-wide decline in grain shipments of 22%.

On November 1, 2001, the Company completed its merger with Agricore Cooperative Ltd. Therefore the consolidated financial statements for the 12 months ended July 31, 2002 now represent a more meaningful reflection of activity as Agricore United - including 12 months of United Grain Growers Limited ("UGG") and nine months of Agricore Cooperative Ltd. from November 1, 2001. Comparative figures for the 2001 fourth quarter and 2001 fiscal year represent UGG alone.

In June 2002, Agricore United announced a change in its year-end from July 31 to October 31. Accordingly, the Company's annual audited financial statements at October 31, 2002 will include the operating results for the 15 month period commencing August 1, 2001 as well as the 12 month period ending October 31, 2002, which will represent the first full year of operation of the new company
following the merger.

Consolidated Financial Results

Gross profit and revenue from services for the quarter increased $106 million (or 2.3 times the 2001 fourth quarter) to $186 million. Earnings before interest, taxes and depreciation ("EBITDA") growth reflected a proportionately larger increase of 2.5 times over the same quarter last year due to the lower cash operating expenses incurred in the current year on a relative basis.

Gross profit and revenue from services depends on a combination of market size, market share and average revenue earned for each unit of product sold or handled. Western Canadian grain shipments of the six major grains declined 22% in 2002 compared to the prior year - a continuation of the trend of below average shipping due to the impact of the drought in the 2001 crop year. As reported at the end of April, Agricore United's shipping was marginally better than the industry average. Accordingly, the  Company's market share for grain shipping did not decline on a pro forma basis. The Company realized an average margin on grain handled of $22.53 per tonne year-to-date, an increase over the average margin of $21.57 per tonne in the prior year. Current year earnings also reflect a partial recovery of the Company's income reduction from low industry grain handling volumes under UGG's integrated risk financing program.

The agricultural sector experienced a second drought on the prairies in the 2002 crop year just ended which negatively impacted the sale of crop inputs, particularly the sale of crop protection products that typically occur late in the growing season. The 2002 drought followed on the heels of a dry fall and late spring that delayed seeding and compressed a normally "tight" sales season between April and June.
Nevertheless, the Company achieved a level of Crop Production Services ("CPS") sales equivalent to 89% of the sales achieved by the Company in the prior year on a pro forma basis - a year in which the Company's CPS sales were not significantly impacted by drought. Average CPS margin, as a percentage of underlying sales of $654 million for the 12 months ended July 31, 2002, increased to 23% from 21% for the prior year (based on 2001 sales of $314 million).

Livestock Services posted increased sales from higher feed tonnes manufactured as a result of the "annualization" of the operation of the Unifeed Chilliwack mill acquired half-way through fiscal 2001. The Company also increased its average margin per tonne compared to the prior year, in part due to expanded fish feed production at Chilliwack and the more efficient operation of its new mill in Olds, Alberta.

The Company's operating income is highly seasonal with about 90% normally being realized in the quarter ended July 31. Operating income before interest and taxes (EBIT) was $74 million for the quarter ended July 31, 2002 - wiping out the operating loss of the previous nine months and resulting in a year to date operating profit of $37 million. 

Crop Production Services operating income, normally heavily weighted to this quarter, was further skewed to this period by increased sales of fertilizer and seed delayed from earlier in the year due to the dry fall and late spring. However, the impact of the drought served to limit CPS EBIT for the quarter to $76.6 million. For Grain Handling and CPS, significant cost reductions mitigated, to a large extent,
the earnings decline associated with the impact of the drought on the CPS market and the volume of grain available for shipping.

Livestock Services EBIT declined from $11.4 million for the 12 months ended July 31, 2001 to $10 million for the same period in the current year, driven mainly by higher costs associated with the full year operation of the Unifeed Chilliwack mill and lower earnings from its investment in The Puratone Corporation, the second largest hog producer in Western Canada. The decline in earnings from The
Puratone Corporation follows the current downtrend in hog price cycles. Livestock Services also succeeded in reducing its cash operating expenses in the fourth quarter by $500,000 or 6% compared to the same quarter in the prior year.

Farm Business Communications posted an increase in year-to-date EBIT from $1.4 million to $1.8 million as a result of the consolidation of the farm publications businesses following the merger and the consequent impact of lower operating costs.

Although the Company is more than 2.5 times the size of UGG alone, interest expense of $37 million for the 12 months ended July 31, 2002 was less than double the prior year expense of $19 million. As reported in April, the success of the Company's expanded Agricore United Financial program, controlled capital expenditures and reduced borrowings due to the equity issue and asset disposals - most recently the sale of the Company's investment in CanAmera Foods for net proceeds of $29 million - were the most significant drivers of reduced borrowings and consequently proportionately lower interest costs.

Gains of $15 million on the sale of assets are largely unchanged from April and include, among other items, the sale of land of a subsidiary and the sale of Livestock Services' Unipork Genetics business.

Unusual items in the quarter of $1 million and year-to-date of $3.4 million represent restructuring costs arising from the merger, primarily UGG severance costs. Restructuring costs associated with Agricore Cooperative Ltd. were provided for as part of the purchase price in accordance with the purchase method of accounting.

Agricore United's after-tax profit for the fourth quarter was $39.2 million or $0.86 per share (2001 - $0.64 per share). The Company earned $10.2 million after-tax or $0.25 per share for the 12 months ended July 31, 2002 (2001 - $0.63 per share).

Cash flow from operations for the quarter was $85.3 million or $1.88 per share (2001 - $21.7 million or $1.27 per share). Year-to-date cash flow for the 12 months ended July 31, 2002 was $70.2 million or $1.86 per share (2001 - $38.4 million or $2.22 per share).

Liquidity and Capital Resources

The Company's cash position improved from $779,000 at July 31, 2001 to $52.9 million at July 31, 2002 due to reductions in non-cash working capital of $145 million in the quarter and $121 million for the year-to-date (compared with a decrease of $36 million and $10 million for the quarter and year-to-date last year respectively). These working capital decreases in the current year, while seasonal, are
significantly enhanced due to the use of Agricore United Financial for CPS sales, resulting in a rapid conversion of inventory into cash during the peak billing season which occurs during the fourth quarter. Agricore United Financial is a strategic venture with the Bank of Nova Scotia whereby the bank provides trade credit directly to the farmer customer and Agricore United manages the customer relationship and credit application process in return for an agency fee.

Cash flow from operations increased from $38 million for the 12 months ended July 31, 2001 to $70 million for 2002, largely reflecting the proportionately higher levels of non-cash expenses, such as depreciation, embedded in the after-tax earnings for the current year. The Company continued to contain capital spending for the year to $23 million, being more than fully financed by proceeds on asset disposals of $38 million.

The merger with Agricore Cooperative Ltd. on November 1, 2001, at a cost of $241 million, represented an increase of $230 million over business acquisition expenditures in the prior year. The transaction was financed by the issue of 20,492,395 limited voting common shares of United Grain Growers Limited. In addition to this transaction, year-to-date cash flow includes net proceeds of $57 million from
the issue of 7,965,791 treasury common shares in December 2001.

Agricore United reduced long-term debt by $10 million for the fourth quarter ($25 million year-to-date) through scheduled principal repayments by the Company and its subsidiaries. In addition, long-term debt reductions of $52 million for 12 months ended July 31, 2002 include non-scheduled repayments of bank term debt of $28 million arising from net proceeds from the Company's equity issue. The increase in the current portion of long-term debt at July 31, 2002 represents a further non-scheduled repayment of long-term debt of $24 million funded from the net proceeds of the Company's sale of its interest in CanAmera.

Bank and other loans declined by $195 million in the quarter compared with a decline of $67 million in the same quarter last year resulting in a reduction in bank and other loans of $177 million year-to-date (compared to a $6 million decrease in 2001). Reduced bank and other loans reflects lower borrowings under the revolving facility as a result of making Agricore United Financial available to customers of the former Agricore Cooperative Ltd. and securitizing CWB inventory in March 2002. The Company has been able to reduce its available revolving bank credit facilities from $590 million at November 1, 2001 to $300 million at July 31, 2002, of which $120 million remained undrawn at July 31, 2002.

Agricore United's total net debt declined from $772 million at November 1, 2001 to $475 million at July 31, 2002 and its financial leverage ratio (total net debt to tangible net assets) decreased accordingly from 57% to 48% between these dates.

The market capitalization of the Company's 45,281,561 issued and outstanding limited voting common shares (47,137,069 common shares including convertible securities) was $251.3 million as at September 16, 2002 or $5.55 per share compared with the Company's book value of $11.76 per share at July 31, 2002.

Pro Forma Financial Results

To provide a picture of the financial performance of the new company compared to both predecessor companies, the tables below provide pro forma segment information for Agricore Cooperative Ltd. and UGG as if they had been combined for the 12 months ended July 31, 2002 and for the same period of 2001. The pro forma financial information is a non-GAAP earnings measure and does not reflect any adjustments that would result from accounting for the acquisition of Agricore Cooperative Ltd. under the purchase method of accounting. The analysis would also not be indicative of what might have occurred had the acquisition been made on an earlier date nor is it indicative of future events.

Pro forma gross profit for the 12 months ended July 31, 2002 was $459 million, down $119 million from the prior year results.

Grain Handling gross profits were reduced by $74 million or about 25% with the decline in tonnes handled of about 21% which is slightly better than the overall decline in industry shipping of 22% resulting from the 2001 drought. Offsetting lower gross profit was a decline in cash expenses of $30 million for the 12 months compared to the prior year. Consequently, the reduction in EBIT for the year was limited to $36 million.

CPS gross profits declined by $47 million or 22% compared to the prior year, reflecting a reduction in overall sales of about 11% as well as a return to more typical margins on fertilizer sales - fertilizer margins in 2001 benefited from producers locking in sales earlier in the year due to concerns over rising prices associated with higher natural gas prices. The EBIT decline of $26 million was mitigated by a reduction in cash operating expenses of $17 million for the CPS segment as well as a reduction in depreciation and amortization of $5 million.

Looking Forward

Lower grain production due to the 2001 drought reduced industry grain shipments over the most recent 12 months by 22%. Following the drought in 2002, grain production is expected to decline further, on a temporary basis, by more than 20% over the 2001 levels resulting in lower expected tonnes available for shipping over the next 12 months. As with the most recent 12 months, Agricore United shipping is expected to closely track industry shipping trends (thereby maintaining market share) given the Company's broad geographic market coverage. A return to more normal weather patterns will result in increased grain production and should contribute to more normal grain shipping volumes for the industry and the Company.

On August 25, 2002, following 20 months of negotiations, the British Columbia Terminal Elevator Operators Association ("BCTEOA") locked out its employees at all Vancouver port grain terminals. The BCTEOA, of which Agricore United is a member, represents five employers operating five grain terminal facilities in Vancouver. The lock-out does not affect the operation of the Company's interests in
the port terminal at Prince Rupert, British Columbia - which began loading vessels the week of September 2, 2002 - its three wholly owned port terminals in Thunder Bay, Ontario, nor its ability to ship grain south by rail to customers in the United States. The impact of the lock-out on the industry and the Company's earnings is uncertain, particularly given reduced industry grain shipments as a result of the 2002 drought, but ultimately depends on the duration of the dispute. The BCTEOA has reported its desire to resolve the dispute as quickly as possible.

Expected high levels of residual nutrients retained in the soil as a consequence of the 2002 drought, may delay the recovery of industry fertilizer sales in the fall of 2002 and spring of 2003 from current levels. A return to normal weather patterns through the fall and spring of next year would be expected to result in a recovery of crop protection product sales as noted above. Low crop production volumes
around the world and unusually low levels of inventory "carry-out" have contributed to higher prices for many commodities which may increase the proportion of seeded acres planted to oilseeds rather than cereals - in turn possibly impacting the sale of higher margin canola seed products positively in 2003.

Pro forma cash expenses for the nine months since the merger declined by $48 million over the prior year, and $19 million lower for the quarter - continuing the year-to-date trend arising from the merger and the predecessor companies' pre-merger rationalization plans. On August 8, 2002, the Company announced the successful integration of its information technology systems onto a single platform resulting in expected annual cost savings of $9 million per year through the elimination of outsourced services supporting the duplicate system. These savings are not reflected in the cost reductions realized to July 31, 2002. Pro forma interest cost reductions of $8 million and an additional $11 million in non-cash depreciation expenses to the end of July 31, 2002 will result in significantly higher cost savings than the original $50 million forecast last November. Ongoing consolidation of the Company's grain handling network (reduced from 154 country elevator locations at the merger date to about 100 at July 31, 2002), annualization of synergies already achieved and additional synergies not yet realized from the merger will further increase these cost savings in the coming months. Consequently, the Company expects to realize more than $80 million in cost reductions by July 31, 2003.

Agricore United extended its revolving variable rate credit facilities of $300 million, with its existing lenders, from the original maturity date of July 31, 2002 to between October 31, 2002 and November 30, 2002, to enable the Company to complete its plans to restructure its mix of short- and long-term debt. Agricore United is seeking a revolving credit facility of $350 million and a non-revolving credit facility of $150 million from a syndicate of banks. The Company is also seeking a new facility of $100 million of long-term debt from a non-bank lender. The Company hopes to complete this restructuring on or before October 31, 2002. Agricore United's long-term notes of $132 million, maturing over the next 20 years, are not materially affected by the planned debt restructuring. The pro forma impact of the debt restructuring at July 31, 2002 would not impair the Company's markedly improved financial leverage ratio of 48% achieved at July 31, 2002.