Winnipeg, Manitoba
March 27, 2003

Agricore United today announced that it recorded a net loss of $19.6 million or $0.45 per share in the  quarter ended January 31, 2003, compared to a loss of $11.8 million or $0.29 per share for the quarter ended January 31, 2002.

The 2002 drought continues to drive lower industry-wide grain shipments. It is the predominant factor affecting the $24 million reduction in the company's gross profit, offset by further reductions in cash expenses of $18 million from ongoing rationalization of operations and general cost containment efforts. In addition, higher current tax rates on profitable subsidiaries suppressed future tax recoveries calculated at lower expected future tax rates, lowering the effective tax recovery rate to 30 per cent
compared to 41 per cent for the same quarter last year and increasing the loss per share.

"Due to the lagged effect of a poor harvest, the last two years' consecutive droughts have had a sustaining influence on our bottom line," said Brian Hayward, Chief Executive Officer. "But a return to normal growing conditions this spring should similarly lead to sustained improvements in earnings over subsequent quarters."

For the quarter ended January 31, 2003, revenues from Crop Production Services increased $13.1 million to $72 million and gross profit increased $1.7 million or nine per cent over the same quarter one year ago. A $35 million increase (or 40 per cent) in pre-paid sales orders, coupled with higher soil moisture levels across many parts of the prairies compared to a year ago, represent positive indicators for a potential recovery during the 2003 growing season.

A 44 per cent reduction in industry-wide grain shipments in the quarter as a result of the 2002 drought had a similar impact on the company's quarterly grain handling. Consequently, grain handling operating income fell by $12 million. The company's 35 per cent market share of grain shipments for the quarter remained consistent with its average market share for the 12 months ended October 31, 2002 and improved margins per tonne more than compensated for lower market share compared to the same quarter last year.

Excluding the impact on earnings of selling the company's interest in CanAmera Foods in May 2002, its remaining business segments reported results consistent with the prior year.

"No one can predict what this next season will hold, but our lower cost structure leaves us in an excellent position to quickly reap the benefits of the inevitable recovery in the agricultural economy," Hayward said.

During the quarter, the company issued $105 million of convertible unsecured subordinated debentures, $109 million of additional long-term debt and closed the syndication of $500 million of short- and long-term bank debt. In addition to providing scheduled debt repayments and renewal dates through 2023, the refinanced debt enhanced the company's liquidity (a current ratio of 1.25) and reduced its leverage ratio to 53 per cent at January 31, 2003.

"We have significantly strengthened our balance sheet through these initiatives, which were executed in an extremely tight credit market," Hayward noted.

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 common shares are publicly traded on the Toronto Stock Exchange under the symbol "AU".

FIRST QUARTER REPORT FOR THE THREE MONTHS ENDED JANUARY 31, 2003

REPORT TO SHAREHOLDERS

Q1 Highlights

- Improved Leverage and Liquidity - The Company issued $105 million of convertible unsecured subordinated debentures in November 2002 and $109 million of additional long-term debt in December 2002 which was applied to reduce short-term debt resulting in improved liquidity (current ratio of 1.25) and an improved leverage ratio of 53% as at January 31, 2003.

- Continuing Expense Reductions - Operating, general & administrative expenses declined $17.6 million in the quarter ended January 31, 2003 compared to the same quarter in the prior year. Annualized expenses were $84.6 million lower compared to the 12 months immediately preceding the Merger on November 1, 2001 ("pre-Merger period").

- Including interest expense savings, total annualized expense reductions since the Merger were $93.1 million. After giving effect to lower depreciation and amortization expenses, total annualized costs were $111.9 million lower compared to the pre-Merger period ($19.6 million lower for the quarter ended January 31, 2003).

- Improved Grain Handling Profitability on Reduced Grain Shipments - Grain Handling margin per tonne improved in the quarter but earnings suffered from reduced industry, and accordingly Company, grain shipments as a consequence of the 2002 drought.

- Higher Crop Inputs Sales and Gross Profit - Crop Production Services sales increased 22% to $72(million compared to the same quarter last year and outstanding prepaid sales orders at January 31, 2003 increased 40% to $121 million compared to prepaid sales orders outstanding at January 31, 2002.

- Lower Effective Tax Recovery Rate - Current tax provisions on profitable subsidiaries at higher current rates suppressed future tax recoveries calculated at lower expected future tax rates, resulting in a lower effective tax recovery rate of 30% (excluding Large Corporation Capital Tax) for the quarter ended January 31, 2003, compared to 41% for the same quarter last year.

- A loss of $19.6 million or $0.45 per share for the quarter ended January 31, 2003 compared with a loss of $11.8 million or $0.29 per share for the quarter ended January 31, 2002.

Consolidated Financial Results

Synergies, Rationalization Savings & General Cost Containment

The Company's prospectus dated December 11, 2001 projected sustainable annual cost savings arising from the November 1, 2001 merger (the "Merger") of Agricore Ltd. ("Agricore") and United Grain Growers Limited ("UGG") of $47 million by July 31, 2004. In its quarterly report dated December 11, 2002 for the twelve months ended October 31, 2002, the first twelve month period following the Merger, the Company reported a decline in Operating, General & Administrative ("OG&A") expenses of $67.5 million relative to pro forma(1) expenses in the same period of the prior year and total expense reductions (including interest expense) of $76 million. Including depreciation and amortization expenses, total costs declined $92.6 million for the 12 months ended October 31, 2002.

In the quarter ended January 31, 2003, the Company's OG&A expenses declined a further $17.6 million over the same quarter in the prior year due to the annualized impact of Merger savings already realized, ongoing rationalization of the Company's Country Operations and general cost containment. Therefore, annualized OG&A expense reductions since the Merger were $84.6 million compared to the pre-Merger period. Some of the cost savings realized in the current quarter were temporary, arising from further expense reductions relating solely to lower activity resulting from the effects of the 2002
drought. Depreciation and amortization expenses due to the closure and writedown of fixed assets, offset by higher amortization of deferred financing expenses, declined by $2.2 million for the quarter ended January 31, 2003. Accordingly, total cost reductions for the quarter were $19.6 million and total annualized cost reductions (including OG&A, interest expense savings, depreciation and amortization) since the Merger were $111.9 million.

Reductions in total payroll costs for the quarter accounted for over 65% of the total OG&A expense decline. As at January 31, 2003, the Company employed 158 fewer staff (a reduction of 5%) relative to October 31, 2002 and 758 fewer staff (a reduction of 21%) compared to the pre-Merger period based on a weighted average of equivalent full-time employees.

Quarterly reductions in non-payroll costs reflect the cost savings associated with the recent integration of the Company's two predecessor information technology platforms accomplished in August 2002 as well as ongoing savings from the rationalization of the Company's Country Operations. The Company operated 92 grain locations at January 31, 2003, compared with 154 locations at the time of the Merger. However, the Company currently has 83 locations awaiting demolition or sale, following which the residual operating cost associated with these locations will also be eliminated.

Gross Profit and Net Revenue from Services

Gross profit and net revenue from services for the quarter ended January 31, 2003 declined $24 million compared to the same quarter last year, largely attributable to the effects of the 2002 drought on Grain Handling.

Grain Handling gross margin per tonne increased from $20.35 per tonne for the quarter ended January 31, 2002 to $25.68 per tonne for the current quarter ($22.50 per tonne or an increase of 10.6% after excluding a supplementary grain volume insurance payment received in respect of the 2002 drought). Industry grain shipments declined 44% in the quarter compared to the same period last year as a result of the 2002 drought. The Company's market share for the quarter remained consistent with its average market share for the 12 months ended October 31, 2002, although about 4% lower than its market share in the same quarter last year. Grain Handling gross profit therefore declined by $23 million compared to the same quarter last year due to the reduction in industry-wide shipping
(resulting from the 2002 drought) with increased margins per tonne more than offsetting the impact of lower market share.

Crop Production Services ("CPS") sales increased $13.1 million (or 22%) for the current quarter to $72(million and gross profit for the current quarter increased $1.7 million (or 9%) over the quarter ended January 31, 2002. The Company does not record sales until product is delivered to customers or services are rendered. Outstanding prepaid sales orders (not yet recorded as revenue) increased $34.5 million to $121 million at January 31, 2003 compared to outstanding sales orders at January 31, 2002. Accordingly, when combined with recorded sales, total sales and sales orders increased $47.6 million or 33% over the prior year.

Livestock Services gross profit and revenue from services increased modestly to $11.3 million for the current quarter. Gross profit of $10.3 million was earned from the sale of 234,000 tonnes of manufactured feed compared to $10.4 million gross profit on 240,000 tonnes for the same quarter last year - slightly lower tonnes being offset by higher gross margin per tonne. Most of the improvement in total gross profit and revenue from services is attributed to strengthening hog prices and the consequent positive impact on the Company's livestock sales, particularly its investment in The Puratone Corporation, the second largest hog producer in Manitoba. As indicated in the Company's annual report for the 15 months ended October 31, 2002, improved hog prices typically follow any cyclical downturn such as that recently experienced in the industry.

Farm Business Communications revenue from services is largely unchanged from the same
quarter last year. The decline in Financial Markets and Other Investments gross profit of $3
million principally reflects the disposal of the Company's investment in CanAmera Foods in
May 2002.

EBIT(2)

Grain Handling OG&A expenses declined $10.2 million or 25% for the quarter (a reduction of 7% in the 12 months ended January 31, 2003 compared to the 12 months ended October 31, 2002) as a result of Merger synergies, rationalization savings and general cost containment. Following settlement of a labour dispute in mid-December 2002, quarterly OG&A expenses also reflect a partial reinstatement of temporary cost reductions associated with the industry lockout of Vancouver terminal employees and shutdown of the Vancouver port terminal operations. Depreciation and amortization expenses declined
$790,000 over the 2002 quarter to $8.9 million. However, the $11 million reduction in Grain Handling expenses was overshadowed by the impact of the $23 million gross profit reduction - the 2002 drought having lowered production tonnes available for shipping by the industry this year. Accordingly, EBIT declined $12 million from $10.4 million for the quarter ended January 31, 2002 to a loss of $1.6 million for the quarter ended January 31, 2003.

Crop Production Services cash expenses declined $1.6 million or 6.2% to $24 million for the quarter ended January 31, 2003 compared to the same quarter last year. Depreciation and amortization expenses declined $823,000 in the current quarter compared to January 31, 2002. EBIT therefore improved $4.1 million from a loss of $13.4 million for the quarter ended January 31, 2002 to a loss of $9.3 million for the quarter ended January 31, 2003.

Livestock Services cash expenses declined modestly to $7.1 million for the current quarter as a result of general cost containment while depreciation and amortization remained substantively unchanged. As a result, EBIT improved $756,000 to $3.4 million for the current quarter compared to $2.6 million for the same quarter last year.

Farm Business Communications EBIT increased by $150,000 entirely due to lower operating, general and administrative expenses. Financial Markets and Other Investments operating, general and administrative expenses declined $1.1 million and depreciation and amortization declined $772,000 reflecting the sale of CanAmera Foods in May 2002. Coupled with the decline in gross profit and revenue from services, Financial Markets and Other Investment EBIT for the current quarter declined by $1.1 million over the same quarter last year.

Corporate expenses declined $3.9 million in the current quarter compared to the same quarter last year representing cost savings from the consolidation of the information technology platforms in August 2002 as well as a reduction in payroll costs of $1.9 million.

Gain on Disposal of Assets

The gain on disposal of assets in the current quarter reflects an excess of insurance proceeds over the net book value of a country grain elevator destroyed by fire. The gain on disposal of assets in the prior year included a $2.8 million gain on the sale of the Company's Unipork Genetics business.

Income Taxes
 
The Company's effective tax recovery rate for the quarter of about 30% (excluding Large Corporation Capital Tax) is lower than the effective tax recovery rate of 41% for the same quarter ended January 31, 2002. The lower weighted average tax recovery rate in the current quarter, calculated in accordance with generally accepted accounting principles, reflects current taxes on profitable subsidiaries calculated at higher current tax rates offsetting future income taxes recoverable calculated at lower expected future tax rates.

As at January 31, 2003, the Company had tax loss carry-forwards of over $200 million, expiring between October 2005 and 2010 and therefore available to reduce cash income taxes otherwise payable in future years.

Net Loss for the Period

Interest expense for the quarter was consistent with the same quarter last year. Accordingly, the net loss of $19.6 million for the quarter and year-to-date ended January 31, 2003, or a loss of $0.45 per share, was $7.8 million worse than the previous year's quarterly net loss of $11.8 million or $0.29 per share.

Liquidity and Capital Resources

Short-term Debt

The Company had $200 million of Bank and Other Loans outstanding at January 31, 2003, a decrease of $207 million over January 31, 2002, with $113 million of uncommitted short-term borrowing capacity available to it at January 31, 2003. A similar decline in short-term borrowings of $189 million compared to October 31, 2002 reflects the extent to which proceeds from $105 million of convertible debentures issued in November 2002 and additional long-term debt of $109 million issued in December 2002 exceeded long-term debt repayments ($8.2 million), dividends paid ($4.7 million) and financing expenses of $1.8 million.

Cash Flow provided by Operations

A net cash outflow from operations of $15.4 million was incurred in the quarter ended January 31, 2003 compared with cash flow from operations for the same quarter last year of $647,000. In addition to the $7.9 million increase in the pre-tax net loss for the period, an $8.5 million decline in current cash taxes recoverable contributed most of the $16 million deterioration in cash flow from operations for the quarter over the prior year.

Working Capital

Liquidity improved significantly from working capital of $35 million (a current ratio of 1.04 to 1.00) at January 31, 2002 to working capital of $155 million at January 31, 2003 (a current ratio of 1.25 to 1.00). Non-cash working capital changes since October 31, 2002 increased cash flows from operating activities by $21 million due to higher accounts payable of $84 million offset by lower unpresented cheques net of Canadian Wheat Board ("CWB") deposits of $38 million, higher inventories of $19 million and higher accounts receivable and prepaid expenses of $6 million. The modest increase in inventories since October 31, 2002 is comprised of higher Chemical and Fertilizer stocks offset by declines in grain inventories of $14 million and other merchandise of $7 million. Non-CWB grain inventories were $46 million higher at January 31, 2003 compared to January 31, 2002, driven largely
by higher commodity prices. Compared to January 31, 2002, Chemical inventory increased $41 million (due to higher inventory carry-out levels following the 2002 drought) and Fertilizer inventory increased $31 million (primarily due to increased fertilizer prices) and seed and other merchandise inventory decreased $28 million. Accounts receivable at January 31, 2003 were $220 million lower than January 31, 2002 due in part to the financing of crop inputs receivables through Agricore United Financial. In addition, amounts due from the CWB declined $67 million due to securitization of these receivables in March 2002.

Capital Expenditures and Acquisitions

Capital expenditures for the three months ended January 31, 2003 of $4.6 million were fully funded by cash flows from operating activities and reflect both a lower level of sustaining capital expenditures required following the Company's recent infrastructure renewal program as well as general containment of capital spending.

Leverage

Proceeds from the issue of $105 million of convertible debentures in November 2002 improved the Company's covenanted leverage ratio to 53% at January 31, 2003 compared to 60% at January 31, 2002 and 59% at October 31, 2002. The proceeds of the new long-term debt issued to John Hancock Life Insurance Company in December 2002 was used to repay short-term debt and therefore did not impact the Company's overall leverage ratio.

Market Capitalization

The market capitalization of the Company's 45,293,510 issued and outstanding limited voting common shares (61,007,785 common shares including convertible securities) was $178.5 million as at March 24, 2003 or $3.95 per share compared with the Company's book value of $10.50 per share at January 31, 2003.

Outlook

Industry grain shipments declined by 44% for the quarter ended January 31, 2003 compared to the same quarter last year. The Company's market share for the quarter remained consistent with its market share for the 12 months ended October 31, 2002 (which declined 2% compared to the 12 months ended July 31, 2002) and is generally expected to remain stable relative to industry performance given the Company's broad geographic coverage. Based on the drought in the 2002 crop year and available industry data, the Company expects industry shipping during the crop year ending July 31, 2003 to be 35% lower than the 2002 crop year and 50% lower than the 2001 crop year. Higher soil moisture levels across Saskatchewan and southern Alberta at October 31, 2002 compared to October 31, 2001; above average precipitation in southern Alberta and south-western Saskatchewan (from September 1, 2002 to March 25, 2003); and typically higher precipitation levels in central Alberta, south-eastern Saskatchewan and Manitoba between April and July relative to the rest of Western Canada (based on 20 years of historical data) are positive indicators of a potential recovery in the 2003 growing season. A return to more normal growing conditions in 2003 would result in substantially improved grain production and increased grain tonnes available for shipping in fiscal 2004 for the industry and the Company.

Prepaid sales orders at January 31, 2003 increased by $35 million or 40% over January 31, 2002, primarily for Seed and Fertilizer. In addition to the potential for improved Fertilizer and Seed sales as evidenced by increased prepaid sales orders, a return to normal weather conditions through the spring of 2003 may lead to a recovery in crop protection product sales and related services that declined in 2002 due to the drought. Low levels of inventory "carry-out" around the world continue to support higher prices for many commodities which may increase the proportion of seeded acres planted to oilseeds and in turn the sale of higher margin canola seed and related crop nutrient and crop protection products in 2003. The Company has recently shifted its focus from seed research and development to retail seed distribution. While the Company continues to access leading seed technology through its distribution arrangements with prominent breeding companies, the change in focus w  ill result in lower seed margins compared to prior years offset by lower operating expenses and reduced exposure to the risks associated with varietal seed research.

(1)Pro Forma financial information is provided to assist investors in comparing results between periods after giving effect to the Merger. In particular, results for UGG from comparable periods in fiscal 2001 have been adjusted to give effect to the Merger as if it had occurred on August 1, 2000 and, accordingly reflect operating results of Agricore in the current periods as if it had been owned for the same number of days in the comparable prior periods. A reconciliation of certain pro forma financial information and actual financial results is provided in the Summary Operating Information above. Pro forma financial information is not intended to reflect the results of operations which would have actually
resulted had the Merger occurred on August 1, 2000. Pro forma financial information does not have a standardized meaning prescribed by GAAP and the information provided is therefore unlikely to be comparable to similar measures presented by other companies.

(2)EBITDA and EBIT - Earnings before interest & securitization expenses, taxes, depreciation and amortization, gains or losses on asset disposals and unusual items ("EBITDA") and earnings before gains or losses on asset disposals, interest & securitization expenses, taxes and unusual items ("EBIT") are provided to assist investors in determining the ability of the Company to generate cash from operations to cover financial charges before income and expense items from investing activities, income taxes and items not considered to be in the ordinary course of business. Reconciliations of such measures and net income (loss) are provided in the Consolidated Statements of Earnings and Retained Earnings and Note 4 below. The items are excluded in the determination of such measures as they are non-cash in nature, income taxes, financing charges or are otherwise not considered to be in the ordinary course of business. Such measures should not be considered in isolation of or as a
substitute for (i) net income or loss, as an indicator of the Company's operating performance or (ii) cash flows from operating, investing and financing activities, as a measure of the Company's liquidity. EBITDA and EBIT do not have any standardized meanings prescribed by Canadian generally accepted accounting principles and are therefore unlikely to be comparable to similar measures presented by other companies.