Higher grain handling volumes and improved market share coupled with higher per tonne margins led Agricore United's results for the third quarter of 2004. Overshadowing this increase, a late spring and wet and cooler than normal growing conditions contributed to lower sales of crop nutrients and crop protection products despite increased seed sales. As a result, $42.8 million of net earnings ($0.92 basic earnings per share or $0.72 diluted earnings per share) for the third quarter were $2.1 million lower than 2003 but contributed to $13.4 million of net earnings ($0.21 basic and diluted earnings per share) for the nine months ended July 31, 2004. The same nine-month period in 2003 generated net earnings of $3.1 million ($nil basic and diluted earnings per share).

"Increased handling from last year's crop and improved grain margins in the latest quarter have made a substantial contribution to the company's bottom line," says Brian Hayward, Chief Executive Officer. "And apart from expected higher costs of insurance and port terminal operations, there has been no significant increase in grain expenses despite considerably increased handling activity over the past nine months."

The company's third quarter is traditionally the strongest for selling crop production inputs and services. Seed sales increased over the same quarter last year and also contributed higher margins. However, a late spring and unfavourable weather conditions limited opportunities for customers to apply fertilizer and reduced crop nutrient sales during the quarter. Excess moisture conditions also prevented some customers from applying herbicide at the appropriate stages of weed growth, resulting in a decrease in crop protection product sales. Lower product sales in turn contributed to reduced revenues from the provision of related agri-services.

"Our preliminary estimates indicate our market share in crop input sales remains largely unchanged, however, weather conditions this summer frustrated the efforts of our farmer customers and limited sales opportunities for the industry," concludes Hayward. "The effects of continued excessive moisture and the more recent effects of frost have also delayed progress on the 2004 harvest leading to reduced crop quality with yields likely to be no better than the 10 year average."

Livestock Services' gross profit and revenue from services in the quarter reflected a modest increase over 2003 due to increased feed tonnes sold and improved results from the Company's investment in swine production. However, these improvements were more than offset by higher operating expenses as well as higher credit expenses associated with restructuring outstanding trade credit following the negative impact on feed customers of BSE, avian flu and marginal hog profitability.

Despite the competing effects of improved grain handling and lower crop input sales, the Company continued to reduce its leverage while maintaining its short-term liquidity. The Company's weighted average leverage ratio over the 12 months ended July 31, 2004 declined to 46.2% compared to 47.6% for the same 12 month period ended July 31, 2003. A current ratio of 1.43 to 1 at July 31, 2004 declined modestly from 1.48 to 1 at the same time last year. The Company also generated free cash flow (cash flow provided by operations less net capital expenditures) of $41 million for the 12 months ended July 31, 2004. Consequently, total net funded debt decreased to $355 million from $401 million at July 31, 2003.

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 financial markets. Agricore United's shares are publicly traded on the Toronto Stock Exchange under the symbol "AU".