Agricore United today announced its second quarter results that showed a marked improvement in grain shipments for the six months ended April 30, 2006. The company shipped 10 percent more grain compared to the same period a year ago at a higher margin per tonne. The improvement in grain was offset by a decline in Crop Production Services
(CPS) profits, due mainly to delayed sales driven by a later spring season, as well as margin pressures in certain product lines as producers responded to higher input costs, a stronger Canadian dollar and volatile commodity prices.

"While the timing of our CPS sales activity in the second quarter of 2006 has influenced our quarterly results, much of the decline in second quarter sales were recouped by the beginning of June," says Brian Hayward, Chief Executive Officer. "Additionally, our second quarter results do not yet reflect any significant sales activity for our crop protection products since typically more than 80% of these sales are only reflected later in our third quarter, coinciding with the timing of weed emergence."

The livestock segment reported a recovery of almost $1 million in its non-feed gross profit this quarter, due to the favourable resolution of a class action lawsuit in which the company was one of the plaintiffs. An increase in feed volumes for the six months ended April 30, 2006 contributed to higher gross profit, which was offset by lower hog margins and subsidiary earnings, resulting in financial performance consistent with the prior year.


Operating expenses for the period increased by only 1.5% compared to the same period of 2005, despite increased payroll costs attributable to higher port terminal activity and increases in utilities costs which were fully offset by higher grain drying revenue.

Gross profit and net revenue from services declined by $4.5 million for the six months ended April 30, 2006, corresponding to the decline in CPS profits and contributing to an overall net loss for the quarter of $8.0 million
($0.18 loss per share), an increase of $3.6 million over the restated $4.4 million loss ($0.10 loss per share) for the same quarter last year.

"Recent industry reports indicate that production for 2006 will be strongly influenced by the excellent moisture conditions through most of the prairies and an anticipated strengthening of grain and oilseed prices," continues Hayward. "Strong demand from the biofuels market, combined with forecasted increases in exports should be favourable for producers and for the company."

Agricore United is one of Canada's leading agri-businesses with headquarters in Winnipeg, Manitoba and extensive operations and distribution capabilities across western Canada. Agricore United leverages its technology, facilities, services and logistics expertise to connect prairie-based agricultural customers to domestic and international end-use customers and suppliers. The company's operations are diversified into sales of crop inputs and services, grain merchandising, livestock production services and financial services. Agricore United's common shares are traded on the Toronto Stock Exchange under the symbol AU.LV.