Agricore United (TSX:AU) today announced its third quarter results which continue to show improved grain shipments for the nine months ended July 31, 2006. The company shipped 12 percent more grain compared to the same period a year ago at a higher margin per tonne. The significant improvement in grain handling earnings together with improved livestock segment performance contributed to Agricore United's net earnings of $56.3 million ($0.95 diluted earnings per share) for the quarter, an increase of $7.7 million or 16% over the restated $48.3 million profit ($0.82 diluted earnings per share) for the same quarter last year.

"The results in our grain segment are certainly the best we've seen in recent years and we're beginning to capture the benefit of our tremendous operating leverage," says Brian Hayward, Chief Executive Officer, Agricore United. "Since our costs are relatively fixed, just a 12 percent improvement in grain shipments this year translated directly into an 87 percent improvement in grain operating income."

Earnings from the Crop Production Services (CPS) segment declined in the third quarter compared to 2005, as lower crop nutrition product sales caused by higher fertilizer prices limited spring fertilizer application and contributed to tighter margins. As a result, earnings before interest, taxes, depreciation and amortization ("EBITDA") in this segment declined $7.4 million for the quarter and $22.9 million for the nine months ended July 31, 2006 compared to the respective periods one year ago.

Despite the decline in the CPS segment performance, the combined EBITDA for the company was $110.2 million for the quarter and $124.8 million for the nine months to July 31, 2006, each reflecting the best results since the merger of Agricore and United Grain Growers in 2001.

Agricore United's operating expenses declined marginally in the quarter. Increased payroll costs of $2.7 million due to greater port terminal activity, combined with additional legal costs associated with the ongoing Competition Tribunal proceedings regarding the sale of the company's Vancouver terminal contributed to higher operating expenses for the nine month period to July 31, 2006. Nevertheless, tighter controls over operating expenses resulted in only a $1.1 million (or 0.5%) increase in operating costs in this period.

In keeping with company's strategic intent to expand its presence in downstream processing, on August 14, 2006 Agricore United completed its acquisition of Hi-Pro Feeds, a feed manufacturing operation in Friona, Texas, for a purchase price of $38.5 million plus net working capital. Financing for the acquisition will be provided by a portion of the company's Term B Loan announced on September 6, 2006.

"The refinancing efforts we announced yesterday were a great success," says Hayward. "The lower financing costs will not only free up additional cash flow that may be applied to reduce our debt levels, but the greater flexibility we negotiated under our lending agreements should also allow us to pursue the execution of our strategic intents."

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Agricore United is one of Canada's leading agri-businesses with headquarters in Winnipeg, Manitoba and extensive operations and distribution capabilities across western Canada, as well as operations in the United States and Japan. Agricore United leverages its technology, facilities, services and logistics expertise to connect 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".