Agricore United Posts Larger Loss

WINNIPEG - Mar 9/06 - SNS -- Agricore United reported a first quarter o loss of CDN $20.598 million on gross revenue of $544,4 million for the three months ending January 31, compared to a loss of $18.416 million on gross revenue of $565.9 million the previous year.

While saying higher grain shipments and feed sales lifted earnings, first quarter results "were overshadowed by the timing effect of delayed sales of crop nutrients. As a result, the company's gross profit and net revenue from services for the three months ended January 31, 2006 decreased 2% over the same period last year . . .

"Sales of crop inputs in the latest quarter decreased $19 million to $51 million as farmers responded to escalating fertilizer prices and low commodity prices by delaying purchasing decisions until a point in time closer to spring seeding," the company said. "Due to the seasonal nature of the growing season in western Canada, the Company's crop input sales in the first quarter typically represent less than 10% of its annual sales of crop inputs."

Brian Hayward, Chief Executive Officer, Agricore United, tried to paint a bright picture, arguing, "Good moisture conditions across western Canada will encourage maximum use of the productive capacity and the impact of significant crop growth last year indicates a need for fertilizer products this year.

"In addition, the combination of high rates of collection on last year's credit programs and the positive credit profile of the Company's farmer customers suggest that the delays in customer purchasing decisions are operational rather than financial, as farmers weigh final planting decisions against demand signals from the world commodity markets."

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