Agricore Buys United Feeds

TORONTO - Jul 4/06 - SNS -- Agricore United is paying U.S. $38.5 million plus working capital for the assets of Hi-Pro Feeds of Friona, Texas.

Agricore says the addition of Hi-Pro will increase the livestock division's EBITDA contribution to the company from about 15% to 22% on a pro-forma basis at April 30, 2006, thus enhancing the contribution from this segment relative to the grain and crop production segments of the company. The purchase of the assets will be financed in the near term by a bridge facility expiring in November 2007 at current market rates.

Hi-Pro services over 4,000 customers in the southwestern states, an area that encompasses the largest concentration of beef cattle on feed in the U.S. This area also is one of the highest growth markets in the U.S. dairy industry as herds are rapidly being established in the vicinity for a variety of favorable economic, climatic and business environment reasons.

Hi-Pro has two facilities in Texas - a recently rebuilt manufacturing facility in Friona, which is one of the largest state-of-the art facilities in the region, and a second facility in Lubbock. In addition, Hi-Pro services the growing dairy market from two facilities located near Dexter, New Mexico. Together, these facilities manufacture over 500,000 metric tons (MT) of feed annually, with a total capacity of over 600,000 MT.