DBRS Upgrades Agricore United

Dominion Bond Rating Service (“DBRS”) has today upgraded the ratings of Agricore United’s (“Agricore” or the “Company”) Senior Debt to BB from BB (low), Long-Term Debt, Senior A, B Notes to BB (low) from B (high), and Series A Convertible Preferred Shares to Pfd-4 from Pfd-5 (high). The trends are all Stable.

The upgrade reflects Agricore’s ability to survive the “hell or high water” environment that existed over the past five years – three years of drought and two years of floods, frost, and low-quality grain. During this period, the Company also rationalized its extensive elevator network, and integrated two cultures into one viable entity.

Agricore now operates a much more efficient and relatively low-cost elevator network, benefiting from its size (economies of scale) and leading market position (35% share in western Canada). The Company also benefits from good product diversification as it is also involved in marketing fertilizers, pesticides, insecticides, seeds, and feeds, in addition to grain handling.

Agricore’s balance sheet is also improving and will benefit further from low future capex requirements. DBRS estimates the Company has the ability to generate Cdn$25 million to Cdn$50 million in free cash flow, which could be used to repay debt. In addition, Cdn$105 million in convertible debt could potentially be converted to equity by December 2006, which would further improve the financial profile.

Agricore is in a good position to take advantage of growth in livestock as it operates a successful feed division throughout western Canada. Finally, the industry is maturing, and in DBRS’s opinion is becoming more disciplined while remaining competitive. These positive factors enable Agricore to better withstand the volatility of the weather-sensitive grain handling business going forward.