Ag Growth Income Fund Reports Results for the Three and Nine Months Ended September 30, 2005 and Announces Special Distribution of $0.12 per unit.

ROSENORT, Manitoba -- Ag Growth Income Fund (TSX:AFN.UN) today reported its financial results for the three and nine-month periods ended September 30, 2005. In addition, the Fund announced today that the Board of Trustees has approved a special distribution of $0.12 per unit, payable December 30, 2005 to unitholders of record at November 30, 2005. The special distribution recognizes that distributable cash generated through the third quarter exceeds year to date distributions. As the Fund's Declaration of Trust requires that it distribute all taxable income earned in its fiscal year, the Fund's Board of Trustees will meet again in December to determine if an additional special distribution should be paid with respect to fiscal 2005.

Results for the three-months ended September 30, 2005

The Fund reported revenue of $26.8 million and earnings before interest, taxes, depreciation, and amortization of $8.1 million. During the quarter the Fund generated distributable cash of $0.6859 per unit and declared distributions of $0.3800 per unit.

Results for the nine-months ended September 30, 2005

The Fund reported revenue of $67.1 million and earnings before interest, taxes, depreciation, and amortization of $20.1 million. For the nine-months ended September 30, 2005 the Fund generated distributable cash of $1.7312 per unit and declared distributions of $1.0483 per unit.

Overview of Results

Sales and EBITDA for both the three and nine-month periods ended September 30, 2005 exceeded the previous highs recorded in the same periods in 2004. A strong performance in key U.S. markets, solid gross margins, and the acquisition of the Edwards Group all contributed to the favourable sales and EBITDA. The strong financial performance has also resulted in a lower than anticipated distribution payout ratio for the three and nine-month periods. "We are very pleased with our September 30, 2005 results," said Rob Stenson, President and CEO of Ag Growth Income Fund, "Once again our geographic diversification and the strength of our distribution network served us well, as we were able to achieve these results despite unfavourable conditions in certain areas of the U.S, Western Canada, and Australia. In addition, the Edwards Group had another successful quarter and made a significant contribution to our results. We are looking forward to the fourth quarter and the conclusion of a very successful 2005."

Uncertainty Regarding Taxation of Income Trusts

Uncertainty created by the federal government's review process has caused volatility in our unit price. We regret this volatility but until that uncertainty is lifted it remains unclear what their intentions are. Speculation is wide ranging and includes a concern that a new tax on income trusts may be imposed. The federal government has called for input by December 31, 2005. We believe our unitholders should express their views on this important issue and whether they support a tax on business trusts to their local Member of Parliament and to the Minister of Finance, Ralph Goodale. To find your Member of Parliament's contact information by postal code go to http://www.parl.gc.ca.

Distributions

The Fund's policy is to make monthly distributions to holders of both Fund units and Class B Exchangeable limited partnership units. Furthermore, in accordance with the terms of the Fund's prospectus, holders of Class C Subordinated Exchangeable limited partnership units receive distributions quarterly provided the relevant terms of subordination have been met, which they have since the inception of the Fund.

The Fund's Declaration of Trust requires that it distribute all taxable income earned in its fiscal period ending December 31. It may be necessary for the Fund to estimate a special year-end distribution to achieve this requirement. The initial distribution, if any, will be made in December and paid to unitholders of record on December 30. Upon completion of the annual financial statements, a final determination of any additional distribution will be made, and the additional amount, if any, will be paid to unitholders of record at that time. If the Fund is required to make an additional distribution, the unitholders of record on December 30 will be required to include the amount of the additional distribution in their taxable income. If they are not unitholders at the record date of the additional payment they will be required to include the amount in their taxable income even though they do not receive the distribution. Those unitholders, however, can reduce their capital gain on the sale by the amount of the additional distribution.

The Fund's Board of Trustees reviews financial performance and other factors when assessing the Fund's distribution levels. An adjustment to distribution levels will be made at such time as the Board determines the adjustment is sustainable and in the long-term best interest of the Fund and its unitholders.

Company Profile

Ag Growth is a leading manufacturer of portable grain handling equipment including augers, belt conveyors and numerous other grain handling accessories. Ag Growth has a leading North American sales, marketing and distribution system within the short-line farm equipment industry, including approximately 1,400 dealers and distributors, in 48 states and nine provinces.

Non-GAAP measures

References to "EBITDA" are to earnings before interest, income taxes, depreciation, and amortization. Management believes that, in addition to net income or loss, EBITDA is a useful supplemental measure in evaluating its performance. Specifically, management believes that EBITDA is the appropriate measure from which to make adjustments to determine the Fund's distributable cash. EBITDA is not a financial measure recognized by Canadian generally accepted accounting principles ("GAAP") and does not have a standardized  meaning prescribed by GAAP. Management cautions investors that EBITDA should not replace net income or loss as an indicator of performance, or cash flows from operating, investing, and financing activities as a measure of the Fund's liquidity and cash flows. The Fund's method of calculating EBITDA may differ from the methods used by other issuers.

Forward-Looking Statements

The statements contained in this news release that are forward-looking are based on current expectations, and are subject to a number of uncertainties and risks, and actual results may differ materially. These uncertainties and risks include, but are not limited to, the dependence of Ag Growth Income Fund on the operations and assets currently owned by Ag Growth Industries Limited Partnership, the degree to which Ag Growth Industries Limited Partnership and its affiliates are leveraged, the fact that cash distributions are not guaranteed and will fluctuate with Ag Growth Industries Limited Partnership's financial performance, dilution, restrictions on potential future growth, the risk of unitholder liability, competitive pressures (including price competition), changes in market activity, the cyclicality of the farm equipment industry, seasonality of the business, poor weather conditions, international operations and foreign currency fluctuations, legal proceedings, commodity price and raw material exposure, dependence on key personnel, and environmental, health and safety and other regulatory requirements. Further information about these and other risks and uncertainties can be found in the disclosure documents filed by Ag Growth Income Fund with the securities regulatory authorities, available at www.sedar.com.

AG GROWTH INCOME FUND

MANAGEMENT'S DISCUSSION AND ANALYSIS

NOVEMBER 7, 2005

This Management's Discussion and Analysis should be read in conjunction with the unaudited interim consolidated financial statements and accompanying notes ("Interim Financial Statements") of Ag Growth Income Fund for the three and nine-month periods ended September 30, 2005, and the audited consolidated financial statements and accompanying notes of Ag Growth Income Fund as at and for the 283-day period ended December 31, 2004 (including Ag Growth's results of operations for the 228-day period ended December 31, 2004). Results are reported in Canadian dollars unless otherwise stated and have been prepared in accordance with Canadian generally accepted accounting principles.

OVERVIEW OF THE FUND

Ag Growth Income Fund (the "Fund") is an unincorporated, open-ended, limited purpose trust established under the laws of the Province of Ontario by a Declaration of Trust made as at March 24, 2004. On May 5, 2004, the Fund filed a final prospectus for the sale of 6,904,000 units at $10 per unit. In conjunction with the IPO, the Fund acquired indirectly all of the securities and assets of Ag Growth Industries Inc. ("Ag Growth"), which conducts business in the grain handling, storage, and conditioning market. As consideration for the acquisition, the owners of Ag Growth received, in addition to cash, 800,000 Class B Exchangeable units and 1,926,000 Class C Exchangeable Subordinated units of AGX Holdings Limited Partnership ("AGHLP"), a wholly owned subsidiary of the Fund. The units of the Fund and the Class B and Class C units of AGHLP participate pro rata  in the distributions of net earnings. Subsequent to the date of the offering, a total of 630,022 Class B units of AGHLP have been exchanged for 630,022 units of the Fund. Effective April 8, 2005, the Fund acquired substantially all of the assets of The Edwards Group of Companies, a leading manufacturer of agricultural aeration equipment. In conjunction with the acquisition of the Edwards Group, the Fund issued an additional 1,595,000 units via a private placement. Subsequent to this unit issuance, the prior owners of Ag Growth hold a 19% interest in the Fund and hold 2,095,978 Special Voting Units.

As at November 7, 2005, the following units of the Fund were issued
 and outstanding:

Trust units                                                9,129,022
Class B Exchangeable units                                   169,978
Class C Exchangeable Subordinated units                    1,926,000
                                                         ------------
Total units that participate pro rata in distribution     11,225,000
                                                         ------------

Special Voting Units (1)                                   2,095,978
                                                         ------------
                                                         ------------

(1) The Fund has issued a Special Voting Unit for each Class B and
    Class C unit outstanding. The Special Voting Units are not
    entitled to any interest or share in the Fund, or in any
    distribution from the Fund, but are entitled to vote on matters
    related to the Fund.

Ag Growth Income Fund units trade on the Toronto Stock Exchange under the symbol AFN.UN.

BASIS OF MANAGEMENT'S DISCUSSION AND ANALYSIS

The Fund was inactive until its acquisition of Ag Growth on May 18, 2004. To provide meaningful information to the reader, comparative results for the nine-month period ended September 30, 2004 include Ag Growth's results of operations for the 137-day period ended May 17, 2004. Management's Discussion and Analysis will refer to the Combined Operating Results of the Fund for the nine-month period ended September 30, 2004, which is comprised of the operations of the Fund for the 136-day period ended September 30, 2004, and Ag Growth's results of operations for the 137-day period ended May 17, 2004 (the "combined operating results"). Readers are cautioned that the combined operating results presented are not the results of the Fund for the nine-month period ended September 30, 2004 and have been presented only to provide the reader with additional information to enhance comparability to operating results of the Fund for the nine-month period ended September 30, 2005.

Comparative results - Nine-months ended September 30, 2004

The table below reconciles the operating results reported by the Fund to the combined operating results for the nine-month period ended September 30, 2004. Other than transactions related to the initial public offering on May 18, 2004, and the gain on sale of Ag Growth's outstanding foreign exchange contracts in January 2004, there are no unusual items in either Ag Growth's or the Fund's results for the nine-month period ended September 30, 2004. Certain comparative figures have been reclassified to conform with the current period's presentation.

Combined
                                                           operating
                       Ag Growth       The Fund (1)          results
                       (Pre Fund)
                                                          Nine-month
                     January 1 -       Inception -            period
                          May 17,     September 30,     September 30,
                            2004              2004              2004

Sales                $19,746,893       $29,636,113       $49,383,006
Cost of sales         11,017,758        15,055,513        26,073,271
                     ------------      ------------      ------------
Gross margin           8,729,135        14,580,600        23,309,735
Operating expenses     4,402,052         5,920,779        10,322,831
                     ------------      ------------      ------------
EBITDA before gain
 on sale and IPO
 expenses              4,327,083         8,659,821        12,986,904
Gain on sale (2)      (4,553,611)                0        (4,553,611)
IPO expenses           1,401,750                 0         1,401,750
                     ------------      ------------      ------------
EBITDA (3)             7,478,944         8,659,821        16,138,765
Amortization (3)         287,486         1,205,123         1,492,609
Interest expense       1,082,401           437,700         1,520,101
                     ------------      ------------      ------------
Earnings before tax    6,109,057         7,016,998        13,126,055
Tax expense            2,562,000            92,500         2,654,500
                     ------------      ------------      ------------
Net earnings         $ 3,547,057       $ 6,924,498       $10,471,555
                     ------------      ------------      ------------
                     ------------      ------------      ------------

(1) The Fund was inactive until its acquisition of Ag Growth on May
    18, 2004. Included in the Fund's results of operations are the
    results of Ag Growth's operations for only the 136-day period
    from the date of acquisition, May 18, 2004, to September 30,
    2004. Also, certain figures have been reclassified to conform
    with the current period's presentation.

(2) In January 2004 Ag Growth realized a gain on the sale of its
    outstanding forward foreign exchange contracts. Due to the
    significance of the gain it has been segregated from operating
    expenses.

(3) See discussion of non-GAAP measures.

The Edwards Group Acquisition

Effective April 8, 2005, the Fund acquired substantially all of the assets of The Edwards Group of Companies. Results of operations of the Edwards Group are included in the results of the Fund for the period subsequent to the acquisition. Furthermore, Edwards' assets and liabilities have been consolidated with those of the Fund. In conjunction with the acquisition, the Fund completed a private placement of 1,595,000 Trust Units priced at $13.50 per unit for gross proceeds of approximately $21.5 million. The Fund's expenses in connection with the offering are approximately $1.1 million. Net assets acquired are as follows:

Accounts receivable                                        1,348,830
Inventory                                                  3,672,603
Prepaid expenses and other assets                            174,246
Property, plant and equipment                              6,992,000
Intangible assets
 Brand name                                                4,363,000
 Distribution network                                      2,839,000
 Patent                                                      250,000
Goodwill                                                   3,406,168
Accounts payable and accrued liabilities                  (1,360,104)
                                                       --------------
                                                        $ 21,685,743
                                                       --------------
                                                       --------------


OPERATING RESULTS

                        Three Months Ended         Nine Months Ended
                              September 30              September 30
                         2005         2004         2005       2004(1)

Sales             $26,755,797  $21,780,593  $67,133,220  $49,383,006
Cost of sales      13,747,630   11,027,731   35,340,204   26,073,271
                 ------------  -----------  -----------  ------------
Gross margin       13,008,167   10,752,862   31,793,016   23,309,735
Operating expenses  4,889,898    4,103,524   11,652,359   10,322,831
                 ------------  -----------  -----------  ------------
EBITDA before gain
 on sale and IPO
 expenses           8,118,269    6,649,338   20,140,657   12,986,904
Gain on sale (1)            0            0            0   (4,553,611)
IPO expenses                0            0            0    1,401,750
                 ------------  -----------  -----------  ------------
EBITDA (2)          8,118,269    6,649,338   20,140,657   16,138,765
Amortization (3)    1,152,334      813,419    2,873,643    1,492,609
Interest expense      330,378      290,927      767,244    1,520,101
                 ------------  -----------  -----------  ------------
Earnings before
 tax                6,635,557    5,544,992   16,499,770   13,126,055
Tax expense
 (recovery)            68,000       61,500      228,000    2,654,500
                 ------------  -----------  -----------  ------------
Net earnings      $ 6,567,557  $ 5,483,492  $16,271,770  $10,471,555
                 ------------  -----------  -----------  ------------
                 ------------  -----------  -----------  ------------

Net earnings
 per unit         $      0.59  $      0.57  $      1.53  $    0.72(1)
                 ------------  -----------  -----------  ------------

(1) Results for the nine-month period ended September 30, 2004
    include the results of Ag Growth for the period January 1 to May
    17, 2004. See "Basis of Management's Discussion and Analysis".
    Also, certain figures have been reclassified to conform with the
    current period's presentation.
(2) In January 2004 Ag Growth realized a gain on the sale of its
    outstanding forward foreign exchange contracts. Due to the
    significance of the gain it has been segregated from operating
    expenses.
(3) See discussion of non-GAAP measures.

                        September 30, 2005        September 30, 2004

Total assets                  $147,535,726              $124,990,475
Total liabilities             $ 32,391,992              $ 31,398,064

For the three and nine-month periods ended September 30, 2005, the Fund generated distributable cash of $0.6859 per unit and $1.7312 per unit respectively, and declared distributions of $0.3800 per unit and $1.0483 per unit for the periods then ended.

The table below summarizes the distributions declared for trust units of the Fund and for Class B Exchangeable limited partnership units and Class C Subordinated limited partnership units of AGX Holdings Limited Partnership:

Periods Ended September 30, 2005
                              Three Months               Nine Months

Trust units                   $  3,469,028              $  8,989,661
Class B Exchangeable units          64,592                   177,032
Class C Exchangeable
 Subordinated units                731,880                 2,005,929
                             --------------            --------------
                              $  4,265,500              $ 11,172,622
                             --------------            --------------
                             --------------            --------------

Foreign Exchange

Sales and expenses are recorded at the monthly rate of exchange. As Ag Growth has historically generated over 60% of its sales in US Dollars, with a much lower proportion of its expenses being US Dollar denominated, a change in exchange rates has a significant effect on financial results.

The gain or loss on Ag Growth's currency hedging instruments and the gain or loss on the translation of US Dollar denominated working capital is reflected in expenses as a gain or loss on foreign exchange. Ag Growth's foreign currency hedging instruments impact sales only to the extent that a portion of the premium or discount on the forward at the time of entering the contract is amortized to sales. For the three and nine months ended September 30, 2005, the impact on sales was just $68,375 and $152,451 respectively.

For the three and nine-month periods ended September 30, 2005, the effective exchange rate to record U.S. dollar sales was $0.82, compared to $0.75 for the same periods in 2004. Accordingly, as the Fund's sales are not materially affected by its hedging instruments, sales for the three and nine-month periods reflect activity at these rates.

For the nine-month period ended September 30, 2005, the benefit of the Fund's hedging instruments was almost entirely eliminated by the strengthening dollar's impact on US Dollar working capital. As a result, the Fund's gain on foreign exchange for the period was just $0.1 million. Accordingly, as the net gain on foreign exchange is negligible, the Fund's EBITDA and net income for the period effectively reflect results of operations at a Canadian dollar exchange rate of approximately $0.82. For the three-month period ended September 30, 2005, the Fund recorded a net loss on foreign exchange of $0.3 million.

Sales

Sales for the three-month period ended September 30, 2005 increased $5.0 million or 22.8% over the same period in 2004. Sales for the quarter were positively impacted by the April 8, 2005 acquisition of the Edwards Group, which recorded sales of $5.2 million. Excluding Edwards, sales for the three-month period ended September 30, 2005 decreased $0.2 million or 0.1% compared to 2004. Sales in the third quarter of 2005 compared very favourably to the third quarter of 2004, which had been the strongest quarter in the history of the company. Sales in the Fund's key U.S. markets increased significantly over the record levels of 2004. Although sales in the third quarter of 2005 benefited from a September 2004 price increase of 8%, they were negatively impacted by an 8% decrease in the rate at which the Fund recorded US Dollar denominated sales, and by poor crop conditions in certain areas of the U.S., Western Canada, and Australia. The third quarter of 2005 was negatively impacted by the strength of the first two quarters of the year, as these quarters effectively captured some sales that historically would have been recorded in the third quarter.

For the nine-month period ended September 30, 2005, sales increased $17.8 million or 35.9% over the same period in 2004. Excluding Edwards, sales for the nine-month period ended September 30, 2005 increased $7.9 million or 16.1% over 2004. The significant increase in sales is largely the result of the Fund's ability to use its strong market share and geographic diversification to capitalize on favourable conditions in several key U.S. markets. The strength of the Fund's distribution network contributed to strong sales in certain drought-impacted areas of the U.S. corn belt. Sales benefited from price increases implemented throughout 2004 in response to rising input costs, and a trend towards larger, more expensive units, which resulted in higher per unit revenue in 2005. These factors more than offset the negative impact of a stronger Canadian Dollar, which resulted in U.S. Dollar denominated sales being recorded at rates approximately 8% lower than in the same period in 2004.

Expenses

Gross margin as a percentage of sales for the three and nine-month periods ended September 30, 2005 was 48.6% and 47.4% respectively, compared to 49.4% and 47.2% for the same periods in 2004. The strong gross margin recorded in the third quarter of 2005 was achieved despite recording U.S. Dollar denominated transactions at significantly lower rates of foreign exchange. The increase in gross margin in the nine months ended September 30, 2005 was largely the result of higher sales volumes and the benefit of price increases implemented in 2004, offset by the negative impact of foreign exchange. The inclusion of results for the Edwards Group in 2005 did not significantly impact gross margin percentages compared to the prior year.

Operating expenses for the three-months ended September 30, 2005 were $4.9 million, including $0.4 million recorded by the Edwards Group, compared to $4.1 million for the same period in 2004. Excluding Edwards, the increase of $0.4 million was the result of a number of factors. Long term incentive plan expense was $0.7 million higher than the prior year due to a 20% increase in the Fund's distribution rate and strong earnings that resulted in estimated taxable income exceeding expectations. Also, earnings based incentive programs resulted in salary expenses increasing $0.2 million over the prior year. These increases were offset by a $0.4 million decrease in the Fund's loss on foreign exchange, a $0.3 million decrease in sales commission that resulted from a reduction in commission rates and changes to the Fund's representation in certain U.S. states, and a $0.2 million decrease in legal fees compared to the prior year. A number of smaller miscellaneous items accounted for the remaining change.

For the nine-month period ended September 30, 2005, operating expenses were $11.7 million, including $0.9 million recorded by the Edwards Group, compared to $10.3 million in 2004, prior to the gain Ag Growth realized on the sale of its outstanding forward foreign exchange contracts and the accrual of IPO expenses. For the reasons noted above, compared to the nine-month period ended September 30, 2004, expenses related to the Fund's long term incentive plan increased $0.7 million and salary expenses increased $0.5 million. Also, for the nine months ended September 30, 2005 the Fund recorded a gain on foreign exchange of $0.1 million, compared to a loss of $0.6 million in the prior year. Also, expenses were lower in 2005 due to the elimination of management fees payable to the owners of Ag Growth prior to the IPO that totalled $0.3 million in the period January 1, 2004 to May 17, 2004. A number of smaller miscellaneous items accounted for the remaining change.

Prior to the initial public offering, Ag Growth realized a net gain of $4.6 million on the sale of its forward foreign exchange contracts. Ag Growth subsequently entered into a number of new forward foreign exchange contracts that continue to form part of the Fund's hedging strategy. The $4.6 million gain on sale significantly affected Ag Growth's financial results for the nine-month period ended September 30, 2004.

Included in the results of Ag Growth for the period of January 1, 2004 to May 17, 2004 is the accrual of $1.4 million of IPO related costs. No unusual costs were recorded in the three and nine-month periods ended September 30, 2005.

Net earnings and EBITDA (see discussion of non-GAAP measures)

EBITDA for the three months ended September 30, 2005 was $8.1 million, compared to $6.6 million in the same period in 2004. The significant increase in EBITDA is primarily the result of the acquisition of the Edwards Group on April 8, 2005 and a strong performance by the Fund's largest division, Westfield Industries, partially offset by an increase in operating expenses.

EBITDA for the nine months ended September 30, 2005 was $20.1 million, compared to $13.0 million in 2004 prior to the gain Ag Growth realized on the sale of its outstanding forward foreign exchange contracts and the accrual of IPO expenses. The significant increase in EBITDA is the result of the acquisition of the Edwards Group, strong sales and favourable gross margins at the other divisions, particularly Westfield, partially offset by an increase in operating expenses. After recognition of the gain on sale and the accrual of IPO expenses, EBITDA for the nine months ended September 30, 2004 was $16.1 million.

Upon completion of the IPO on May 18, 2004, the Fund retired the existing debt obligations of Ag Growth and entered into a new credit facility with a single lender. The credit facility includes term debt of $20 million and an operating facility of $15 million, increasing to $18 million for the period May 31 to September 30 each year. Both facilities bear interest at rates based on performance calculations. For the three and nine-month periods ended September 30, 2005, the Fund's effective interest rate on its term debt was 4.5%, and after consideration of the effect of the Funds interest rate swap (see "Financial Instruments") was 4.5% and 4.4% respectively.

Amortization for the three and nine-month periods ended September 30, 2005 was $1.2 million and $2.9 million respectively. Amortization for the three-months ended September 30, 2005 includes the amortization of intangible assets of $0.5 million, the amortization of deferred financing costs of $0.2 million, and the amortization of property, plant and equipment of $0.5 million. Amortization for the nine months ended September 30, 2005 includes the amortization of intangible assets of $1.2 million, the amortization of deferred financing costs of $0.4 million, and the amortization of property, plant and equipment of $1.3 million. For the three and nine-month periods ended September 30, 2005, the increase in amortization of property, plant and equipment and intangibles is largely the result of the acquisition of the Edwards Group.

The Fund is a mutual fund trust for income tax purposes and therefore is not subject to tax on income distributed to unitholders. The manufacturing business operations of the Fund are carried out within a limited partnership. Income from the limited partnership is not subject to tax but flows through to the holders of the partnership units, which include the Fund. The Fund's distributions are taxable in the hands of the unitholders. As a result of the Fund's structure, tax expense is recorded only for the Fund's subsidiary corporations. The recorded tax expense of $68,000 and $228,000 for the three and nine-month periods ended September 30, 2005 represents income taxes and large corporation tax payable on the net income and taxable capital primarily allocated to Ag Growth through its ownership in AGLP after deductions for interest expense, financing fees and capital taxes.

Net earnings for the three and nine-month periods ended September 30, 2005 were $6.6 million and $16.3 million respectively, and earnings per basic and diluted unit were $0.59 and $1.53 for the periods then ended.

Quarterly Financial Information

                                   2005 Q3      2005 Q2      2005 Q1

Total sales                    $26,755,797  $24,363,985  $16,013,438
Gain (loss) on foreign
exchange                       $  (274,763) $   115,822  $   220,020
Net earnings                   $ 6,567,557  $ 6,255,028  $ 3,449,185
Basic and diluted net earnings
 per unit                      $      0.59  $      0.56  $      0.36


                                   2004 Q4      2004 Q3    2004 Q2(1)

Total sales                    $13,911,771  $21,780,593   $7,855,520
Gain (loss) on foreign
 exchange                      $     3,552  $  (626,254)  $ (520,596)
Net earnings                   $ 1,798,911  $ 5,483,492   $1,441,006
Basic and diluted net earnings
 per unit                      $      0.19  $      0.57   $     0.15


(1) Includes Ag Growth's operations only for the 44-day period May 18
    to June 30, 2004.

(2) Certain comparative figures have been reclassified to conform to
    the current period's presentation.

The second and third quarters of 2005, compared to the same periods in 2004, were significantly impacted by the April 8, 2005 acquisition of the Edwards Group. Also, the second quarter of 2004 reflects the operations of Ag Growth for only the 44-day period from the date of the Fund's May 18, 2004 initial public offering to the quarter-end date. The first and second quarters of 2005 were also stronger than usual due to the demand that resulted from lean inventory levels following the record 2004 U.S. harvest.

Interim period revenues and earnings historically reflect some seasonality. The third quarter is typically the strongest primarily due to high in-season demand at the farm level. Distributable cash generated per unit will also typically be highest in the third quarter. The Fund's collections of accounts receivable are weighted towards the third and fourth quarters. This collection pattern, combined with seasonally high sales in the third quarter, result in accounts receivable levels increasing throughout the year and peaking in the third quarter. In order to ensure the Fund has adequate supply throughout its distribution network in advance of the in-season demand experienced primarily in the third quarter, inventory levels must be gradually increased throughout the year. Accordingly, inventory levels typically increase in the first and second quarters and then begin to decline in the third or fourth quarter as sales levels exceed production.

As a result of these working capital movements, historically, Ag Growth's use of its bank revolver is typically highest in the first and second quarters. The revolver balance would normally begin declining in the third quarter as collections of accounts receivable increase. Ag Growth has generally fully repaid its revolver balance by early in the fourth quarter.

CASHFLOW AND LIQUIDITY

The table below reconciles net income to cash flow from operations for the three and nine-month periods ended September 30, 2005 and September 30, 2004. Consistent with the discussion above, the three and nine-month periods ended September 30, 2005 and 2004 reflect an increase in accounts receivable. Also, strong preseason demand resulted in higher than usual customer deposits in the fourth quarter of 2004. The Fund invested significantly in working capital in the first six months of 2004 and 2005, however in the third quarter of both years the Fund recognized positive cash flow from changes in working capital balances.

Nine-Months               Three-Months
                           Ended Sep 30              Ended Sep 30
                         2005       2004(1)        2005         2004

Net income        $16,271,770  $10,471,555  $ 6,567,557  $ 5,483,492

Add charges
 (deduct credits)
 to operations not
 requiring a
 current cash
 payment:
 Amortization       2,873,643    1,492,609    1,152,334      813,419
 Future income
  taxes               183,000       62,000       53,000       51,000
 Deferred foreign
  exchange loss      (467,451)    (639,013)    (350,703)    (431,690)
 Loss (gain) on
  sale of assets      (10,082)         490            0            0
                 ------------  -----------  -----------  ------------

                   18,850,880   11,387,641    7,422,188    5,916,221
Net change in
 non-cash working
 capital balances
 related to
 operations:
 Accounts
  receivable      (11,809,514)  (9,248,457)  (1,164,955)    (773,702)
 Inventory         (1,314,070)  (1,868,850)     529,215    1,705,830
 Prepaid expenses
  and other           484,542     (253,228)     103,879       71,067
 Accounts payable   1,779,059    1,537,344    1,167,374    1,050,539
 Long term
  incentive plan      421,029            0      394,837            0
 Customer deposits (2,792,954)     152,412      184,880      211,353
 Income tax payable   395,420     (915,063)      15,000   (1,406,985)
                 ------------  -----------  -----------  ------------

                  (12,836,488) (10,595,842)   1,096,230      858,102
                 ------------  -----------  -----------  ------------

Cash flow from
 operations         6,014,392      791,799    8,652,418    6,774,323

Add (deduct)
 unusual items: (2)
 IPO expenses               0    1,401,750            0            0
 Gain on sale (3)           0   (4,553,611)           0            0
                 ------------  -----------  -----------  ------------

Cash flow from
 (used in)
 operations after
 unusual items    $ 6,014,392  $(2,360,062) $ 8,652,418  $ 6,774,323
                 ------------  -----------  -----------  ------------
                 ------------  -----------  -----------  ------------

(1) Results for the nine-month period ended September 30, 2004
    include the results of Ag Growth for the period January 1 to May
    17, 2004. See "Basis of Management's Discussion and Analysis".
(2) Due to the significance of the IPO expenses and the gain on sale
    of outstanding foreign exchange contracts, and their impact on
    the comparability of results, cash flow used in operations for
    the nine-month period ended September 30, 2004 has also been
    presented net of these items.
(3) In January 2004 Ag Growth realized a gain on the sale of its
    outstanding forward foreign exchange contracts. Due to the
    significance of the gain it has been segregated from operating
    expenses.

The Fund had capital expenditures of $0.1 million in the three-months ended September 30, 2005 and $0.9 million in the nine-month period then ended. Capital expenditures in the three-month period ended September 30, 2005 related primarily to purchases of manufacturing equipment, while capital expenditures for the nine-month period ended September 30, 2005 related primarily to the purchases of manufacturing equipment, forklifts, and semi trailer  units. For the nine-month period ended September 30, 2005, the Fund's cash balance decreased $6.7 million, which was in line with management expectations for the reasons discussed above. Consistent with prior years, management expects to fully repay its revolver facility in the fourth quarter.

CONTRACTUAL OBLIGATIONS

                  Total    2005    2006       2007       2008   2009+

Long-term
 debt        20,076,965  10,873  33,495 10,027,008 10,005,589       0
Operating
 leases      1 ,400,155 125,296 427,937    373,217    255,604 218,101
             ---------- ------- ------- ---------- ---------- -------
Total
 obligations 21,477,120 136,169 461,432 10,400,225 10,261,193 218,101
             ---------- ------- ------- ---------- ---------- -------
             ---------- ------- ------- ---------- ---------- -------

The term loan matures May 2006 and is extendible annually for an additional one-year term at the lender's option. Under the terms of the credit facility agreement, if the bank elects to not extend the operating loan and term loan facilities beyond the current May 31, 2006 maturity date, all amounts outstanding under the facilities become repayable in four equal quarterly instalments of principal, commencing on the last day of the third month following the first anniversary of the expiry date.

The operating leases relate to vehicle, equipment, and warehouse facility leases entered into in the normal course of business.

TRANSACTIONS WITH RELATED PARTIES

Under the terms of the long term incentive plan ("LTIP"), 10% to 20% of cash distributions in excess of an established threshold are payable to plan participants. The cost is accrued as an expense in the period when it is determined an amount payable under the LTIP is likely. For the three and nine-month periods ended September 30, 2005, LTIP expense was $660,625 and 686,817 respectively.

DISTRIBUTIONS

Distributions are paid at the end of the month that follows the month when the cash was earned. The Fund declared distributions to public unitholders of $3.5 million and $9.0 million for the three and nine-month periods ended September 30, 2005. Furthermore, consistent with the Fund's prospectus dated May 5, 2004, the Fund declared distributions to Ag Growth's previous owners of $0.8 million and $2.2 million for the three and nine-month periods ended September 30, 2005.

The Fund's policy is to make monthly distributions to holders of both Trust units and Class B Exchangeable limited partnership units. Furthermore, in accordance with the terms of the Fund's prospectus, holders of Class C Subordinated Exchangeable limited partnership units receive distributions quarterly provided the relevant terms of subordination have been met, which they have since the inception of the Fund.

The Fund's Declaration of Trust requires that it distribute all taxable income earned in its fiscal period ending December 31. It may be necessary for the Fund to estimate a special year-end distribution to achieve this requirement. The initial distribution, if any, will be declared in December and paid to unitholders of record on December 30. Upon completion of the annual financial statements, a final determination of any additional distribution will be made, and the additional amount, if any, will be paid to unitholders of record at that time. If the Fund is required to make an additional distribution, the unitholders of record on December 30 will be required to include the amount of the additional distribution in their taxable income. If they are not unitholders at the record date of the additional payment they will be required to include the amount in their taxable income even though they do not receive the distribution. Those unitholders, however, can reduce their capital gain on the sale by the amount of the additional distribution.

The Fund's Board of Trustees reviews financial performance and other factors when assessing the Fund's distribution levels. An adjustment to distribution levels will be made at such time as the Board determines the adjustment is sustainable and in the long-term best interest of the Fund and its unitholders.

Distributable cash generated for the three and nine-month periods ended September 30, 2005 is calculated as follows:

Nine -Months      Three-Months
                                             Ended             Ended
                                      September 30,     September 30,
                                              2005              2005

Net income for the period             $ 16,271,770       $ 6,567,557
Add:  Amortization                       2,873,643         1,152,334
      Interest expense                     767,244           330,378
      Tax expense                          228,000            68,000
                                      ------------       ------------
EBITDA (1)                              20,140,657         8,118,269
Less:  Interest expense                    767,244           330,378
       Net capital expenditures            877,210            73,640
       Current income taxes                 45,000            15,000
                                      ------------       ------------
Distributable cash (1)                $ 18,451,203       $ 7,699,251
                                      ------------       ------------

Weighted average units outstanding      10,658,278        11,225,000
Distributable cash generated per unit $     1.7312       $    0.6859
Distributions declared per unit       $     1.0483       $    0.3800
Distribution percentage                      60.55%            55.40%

(1) See discussion of non-GAAP measures below.

Historical distributable cash generated per unit and distributions declared as a percentage of distributable cash generated is as follows:

---------------------------------------------------------------------
                     2004 Distributable Cash
---------------------------------------------------------------------
                                Generated per Unit    Distribution %
                                   3 mos.      YTD  Quarter      YTD
Q2 (1)                             $0.18     $0.18     88.8%    88.8%
Q3                                 $0.63     $0.81     51.6%    59.8%
Q4                                 $0.20     $1.01    163.5%    80.3%
Special                              N/A       N/A      N/A     94.0%

(1) Includes Ag Growth's operations only for the 44-day period May 18
    to June 30, 2004.

---------------------------------------------------------------------
                     2005 Distributable Cash
---------------------------------------------------------------------
                                Generated per Unit    Distribution %
                                   3 mos.      YTD  Quarter      YTD
Q1                                 $0.40     $0.40     82.6%    82.6%
Q2                                 $0.64     $1.04     54.2%    64.2%
Q3                                 $0.69     $1.73     55.4%    60.6%

CAPITAL RESOURCES

The term loan matures May 2006 and is extendible annually at the lender's option. The Fund also has available a $15 million operating facility, increasing to $18 million for the period May 31 to September 30. At September 30, 2005, the Fund's bank indebtedness was $1.0 million. Under the terms of the credit facility agreement, if the bank elects to not extend the operating loan and term loan facilities beyond the current May 31, 2006 maturity date, all amounts outstanding under the facilities become repayable in four equal quarterly instalments of principal, commencing on the last day of the third month following the first anniversary of the expiry date. In addition, under the terms of the facility agreement, the operating and term loan facilities will bear interest at prime plus 0.0%, 0.50%, or 1.00% per annum based on performance calculations. The Fund is party to an interest rate swap agreement to mitigate the impact of fluctuating interest rates on its term loan.

OFF-BALANCE SHEET ARRANGEMENTS

The Fund has no off balance sheet arrangements with the exception of the interest rate swap and foreign currency contracts discussed below in Financial Instruments.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period. The Fund believes the accounting policies that are critical to its business relate to the use of estimates regarding the recoverability of accounts receivable and the valuation of inventory, intangibles, and goodwill. Due to the nature of Ag Growth's business and the credit terms it provides to its customers, estimates and judgments are inherent in the on-going assessment of the recoverability of accounts receivable. In addition, assessments and judgments are inherent in the determination of the net realizable value of inventories. Another area requiring judgment includes the allocation of the purchase price related to the IPO and the acquisition of the Edwards Group, specifically the allocation between goodwill and other intangible assets, and the amortization period of the intangible assets. In the normal course of its operations, the Fund may become involved in various legal actions. The Fund maintains, and regularly updates on a case-by-case basis, provisions when the expected loss is both likely and can be reasonably estimated. While management has applied judgment based on assumptions believed to be reasonable in the circumstances, actual results can vary from these assumptions. It is possible that materially different results would be reported using different assumptions.

FINANCIAL INSTRUMENTS

Risk from foreign exchange arises as a result of variations in exchange rates between the Canadian and the U.S. Dollar. Historically, over 60% of Ag Growth's sales are denominated in US Dollars while a much smaller proportion of its expenses are denominated in this currency. The Fund has entered into foreign exchange contracts with a Canadian chartered bank to hedge its foreign currency exposure on anticipated US dollar sales transactions and the collection of the related accounts receivable. At September 30, 2005, the Fund had outstanding USD $34.2 million of forward foreign exchange contracts, dated from October 2005 to December 2007, with a Canadian Dollar equivalent of $44.9 million. The Fund also has outstanding reverse knock-in currency options consisting of a series of call and put options, with a face value of U.S. $4.6 million, at rates of $1.1363 and $1.2750 respectively, with maturities dated from March 2007 to December 2007. As at September 30, 2005, the Fund has recorded a deferred foreign exchange loss of $0.5 million with respect to its hedged accounts receivable. At September 30, 2005, the unrealized gain on forward foreign exchange contracts was $5.3 million.

The Fund is subject to risks associated with fluctuating interest rates on its long-term debt. To manage this risk, the Fund has entered into an interest rate swap transaction with a Canadian chartered bank. The swap transaction expires on May 4, 2008 and involves the exchange of the underlying floating interest rate for an effective fixed interest rate of 3.68%, resulting in interest charges to the Fund of 3.68% plus a variable rate based on performance calculations. The notional amount of the swap transaction at September 30, 2005 was $20.0 million. At September 30, 2005, a cash payment of $77,498 would have been required to settle the interest rate swap.

The Fund manages its short-term cash position partially through the use of foreign exchange swap contracts. At September 30, 2005, the Fund had outstanding USD $2.9 million of foreign exchange swap contracts with maturities in October 2005, with a Canadian Dollar equivalent of $3.4 million. The recognized fair value of the foreign currency swap arrangements at September 30, 2005 resulted in a liability of $40,671.

CHANGES IN ACCOUNTING POLICIES

In an effort to harmonize Canadian GAAP with US GAAP, the Canadian Accounting Standards Board has issued the following sections:

- 1530, Comprehensive Income;

- 3855, Financial Instruments-Recognition and Measurement; and

- 3865, Hedges.

Under these new standards, all financial assets should be measured at fair value with the exception of loans, receivables and investments that are intended to be held to maturity and certain equity investments, which should be measured at cost. Similarly, all financial liabilities should be measured at fair value when they are held for trading or they are derivatives. Gains and losses on financial instruments measured at fair value will be recognized in the income statement in the periods they arise with the exception of gains and losses arising from:

- Financial assets held for sale, for which unrealized gains and losses are deferred in other comprehensive income until sold or impaired; and

- Certain financial instruments that qualify for hedge accounting.

Sections 3855 and 3865 of the CICA Handbook make use of "other comprehensive income". Other comprehensive income comprises revenues, expenses, gains and losses that are recognized in comprehensive income, but are excluded from net income. Unrealized gains and losses on qualifying hedging instruments, translation of self-sustaining  foreign operations, and unrealized gains or losses on financial instruments held for sale will be included in other comprehensive income and reclassified to net income when realized. Comprehensive income and its components will be a required disclosure under the new standard. These new standards are effective for fiscal years beginning on or after October 1, 2006 and early adoption is permitted. Management has not yet determined the impact of the adoption of these standards on the presentation of the Fund's results from operations or financial position.

RISKS AND UNCERTAINTIES

The risks and uncertainties described below are not the only risks and uncertainties we face. We believe that the risks mentioned are the principal risks relating to our operations. There are other risks that relate to the structure of the Fund. Additional risks and uncertainties not currently known to us or that we currently deem immaterial also may impair operations. If any of the following risks actually occur, our business, results of operations and financial condition, and the amount of cash available for distribution could suffer.

Industry Cyclicality

The performance of the farm equipment industry is cyclical, with sales depending on the performance of the agricultural sector. To the extent that the agricultural sector declines or experiences a downturn, this is likely to have a negative impact on the farm equipment industry.

Seasonality of Business

The seasonality of the demand for Ag Growth's products results in lower cash flow in the first three quarters of each calendar year and may impact the ability of the Fund to make cash distributions to Unitholders, or the quantum of such distributions, if any. No assurance can be given that the Fund's credit facility will be sufficient to offset the seasonal variations in Ag Growth's cash flow.

Risk of Decreased Crop Yields

Decreased crop yields due to poor weather conditions and other factors are a significant risk affecting Ag Growth. Both reduced crop volumes and the accompanying decline in farm incomes can negatively affect demand for grain handling equipment.

Potential Volatility of Production Costs

Various materials and components are purchased in connection with Ag Growth's manufacturing process, some or all of which may be subject to wide price variation. Consistent with past and current practices within the industry, Ag Growth manages its exposure to material and component price volatility by planning and negotiating significant purchases on an annual basis, and passing through to customers, most, if not all, of the price volatility. There can be no assurance that industry dynamics will allow Ag Growth to continue to reduce its exposure to volatility of production costs by passing through price increases to its customers.

Commodity Prices, International Trade and Political Uncertainty

Prices of commodities are influenced by a variety of unpredictable factors that are beyond the control of Ag Growth, including weather, government (Canadian, United States and other) farm programs and policies, and changes in global demand or other economic factors. The world grain market is subject to numerous risks and uncertainties, including risks and uncertainties related to international trade and global political conditions.

Competition

Ag Growth experiences competition in the markets in which it operates. Certain of Ag Growth's competitors may have greater financial and capital resources than Ag Growth. Ag Growth could face increased competition from newly formed or emerging entities, as well as from established entities that choose to focus (or increase their existing focus) on Ag Growth's primary markets. As the grain handling equipment sector is fragmented, there is also a risk that a larger, formidable competitor may be created through a combination of one or more smaller competitors. Ag Growth may also face potential competition from the emergence of new products or technology.

Business Interruption

The operation of the manufacturing facilities of Ag Growth are subject to a number of business interruption risks, including delays in obtaining production materials, plant shutdowns, labour disruptions and weather conditions/natural disasters. Ag Growth may suffer damages associated with such events that it cannot insure  against or which it may elect not to insure against because of high premium costs or other reasons. For instance, Ag Growth's Rosenort facility is located in an area that was affected by widespread floods  experienced in Manitoba in 1997, and insurance coverage for this type of business interruption is limited. Ag Growth is not able to predict the occurrence of business interruptions.

Litigation

In the ordinary course of its business, Ag Growth may be party to various legal actions, the outcome of which cannot be predicted with certainty. One category of potential legal actions is product liability claims. Farming is an inherently dangerous occupation. Grain handling equipment used on farms may result in product liability claims that require not only proper insuring of risk, but management of the legal process as well.

Dependence on Key Personnel

Ag Growth's future business, financial condition, and operating results depend on the continued contributions of certain of Ag Growth's executive officers and other key management and personnel, certain of whom would be difficult to replace.

Distribution, Sales Representative and Supply Contracts

Ag Growth typically does not enter into written agreements with its dealers, distributors or suppliers. As a result, such parties may, without notice or penalty, terminate their relationship with Ag Growth at any time. In addition, even if such parties should decide to continue their relationship with Ag Growth, there can be no guarantee that the consideration or other terms of such contracts will continue on the same basis.

Foreign Exchange Risk

Ag Growth generates a majority of its sales in US dollars, but a materially smaller proportion of its expenses are denominated in US dollars. As a result, a significant strengthening of the Canadian dollar against the US dollar will negatively impact the return from US dollar sales revenue. To mitigate the effects of exchange rate fluctuation, management has implemented a hedging strategy of purchasing foreign exchange contracts. Ag Growth has entered into a series of hedging arrangements to mitigate the potential effect of fluctuating exchange rates through December 2007. To the extent that Ag Growth does not adequately hedge its foreign exchange risk, changes in the exchange rate between the Canadian dollar and the US dollar may have a material adverse effect on Ag Growth's results of operations, business, prospects and financial condition.

Potential Undisclosed Liabilities Associated with Acquisitions

To the extent that prior owners of businesses acquired by Ag Growth failed to comply with or otherwise violated applicable laws, Ag Growth, as a successor owner, may be financially responsible for these violations. In particular, to the extent that businesses acquired by Ag Growth have failed to make all necessary filings with applicable governmental, regulatory or tax authorities prior to the date of their acquisition by Ag Growth, Ag Growth may be subject to certain penalties and/or liabilities.

Uninsured and Underinsured Losses

Ag Growth will use its discretion in determining amounts, coverage limits and deductibility provisions of insurance, with a view to maintaining appropriate insurance coverage on its assets and operations at a commercially reasonable cost and on suitable terms. This may result in insurance coverage that, in the event of a substantial loss, would not be sufficient to pay the full current market value or current replacement cost of its assets or cover the cost of a particular claim.

Distributions

The Fund's Declaration of Trust requires that it distribute all taxable income earned in its fiscal period ending December 31. It may be necessary for the Fund to estimate a special year-end distribution to achieve this requirement. The initial distribution, if any, will be made in December and paid to unitholders of record on December 30. Upon completion of the annual financial statements, a final determination of any additional distribution will be made, and the additional amount, if any, will be paid to unitholders of record at that time. If the Fund is required to make an additional distribution, the unitholders of record on December 30 will be required to include the amount of the additional distribution in their taxable income. If they are not unitholders at the record date of the additional payment they will be required to include the amount in their taxable income even though they do not receive the distribution.

Uncertainty Regarding Taxation of Income Trusts

On September 8, 2005, the Department of Finance (Canada) released a consultation paper on tax and other issues related to publicly listed flow-through entities (''FTEs'') such as income trusts and limited partnerships and invited interested parties to make submissions prior to December 31, 2005. The stated focus of the consultation paper is to assess the tax and economic efficiency implications of FTEs to determine if the current tax system is appropriate or should be modified. Although the consultation paper does not propose any particular legislative or administrative changes, it identifies possible policy approaches, including limiting the deduction of interest expenses by operating entities, taxing FTEs in a manner similar to corporations or better integrating the personal and corporate income tax systems to make the tax system more neutral between forms of business organizations. On September 19, 2005, the Minister of Finance (Canada) announced that he had requested that CRA postpone providing advance income tax rulings respecting FTE structures pending these consultations, that the Department of Finance (Canada) is closely monitoring developments in the FTE market with a view to proposing measures in response to the consultations and that consideration would be given to what, if any, transitional measures were appropriate. Further initiatives in this area, if any, including the possible initiatives referred to in the consultation paper, may be taken following the completion of such consultations. Accordingly, legislative changes in this area are possible, and such changes could result in the income tax considerations described herein being materially different in certain respects.

OUTLOOK

The Fund expects the fourth quarter of 2005 to follow the pattern of earlier years. In general, as harvest nears completion there are fewer in-season sales, order backlogs decrease, and the focus moves to preseason bookings and fiscal 2006. Based on market conditions and current order backlogs, the Fund anticipates its fourth quarter to approximate the results of prior years. In conjunction with the distributable cash generated in the nine months ended September 30, 2005, it appears likely the Fund's results for fiscal 2005 will exceed expectations. Accordingly, as the Fund's Declaration of Trust requires that it distribute all taxable income earned in its fiscal year ending December 31, the Fund's Board of Trustees will meet again in December to determine if an additional special distribution should be paid with respect to fiscal 2005.

Looking forward to 2006, the Fund anticipates industry sentiment to be positive following a largely successful 2005 harvest, and accordingly expects favourable results in the first and second quarters of the new year. However, it is not currently anticipated that market demand in the first half of 2006 will meet the exceptional demand experienced in the first half of 2005. Consistent with prior years, demand in 2006, particularly in the second half, will be influenced by crop conditions.

NON-GAAP MEASURES

References to "EBITDA" are to earnings before interest, income taxes, depreciation, and amortization. Management believes that, in addition to net income or loss, EBITDA is a useful supplemental measure in evaluating its performance. Specifically, management believes that EBITDA is the appropriate measure from which to make adjustments to determine the Fund's distributable cash. EBITDA is not a financial measure recognized by Canadian generally accepted accounting principles ("GAAP") and does not have a standardized meaning prescribed by GAAP. Management cautions investors that EBITDA should not replace net income or loss as an indicator of performance, or cash flows from operating, investing, and financing activities as a measure of the Fund's liquidity and cash flows. The Fund's method of calculating EBITDA may differ from the methods used by other issuers.

Distributable cash is a non-GAAP measure generally used by Canadian income funds as an indicator of financial performance. The Fund defines distributable cash as EBITDA less interest expense, maintenance capital expenditures, and current taxes. The method of calculating the Fund's distributable cash may differ from similar computations as reported by similar entities and, accordingly, may not be comparable to distributable cash as reported by such entities.

Amortization in the Combined Operating Results for the nine-month period ended September 30, 2004 is a non-GAAP measure as amortization, based on a combination of assets valued at historical cost and fair value, would not be combined when reporting under GAAP. The combined operating results for the nine-month period ended September 30, 2004, representing the financial results of Ag Growth prior to its acquisition by the Fund (January 1, 2004 to May 17, 2004) and the Fund's financial results from inception to September 30, 2004, have been presented to provide the reader with additional information to enhance comparability to operating results of the Fund for the nine-month period ended September 30, 2005.

FORWARD-LOOKING STATEMENTS

This Management Discussion and Analysis may contain forward-looking statements which reflect our expectations regarding the future growth, results of operations, performance and business prospects, and opportunities of the Fund. Forward-looking statements contain such words as "anticipate", "believe", "continue", "could", "expects", "intend", "plans" or similar expressions suggesting future conditions or events. Such forward-looking statements reflect our current beliefs and are based on information currently available to us. Forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual results to differ materially from results discussed in the forward-looking statements, including the effects, as well as changes in national and local business conditions, decreased crop yields, industry cyclicality, and competition. Although the forward-looking statements contained in this MD&A are based on what we believe to be reasonable assumptions, we cannot assure readers that actual results will be consistent with these forward-looking statements.

ADDITIONAL INFORMATION

Additional information relating to the Fund, including all public filings, is available on SEDAR (www.sedar.com).

Unaudited Interim Consolidated Financial Statements

Ag Growth Income Fund

September 30, 2005


UNAUDITED INTERIM CONSOLIDATED BALANCE SHEETS

                                                  As at        As at
                                           September 30, December 31,
                                                   2005         2004
                                                      $            $
---------------------------------------------------------------------

ASSETS (notes 10 and 11)
Current
Cash and cash equivalents                             -    7,001,929
Accounts receivable                          17,673,397    4,515,053
Inventory (note 6)                           20,460,250   15,473,577
Prepaid expenses and other assets               648,129      958,425
---------------------------------------------------------------------
Total current assets                         38,781,776   27,948,984
---------------------------------------------------------------------
Property, plant and equipment (note 7)       12,190,096    5,623,174
---------------------------------------------------------------------
Other assets
 Goodwill                                    35,970,059   32,888,891
 Intangible assets (note 8)                  59,364,878   53,144,658
 Deferred financing costs (note 9)              248,566      454,559
 Future tax assets (note 13)                    465,000      563,000
 Deferred foreign exchange loss                 515,351       47,900
---------------------------------------------------------------------
                                             96,563,854   87,099,008
---------------------------------------------------------------------
                                            147,535,726  120,671,166
---------------------------------------------------------------------
---------------------------------------------------------------------

LIABILITIES AND UNITHOLDERS' EQUITY
Current
Bank indebtedness (note 10)                   1,000,222            -
Accounts payable and accrued liabilities      7,184,008    4,044,845
Customer deposits                             1,032,217    3,825,171
Income taxes payable                            471,013       75,593
Distributions payable                         1,940,750    2,789,041
Long-term incentive plan (note 15)              686,817      265,788
Current portion of long-term debt (note 11)      33,495       33,495
---------------------------------------------------------------------
Total current liabilities                    12,348,522   11,033,933
Long-term debt (note 11)                     20,043,470   20,068,593
---------------------------------------------------------------------
Total liabilities                            32,391,992   31,102,526
Commitments (notes 16 and 18)
Unitholders' equity                         115,143,734   89,568,640
---------------------------------------------------------------------
                                            147,535,726  120,671,166
---------------------------------------------------------------------
---------------------------------------------------------------------

See accompanying notes

On behalf of the Board of Trustees:

                (signed) Rod Senft      (signed) John R. Brodie, FCA
                      Trustee                      Trustee


Ag Growth Income Fund

UNAUDITED INTERIM CONSOLIDATED
STATEMENTS OF EARNINGS

                                              Nine-month     191-day
                    Three month period ended      period      period
                    ------------------------       ended       ended
                       September   September   September   September
                        30, 2005    30, 2004    30, 2005  30, 2004(1)
                                                             (note 2)
                               $           $           $           $
---------------------------------------------------------------------

Sales                 26,755,797  21,780,593  67,133,220  29,636,113
Cost of goods sold    13,747,630  11,027,731  35,340,204  15,055,513
---------------------------------------------------------------------
Gross margin          13,008,167  10,752,862  31,793,016  14,580,600
---------------------------------------------------------------------
Expenses
 Selling, general and
  administration       3,672,395   3,134,081  10,073,401   4,294,284
 Professional fees        95,758     197,350     353,317     231,961
 Long-term incentive
  plan                   660,625           -     686,817           -
 Research and
  development            125,237     100,519     492,306     141,348
 Capital taxes            97,358      81,878     222,358     138,930
 Loss (gain) on
  foreign exchange       274,763     626,254     (61,079)  1,146,850
 Other income            (36,238)    (36,558)   (114,761)    (32,594)
---------------------------------------------------------------------
                       4,889,898   4,103,524  11,652,359   5,920,779
---------------------------------------------------------------------
Earnings before the
 following             8,118,269   6,649,338  20,140,657   8,659,821
---------------------------------------------------------------------
Interest expense
 Short-term debt          87,298      59,803      99,908     103,459
 Long-term debt          243,080     231,124     667,336     334,241
---------------------------------------------------------------------
                         330,378     290,927     767,244     437,700
---------------------------------------------------------------------
Earnings before
 amortization and
 income taxes          7,787,891   6,358,411  19,373,413   8,222,121
---------------------------------------------------------------------
Amortization of
 property, plant
 and equipment           536,693     183,599   1,301,870     286,851
Amortization of
 deferred
 financing costs         174,751     257,765     339,993     377,450
Amortization of
 intangible assets       440,890     372,055   1,231,780     540,822
---------------------------------------------------------------------
                       1,152,334     813,419   2,873,643   1,205,123
---------------------------------------------------------------------
Earnings before
 provision for
 income taxes          6,635,557   5,544,992  16,499,770   7,016,998
---------------------------------------------------------------------
Provision for income
 taxes (note 13)
 Current                  15,000      10,500      45,000      15,500
 Future                   53,000      51,000     183,000      77,000
---------------------------------------------------------------------
                          68,000      61,500     228,000      92,500
---------------------------------------------------------------------
Net earnings for
 the period            6,567,557   5,483,492  16,271,770   6,924,498
---------------------------------------------------------------------
---------------------------------------------------------------------
Basic and diluted net
 earnings per unit         $0.59       $0.57       $1.53       $0.72
---------------------------------------------------------------------
---------------------------------------------------------------------
Basic and diluted
 weighted average
 number of units
 outstanding          11,225,000   9,630,000  10,658,278   9,630,000
---------------------------------------------------------------------
---------------------------------------------------------------------

(1) (includes the results of Ag Growth's operations for the 136-day
     period from May 18, 2004 to September 30, 2004).

See accompanying notes

Ag Growth Income Fund

UNAUDITED INTERIM CONSOLIDATED
STATEMENT OF UNITHOLDERS' EQUITY

Nine-month period ended September 30, 2005

                Unitholders' Accumulated    Accumulated
                    capital     earnings  distributions        Total
                          $            $              $            $
---------------------------------------------------------------------
                   (note 12)

Balance,
 beginning
 of period       89,954,248    8,723,409     (9,109,017)  89,568,640
Issuance of
 units (note 5)  21,532,500            -              -   21,532,500
Issuance costs
 (note 5)        (1,056,554)           -              -   (1,056,554)
Net earnings for
 the period               -   16,271,770              -   16,271,770
Distributions
 declared                 -            -    (11,172,622) (11,172,622)
---------------------------------------------------------------------
Balance, end
 of period      110,430,194   24,995,179    (20,281,639) 115,143,734
---------------------------------------------------------------------
---------------------------------------------------------------------

191-day period ended September 30, 2004 and 283-day period ended
December 31, 2004

(includes the results of Ag Growth's operations
 for the 136-day period from May 18, 2004 to September 30, 2004 and
 for the 228-day period ended December 31, 2004) (note 2)


                Unitholders' Accumulated    Accumulated
                    capital     earnings  distributions        Total
                          $            $              $            $
---------------------------------------------------------------------

Issuance of
 initial
 subscriber units        30            -              -           30
Redemption of
 initial
 subscriber units       (30)           -              -          (30)
Issuance of units
 on initial
 public offering 69,040,000            -              -   69,040,000
Issuance costs   (6,345,752)           -              -   (6,345,752)
Issuance of AGHLP
 units as
 consideration on
 acquisition of
 Ag Growth       27,260,000            -              -   27,260,000
Net earnings for
 the 191-day
 period ended
 September 30,
 2004                     -    6,924,498              -    6,924,498
Distributions
 declared during
 the 191-day
 period ended
 September 30,
 2004                     -            -     (4,651,228)  (4,651,228)
---------------------------------------------------------------------
Balance,
 September 30,
 2004            89,954,248    6,924,498     (4,651,228)  92,227,518
---------------------------------------------------------------------
---------------------------------------------------------------------
Net earnings for
 the three-month
 period ended
 December 31,
 2004                     -    1,798,911              -    1,798,911
Distributions
 declared during
 the three-month
 period ended
 December 31,
 2004                     -            -     (4,457,789)  (4,457,789)
---------------------------------------------------------------------
Balance,
 December 31,
 2004            89,954,248    8,723,409     (9,109,017)  89,568,640
---------------------------------------------------------------------
---------------------------------------------------------------------
See accompanying notes

Ag Growth Income Fund

UNAUDITED INTERIM CONSOLIDATED
STATEMENTS OF CASH FLOWS

                                              Nine-month     191-day
                    Three month period ended      period      period
                    ------------------------       ended       ended
                       September   September   September   September
                        30, 2005    30, 2004    30, 2005  30, 2004(1)
                                                             (note 2)
                               $           $           $           $
---------------------------------------------------------------------
OPERATING ACTIVITIES
Net earnings for
 the period            6,567,557   5,483,492  16,271,770   6,924,498
Add charges to
 operations not
 requiring a current
 cash payment
   Amortization        1,152,334     813,419   2,873,643   1,205,123
   Future income taxes    53,000      51,000     183,000      77,000
   Deferred foreign
    exchange loss       (350,703)   (431,690)   (467,451)   (639,013)
   Loss (gain) on sale
    of property, plant
    and equipment              -           -     (10,082)        490
---------------------------------------------------------------------
                       7,422,188   5,916,221  18,850,880   7,568,098
---------------------------------------------------------------------
Net change in non-cash
 working capital
 balances related to
 operations
   Accounts
    receivable        (1,164,955)   (773,702)(11,809,514) (2,871,667)
   Inventory             529,215   1,705,830  (1,314,070)  1,045,913
   Prepaid expenses
    and other assets     103,879      71,067     484,542     (37,247)
   Accounts payable
    and accrued
    liabilities        1,167,374   1,050,539   1,779,059    (465,699)
   Long-term incentive
    plan                 394,837           -     421,029           -
   Income taxes payable   15,000  (1,406,985)    395,420  (1,407,175)
   Customer deposits     184,880     211,353  (2,792,954)    203,379
---------------------------------------------------------------------
                       1,230,230     858,102 (12,836,488) (3,532,496)
---------------------------------------------------------------------
Cash provided by
 operating
 activities            8,652,418   6,774,323   6,014,392   4,035,602
---------------------------------------------------------------------
INVESTING ACTIVITIES
Acquisition of
 property, plant and
 equipment               (73,640)   (164,898)   (877,210)   (434,248)
Acquisition of assets
 of the Edwards Group
 of Companies              2,672           - (21,685,743)          -
Cash held in trust
 related to acquisition
 of the Edwards Group
 of Companies            406,133           -           -           -
Transfers to restricted
 cash for settlement
 of AgGrowth acquisition
 costs                         -     (85,370)          -    (127,187)
Proceeds from sale of
 property, plant and
 equipment                     -           -      10,500      24,767
Acquisition of Ag Growth
 Industries Inc.               -           -           - (32,133,771)
Pre-existing Fund
 structure tax credits
 received                      -           -     240,000           -
---------------------------------------------------------------------
Cash used in investing
 activities              335,165    (250,268)(22,312,453)(32,670,439)
---------------------------------------------------------------------

FINANCING ACTIVITIES
Increase (decrease)
 in bank indebtedness (4,725,236) (3,323,363)  1,000,222  (1,089,655)
Repayment of long-term
 debt                     (8,374)     (9,505)    (25,123)(32,891,562)
Distributions paid    (4,088,921) (3,191,187)(12,020,913) (3,191,187)
Issuance of units,
 net of expenses         (31,052)          -  20,475,946           -
Issuance of long-term
 debt                          -           -           -  20,082,470
Increase in deferred
 financing costs on
 long-term debt         (134,000)          -    (134,000)   (661,011)
Initial public offering
 of fund units, net of
 expenses                      -           -           -  62,694,248
Redemption of Class D
 preferred shares of
 Ag Growth                     -           -           - (16,000,000)
Payment of dividend on
 Class D preferred
 shares of Ag Growth           -           -           -    (308,466)
---------------------------------------------------------------------
Cash provided by (used
 in) financing
 activities           (8,987,583) (6,524,055)  9,296,132  28,634,837
---------------------------------------------------------------------

Net decrease in cash
 and cash equivalents
 during the period             -           -  (7,001,929)          -
Cash and cash
 equivalents, beginning
 of period                     -           -   7,001,929           -
---------------------------------------------------------------------
Cash and cash
 equivalents,
 end of period                 -           -           -           -
---------------------------------------------------------------------
---------------------------------------------------------------------

Supplemental cash
 flow information
Interest paid            301,170     322,403     748,864     427,908
Income taxes paid
 (recovered)                   -   1,417,485    (339,970)  1,422,675
---------------------------------------------------------------------
---------------------------------------------------------------------

(1) (includes the results of Ag Growth's operations for the 136-day
     period from May 18, 2004 to September 30, 2004).

See accompanying notes


Ag Growth Income Fund

NOTES TO UNAUDITED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS

September 30, 2005

1. ORGANIZATION AND NATURE OF BUSINESS

Ag Growth Income Fund (the "Fund") is an unincorporated, open-ended, limited purpose trust established under the laws of the Province of Ontario by a Declaration of Trust made as at March 24, 2004. The Fund and its wholly-owned subsidiaries conduct business in the grain handling, storage, and conditioning market. Each unitholder participates pro rata in distributions of net earnings and, in the event of termination, participates pro rata in the net assets remaining after satisfaction of all liabilities. Income tax obligations related to the distribution of net earnings by the Fund are the obligations of the unitholders.

2. BASIS OF PRESENTATION

The Fund prepares its consolidated financial statements in accordance with Canadian generally accepted accounting principles. The unaudited interim consolidated financial statements should be read in conjunction with the Fund's annual consolidated financial statements as at and for the 283-day period ended December 31, 2004.

Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end. In the opinion of management, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature to present fairly the consolidated financial position of the Fund as at September 30, 2005.

These unaudited interim consolidated financial statements reflect the results of operations of the Fund for the three-month and nine-month periods ended September 30, 2005. Although a Declaration of Trust for the Fund was made on March 24, 2004, the Fund was inactive until its acquisition of Ag Growth Industries Inc. ("Ag Growth") on May 18, 2004. As a result, comparative financial information, for the three-month and 191-day periods ended September 30, 2004, provided on the statements of earnings, unitholders' equity and cash flows only include the results of Ag Growth's operations for the period May 18, 2004 to September 30, 2004.

3. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies are summarized below:

Principles of consolidation

The consolidated financial statements include the accounts of the Fund and its wholly-owned subsidiaries Ag Growth Operating Trust, AGX Holdings Inc., AGX Holdings Limited Partnership ("AGHLP"), Ag Growth Industries Limited Partnership, Ag Growth, Westfield Distributing Ltd. and Westfield Distributing (North Dakota) Inc. All material intercompany balances and transactions have been eliminated.

Cash and cash equivalents

Cash and cash equivalents consist of cash and highly liquid money market funds with maturities of less than three months.

Inventory

Inventory is comprised of raw materials and finished goods. Raw materials are recorded at the lower of cost and replacement cost. Finished goods are recorded at the lower of cost, which includes direct costs and an allocation of direct manufacturing overhead, and net realizable value. Cost is determined on a first-in, first-out  basis.

Property, plant and equipment

Property, plant and equipment are recorded at cost, net of amortization. Amortization is provided over the estimated useful lives of the assets using the following rates and methods:

Buildings                    4% - 5%     declining balance
Leasehold improvements           20%         straight line
Furniture and fixtures           20%     declining balance
Automotive equipment       20% - 30%     declining balance
Computer equipment               30%     declining balance
Manufacturing equipment    20% - 30%     declining balance

Goodwill

Goodwill represents the amounts paid to acquire Ag Growth and the Edwards Group in excess of the estimated fair value of the net identifiable assets acquired. Goodwill is not subject to amortization. Goodwill is tested for impairment at least annually by comparing the estimated fair value of its reporting unit to its carrying value. The carrying value of goodwill is written down to estimated fair value if the carrying value of the reporting unit's goodwill exceeds its estimated fair value.

Intangible assets

Intangible assets are comprised of Ag Growth and the Edwards Group's brand names, which are considered to have an indefinite life, Ag Growth and the Edwards Group's distribution networks, which are being amortized over 25 years on a straight-line basis, and a patent acquired from the Edwards Group which is being amortized over a one year period. Indefinite life intangible assets are tested for impairment at least annually by comparing their estimated fair values to their carrying values. The carrying value of an indefinite life intangible asset is written down to its estimated fair value if its carrying value exceeds its estimated fair value.

Impairment of property, plant and equipment and finite life intangible assets

Impairment of property, plant and equipment and finite life intangible assets is recognized when an event or change in circumstances causes the asset's carrying value to exceed the total undiscounted cash flows expected from its use and eventual disposition. The impairment loss is calculated by deducting the estimated fair value of the asset from its carrying value.

Deferred financing costs

Deferred financing costs are amortized on a straight-line basis over the two-year term of the related debt financing.

Income taxes

The Fund is a mutual fund trust for income tax purposes and therefore is not subject to tax on income distributed to unitholders. Taxes payable on income of the Fund distributed to unitholders are the responsibility of individual unitholders.

The Fund's corporate subsidiaries use the liability method of accounting for income taxes. Under this method, assets or liabilities are recognized for the future income tax consequences of temporary differences between the carrying amounts of assets and liabilities and their tax bases. Future income taxes are measured using the substantively enacted tax rates expected to be in effect in the years in which those temporary differences are expected to reverse. Future income tax benefits are recognized when realization is considered more likely than not.

Foreign currency translation

The Fund follows the temporal method of accounting for the translation of its integrated foreign subsidiary and foreign currency transactions. Monetary assets and liabilities denominated in foreign currencies are translated to Canadian dollars at the exchange rates in effect at the consolidated balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated to Canadian dollars at their historical exchange rates. Revenue and expenses denominated in foreign currencies are translated to Canadian dollars at the monthly rate of exchange. Gains and losses on translation are reflected in net earnings for the period.

Revenue recognition

The Fund recognizes revenue when the risks and rewards of ownership in the products have transferred to its customer and collection is reasonably assured. Subject to the terms of the contract, these criteria are generally met when the products are shipped, free on board shipping point. For products on consignment, revenue is recognized upon the sale of the product by the consignee. Provision is made at the time revenue is recognized for estimated product returns and warranties.

Research and development

Research expenses are charged to earnings in the period they are incurred. Development expenses are charged to earnings unless the Fund believes the costs meet generally accepted criteria for deferral  and amortization.

Leases

Leases are classified as either capital or operating. Leases which transfer substantially all the benefits and risks of ownership of the property to the Fund are accounted for as capital leases. Capital lease obligations reflect the present value of future lease payments, discounted at the appropriate interest rate. All other leases are accounted for as operating leases wherein rental payments are expensed as incurred.

Net earnings per unit

Net earnings per unit is based on the consolidated net earnings for the period divided by the weighted average number of units outstanding during the period. Diluted earnings per unit is computed in accordance with the treasury stock method and based on the weighted average number of units and dilutive unit equivalents.

Long-term incentive plan

Under the terms of the long-term incentive plan ("LTIP"), the Fund establishes an amount to be allocated to eligible participants based on 10% to 20% of cash distributions in excess of an established threshold. The cost is accrued as an expense in the period when it is determined an amount payable under the LTIP appears likely.

Derivative financial instruments

Derivative financial instruments are utilized by the Fund in the management of its foreign currency and interest rate exposures. The Fund's policy is not to utilize derivative financial instruments for trading or speculative purposes.

The Fund formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. This process includes linking foreign exchange contracts to specific anticipated sales transactions on the consolidated balance sheet. The Fund also formally assesses, both at the hedge's inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

The Fund purchases foreign exchange contracts to hedge anticipated sales to customers in the United States and the collection of the related accounts receivable. Foreign exchange translation gains and losses on foreign currency denominated derivative financial instruments used to hedge anticipated U.S. dollar denominated sales are recognized as an adjustment of the revenues when the sale is recorded. For foreign exchange contracts used to hedge anticipated U.S. dollar denominated sales and the collection of the related accounts receivable, the portion of the forward premium or discount on the contract relating to the period prior to consummation of the sale is also recognized as an adjustment of the revenues when the sale is recorded; and the portion of the premium or discount that relates to the resulting account receivable  is amortized over the expected period to collection of the accounts receivable.

Realized and unrealized gains or losses associated with derivative instruments, which have been terminated or cease to be effective prior to maturity, are deferred under other current, or non-current, assets or liabilities on the consolidated balance sheet and recognized in earnings in the period in which the underlying hedged transaction is recognized. In the event a designated hedged item is sold, extinguished or matures prior to the termination of the related derivative instrument, any realized or unrealized gain or loss on such derivative instrument is recognized in earnings.

The Fund uses foreign currency swap agreements to manage its cash positions. The Fund's foreign currency swap agreements do not qualify for hedge accounting. The Fund also enters into interest rate swaps in order to reduce the impact of fluctuating interest rates on its long-term debt. These swap agreements require the periodic exchange of payments without the exchange of the notional principal amount on which the payments are based. During the three-month period ended September 30, 2005, the terms of the interest rate swap were changed and it no longer qualifies for hedge accounting. These swaps are measured at their fair value and included in accounts payable and accrued liabilities on the consolidated balance sheet. Changes in the fair value of the foreign currency swaps and interest rate swaps are recognized in earnings and are included in loss (gain) on foreign exchange and interest expense, respectively, in the corresponding period.

Use of estimates

The preparation of financial statements in accordance with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies at the consolidated balance sheet date and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

4. SEASONALITY OF BUSINESS

Interim period revenues and earnings historically reflect some seasonality. The third quarter is typically the strongest primarily due to high in-season demand at the farm level. The Fund's collections of accounts receivable are weighted towards the third and fourth quarters. This collection pattern, combined with seasonally high sales in the third quarter, result in accounts receivable levels increasing throughout the year and normally peaking in the third quarter. As a result of these working capital movements, historically, the Fund's use of its bank revolver is typically highest in the first and second quarters. The revolver balance begins to decline in the third quarter as collections of accounts receivable increase. The Fund would expect to repay its revolver in the fourth quarter of each year.

5. ISSUANCE OF FUND UNITS AND ACQUISITION

Effective April 8, 2005, the Fund acquired substantially all of the assets of The Edwards Group of Companies ("the Edwards Group"), a leading manufacturer of agricultural aeration equipment, for cash consideration in the amount of $21,685,743. In conjunction with the acquisition, the Fund completed a private placement of 1,595,000 Trust Units priced at $13.50 per unit for gross proceeds of $21,532,500. The Fund has recorded expenses in connection with the offering, including commissions payable to the underwriters, of $1,056,554.

The acquisition has been accounted for by the purchase method with the results of the Edwards Group's operations included in the Fund's earnings from the date of acquisition (the unaudited interim consolidated statement of earnings includes the results of the Edward Group's operations for the 176-day period from April 8, 2005 to September 30, 2005). These unaudited interim consolidated financial statements reflect the assets and liabilities of the Edwards Group at assigned estimated fair values as follows:

$
---------------------------------------------------------------------
Net assets acquired
 Accounts receivable                                       1,348,830
 Inventory                                                 3,672,603
 Prepaid expenses and other assets                           174,246
 Property, plant and equipment                             6,992,000
 Intangible assets
  Brand name                                               4,363,000
  Distribution network                                     2,839,000
  Patent                                                     250,000
 Goodwill                                                  3,406,168
 Accounts payable and accrued liabilities                 (1,360,104)
---------------------------------------------------------------------
                                                          21,685,743
---------------------------------------------------------------------
---------------------------------------------------------------------


6. INVENTORY



                                         September 30,   December 31,
                                                 2005           2004
                                                    $              $
---------------------------------------------------------------------
Raw materials                               6,701,176      4,080,743
Finished goods                              3,759,074     11,392,834
---------------------------------------------------------------------
                                           20,460,250     15,473,577
---------------------------------------------------------------------
---------------------------------------------------------------------


7. PROPERTY, PLANT AND EQUIPMENT


                                           September 30, 2005
                               --------------------------------------
                                          Accumulated       Net book
                                   Cost  amortization          value
                                      $             $              $
---------------------------------------------------------------------

Land                            861,315             -        861,315
Buildings                     5,098,232       228,678      4,869,554
Leasehold improvements            7,000         6,177            823
Furniture and fixtures          112,050        20,280         91,770
Automotive equipment          1,489,037       434,791      1,054,246
Computer equipment              417,444       124,199        293,245
Manufacturing equipment       6,005,750       986,607      5,019,143
---------------------------------------------------------------------
                             13,990,828     1,800,732     12,190,096
---------------------------------------------------------------------
---------------------------------------------------------------------


                                           December 31, 2004
                               --------------------------------------
                                          Accumulated       Net book
                                   Cost  amortization          value
                                      $             $              $
---------------------------------------------------------------------

Land                            611,315             -        611,315
Buildings                     2,940,739        80,893      2,859,846
Leasehold improvements           10,486         2,942          7,544
Furniture and fixtures           83,543        10,831         72,712
Automotive equipment          1,197,541       183,447      1,014,094
Computer equipment              285,842        60,667        225,175
Manufacturing equipment         998,442       165,954        832,488
---------------------------------------------------------------------
                              6,127,908       504,734      5,623,174
---------------------------------------------------------------------
---------------------------------------------------------------------


8. INTANGIBLE ASSETS

                                          September 30, 2005
                               --------------------------------------
                                          Accumulated       Net book
                                   Cost  amortization          value
                                      $             $              $
---------------------------------------------------------------------

Distribution network         37,839,000     1,962,122     35,876,878
Brand name                   23,363,000             -     23,363,000
Patent                          250,000       125,000        125,000
---------------------------------------------------------------------
                             61,452,000     2,087,122     59,364,878
---------------------------------------------------------------------
---------------------------------------------------------------------


                                          December 31, 2004
                               --------------------------------------
                                          Accumulated       Net book
                                   Cost  amortization          value
                                      $             $              $
---------------------------------------------------------------------

Distribution network         35,000,000       855,342     34,144,658
Brand name                   19,000,000             -     19,000,000
Patent                                -             -              -
---------------------------------------------------------------------
                             54,000,000       855,342     53,144,658
---------------------------------------------------------------------
---------------------------------------------------------------------


9. DEFERRED FINANCING COSTS

                                          September 30, 2005
                               --------------------------------------
                                          Accumulated       Net book
                                   Cost  amortization          value
                                      $             $              $
---------------------------------------------------------------------
                                795,011       546,445        248,566
---------------------------------------------------------------------
---------------------------------------------------------------------

                                          December 31, 2004
                               --------------------------------------
                                          Accumulated       Net book
                                   Cost  amortization          value
                                      $             $              $
---------------------------------------------------------------------
                                661,011       206,452        454,559
---------------------------------------------------------------------
---------------------------------------------------------------------

10. BANK INDEBTEDNESS

The Fund has an operating facility of $15 million, increasing to $18 million for the period May 31 to September 30. The facility bears interest at a rate of prime to prime plus 1.0% per annum based on performance calculations. The effective interest rate during the three-month and nine-month periods ended September 30, 2005 was 4.50% (three-month and 191-day periods ended September 30, 2004 - 4.3%). At September 30, 2005, $1,687,039 (December 31, 2004 - $Nil) was outstanding under this facility. Collateral for the operating facility includes a general security agreement over all assets and first position collateral mortgages on land and buildings.

11. LONG-TERM DEBT

                                           September 30, December 31,
                                                   2005         2004
                                                      $            $
---------------------------------------------------------------------
Term loan interest payable monthly at prime
 to prime plus 1% per annum based on
 performance calculations. As described in
 note 16, the Fund has entered into a swap
 contract that effectively fixes the Fund's
 interest rate at 3.68%, plus 1.0%, 1.5%, or
 2.0% per annum based on performance
 calculations. The effective interest rate
 during the three-month and nine-month
 periods ended September 30, 2005 would have
 been 4.5% (three-month and 191-day periods
 ended September 30, 2004 - 4.3%) and after
 consideration of the effect of the interest
 rate swap was 4.54% and 4.40% for the
 three-month and nine-month periods ended
 September 30, 2005 (three-month and 191-day
 periods ended September 30, 2004 - 4.32%)   20,000,000   20,000,000
GMAC loans, 0% maturing in 2007 and 2008,
 with monthly payments of $2,791. Vehicles
 financed are pledged as collateral              76,965      102,088
---------------------------------------------------------------------
                                             20,076,965   20,102,088
Less current portion                             33,495       33,495
---------------------------------------------------------------------
                                             20,043,470   20,068,593
---------------------------------------------------------------------
---------------------------------------------------------------------

Under the agreement for the term loan, the Fund is required to maintain certain financial covenants. As at September 30, 2005 and December 31, 2004, the Fund was in compliance with the applicable financial covenant terms. Collateral for the term loan and operating facility (note 10) includes a general security agreement over all assets and first position collateral mortgages on land and buildings.

The term loan matures May 2006 and is extendible annually for an additional one-year term at the lender's option. Under the terms of the credit facility agreement, if the bank elects to not extend the operating loan and term loan facilities beyond the current May 31, 2006 maturity date, all amounts outstanding under the facilities become repayable in four equal quarterly instalments of principal, commencing on the last day of the third month following the first anniversary of the expiry date.

Principal repayments due within the next four fiscal years, if the
term loan is not renewed and is repayable commencing August 31, 2007,
are as follows:

                                                                   $
---------------------------------------------------------------------

2005 (October 1 - December 31)                                10,873
2006                                                          33,495
2007                                                      10,027,008
2008                                                      10,005,589
---------------------------------------------------------------------
                                                          20,076,965
---------------------------------------------------------------------
---------------------------------------------------------------------

Collateral for the term loan and operating facility (note 10)
includes a general security agreement over all assets and first
position collateral mortgages on land and buildings.

12. UNITHOLDERS' CAPITAL

Unitholders' capital is comprised of the following:

                                  Class B       Class C
                       Fund  Exchangeable  Exchangeable        Total
                      Trust      units of      units of  Unitholders'
                      units         AGHLP         AGHLP      capital
                          $             $             $            $
---------------------------------------------------------------------

Balance,
 December
 31, 2004        68,883,378     1,810,870    19,260,000   89,954,248
Issuance of
 units, net of
 costs           20,475,946             -             -   20,475,946
Exchange of
 units              111,090      (111,090)            -            -
---------------------------------------------------------------------
Balance,
 September 30,
 2005            89,470,414     1,699,780    19,260,000  110,430,194
---------------------------------------------------------------------
---------------------------------------------------------------------


                                               Class B       Class C
                                    Fund  Exchangeable  Exchangeable
                                   Trust      units of      units of
                                   units         AGHLP         AGHLP
                                       #             #             #
---------------------------------------------------------------------

Balance, December 31, 2004     7,522,913       181,087     1,926,000
Issuance of units (note 5)     1,595,000             -             -
Exchange of units                 11,109       (11,109)            -
---------------------------------------------------------------------
Balance, September 30, 2005    9,129,022       169,978     1,926,000
---------------------------------------------------------------------
---------------------------------------------------------------------

The Fund Declaration of Trust provides that an unlimited number of trust units may be issued. Each trust unit represents an equal undivided beneficial interest in the Fund and any distributions from the Fund. Each trust unit is transferable, entitles the holder thereof to participate equally in distributions of the Fund, is not subject to future calls or assessments, entitles the holder to rights of redemption and entitles the holder to one vote at all meetings of unitholders.

The Fund Declaration of Trust also provides for the issuance of an unlimited number of Special Voting Units. The Special Voting Units are only issuable for the purpose of providing voting rights to the holders of Exchangeable LP Units or Subordinated LP Units. Each unit is entitled to one vote on matters related to the Fund. The Special Voting Units are not entitled to any interest or share in the Fund or in any distribution from the Fund. There is no value attached to these units. At September 30, 2005, there were 2,095,978 Special Voting Units outstanding (December 31, 2004 - 2,107,087 units), which were attached to the outstanding Class B Exchangeable LP Units of AGHLP and the Class C Exchangeable Subordinated LP Units of AGHLP.

The Class B Exchangeable LP Units of AGHLP are exchangeable for trust units of the Fund at the option of the holder on a one-for-one basis at any time. During the nine-month period ended September 30, 2005, 11,109 Class B Exchangeable LP Units of AGHLP, with a value of $111,090, were exchanged into 11,109 Units of the Fund.

The Class C Subordinated Exchangeable LP Units of AGHLP are exchangeable for Class B Exchangeable LP Units of AGHLP on a one-for-one basis at the option of the holder after December 31, 2009 and by AGHLP on the subordination end date which can be no earlier than June 30, 2006, and is determined based on certain earnings and cash distribution thresholds of the Fund.

13. INCOME TAXES

Income tax obligations relating to distributions from the Fund are the obligations of the unitholders and accordingly, no provision for income taxes on the income of the Fund has been made. A provision for income taxes is recognized for the corporate subsidiaries of the Fund, which are subject to tax, including large corporation tax.

The provision for income taxes varies from the amount that would be expected if computed by applying the Canadian federal and provincial statutory income tax rates to the earnings before income taxes as shown in the following table:

Three-month  Three-month   Nine-month      191-day
                    period       period       period       period
                     ended        ended        ended        ended
                 September    September    September    September
                  30, 2005     30, 2004     30, 2005     30, 2004
---------------------------------------------------------------------
                         $  %         $  %         $  %         $  %
---------------------------------------------------------------------
Earnings before
 income taxes    6,635,557    5,544,992   16,499,770    7,016,998
Temporary
 differences
 and non-tax
 deductible
 expenses          189,104      323,954      159,913      496,994
Earnings
 subject to
 tax in the
 hands of
 unitholders/
 limited
 partners       (6,685,353)  (5,734,944) (16,183,525)  (7,309,987)
---------------------------------------------------------------------
Income of
 subsidiary
 companies
 subject
 to tax            139,308      134,002      476,158      204,005
---------------------------------------------------------------------
---------------------------------------------------------------------

Provision for
 income taxes       53,000 38    51,000 38   183,000 38    77,000 38
Large corporation
 tax                15,000 11    10,500  8    45,000  9    15,500  7
---------------------------------------------------------------------
Income tax
 provision          68,000 49    61,500 46   228,000 47    92,500 45
---------------------------------------------------------------------
---------------------------------------------------------------------

During the nine-month period ended September 30, 2005, the Fund recorded $240,000 of tax credits and $85,000 of benefits related to non-capital loss carryforwards which pre-existed the Fund structure and have been credited to goodwill.

Significant components of the Fund's future tax assets are shown below:

September 30,  December 31,
                                                  2005          2004
                                                     $             $
---------------------------------------------------------------------

Future tax assets
Financing costs                                182,000       377,000
Non-capital losses                             283,000       186,000
---------------------------------------------------------------------
                                               465,000       563,000
---------------------------------------------------------------------
---------------------------------------------------------------------

The non-capital losses expire as follows:

                                                                   $
---------------------------------------------------------------------
2014                                                         186,000
2015                                                          97,000

14. DISTRIBUTIONS TO UNITHOLDERS

For the three-month and nine-month periods ended September 30, 2005, the Fund made distributions of $4,265,500 ($0.3800 per unit) and $11,172,622 ($1.0483 per unit). For the three-month and the 191-day periods ended September 30, 2004, the Fund made distributions of $3,128,787 ($0.3249 per unit) and $4,651,228 ($0.4830 per unit) respectively. In accordance with the terms of the Fund's Declaration of Trust, taxable income of the Fund in a given fiscal year not yet having been distributed to unitholders will become due and payable to the unitholders of record as at December 31. Based on the financial results and the distributions declared for the nine-month period ended September 30, 2005, the Fund anticipates a special distribution(s) being declared.

15. LONG TERM INCENTIVE PLAN

Key senior management of the Fund are eligible to participate in the Fund's LTIP. The purpose of the LTIP is to provide eligible participants with compensation opportunities that encourage ownership of units of the Fund, enhance the Fund's ability to attract, retain and motivate key personnel and reward key senior management for significant performance and associated growth in distributions. Pursuant to the LTIP, the Fund establishes the amount to be allocated to eligible participants based upon the amount by which the Fund's distributions exceed cash distribution thresholds (as defined in the LTIP plan documents). The LTIP is administered by the Corporate Governance and Compensation Committee.

The Board of Trustees of the Fund or the Corporate Governance and Compensation Committee has the power to, among other things, determine those individuals who participate in the LTIP and determine the level of participation of each participant.

The Fund has a recorded liability with respect to the fiscal 2005 LTIP at September 30, 2005 of $686,817 (December 31, 2004 - $265,788).

16. FINANCIAL INSTRUMENTS

The Fund has the following financial instruments: cash and cash equivalents, accounts receivable, bank indebtedness, accounts payable and accrued liabilities, customer deposits, distributions payable, long-term incentive plan, long-term debt, an interest rate swap arrangement, foreign exchange contracts and foreign currency swap agreements. It is management's opinion that the Fund is not exposed to significant credit risks arising from these financial instruments.

Currency exposures

Risk from foreign exchange arises as a result of variations in exchange rates between the Canadian and the U.S. dollar. The Fund has entered into foreign exchange contracts to hedge its foreign currency exposure on anticipated U.S. dollar sales transactions and the collection of the related accounts receivable.

At September 30, 2005, the Fund had outstanding forward foreign exchange contracts as follows:

Settlement dates                            Face value  Average rate
                                                  $U.S.         $Cdn
---------------------------------------------------------------------
October 2005 to December 2005               11,100,000        1.3230
March 2006 to December 2006                 18,500,000        1.3227
March 2007 to December 2007                  4,625,000        1.2357
---------------------------------------------------------------------
---------------------------------------------------------------------

In addition, the Fund entered into currency options consisting of a series of call and put options at rates of $1.1363 and $1.2750 respectively. The contracts mature in 2007 and have a total face value of U.S. $4,625,000.

At September 30, 2005, the Fund also had outstanding U.S. $2,900,000 of foreign currency swap agreements maturing in October 2005 at an average rate of Cdn. $1.1767.

Interest rate exposures

The Fund is subject to risks associated with fluctuating interest rates on its long-term debt. To manage this risk, the Fund has entered into an interest rate swap transaction with a Canadian chartered bank. The swap transaction expires on May 4, 2008. The swap transaction involves the exchange of the underlying floating interest rate of prime to prime plus 1.00% per annum for an effective fixed interest rate of 3.68% plus 1.00% to 2.00% per annum based on performance calculations. The notional amount of the swap transaction at September 30, 2005 and December 31, 2004 was $20,000,000.

Fair value

At September 30, 2005, the carrying value of the Fund's financial instruments approximates their fair value with the exception of derivative financial instruments. The unrealized gain on foreign exchange contracts was $5,297,126 at September 30, 2005. Upon maturity of the foreign exchange contracts, any gain/loss would be recognized in sales and/or realized foreign exchange gain/loss in the consolidated statement of earnings.

17. SEGMENTED DISCLOSURE

The Fund operates in one business segment related to the manufacturing and distributing of portable grain handling and aeration equipment. Geographic information about the Fund's revenues is based on the product shipment destination. Assets are based on their physical location as at the period end:

Revenues
             --------------------------------------------------------
              Three-month   Three-month    Nine-month        191-day
             period ended  period ended  period ended   period ended
             September 30, September 30, September 30,  September 30,
                     2005          2004          2005           2004
                        $             $             $              $
---------------------------------------------------------------------

Canada          7,418,355     6,005,686    19,895,045      8,411,980
United States  18,181,660    14,529,971    44,568,780     19,461,828
International   1,155,781     1,244,936     2,669,395      1,762,305
---------------------------------------------------------------------
               26,755,797    21,780,593    67,133,220     29,636,113
---------------------------------------------------------------------
---------------------------------------------------------------------

                                             Property, plant and
                                             equipment, goodwill
                                           and intangible assets at
                                         ----------------------------
                                         September 30,   December 31,
                                                 2005           2004
                                                    $              $
---------------------------------------------------------------------
Canada                                    107,291,531     91,420,726
United States                                 233,502        235,997
International                                       -              -
---------------------------------------------------------------------
                                          107,525,033     91,656,723
---------------------------------------------------------------------
---------------------------------------------------------------------

18. COMMITMENTS

The Fund has entered into various operating leases for office and
manufacturing equipment, warehouse facilities and vehicles. Minimum
annual lease payments required in aggregate are as follows:

                                                                   $
---------------------------------------------------------------------
2005 (October 1 to December 31)                              125,296
2006                                                         427,937
2007                                                         373,217
2008                                                         255,604
2009 and forward                                             218,101
---------------------------------------------------------------------
                                                           1,400,155
---------------------------------------------------------------------
---------------------------------------------------------------------

19. SUBSEQUENT EVENT

A special distribution of $0.12 per unit was declared by the Fund subsequent to September 30, 2005, payable on December 30, 2005 to holders of record of units on November 30, 2005.

20. COMPARATIVE FIGURES

Certain comparative figures have been reclassified to conform to the current period's presentation.

Ag Growth Income Fund (TSX:AFN.UN)