Ag Services Second Quarter Earnings to be Below Expectations.

Business Editors

CEDAR FALLS, Iowa--(BUSINESS WIRE)--Sept. 5, 2001

Ag Services of America, Inc. (NYSE:ASV) today announced that it expects to report earnings for the three and six months ended August 31, 2001 below prior expectations. The Company expects to report diluted earnings per share in the range of $0.34 to $0.36 for the second quarter ended August 31, 2001 as a result of a decline in the prime lending rate and the effect of an interest rate swap agreement. Also contributing to the decline in earnings was the impact of unplanted acres and the change in crops planted by customers due to the wet weather conditions experienced during the 2001 planting season.

"Current general agricultural economic conditions have created a difficult environment to operate in for us as well as our customers and other agribusinesses. Along with the poor economic conditions, Fiscal 2002 second quarter and six-month results were impacted by interest rate declines and wet weather conditions this spring in much of our primary market area," stated Brad D. Schlotfeldt, Senior Executive Officer. "The decline in the prime lending rate, which is the base rate used by the Company to charge interest, has the effect of reducing earnings on our invested capital and negatively impacting the interest rate swap agreement that was associated with the $30 million term debt facility entered into last year during the second quarter. As stated at the end of the first quarter, the cool wet weather in the spring delayed crop planting and in many areas of North Dakota, South Dakota, Minnesota, portions of Iowa and portions of Nebraska. Cool wet conditions caused many producers to change the type of crops planted (in some cases resulting in the need of 50% fewer crop inputs to produce the alternate crop) and to leave a portion of their acres unplanted. The impact of unplanted acres and changes in crops planted was more significant than we expected at the end of the first quarter. The combination of reduced acres planted, changes in crops planted, and the interest rate swap agreement coupled with lower interest rates will have a negative effect on our overall revenues and earnings for Fiscal 2002. We expect fiscal year revenues to increase in the range of $20 - 30 million over last year's levels and earnings for the year to range from $1.10 to $1.15 per diluted share."

The Company intends to release second quarter results on September 25, 2001 and conduct a conference call on second quarter results at 10:30 a.m. Eastern, 9:30 a.m. CST on September 25, 2001. To listen live call [phone]. A recording of the call will be available for replay until October 10, 2001 at [phone] or [phone] code No. 5513845.

Ag Services of America, Inc., which operates Powerfarm.com, is based in Cedar Falls, Iowa, and is a leading supplier of input financing and agricultural inputs, including seed, chemicals, fertilizer and cash advances to primarily corn and soybean growers in the U.S. The Company's one-stop shopping business model includes competitive and flexible financing packages through its AgriFlex Credit(R) program combined with the most comprehensive offering of agricultural inputs from national sources such as Asgrow, Aventis, BASF, Dekalb, Dow AgroSciences, DuPont, Garst, Monsanto, Pioneer Hi-Bred, and Syngenta. The Company also provides ancillary services such as crop insurance, crop scouting and grain marketing.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. This release contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The factors that could cause actual results to differ materially, include the following: general economic conditions within the agricultural industry; competitive factors and pricing pressures; changes in product mix; changes in the seasonality of demand patterns; changes in weather conditions; changes in agricultural regulations; unknown risks; the amount and availability under its asset backed securitization program; and the risks described from time to time in the Company's SEC reports.

AgriFlex Credit is a registered trademark and Powerfarm.com and Powerfarm Credit are trademarks of Ag Services of America, Inc. All other trademarks or product names are the property of their respective owners. For more information visit www.agservices.com or www.powerfarm.com.