Ag-Bag International Limited Announces 2000 Year End Results.

Business Editors

WARRENTON, Ore.--(BUSINESS WIRE)--March 20, 2001

Ag-Bag International Limited (OTCBB:AGBG) announced today that net sales for the year ended Dec. 31, 2000 were $31,451,150 compared to $32,686,832 for the same period last year.

Ag-Bag International Limited President and CEO, Larry Inman, stated, "Sales for the year were down 3.78% as a result of record low U.S. milk prices coupled with the tightening of credit by financial institutions in the U.S. farming sector and rising interest rates, all of which, caused farmers to become cautious on capital equipment purchases. Machine sales for the year were down 7.87%. U.S. milk prices are beginning to move upward in the first quarter of 2001 and are forecast to continue to show some improvement over last years historical lows. This upward trend is a positive indicator for 2001 that farmers may once again move into the farm capital equipment acquisition mode. In 2000 we continued to benefit from recent independent university research articles published on the benefits of bagging over storage in a bunker or silo. The Company also sold twelve new composting systems during the year and we hope to have additional system sales during 2001."

Net income for the year was $521,814, or $.04 share, compared to net income of $648,571, or $.05 share, for the same period last year. This decrease resulted from lower sales, lower gross profit from increased competition and product mix of machinery models sold, and higher interest costs incurred, partially offset by lower selling, administrative, research and income tax expense.

                                 2000                   1999
                                 ----                   ----

Net Sales                     $ 31,451,150          $ 32,686,832
Gross Profit from Operations  $  6,651,460          $  7,602,255
Income from Operations        $    636,948          $  1,004,770
Net Income                    $    521,814          $    648,571
Basic Earnings per Share      $        .04          $        .05

Ag-Bag International Limited is headquartered in Warrenton, Oregon, with a second major facility located in Blair, Nebraska. The Company manufactures and sells to the international agricultural industry its farm feed management systems, for the high moisture storage of silage and grains, and its composting system, for large scale "in-vessel" composting.

The discussion in this press release contains forward-looking statements that involve risks and uncertainties and various factors that could cause actual results to differ materially from those projected. Forward-looking statements relate to future sales of the Company's products for farming and composting systems. The following factors, among others, could cause actual results to differ from those indicated in the forward-looking statements: decline in U.S. milk prices, lack of market acceptance for our composting system, weak sales of farm equipment and the risks detailed from time to time in the Company's reports filed with the Securities and Exchange Commission, including the annual report on Form 10-K for the year ended December 31, 1999. Actual results may differ materially from the forward-looking statements.