UNITED GRAIN GROWERS LIMITED -- UGGRecords Seasonal Loss.

WINNIPEG, MANITOBA--(BUSINESS WIRE)--MARCH 14, 1995--UNITED GRAIN (TSE, THE WINNIPEG STOCK EXCHANGE: UGG) United Grain Growers (UGG) today reported a seasonal loss for the first six months of the fiscal year of $6.95 million, or 74 cents per share, compared to last year's six month loss of $2.9 million, or 43 cents per share.

Due to the seasonal nature of the business, it is customary for UGG to experience losses through the first three quarters of its fiscal year.

Timing issues, related to when revenues are recognized by the Company, were important factors contributing to year-to-date results. The main reason for the relatively weaker performance was a decline in grain handling and marketing operating income, compared to the previous fiscal year. It is the practice of the grain industry to record income for non Canadian Wheat Board grains on the basis of sales contracts entered into.

Compared to the previous year, there was a significant reduction in the level of such contracts booked due to changes in the pattern of demand. The impact was particularly pronounced in the current fiscal year, as non Canadian Wheat Board grain increased to 46% of corporate grain receipts in the first six months compared to a longer term average of 20% to 25%. Poor trading margins for non Board grain and specialty crops (such as peas and lentils), a consequence of competitive market conditions, also influenced results.

Crop Production Services reported income in the second quarter of $1.5 million. At quarter end, sales of crop inputs were more than double the level of the preceding fiscal year. It must be noted, however, that while approximately 75% of Crop Production Services sales normally occur during the last quarter of the fiscal year, such buoyancy early in the season may not carry through to the second half of the year.

Livestock Services sustained a year over year improvement, with year-to-date operating income levels more than doubling to a ten year high of $1.9 million. Gross profit rose 24% to $9.3 million, primarily due to feed sales improving by 17% to $42 million. Communications and Information Services operating income improved by $0.3 million.

In commenting on the results, UGG's CEO Brian Hayward said, "The management team of UGG has endeavoured to convey to the investing community that UGG is not a company to be judged solely by quarterly results good or bad. Our business is new to non-farm investors. The business of agriculture is seasonal, and even particular quarters may be good or sub-par."

On February 27, the Government announced that freight subsidies for the transport of grain by rail out of the Prairies would be eliminated. "The budget documents envision a commercial freight environment for grain, for the first time in Canadian history", said Hayward. "It was the anticipation of change that led the Company to go public in 1993. We've been preparing for this time. We are ready to grow."

Corporate working capital, the best measure of ability to invest in the grain and crop production services industry, stood at $71 million at quarter end compared with $34.5 million at the same time last year. During the first six months of the current fiscal year, UGG invested $20 million in capital projects with core investments in three new high throughput elevators at Kindersley, Saskatchewan, Grassy Lake, Alberta, and Souris, Manitoba.

At a recent meeting, the Board of Directors approved a change to UGG's Employee Share Purchase Plan, authorizing the purchase of shares for employees on the open market rather than through the issue of treasury shares, as was previously the case. The change will be implemented as soon as the necessary modifications to the Employee Share Purchase Plan have been made.

UGG is one of Western Canada's largest agribusiness enterprises, founded in 1906. The Company is publicly traded on the Winnipeg and Toronto Stock Exchanges, under the symbol "UGG".

Highlights

(dollars in thousands  Second Quarter         Six Months
  except per share)     1995       1994      1995      1994
------------------------------------------------------------

Sales and revenue
   from services     $444,031   $288,018  $792,523  $498,853
Gross profit &
  revenue from
  services           $34,793     $36,867   $74,892   $65,939
Operating
 Income (Loss)       ($6,244)     $2,133   ($5,870)  ($1,577)
Earnings (loss)
   for the period    ($5,340)       $136   ($6,950)  ($2,905)
Working capital,
  end of period      $70,970     $34,573   $70,970   $34,573
Earnings (loss)
   per share         ($0.55)     ($0.02)   ($0.74)    ($0.43)
Capital
  expenditures      $13,857      $7,700   $20,124    $13,649
Cash flow           ($1,716)     $3,252       $63     $3,582
Cash flow
   per share         ($0.20)      $0.37    ($0.05)     $0.37
Grain
  handling volumes -
   Country elevators
   (thousands of
     tonnes)         1,134       1,260      2,843      2,212

CONTACT: United Grain

Brian Hayward, 204/944-5554

Peter Cox, 204/944-5556 REPEATS: New York 212-575-8822 or 800-221-2462; Boston 617-330-5311 or