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Farmland seeks to restructure fertilizer assets, strengthen food business

(Wednesday, Sept. 4, 2002 -- CropChoice news) -- Farmland Industries Inc. announced today that it seeks to restructure its fertilizer manufacturing assets through a sale or strategic alliance as part of its bankruptcy reorganization process. The assets are the primary component of Farmland's Crop Production division, which had sales of $745 million in fiscal 2001.

Farmland president and CEO Bob Terry said, "Selling or repositioning our fertilizer business will allow us to significantly reduce outstanding debt and reduce or eliminate the cyclical business risk inherent in the fertilizer industry."

Terry continued, "We believe there is tremendous potential in Farmland Foods and the Farmland(r) brand. We have elected to place stronger focus on growing and improving this business."

Farmland owns seven nitrogen fertilizer manufacturing facilities, located in Fort Dodge, Iowa; Coffeyville, Kan.; Dodge City, Kan.; Lawrence, Kan., Pollock, La., Beatrice, Neb.; and Enid, Okla. Farmland also owns 19 fertilizer distribution terminals throughout the U.S. Farmland's Crop Production division employs 531 administrative and production workers.

In addition, Farmland is a partner in phosphate manufacturing joint ventures in Wyoming and Utah, and jointly owns a nitrogen manufacturing plant in Trinidad and Tobago with Mississippi Chemical Corp. Farmland continues working with Cargill toward the sale of Farmland's interest in Farmland Hydro, a phosphate fertilizer operation in Bartow, Fla. The company will also continue to pursue the sale of non-core assets and investments, including its petroleum refinery in Coffeyville, Kan.

"We intend to restructure our fertilizer assets through a sale or strategic alliance, presuming we can identify an appropriate buyer or partner and negotiate a fair price," said Terry. "Meanwhile we will continue to operate the plants, and we expect no disruption of fertilizer supply to our members."

Terry said the decision was made by Farmland's 21-member Board of Directors and will be reviewed by the court-appointed committees overseeing Farmland's reorganization.

Farmland Industries, Inc., Kansas City, Mo., is a diversified agricultural cooperative with interests in food, fertilizer, petroleum, animal feed and grain businesses.

CONTACT: Sherlyn Manson, Corporate Communications of Farmland Industries Inc., +1-816-713-6230, Slmanson@farmland.com

Web site: http://www.farmland.com