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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the quarterly period ended May 29, 2005



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the transition period from
 to
.



Commission File Number 000-51035



UAP Holding Corp.

(Exact Name of
Registrant as Specified in Its Charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 11-3708834                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|7251 W. 4thStreet, Greeley,
Colorado                           |  | 80634                               
|(Address of Principal Executive Offices)                       |  | (Zip Code)                          



(970) 356-4400

(Registrants Telephone Number, Including Area Code)



Not applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)



Indicate by check mark whether the company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that
the company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



Yes  xNo ̈



Indicate
by check mark whether the company is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).



Yes ̈No   x



|                                         |  |                            
|---------------------------------------- |  | ---------------------------
|Class                                    |  | Outstanding at July 6, 2005
|Common Stock, par value $0.001 per share |  | 50,434,372 shares          



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##### Table of Contents

TABLE OF CONTENTS



|                                                                                              |  |   
|--------------------------------------------------------------------------------------------- |  | --
|Part I. Financial Information                                                                 |  | 3 
|                                                                                              | 
|ITEM 1. FINANCIAL STATEMENTS                                                                  |  | 3 
|Report of Independent Registered Public Accounting Firm                                       |  | 3 
|Condensed Consolidated Balance Sheets                                                         |  | 4 
|Condensed Consolidated Statements of Earnings                                                 |  | 5 
|Condensed Consolidated Statements of Cash Flows                                               |  | 6 
|Condensed Consolidated Statement of Stockholders Equity                                      |  | 7 
|Notes to Condensed Consolidated Financial Statements                                          |  | 8 
|                                                                                              | 
|ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  | 15
|                                                                                              | 
|ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |  | 22
|                                                                                              | 
|ITEM 4. CONTROLS AND PROCEDURES                                                               |  | 22
|                                                                                              | 
|Part II. Other Information                                                                    |  | 23
|                                                                                              | 
|ITEM 6. EXHIBITS                                                                              |  | 23
|                                                                                              | 
|SIGNATURES                                                                                    |  | 24



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PART I. FINANCIAL INFORMATION



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders of UAP Holding Corp.

Greeley, Colorado



We have reviewed the accompanying condensed consolidated balance sheets of UAP Holding Corp. and subsidiaries (the Company) as
of May 29, 2005 and May 30, 2004, the related condensed consolidated statements of earnings and of cash flows for the 13-week period ended May 29, 2005 and the 14-week period ended May 30, 2004, and the condensed consolidated statement of
stockholders equity as of May 29, 2005. These interim financial statements are the responsibility of the Companys management.



We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information
consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.



Based on our reviews, we are not aware of any material modifications that should be made to
such condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.



We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
consolidated balance sheet of UAP Holding Corp. and subsidiaries as of February 27, 2005, and the related consolidated statements of earnings, stockholders equity, and cash flows for the year then ended (not presented herein) and in our report
dated May 27, 2005, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of February 27, 2005 is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it has been derived.



DELOITTE & TOUCHE LLP



Denver, Colorado



JULY 5, 2005



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##### Table of Contents

UAP HOLDING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share data)

UNAUDITED



|                                                                                                                                        |  |              |           |   |                   |   |           |              |  |   |           |  
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- | - | ----------------- | - | --------- | ------------ |  | - | --------- | -
|                                                                                                                                        |  | May 29, 2005 |           |   | February 27, 2005 |   |           | May 30, 2004 | 
|ASSETS                                                                                                                                  |  |              |           |   |                   |   |           |              |  |   |           |  
|Current assets:                                                                                                                         |  |              |           |   |                   |   |           |              |  |   |           |  
|Cash and cash equivalents                                                                                                               |  | $            | 15,779    |   |                   | $ | 48,204    |              |  | $ | 27,219    |  
|Receivables, less allowance for doubtful accounts of $15,524, $13,749 and $27,881                                                       |  |              | 1,009,097 |   |                   |   | 234,824   |              |  |   | 896,057   |  
|Inventories                                                                                                                             |  |              | 681,913   |   |                   |   | 697,134   |              |  |   | 594,079   |  
|Deferred income taxes                                                                                                                   |  |              | 21,223    |   |                   |   | 17,263    |              |  |   | 4,566     |  
|Vendor prepay                                                                                                                           |  |              | 33,360    |   |                   |   | 149,010   |              |  |   | 32,243    |  
|Other current assets                                                                                                                    |  |              | 5,978     |   |                   |   | 8,753     |              |  |   | 10,489    |  
|                                                                                                                                        |  |              |           |   |                   |   |           |              |  |   |           |  
|Total current assets                                                                                                                    |  |              | 1,767,350 |   |                   |   | 1,155,188 |              |  |   | 1,564,653 |  
|Property, plant and equipment                                                                                                           |  |              | 107,414   |   |                   |   | 104,745   |              |  |   | 102,607   |  
|Less accumulated depreciation                                                                                                           |  |              | (17,876   | ) |                   |   | (15,080   | )            |  |   | (5,442    | )
|                                                                                                                                        |  |              |           |   |                   |   |           |              |  |   |           |  
|Property, plant and equipment, net                                                                                                      |  |              | 89,538    |   |                   |   | 89,665    |              |  |   | 97,165    |  
|Goodwill                                                                                                                                |  |              | 34,645    |   |                   |   | 34,645    |              |  |   | 43,466    |  
|Intangible assets, net                                                                                                                  |  |              | 25,561    |   |                   |   | 25,894    |              |  |   | 6,705     |  
|Deferred income taxes                                                                                                                   |  |              | 7,544     |   |                   |   | 6,967     |              |  |   | 6,605     |  
|Debt issue costs, net                                                                                                                   |  |              | 20,186    |   |                   |   | 20,259    |              |  |   | 22,733    |  
|Investment in unconsolidated affiliates                                                                                                 |  |              | 3,360     |   |                   |   | 4,071     |              |  |   | 3,050     |  
|Other assets                                                                                                                            |  |              | 784       |   |                   |   | 653       |              |  |   | 4,562     |  
|                                                                                                                                        |  |              |           |   |                   |   |           |              |  |   |           |  
|Total assets                                                                                                                            |  | $            | 1,948,968 |   |                   | $ | 1,337,342 |              |  | $ | 1,748,939 |  
|                                                                                                                                        |  |              |           |   |                   |   |           |              |  |   |           |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                    |  |              |           |   |                   |   |           |              |  |   |           |  
|Current liabilities:                                                                                                                    |  |              |           |   |                   |   |           |              |  |   |           |  
|Short-term debt                                                                                                                         |  | $            |          |   |                   | $ | 55        |              |  | $ | 42,123    |  
|Accounts payable                                                                                                                        |  |              | 1,217,688 |   |                   |   | 822,867   |              |  |   | 996,143   |  
|Other accrued liabilities                                                                                                               |  |              | 211,206   |   |                   |   | 72,164    |              |  |   | 246,563   |  
|Income taxes payable                                                                                                                    |  |              | 35,379    |   |                   |   | 3,252     |              |  |   | 6,517     |  
|Deferred income taxes                                                                                                                   |  |              | 108       |   |                   |   | 108       |              |  |   | 8,709     |  
|                                                                                                                                        |  |              |           |   |                   |   |           |              |  |   |           |  
|Total current liabilities                                                                                                               |  |              | 1,464,381 |   |                   |   | 898,446   |              |  |   | 1,300,055 |  
|Long-term debt                                                                                                                          |  |              | 298,456   |   |                   |   | 295,948   |              |  |   | 311,432   |  
|Series A redeemable preferred stock                                                                                                     |  |              |          |   |                   |   |          |              |  |   | 35,379    |  
|Other non-current liabilities                                                                                                           |  |              | 3,645     |   |                   |   | 2,871     |              |  |   | 5,646     |  
|Deferred income taxes                                                                                                                   |  |              | 23,156    |   |                   |   | 23,590    |              |  |   | 264       |  
|Commitments and contingencies (note 8)                                                                                                  |  |              |           |   |                   |   |           |              |  |   |           |  
|Stockholders equity:                                                                                                                   |  |              |           |   |                   |   |           |              |  |   |           |  
|Common stock, $.001 par value, 90,000,000 shares authorized, 50,434,372, 50,431,872 and 47,248,265 issued and outstanding,
respectively |  |              | 50        |   |                   |   | 50        |              |  |   | 47        |  
|Management stock  rabbi trust                                                                                                          |  |              | 4,819     |   |                   |   | 4,819     |              |  |   | 5,550     |  
|Additional paid-in capital                                                                                                              |  |              | 110,036   |   |                   |   | 109,863   |              |  |   | 55,993    |  
|Retained (deficit) earnings                                                                                                             |  |              | 41,547    |   |                   |   | (1,535    | )            |  |   | 35,175    |  
|Accumulated other comprehensive income (loss)                                                                                           |  |              | 2,878     |   |                   |   | 3,290     |              |  |   | (602      | )
|                                                                                                                                        |  |              |           |   |                   |   |           |              |  |   |           |  
|Stockholders equity                                                                                                                    |  |              | 159,330   |   |                   |   | 116,487   |              |  |   | 96,163    |  
|                                                                                                                                        |  |              |           |   |                   |   |           |              |  |   |           |  
|Total liabilities and stockholders equity                                                                                              |  | $            | 1,948,968 |   |                   | $ | 1,337,342 |              |  | $ | 1,748,939 |  
|                                                                                                                                        |  |              |           |   |                   |   |           |              |  |   |           |  



The accompanying notes
are an integral part of the condensed consolidated financial statements.



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UAP HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(dollars in thousands, except earnings per share amounts)

UNAUDITED



|                                                         |  |                                   |            |   |                                  |   |            |  
|-------------------------------------------------------- |  | --------------------------------- | ---------- | - | -------------------------------- | - | ---------- | -
|                                                         |  | Thirteen Weeks Ended May 29, 2005 |            |   | Fourteen WeeksEnded May 30, 2004 |  
|Net sales                                                |  | $                                 | 1,356,910  |   |                                  | $ | 1,258,489  |  
|Costs and expenses:                                      |  |                                   |            |   |                                  |   |            |  
|Cost of goods sold                                       |  |                                   | 1,188,158  |   |                                  |   | 1,122,755  |  
|                                                         |  |                                   |            |   |                                  |   |            |  
|Gross profit                                             |  |                                   | 168,752    |   |                                  |   | 135,734    |  
|Selling, general and administrative expenses             |  |                                   | 86,348     |   |                                  |   | 82,956     |  
|Gain on sale of assets                                   |  |                                   | (18        | ) |                                  |   | (572       | )
|Royalties, service charges and other income and expenses |  |                                   | (7,784     | ) |                                  |   | (2,673     | )
|                                                         |  |                                   |            |   |                                  |   |            |  
|Operating income                                         |  |                                   | 90,206     |   |                                  |   | 56,023     |  
|Third party interest expense                             |  |                                   | 8,328      |   |                                  |   | 12,132     |  
|Finance related and other charges                        |  |                                   |           |   |                                  |   | 1,875      |  
|                                                         |  |                                   |            |   |                                  |   |            |  
|Income before income taxes                               |  |                                   | 81,878     |   |                                  |   | 42,016     |  
|Income tax expense                                       |  |                                   | 32,491     |   |                                  |   | 16,494     |  
|                                                         |  |                                   |            |   |                                  |   |            |  
|Net income                                               |  | $                                 | 49,387     |   |                                  | $ | 25,522     |  
|                                                         |  |                                   |            |   |                                  |   |            |  
|Earnings per share:                                      |  |                                   |            |   |                                  |   |            |  
|Basic                                                    |  | $                                 | 0.98       |   |                                  | $ | 0.54       |  
|                                                         |  |                                   |            |   |                                  |   |            |  
|Diluted                                                  |  | $                                 | 0.94       |   |                                  | $ | 0.50       |  
|                                                         |  |                                   |            |   |                                  |   |            |  
|Weighted average shares outstanding:                     |  |                                   |            |   |                                  |   |            |  
|Basic                                                    |  |                                   | 50,432,696 |   |                                  |   | 47,232,631 |  
|                                                         |  |                                   |            |   |                                  |   |            |  
|Diluted                                                  |  |                                   | 52,261,501 |   |                                  |   | 50,883,198 |  
|                                                         |  |                                   |            |   |                                  |   |            |  



The accompanying notes
are an integral part of the condensed consolidated financial statements.



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UAP HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

UNAUDITED



|                                                                                  |  |                                   |          |   |                                  |   |          |  
|--------------------------------------------------------------------------------- |  | --------------------------------- | -------- | - | -------------------------------- | - | -------- | -
|                                                                                  |  | Thirteen Weeks Ended May 29, 2005 |          |   | Fourteen WeeksEnded May 30, 2004 |  
|Operations                                                                        |  |                                   |          |   |                                  |   |          |  
|Net income                                                                        |  | $                                 | 49,387   |   |                                  | $ | 25,522   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                   |          |   |                                  |   |          |  
|Depreciation                                                                      |  |                                   | 2,845    |   |                                  |   | 3,501    |  
|Amortization of intangibles                                                       |  |                                   | 340      |   |                                  |   | 365      |  
|Amortization of debt issuance costs                                               |  |                                   | 1,119    |   |                                  |   | 947      |  
|Accretion of discount on notes                                                    |  |                                   | 2,508    |   |                                  |   | 2,862    |  
|Gain on sales of fixed assets                                                     |  |                                   | (18      | ) |                                  |   | (572     | )
|Deferred tax provision (benefit)                                                  |  |                                   | (4,969   | ) |                                  |   | 9,585    |  
|Stock compensation                                                                |  |                                   | 173      |   |                                  |   |         |  
|Change in operating assets and liabilities                                        |  |                                   | (104,082 | ) |                                  |   | (247,135 | )
|                                                                                  |  |                                   |          |   |                                  |   |          |  
|Net cash used in operations                                                       |  |                                   | (52,697  | ) |                                  |   | (204,925 | )
|                                                                                  |  |                                  
|Investing                                                                         |  |                                   |          |   |                                  |   |          |  
|Additions to property, plant and equipment                                        |  |                                   | (3,215   | ) |                                  |   | (3,890   | )
|Proceeds from sales of assets                                                     |  |                                   | 381      |   |                                  |   | 857      |  
|Investment in unconsolidated affiliates                                           |  |                                   | 711      |   |                                  |   | 908      |  
|                                                                                  |  |                                   |          |   |                                  |   |          |  
|Net cash used in investing activities                                             |  |                                   | (2,123   | ) |                                  |   | (2,125   | )
|                                                                                  |  |                                  
|Financing                                                                         |  |                                   |          |   |                                  |   |          |  
|Check float on zero balance accounts                                              |  |                                   | 23,621   |   |                                  |   | 19,437   |  
|Net borrowings of short-term debt                                                 |  |                                   | (55      | ) |                                  |   | 42,204   |  
|Debt issuance costs                                                               |  |                                   | (1,046   | ) |                                  |   |         |  
|                                                                                  |  |                                   |          |   |                                  |   |          |  
|Net cash provided by financing activities                                         |  |                                   | 22,520   |   |                                  |   | 61,641   |  
|                                                                                  |  |                                   |          |   |                                  |   |          |  
|Net change in cash and cash equivalents                                           |  |                                   | (32,300  | ) |                                  |   | (145,409 | )
|Net effect of exchange rates on cash and cash equivalents                         |  |                                   | (125     | ) |                                  |   | (19      | )
|                                                                                  |  |                                   |          |   |                                  |   |          |  
|Net change in cash and cash equivalents                                           |  |                                   | (32,425  | ) |                                  |   | (145,428 | )
|Cash and cash equivalents at beginning of period                                  |  |                                   | 48,204   |   |                                  |   | 172,647  |  
|                                                                                  |  |                                   |          |   |                                  |   |          |  
|Cash and cash equivalents at end of period                                        |  | $                                 | 15,779   |   |                                  | $ | 27,219   |  
|                                                                                  |  |                                   |          |   |                                  |   |          |  
|Supplemental disclosure of cash flow information:                                 |  |                                   |          |   |                                  |   |          |  
|Cash paid during the period for interest                                          |  | $                                 | 797      |   |                                  | $ | 800      |  
|Net cash (refunded) paid during the period for income taxes                       |  | $                                 | (5,291   | ) |                                  | $ | 631      |  
|Dividends declared but not yet paid                                               |  | $                                 | 6,305    |   |                                  | $ |         |  



The accompanying notes
are an integral part of the condensed consolidated financial statements.



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UAP HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY

(dollars in thousands)

UNAUDITED



|                                        |  |             |    |                          |   |             |  |                  |       |  |                                     |        |   |                          |   |       |   |  |   |         |  
|--------------------------------------- |  | ----------- | -- | ------------------------ | - | ----------- |  | ---------------- | ----- |  | ----------------------------------- | ------ | - | ------------------------ | - | ----- | - |  | - | ------- | -
|                                        |  | CommonStock |    | AdditionalPaid inCapital |   | Rabbi Trust |  | RetainedEarnings |       |  | AccumulatedOtherComprehensiveIncome |        |   | TotalStockholdersEquity |  
|Thirteen Weeks Ended May 29, 2005       |  |             |    |                          |   |             |  |                  |       |  |                                     |        |   |                          |   |       |   |  |   |         |  
|Balance at February 27, 2005            |  | $           | 50 |                          | $ | 109,863     |  | $                | 4,819 |  | $                                   | (1,535 | ) |                          | $ | 3,290 |   |  | $ | 116,487 |  
|Dividends to stockholders               |  |             |   |                          |   |            |  |                  |      |  |                                     | (6,305 | ) |                          |   |      |   |  |   | (6,305  | )
|Issuance of director shares             |  |             |   |                          |   | 36          |  |                  |      |  |                                     |       |   |                          |   |      |   |  |   | 36      |  
|Restricted stock unit vesting           |  |             |   |                          |   | 137         |  |                  |      |  |                                     |       |   |                          |   |      |   |  |   | 137     |  
|Comprehensive income:                   |  |             |    |                          |   |             |  |                  |       |  |                                     |        |   |                          |   |       |   |  |   |         |  
|Net income                              |  |             |   |                          |   |            |  |                  |      |  |                                     | 49,387 |   |                          |   |      |   |  |   | 49,387  |  
|Foreign currency translation adjustment |  |             |   |                          |   |            |  |                  |      |  |                                     |       |   |                          |   | (412  | ) |  |   | (412    | )
|                                        |  |             |    |                          |   |             |  |                  |       |  |                                     |        |   |                          |   |       |   |  |   |         |  
|Total comprehensive income              |  |             |   |                          |   |            |  |                  |      |  |                                     | 49,387 |   |                          |   | (412  | ) |  |   | 48,975  |  
|                                        |  |             |    |                          |   |             |  |                  |       |  |                                     |        |   |                          |   |       |   |  |   |         |  
|Balance at May 29, 2005                 |  | $           | 50 |                          | $ | 110,036     |  | $                | 4,819 |  | $                                   | 41,547 |   |                          | $ | 2,878 |   |  | $ | 159,330 |  
|                                        |  |             |    |                          |   |             |  |                  |       |  |                                     |        |   |                          |   |       |   |  |   |         |  



The accompanying notes
are an integral part of the condensed consolidated financial statements.



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UAP HOLDING CORP.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Thirteen-Week Period Ended May 29, 2005 and the
Fourteen-Week Period Ended May 30, 2004



UNAUDITED



|1. | Description of the Business and Basis of Presentation
|-- | -----------------------------------------------------



Interim Financial Statements.The accompanying unaudited condensed consolidated financial statements of UAP Holding Corp. and its subsidiaries (the
Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and reflect all adjustments (consisting of normal recurring
accruals) which, in the opinion of management, are necessary for a fair presentation of the financial position, operating results, and cash flows for the periods presented. These financial statements should be read in conjunction with the
consolidated and combined financial statements and notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended February 27, 2005.



Business.We are the largest distributor of agricultural and non-crop inputs in the United States and Canada. We market a comprehensive line of
products including chemicals, seed and fertilizer to growers and regional dealers. We have approximately 330 general distribution centers and sales locations. We also have three formulation facilities where we blend products primarily for sale by
our distribution facilities.



On November 24, 2003, Apollo Management, L.P.
(Apollo), us and ConAgra Foods consummated a transaction in which we acquired ConAgra Foods United States and Canadian Agricultural Products Businesses, excluding its wholesale fertilizer and other international crop distribution
businesses, which we refer to as the Acquisition. On November 29, 2004, we consummated the initial public offering of our common stock, (the Common Stock Offering) which is traded under the symbol UAPH on the
NASDAQ National Market.



Principles of Consolidation.The
consolidated financial statements include our accounts and the accounts of all our wholly-owned subsidiaries. Significant intercompany balances and transactions have been eliminated. Investments in 50% or less owned affiliates over which we do not
have the ability to exercise significant control are accounted for using the equity method. During the reported periods, we did not have any less than 20% owned investments in affiliates accounted for under the equity method.



Fiscal Year.Our fiscal year operates on a 52- or 53-week period
ending on the last Sunday in February. Our fiscal year 2006 contains 52 weeks while our fiscal year 2005 contained 53 weeks. The additional week in fiscal year 2005 was included in the first quarter.



Seasonality.Our and our customers businesses are seasonal, based
upon the planting, growing, and harvesting cycles. During fiscal 2005 and 2004, at least 75% of our net sales occurred during the first and second fiscal quarters of each year because of the condensed nature of the planting season. As a result of
the seasonality of sales, we experience significant fluctuations in our revenues, income and net working capital levels. In addition, weather conditions can significantly vary quarterly results.



Since our suppliers typically operate on a crop year, which is a different year than our
fiscal year, our rebate agreements with our suppliers are estimated throughout the year and adjusted, as necessary, in our fourth fiscal quarter. These estimates can impact our margin percentages by quarter. Also, our receivables are seasonal since
customers operate on a crop year and payments are cyclical throughout the year. Accordingly, our results of operations over any one quarter are not necessarily indicative of the results to be expected over the full fiscal year.



Use of Estimates.The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates or assumptions affect reported amounts of assets, liabilities, revenue and expenses as
reflected in the financial statements. Actual results could differ from those estimates and the differences could be material.



Earnings Per Share.Earnings per share are based on the weighted average number of shares of common stock outstanding during the period. For the
thirteen weeks ended May 29, 2005, and the fourteen weeks ended May 30, 2004,



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the weighted average number of shares outstanding for the basic earnings per share calculation was 50,432,696 and 47,232,631, respectively, and for the
diluted earnings per share calculation was 52,261,501 and 50,883,198, respectively.



|                                                                                               |  |                                                          |            |                                  |   |           
|---------------------------------------------------------------------------------------------- |  | -------------------------------------------------------- | ---------- | -------------------------------- | - | ----------
|                                                                                               |  | Thirteen WeeksEnded May 29, 2005                         |            | Fourteen WeeksEnded May 30, 2004
|                                                                                               |  | (dollars in thousands, exceptearnings per share amounts)
|Earnings per share:                                                                            |  |                                                          |            |                                  |   |           
|Net income                                                                                     |  | $                                                        | 49,387     |                                  | $ | 25,522    
|                                                                                               |  |                                                          |            |                                  |   |           
|Weighted average shares of common stock outstanding used in computing basic earnings per share |  |                                                          | 50,432,696 |                                  |   | 47,232,631
|Net effect of restricted stock units                                                           |  |                                                          | 141,129    |                                  |   |          
|Net effect of dilutive stock options                                                           |  |                                                          | 1,687,676  |                                  |   | 3,650,567 
|                                                                                               |  |                                                          |            |                                  |   |           
|Weighted average shares of common stock used in computing diluted earnings per share           |  |                                                          | 52,261,501 |                                  |   | 50,883,198
|                                                                                               |  |                                                          |            |                                  |   |           
|Basic earnings per share                                                                       |  | $                                                        | 0.98       |                                  | $ | 0.54      
|                                                                                               |  |                                                          |            |                                  |   |           
|Diluted earnings per share                                                                     |  | $                                                        | 0.94       |                                  | $ | 0.50      
|                                                                                               |  |                                                          |            |                                  |   |           



Stock Based
Compensation.We account for employee stock option plans in accordance with Accounting Principles Board Opinion No 25, Accounting for Stock Issued to Employees. Accordingly, no stock based compensation expense is reflected
in net income, as options granted under these plans have an exercise price equal to the market value of the underlying common stock on the date of the grant.



The impact on our net income if we complied with SFAS No. 123R, Share-Based Payment would be as follows:



|                                                                                                                          |  |                                                         |        |                                  |   |       
|------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------- | ------ | -------------------------------- | - | ------
|                                                                                                                          |  | Thirteen WeeksEnded May 29, 2005                        |        | Fourteen WeeksEnded May 30, 2004
|                                                                                                                          |  | (dollars in thousands exceptearnings per share amounts)
|Stock-Based Compensation                                                                                                  |  |                                                         |        |                                  |   |       
|Net income as reported                                                                                                    |  | $                                                       | 49,387 |                                  | $ | 25,522
|Less: Total stock-based employee compensation expense determined under fair-value-based method for all awards, net of tax |  |                                                         | 12     |                                  |   | 36    
|                                                                                                                          |  |                                                         |        |                                  |   |       
|Pro forma net income                                                                                                      |  | $                                                       | 49,375 |                                  | $ | 25,486
|                                                                                                                          |  |                                                         |        |                                  |   |       
|Basic earnings per share:                                                                                                 |  |                                                         |        |                                  |   |       
|As reported                                                                                                               |  | $                                                       | 0.98   |                                  | $ | 0.54  
|Pro forma                                                                                                                 |  | $                                                       | 0.98   |                                  | $ | 0.54  
|Diluted earnings per share:                                                                                               |  |                                                         |        |                                  |   |       
|As reported                                                                                                               |  | $                                                       | 0.94   |                                  | $ | 0.50  
|Pro forma                                                                                                                 |  | $                                                       | 0.94   |                                  | $ | 0.50  



Reclassifications.Certain prior year amounts in the consolidated financial statements have been reclassified to conform to current year presentation. These reclassifications had no net impact on previously reported results of operations. We reclassed royalties,
service charges, other income and expenses and finance related and other charges which were previously included in other income and selling, general and administrative expenses.



9



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##### Table of Contents

|2. | Royalties, Service Charges and Other Income and Expenses
|-- | --------------------------------------------------------



The table below details thirteen weeks ended May 29, 2005, and the fourteen weeks ended May 30, 2004:



|                                                         |  |                                   |        |   |                                   |   |        |  
|-------------------------------------------------------- |  | --------------------------------- | ------ | - | --------------------------------- | - | ------ | -
|                                                         |  | Thirteen Weeks Ended May 29, 2005 |        |   | Fourteen Weeks Ended May 30, 2004 |  
|                                                         |  | (dollars in thousands)            |       
|Royalties, service charges and other income and expenses |  |                                   |        |   |                                   |   |        |  
|Royalty income                                           |  | $                                 | (4,625 | ) |                                   | $ | (2,097 | )
|Service charge income                                    |  |                                   | (1,396 | ) |                                   |   | (971   | )
|Other (income) expense                                   |  |                                   | (1,763 | ) |                                   |   | 395    |  
|                                                         |  |                                   |        |   |                                   |   |        |  
|Royalties, service charges and other income and expenses |  | $                                 | (7,784 | ) |                                   | $ | (2,673 | )
|                                                         |  |                                   |        |   |                                   |   |        |  



|3. | Finance Related and Other Charges
|-- | ---------------------------------



Finance related and other charges are composed of costs and fees related to the Acquisition, the Common Stock Offering, and related financing activities. For the fourteen
weeks ended May 30, 2004, these charges consisted of $1.9 million relating to the non-accountable charges paid to ConAgra Foods relating to the Acquisition.



|4. | Certain Asset Accounts
|-- | ----------------------



Receivables and Allowance for Doubtful Accounts.Our receivables include receivables from customers net of allowances for doubtful accounts, vendor rebates
receivable, and miscellaneous receivables. As of May 29, 2005, February 27, 2005, and May 30, 2004, the net receivables from customers were $872.2 million, $192.5 million, and $772.7 million, respectively, vendor rebates receivable were $121.8
million, $23.2 million, and $102.9 million, respectively, and miscellaneous receivables were $15.1 million, $19.1 million, and $20.5 million, respectively. As of May 29, 2005, February 27, 2005, and May 30, 2004, the allowance for doubtful accounts
totaled, $15.5 million, $13.7 million, and $27.9 million, respectively.



Inventories.Inventories consist primarily of chemicals, fertilizer and seed, and are carried at the lower of cost or market. As of May 29, 2005, February 27, 2005, and May 30, 2004, we had $15.8 million, $25.8 million, and
$16.1 million, respectively, of allowances against inventory.



The cost of
inventory at distribution locations is carried either at average cost or first in, first out (FIFO). As of May 29, 2005, February 27, 2005, and May 30, 2004, approximately 32.4%, 23.5%, and 9.9%, respectively, of inventory was reported on the
average cost basis.



Inventories are comprised of the following:



|                                  |  |                        |         |                   |   |              |  |   |        
|--------------------------------- |  | ---------------------- | ------- | ----------------- | - | ------------ |  | - | -------
|                                  |  | May 29, 2005           |         | February 27, 2005 |   | May 30, 2004
|                                  |  | (dollars in thousands)
|Product inventories:              |  |                        |         |                   |   |              |  |   |        
|Raw materials and work in process |  | $                      | 9,697   |                   | $ | 12,827       |  | $ | 10,189 
|Finished goods                    |  |                        | 672,216 |                   |   | 684,307      |  |   | 583,890
|                                  |  |                        |         |                   |   |              |  |   |        
|Total                             |  | $                      | 681,913 |                   | $ | 697,134      |  | $ | 594,079
|                                  |  |                        |         |                   |   |              |  |   |        



Goodwill. At May
29, 2005, February 27, 2005, and May 30, 2004, goodwill totaled $34.6 million, $34.6 million and $43.5 million, respectively, with no amortization. During the third quarter of fiscal 2005, we finalized the Acquisition purchase price allocation with
the assistance of a third party valuation of certain intangible assets that had been categorized as goodwill.



Debt Issuance Costs. Our debt issuance costs net of amortization were $20.2 million, $20.3 million, and $22.7 million as of May 29, 2005, February 27, 2005, and May 30, 2004, respectively. Our debt
issuance costs consisted of costs associated with United Agri Products revolving credit facility, United Agri Products 81⁄4% Senior Notes due 2011 (the 81⁄4% Senior Notes), and our 103⁄4% Senior Discount Notes due
2012 (the 103⁄4% Senior Discount Notes). Our debt issuance costs increased for the exchange offers relating to the 81⁄4% Senior Notes and the 103⁄4% Senior Discount Notes by $1.0 million in the thirteen week period ended May 29,
2005.



|5. | Costs Associated with Asset Retirement Obligations
|-- | --------------------------------------------------



We had Asset Retirement Obligations related to SFAS No. 143, Accounting for Asset Retirement Obligations.



|                              |  |                                            |       |   |                                        |   |       |                                            |  |   |       |  
|----------------------------- |  | ------------------------------------------ | ----- | - | -------------------------------------- | - | ----- | ------------------------------------------ |  | - | ----- | -
|                              |  | As of the thirteenweeks ended May 29, 2005 |       |   | As of the year ended February 27, 2005 |   |       | As of the fourteen weeksended May 30, 2004 | 
|                              |  | (dollars in thousands)                     |      
|Asset Retirement Obligations: |  |                                            |       |   |                                        |   |       |                                            |  |   |       |  
|Beginning balance             |  | $                                          | 2,411 |   |                                        | $ | 2,343 |                                            |  | $ | 2,343 |  
|Obligations incurred          |  |                                            |      |   |                                        |   |      |                                            |  |   |      |  
|Obligations settled           |  |                                            |      |   |                                        |   | (74   | )                                          |  |   |      |  
|Accretion expense             |  |                                            | 22    |   |                                        |   | 115   |                                            |  |   | 91    |  
|Cash flow revision            |  |                                            | (4    | ) |                                        |   | 27    |                                            |  |   | (22   | )
|                              |  |                                            |       |   |                                        |   |       |                                            |  |   |       |  
|Ending Balance                |  | $                                          | 2,429 |   |                                        | $ | 2,411 |                                            |  | $ | 2,412 |  
|                              |  |                                            |       |   |                                        |   |       |                                            |  |   |       |  



10



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##### Table of Contents

|6. | Income Taxes
|-- | ------------



As of May 30, 2004, we fully utilized the net operating tax loss of $37.7 million for the period from the date of the Acquisition through February 22, 2004. We anticipate that we will use the $0.4 million long term
foreign tax credit in the current year.



The following table summarizes factors
causing our income taxes to differ from U.S. federal statutory rates for the thirteen weeks ended May 29, 2005, and the fourteen weeks ended May 30, 2004:



|                                                 |  |                                   |        |   |                                   |   |       
|------------------------------------------------ |  | --------------------------------- | ------ | - | --------------------------------- | - | ------
|                                                 |  | Thirteen Weeks Ended May 29, 2005 |        |   | Fourteen Weeks Ended May 30, 2004
|                                                 |  | (dollars in thousands)           
|U.S. federal statutory rate                      |  | $                                 | 28,657 |   |                                   | $ | 14,706
|Dividends on shares of stock held in rabbi trust |  |                                   | (82    | ) |                                   |   |      
|State income taxes                               |  |                                   | 3,622  |   |                                   |   | 1,448 
|Foreign credits and other                        |  |                                   | 294    |   |                                   |   | 340   
|                                                 |  |                                   |        |   |                                   |   |       
|Total                                            |  | $                                 | 32,491 |   |                                   | $ | 16,494
|                                                 |  |                                   |        |   |                                   |   |       



|7. | Debt
|-- | ----



Total long-term debt as of May 29, 2005, February 27, 2005, and May 30, 2004, consisted of the following:



|                                              |  |                        |         |                   |   |              |  |   |        
|--------------------------------------------- |  | ---------------------- | ------- | ----------------- | - | ------------ |  | - | -------
|                                              |  | May 29, 2005           |         | February 27, 2005 |   | May 30, 2004
|                                              |  | (dollars in thousands)
|Total debt:                                   |  |                        |         |                   |   |              |  |   |        
|Revolving credit facility                     |  | $                      |        |                   | $ | 55           |  | $ | 42,123 
|81⁄4% Senior Notes                              |  |                        | 203,500 |                   |   | 203,500      |  |   | 225,000
|103⁄4% Senior Discount Notes, at accreted value |  |                        | 94,956  |                   |   | 92,448       |  |   | 86,432 
|                                              |  |                        |         |                   |   |              |  |   |        
|Total                                         |  |                        | 298,456 |                   |   | 296,003      |  |   | 353,555
|                                              |  |                        |        
|Less: current portion                         |  |                        |         |                   |   |              |  |   |        
|Revolving credit facility                     |  |                        |        |                   |   | 55           |  |   | 42,123 
|                                              |  |                        |         |                   |   |              |  |   |        
|Total long term debt                          |  | $                      | 298,456 |                   | $ | 295,948      |  | $ | 311,432
|                                              |  |                        |         |                   |   |              |  |   |        



Our $500.0 million asset based
revolving credit facility has a five-year term and will mature in 2008. At May 29, 2005, there was $500.0 million of borrowing availability under the revolving credit facility and United Agri Products had borrowing capacity thereunder of $475.8
million (after giving effect to $24.2 million of letters of credit under the sub-facility).



On December 29, 2004, $21.5 million of the 81⁄4% Senior Notes were redeemed with proceeds from the Common Stock Offering. In addition, United Agri Products, Inc. may redeem some or all of the remaining 81⁄4%
Senior Notes at a redemption price that may include a redemption premium and a make-whole premium.



The increase in the 103⁄4% Senior Discount Notes is due to accretion.



As of May 29, 2005, management believes approximately $52 million of permitted distributions were available under our restricted payment covenant in our indenture governing the 103⁄4% Senior Discount Notes.



|8. | Commitments and Contingencies
|-- | -----------------------------



We are a party to a number of lawsuits and claims arising out of the operation of our businesses. After taking into account liabilities recorded, management believes the
ultimate resolution of such matters should not have a material adverse effect on our financial condition, results of operations or liquidity.



11



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##### Table of Contents

|9. | Employee Benefit Plans
|-- | ----------------------



Management Incentive Program.We have a management incentive plan for key officers and employees, based on growth, profitability, individual performance of
each operating center and key performance metrics. Amounts charged to expense totaled $19.3 million and $19.2 million for the thirteen weeks ended May 29, 2005, and the fourteen weeks ended May 30, 2004, respectively.



Retirement Program for Canadian Employees.United Agri Products Canada,
Inc., (UAP Canada) one of our subsidiaries, currently has two retirement plans for employees of UAP Canada. They are eligible to participate in these plans after completing one year of service. One plan is an optional RRSP/DPSD Defined Contribution
plan. UAP Canada matches 50% of an employees first 6% of contributions to the plan.



The second plan is a Defined Benefit plan. UAP Canada is responsible for funding this plan and is currently contributing at a rate of 5.95% of payroll. Benefits are based on years of credited service and average
compensation in the last 5 years of service. We assumed the plan assets and obligations of the UAP Canadian Pension Plan as reported under the Predecessor. Components of the Canadian Pension Plan are reported below.



The change in pension benefit costs is as follows:



|                                                   |  |                                   |     |   |                                   |   |     |  
|-------------------------------------------------- |  | --------------------------------- | --- | - | --------------------------------- | - | --- | -
|                                                   |  | Thirteen Weeks Ended May 29, 2005 |     |   | Fourteen Weeks Ended May 30, 2004 |  
|                                                   |  | (dollars in thousands)            |    
|Pension benefit costs                              |  |                                   |     |   |                                   |   |     |  
|Service cost for benefits earned during the period |  | $                                 | 69  |   |                                   | $ | 107 |  
|Interest cost on benefit obligations               |  |                                   | 35  |   |                                   |   | 51  |  
|Assumed return on plan assets                      |  |                                   | (28 | ) |                                   |   | (47 | )
|Recognized net actuarial loss                      |  |                                   |    |   |                                   |   |    |  
|                                                   |  |                                   |     |   |                                   |   |     |  
|Total pension benefit costs                        |  | $                                 | 76  |   |                                   | $ | 111 |  
|                                                   |  |                                   |     |   |                                   |   |     |  



|10. | Equity
|--- | ------



Stock Options. The changes in the outstanding stock options under our two stock option plans during the thirteen weeks ended May 29, 2005, and the fourteen weeks ended May 30, 2004, are summarized below:



|                             |  |                          |  |                                           |     
|---------------------------- |  | ------------------------ |  | ----------------------------------------- | ----
|Stock options                |  | Shares subject to option |  | Weighted-average Exercise price per share
|Balance at February 27, 2005 |  | 3,359,535                |  | $                                         | 2.56
|Granted                      |  |                         |  |                                           |     
|Exercised                    |  |                         |  |                                           |     
|Forfeited / lapsed           |  |                         |  |                                           |     
|                             |  |                          |  |                                           |     
|Balance at May 29, 2005      |  | 3,359,535                |  | $                                         | 2.56
|                             |  |                          |  |                                           |     
|Vested at May 29, 2005       |  | 2,541,827                |  | $                                         | 2.56
|                             |  |                          |  |                                           |     
|Balance at February 22, 2004 |  | 2,789,115                |  | $                                         | 2.56
|Granted                      |  | 629,047                  |  | $                                         | 2.56
|Exercised                    |  |                         |  |                                           |     
|Forfeited / lapsed           |  |                         |  |                                           |     
|                             |  |                          |  |                                           |     
|Balance at May 30, 2004      |  | 3,418,162                |  | $                                         | 2.56
|                             |  |                          |  |                                           |     
|Vested at May 30, 2004       |  | 351,762                  |  | $                                         | 2.56
|                             |  |                          |  |                                           |     



12



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##### Table of Contents

Deferred Compensation Plans. We maintain two deferred compensation plans for the benefit of certain members
of management, the 2003 Deferred Compensation Plan (the 2003 DCP), which was adopted in connection with the Acquisition and the 2004 Deferred Compensation Plan (the 2004 DCP), which was adopted on April 2, 2004. The 2003 DCP
provides for the crediting of deferred shares for each executive who entered into a retention agreement at the time of the Acquisition. The 2004 DCP provides for the crediting of deferred shares for each member of management who waived the right to
receive a portion of their cash bonus for the 2004 fiscal year. Each deferred share represents the right to receive one share of common stock on the applicable payment date, subject to adjustment in the event of a stock split or similar event
affecting UAP Holding Corp.s common stock. Deferred shares become payable upon a termination of the executives employment, certain changes in control of UAP Holding Corp. and certain offerings of UAP Holding Corp.s common stock
(based upon certain piggyback rights contained in the Management Incentive Agreement). The plans prohibit the assignment of the deferred shares except upon an executives death. The company established a trust (the Rabbi Trust) to
hold the assets of the 2003 DCP and the 2004 DCP. The assets of the Rabbi Trust are subject to the claims of the companys creditors in the event of the companys insolvency. As of May 29, 2005, there were 1,883,466 shares of our common
stock remaining in the Rabbi Trust. The shares of common stock held by the Rabbi Trust are issued and outstanding, and therefore participate in dividends and are included in the calculation of the weighted average share computation.



Dividends Declared.On April 29, 2005, our board declared a quarterly
dividend on our common stock in the amount of $0.125 per share of common stock. The record date for the dividend payment was May 13, 2005, and the payment date was June 1, 2005.



Long-Term Incentive Plan. On April 8, 2005, 246,975 restricted stock units were granted to certain employees and management
pursuant to our 2004 Long-Term Incentive Plan. The restricted stock units vest ratably over four years, 25% on each of the four anniversaries of the grant date. We recorded $0.2 million as compensation expense for the period ended May 29, 2005. On
April 29, 2005, our board granted 2,500 restricted stock units to one of our directors. These restricted stock units vested immediately and were converted to common stock.



On April 29, 2005, our board of directors adopted a directors deferred compensation plan (the Director DCP). The Director DCP
allows our non-employee directors to elect to defer payment of all or a portion of their fees and have such amounts credited under the plan in the form of deferred shares. Our board of directors (or its compensation committee) may also grant our
non-employee directors deferred shares under the Director DCP. Each deferred share represents the right to receive one share of common stock on the applicable payment date, subject to adjustment in the event of a stock split or similar event
affecting UAP Holding Corp.s common stock. Deferred shares become payable immediately upon a termination of the directors service. Shares delivered under the Director DCP in respect of an award of deferred shares are charged against the
share limits of our 2004 Plan. The Director DCP prohibits the assignment of the deferred shares except upon a directors death. There were no restricted stock units outstanding under the director plan as of May 29, 2005.



Preferred Stock. Upon consummation of the Common Stock Offering, we eliminated
the Series A Redeemable Preferred Stock in its entirety. As of May 29, 2004, the outstanding amount of Series A Redeemable Preferred Stock of $35.4 million included $1.4 million of accrued dividends.



13



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##### Table of Contents

|11. | Business Segment and Related Information
|--- | ----------------------------------------



We operate in one segment. Net sales and long-lived assets by geographical area are as follows:



|              |  |                                   |           |                                   |   |          
|------------- |  | --------------------------------- | --------- | --------------------------------- | - | ---------
|              |  | Thirteen Weeks Ended May 29, 2005 |           | Fourteen Weeks Ended May 30, 2004
|              |  | (dollars in thousands)           
|Net sales:    |  |                                   |           |                                   |   |          
|United States |  | $                                 | 1,322,500 |                                   | $ | 1,226,589
|Canada        |  |                                   | 34,410    |                                   |   | 31,900   
|              |  |                                   |           |                                   |   |          
|Total         |  | $                                 | 1,356,910 |                                   | $ | 1,258,489
|              |  |                                   |           |                                   |   |          



|                   |  |              |         |                   |   |              |  |   |        
|------------------ |  | ------------ | ------- | ----------------- | - | ------------ |  | - | -------
|                   |  | May 29, 2005 |         | February 27, 2005 |   | May 30, 2004
|Long-lived assets: |  |              |         |                   |   |              |  |   |        
|United States      |  | $            | 177,791 |                   | $ | 178,056      |  | $ | 180,412
|Canada             |  |              | 3,827   |                   |   | 4,098        |  |   | 3,874  
|                   |  |              |         |                   |   |              |  |   |        
|Total              |  | $            | 181,618 |                   | $ | 182,154      |  | $ | 184,286
|                   |  |              |         |                   |   |              |  |   |        



Net sales by product category are as
follows:



|                               |  |                                   |           |                                   |   |          
|------------------------------ |  | --------------------------------- | --------- | --------------------------------- | - | ---------
|                               |  | Thirteen Weeks Ended May 29, 2005 |           | Fourteen Weeks Ended May 30, 2004
|                               |  | (dollars in thousands)           
|Net sales by product category: |  |                                   |           |                                   |   |          
|Chemicals                      |  | $                                 | 723,540   |                                   | $ | 724,095  
|Fertilizer                     |  |                                   | 336,427   |                                   |   | 280,733  
|Seed                           |  |                                   | 276,298   |                                   |   | 233,611  
|Other                          |  |                                   | 20,645    |                                   |   | 20,050   
|                               |  |                                   |           |                                   |   |          
|Total                          |  | $                                 | 1,356,910 |                                   | $ | 1,258,489
|                               |  |                                   |           |                                   |   |          



Net sales by geographical area are
based on the location of the facility producing the sales.



Long-lived assets
consist of property, plant and equipment net of depreciation, goodwill, intangible assets net of amortization, deferred income taxes, debt issuance costs net of amortization, investment in unconsolidated affiliates, and other assets. Long-lived
assets by geographical area are based on the location of our facilities.



14



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##### Table of Contents

|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|------- | --------------------------------------------------------------------------------------



On November 29, 2004, UAP Holding Corp. consummated the initial public offering of its common stock (the Common Stock
Offering), which consisted of a primary offering of 3,125,000 shares of common stock by UAP Holding Corp. and a secondary offering of 28,428,125 shares of UAP Holding Corp.s common stock by UAP Holding Corp.s equity sponsor and
certain members of its management (collectively, the selling stockholders).



Unless the context requires otherwise, all references to Company, we, us, ours, and UAP refer specifically to UAP Holding Corp. and its consolidated
subsidiaries. Additionally, all references to UAP Holdings Corp. refer specifically only to UAP Holding Corp., excluding its subsidiaries, and all references to United Agri Products refer specifically only to United Agri
Products, Inc., and its subsidiaries, and all references to United Agri Products, Inc. refer specifically to United Agri Products, Inc., excluding its subsidiaries.



The purpose of this section is to discuss and analyze our consolidated financial condition, liquidity and capital resources and results
of operations for the periods presented. You should read this analysis in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report. The results of operations for the thirteen weeks ended May 29,
2005 are not necessarily indicative of the results to be expected for other interim periods or for the full fiscal year. This should also be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended February 27, 2005.



Overview



We operate in the highly competitive agricultural inputs distribution industry. Our
principal competitors in the distribution of crop production inputs include agricultural cooperatives, national fertilizer producers, major grain companies and independent distributors and brokers. We, along with other agricultural input
distributors, represent the main route-to-market for agricultural input manufacturers, and fill a critical need in the U.S. and Canadian agricultural input markets by allowing suppliers to economically access a highly fragmented customer base of
growers, dealers and non-crop customers.



The three primary product areas of
the agricultural and non-crop input markets are chemicals, seed and fertilizer. Our industry in general is affected by a number of factors including but not limited to, cost to distribute products, customer financial condition, local and national
laws and regulations, economic conditions, employment, inflation, political climate, interest rates, fuel prices and weather patterns.



Our business depends on farm expenditures for crop inputs, which in turn is dependent upon planted acreage in the United States and Canada. Over the last ten years,
agricultural inputs have grown 3% per year, and planted acreage has been virtually flat, leading to a relatively stable but very competitive industry for crop inputs. Our opportunities within the industry will include the use of our national
distribution network to further participate in the growing seed market, grow fertilizer volumes as we extend that product offering to existing customers, continue to expand our private label lines of seed and chemicals and continue to look for more
efficiencies in expenses and working capital.



Background



We market a comprehensive line of products including chemicals, seed and fertilizer to
growers and regional dealers. In addition to our product offering, we provide a broad array of value-added services including crop management, biotechnology advisory services, custom blending, inventory management and custom applications of crop
inputs. The products and services we offer are critical to growers because they lower the overall cost of crop production and improve crop quality and yield. As a result of our broad scale and scope, we provide leading agricultural input companies
with an efficient means to access a highly fragmented customer base of farmers and growers.



We will continue to seek to grow our business, improve margins and reduce working capital through the following principal strategies:



| |  |  | Leveraging our scale;
| | - |  | ---------------------



15



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##### Table of Contents

| |  |  | Expanding our presence in seed, fertilizer, branded and non-crop products; and
| | - |  | ------------------------------------------------------------------------------



| |  |  | Targeting continued margin enhancement and working capital management.
| | - |  | ----------------------------------------------------------------------



Recent Initiatives



Improving our Nationwide Network.One of our key initiatives is to grow our business by leveraging our size and leading market share across North America. We study our market share by state, county, and
customer, and develop sales initiatives at a local and regional level to address any gaps and opportunities we have in our network on chemical, seed, and fertilizer. Where our data indicates an opportunity, we have the potential to add sales
personnel and/or locations and assets to fill in gaps in our coverage. We have also begun to address the non-crop markets with a focused management team, and have made modifications to our sales coverage and asset base in that market.



Proprietary and Private Label Business.Our proprietary and private label
products offer significantly higher margins than the branded products that we sell. We currently market over 220 proprietary branded products and have a broad proprietary product offering in each of our core product areas, including non-crop. We
continue to work with nearly all of our suppliers on additional private label opportunities.



Seed and Fertilizer Revenue Growth. We have experienced revenue growth in both of these product areas and believe there are significant growth opportunities going forward. As seed varieties continue to
be enhanced through biotechnology we believe they will serve as a growth platform due to the increased value-added nature of their sale to the customer. We intend to leverage our growth in the seed business through: advanced technical training of
our sales-force, hiring and strategically placing experienced salespeople, using incentive compensation plans incorporating seed-specific performance goals, nurturing our relationships with our seed suppliers and targeting new retail and wholesale
opportunities to enhance our sales presence in regions where gaps exist. We will also leverage our growth in the fertilizer business by nurturing relationships with fertilizer suppliers and by making modest investments in storage and blending
facilities in regions where gaps exist.



Working Capital and
Administrative Expense Reduction. We believe we are well positioned to continue to improve the financial performance of our business. We monitor performance regularly on key operating statistics such as credit, inventory efficiency,
operating expenses, gross profit generation and overall return on invested capital. This information will continue to enable us to reduce administrative expense and average levels of working capital by concentrating on the following: earlier
collection of supplier rebates, extending payable terms with key suppliers, continuing inventory efficiencies through SKU reduction efforts and centralized purchasing, evaluating our suppliers on a total return basis including working capital
reductions, continuing to focus on credit policies and procedures to maximize profitability and using competition and best practices among our operating divisions to drive overall focus on working capital and expense reduction that are tied to
variable compensation plans.



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RESULTS OF OPERATIONS



Thirteen Weeks Ended May 29, 2005, Compared to Fourteen Weeks Ended May 30, 2004



Analysis of Condensed Consolidated Statement of Earnings



|                                                          |  |                                   |           |   |                                   |   |           |                |  |       |  
|--------------------------------------------------------- |  | --------------------------------- | --------- | - | --------------------------------- | - | --------- | -------------- |  | ----- | -
|(dollars in thousands, except earnings per share amounts) |  | Thirteen Weeks Ended May 29, 2005 |           |   | Fourteen Weeks Ended May 30, 2004 |   |           | Percent Change | 
|Net Sales                                                 |  | $                                 | 1,356,910 |   |                                   | $ | 1,258,489 |                |  | 7.8   | %
|Cost of goods sold                                        |  |                                   | 1,188,158 |   |                                   |   | 1,122,755 |                |  | 5.8   | %
|                                                          |  |                                   |           |   |                                   |   |           |                |  |       |  
|Gross profit                                              |  |                                   | 168,752   |   |                                   |   | 135,734   |                |  | 24.3  | %
|Selling, general and administrative expenses              |  |                                   | 86,348    |   |                                   |   | 82,956    |                |  | 4.1   | %
|Gain on sale of assets                                    |  |                                   | (18       | ) |                                   |   | (572      | )              |  | -96.9 | %
|Royalties, service charges and other income and expenses  |  |                                   | (7,784    | ) |                                   |   | (2,673    | )              |  | 191.2 | %
|                                                          |  |                                   |           |   |                                   |   |           |                |  |       |  
|Operating income                                          |  |                                   | 90,206    |   |                                   |   | 56,023    |                |  | 61.0  | %
|Third party interest expense                              |  |                                   | 8,328     |   |                                   |   | 12,132    |                |  | -31.4 | %
|Finance related and other charges                         |  |                                   |          |   |                                   |   | 1,875     |                |  | NM    |  
|                                                          |  |                                   |           |   |                                   |   |           |                |  |       |  
|Income before income taxes                                |  |                                   | 81,878    |   |                                   |   | 42,016    |                |  | 94.9  | %
|Income tax expense                                        |  |                                   | 32,491    |   |                                   |   | 16,494    |                |  | 97.0  | %
|                                                          |  |                                   |           |   |                                   |   |           |                |  |       |  
|Net income                                                |  | $                                 | 49,387    |   |                                   | $ | 25,522    |                |  | 93.5  | %
|                                                          |  |                                   |           |   |                                   |   |           |                |  |       |  
|                                                          |  |                                   |          
|Basic earnings per share                                  |  | $                                 | 0.98      |   |                                   | $ | 0.54      |                |  | 81.5  | %
|Diluted earnings per share                                |  | $                                 | 0.94      |   |                                   | $ | 0.50      |                |  | 88.0  | %
|                                                          |  |                                   |          
|NM = Not Meaningful                                       |  |                                   |           |   |                                   |   |           |                |  |       |  
|                                                          |  |                                   |          
|Effective tax rate                                        |  |                                   | 39.7      | % |                                   |   | 39.3      | %              |  |       |  
|                                                          |  |                                   |          
|Comparison as a Percent of Net Sales:                     |  |                                   |           |   |                                   |   |           |                |  |       |  
|Gross profit                                              |  |                                   | 12.4      | % |                                   |   | 10.8      | %              |  |       |  
|Selling, general and administrative expenses              |  |                                   | 6.4       | % |                                   |   | 6.6       | %              |  |       |  
|Operating income                                          |  |                                   | 6.6       | % |                                   |   | 4.5       | %              |  |       |  
|Income before income taxes                                |  |                                   | 6.0       | % |                                   |   | 3.3       | %              |  |       |  
|Net income                                                |  |                                   | 3.6       | % |                                   |   | 2.0       | %              |  |       |  



Net Sales.Sales
increased to $1,356.9 million in the thirteen weeks ended May 29, 2005, compared to $1,258.5 million for the fourteen weeks ended May 30, 2004. Sales of proprietary chemical and seed products were 14.5% of total chemical and seed sales in the
thirteen weeks ended May 29, 2005, relatively flat compared to the fourteen weeks ended May 30, 2004.



Sales of chemicals were relatively flat at $723.5 million in the thirteen weeks ended May 29, 2005, from $724.1 million in the fourteen weeks ended May 30, 2004. Share gains in the Midwest and Northern Plains and a
change in the way Monsanto bills its bulk herbicide business were offset by lower non-crop sales and slightly lower chemical tolling revenue due to the rationalization of two non-strategic formulation facilities that had provided toll manufacturing
services. Higher volumes of glyphosate herbicides offset lower end user unit prices for glyphosate products. Sales of fertilizer increased to $336.4 million in the thirteen weeks ended May 29, 2005, from $280.7 million in the fourteen weeks ended
May 30, 2004. The increase was due to higher pricing and higher volumes from fertilizer applications that normally occur in the fall and winter but were delayed into the spring due to wet weather. Sales of seed increased to $276.3 million in the
thirteen weeks ended May 29, 2005, from $233.6 million in the fourteen weeks ended May 30, 2004. The increase was due to volume growth on both third party and proprietary brands and higher prices due to increased sales of seed with enhanced traits.
Sales of other products were relatively flat at $20.6 million in the thirteen weeks ended May 29, 2005, from $20.1 million in the fourteen weeks ended May 30, 2004.



Cost of Goods Sold.Cost of goods sold was $1,188.2 million in the thirteen weeks ended May 29, 2005, compared to $1,122.8
million in the fourteen weeks ended May 30, 2004. Gross profit (net sales less cost of goods sold) was $168.8 million in the thirteen weeks ended May 29, 2005, compared to $135.7 million in the fourteen weeks ended



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May 30, 2004. Gross margin (gross profit as a percentage of net sales) was 12.4% in the thirteen weeks ended May 29, 2005, compared to 10.8% in the fourteen
weeks ended May 30, 2004. The increase in gross profit and gross margin was partially due to increased cost of sales of $17.4 million in the fourteen weeks ended May 30, 2004, arising from purchase accounting for the Acquisition. At the Acquisition,
the inventory on our books was written up $21.1 million to fair market value. As this inventory was sold, it increased cost of sales by $17.4 million in the fourteen weeks ended May 30, 2004. The remaining $15.6 million increase in gross profit was
primarily due to lower supply chain costs and growth in seed and fertilizer volumes. Gross profit includes rebates, which are accrued monthly based on actual sales at the most likely estimated rates by supplier, then finalized in our fourth quarter
and the accrual adjusted as necessary.



Selling, General and
Administrative Expenses.Selling, general and administrative (SG&A) expenses increased to $86.3 million in the thirteen weeks ended May 29, 2005 from $83.0 million in the fourteen weeks ended May 30, 2004. SG&A expenses were 6.4% of
sales during the thirteen weeks ended May 29, 2005, and 6.6% of sales during the fourteen weeks ended May 30, 2004. The increase in expenses was due to higher personnel costs and professional expenses associated with becoming an independent public
company, and slightly higher insurance expenses, offset by one less week in the thirteen weeks ended May 29, 2005. SG&A expenses for the fourteen weeks ended May 30, 2004 include $0.3 million of management fees paid to Apollo Management.



Royalties, Service Charges and Other Income and Expenses.These
items include royalty income generated by our proprietary products group, service charge income paid by customers who do business with us on terms, and equity earnings in an unconsolidated subsidiary, as well as other items. Other income increased
to $7.8 million in the thirteen weeks ended May 29, 2005, from $2.7 million in the fourteen weeks ended May 30, 2004. Of the total $5.1 million increase, $2.5 million was due to higher royalty income during the thirteen weeks ended May 29, 2005.



Third Party Interest Expense.Interest expense was $8.3 million
in the thirteen weeks ended May 29, 2005, which related primarily to the 81⁄4% Senior Notes, the 103⁄4% Senior Discount Notes, and our revolving credit facility. Interest expense includes interest on the 81⁄4% Senior Notes and 103⁄4%
Senior Discount Notes, interest and fees on the revolving credit facility, and amortization of initial revolving credit facility fees and costs relating to the issuance of the 81⁄4% Senior Notes and the 103⁄4% Senior Discount Notes. For the
fourteen weeks ended May 30, 2004, third party interest expense was $12.1 million, related to interest on the 81⁄4% Senior Notes, the 103⁄4% Senior Discount Notes, our revolving credit facility, preferred stock, and interest accrued on the
final settlement payment to ConAgra Foods. The fourteen weeks ended May 30, 2004 included interest expense on obligations that were no longer outstanding during the thirteen weeks ended May 29, 2005, including interest on preferred stock redeemed in
October and November 2004, and interest relating to $21.5 million of our 81⁄4% Senior Notes which were redeemed in December 2004.



Finance Related and Other Charges. Finance related and other charges for the fourteen weeks ended May 30, 2004, consist of $1.9 million transition services
agreement expenses with ConAgra Foods related to the Acquisition.



Income
Taxes.The effective income tax rate was comparable quarter over quarter at 39.7% for the thirteen weeks ended May 29, 2005 versus 39.3% for the fourteen weeks ended May 30, 2004.



LIQUIDITY AND CAPITAL RESOURCES



Overview



Our principal liquidity requirements are for working capital, consisting primarily of receivables, inventories, pre-paid expenses, reduced
by accounts payable and accrued expenses; capital expenditures; debt service; and dividends on our common stock. We will fund our liquidity needs, including dividend payments, with cash generated from operations and, to the extent necessary, through
borrowings under our revolving credit facility. In addition, we expect to fund any growth capital expenditures with cash generated from operations, reductions in working capital and incremental debt.



At May 29, 2005, we had no short-term debt outstanding under our revolving credit facility
compared to an outstanding balance of $42.1 million at May 30, 2004. The revolving credit facility is included in our financial statements as short-term debt. We believe that our cash flows from operating activities and borrowing capabilities under
our revolving credit facility will be sufficient to meet our liquidity requirements in the foreseeable future, including funding of capital expenditures, debt service payments, and our intended dividend payments on our common stock. If our cash
flows from operating activities are insufficient to fund dividend payments at intended



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levels, we will need to reduce or eliminate dividends or, to the extent we are permitted to do so under our debt agreements, fund dividends with borrowings
or from other sources. If we use working capital or permanent borrowings to fund dividends, we will have less cash available for future dividends and other purposes, which could negatively impact our financial condition, our results of operations
and our ability to maintain or expand our business. Additionally, our revolving credit facility will mature in 2008. If we are unable to refinance such indebtedness prior to its stated maturity, we will be required to use cash to repay such
indebtedness, and we may not have sufficient cash available to us at that time. Even if we have sufficient cash, such a repayment would sufficiently decrease the amount of cash, if any, that is available to pay dividends.



Cash Flows



Our ongoing operations require availability of funds to service debt, fund working capital and meet capital expenditure requirements. We
currently finance and expect to continue to finance these activities through cash flows from operations and from amounts available under our revolving credit facility.



Cash flows used in operating activities totaled $52.7 million in the thirteen weeks ended May 29, 2005, compared to $204.9 million in the
fourteen weeks ended May 30, 2004. The improvement in net cash used in operating activities in the current period versus the prior period is primarily due to better overall payment terms from suppliers and a change in the timing of prepayments to
chemical and seed suppliers. We made larger prepayments to chemical and seed suppliers in the fourth quarter of fiscal 2005, significantly reducing payment obligations to suppliers in the thirteen weeks ended May 29, 2005. However, in the fourth
quarter of fiscal 2004, we decided not to make significant prepayments to suppliers. Instead, we primarily paid on regular trade terms during the thirteen weeks ended May 30, 2004, resulting in more payments to suppliers. This was partially offset
by higher trade receivables from increased sales and higher inventories. Inventories were up due to higher levels of fungicide products and higher fertilizer inventory levels resulting from increased fertilizer cost and slightly delayed markets in
the mid-south due to weather.



Cash flows used in investing activities totaled
$2.1 million for both the thirteen weeks ended May 29, 2005, and the fourteen weeks ended May 30, 2004. Additions to property, plant and equipment were $3.2 million in the thirteen weeks ended May 29, 2005, compared to $3.9 million in the fourteen
weeks ended May 30, 2004. Capital spending during the thirteen weeks ended May 29, 2005 was for a variety of projects; the largest was related to a fertilizer terminal expansion project.



Cash flows provided by financing activities were $22.5 million in the thirteen weeks ended May 29, 2005, compared to $61.6 million in the
fourteen weeks ended May 30, 2004. Cash flows provided by financing activities for May 30, 2004, reflect borrowings under our revolving credit facility used to accommodate the seasonal working capital needs of our business. We actively manage our
cash balances which results in check float on zero balance accounts. The cash flows provided by our check float was $23.6 million and $19.4 million for the periods ending May 29, 2005, and May 30, 2004, respectively.



Credit Facility.At May 29, 2005, there was $500.0 million of borrowing
availability under the revolving credit facility and United Agri Products had borrowing capacity thereunder of $475.8 million after giving effect to $24.2 million of letters of credit under the sub-facility.



Since inception of the credit facility, we have been in compliance with the financial
covenants. During the fifty-two weeks ended May 29, 2005, outstanding borrowings (net of cash on hand) reached a period end peak of $275.2 million on October 24, 2004, while cash on hand reached a period end peak of $48.2 million on February 27,
2005. Our average period end borrowings (net of cash on hand) for the fifty-two week period ended May 29, 2005, were approximately $100.1 million.



Obligations and Commitments



As part of our ongoing operations, we enter into arrangements that obligate us to make future payments under contracts such as lease agreements, debt agreements and
unconditional purchase obligations (i.e., obligations to transfer funds in the future for fixed or minimum quantities of goods or services at fixed or minimum prices, such as take-or-pay contracts). We enter into unconditional purchase
obligation arrangements in the normal course of business to ensure that adequate levels of sourced product are available to us. There were no material changes outside of the ordinary course of business during the thirteen weeks ended May 29, 2005.



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Holding Company



As a holding company, our investments in our operating subsidiaries, including United Agri Products, constitute substantially all of our operating assets. Consequently,
our subsidiaries conduct all of our consolidated operations and own substantially all of our operating assets. Our principal source of the cash required to pay our and our subsidiaries obligations and to repay the principal amount of our and
our subsidiaries obligations, including the 103⁄4% Senior Discount Notes, is the cash that our subsidiaries generate from their operations and our borrowings under the revolving credit facility. Our subsidiaries are separate and distinct
legal entities and have no obligations to make funds available to us. The terms of the agreements governing our existing indebtedness generally restrict our subsidiaries from paying dividends, making loans or other distributions and otherwise
transferring assets to us. Furthermore, our subsidiaries are permitted under the terms of the revolving credit facility and the indentures governing the 81⁄4% Senior Notes and 103⁄4% Senior Discount Notes to incur additional indebtedness that
may severely restrict or prohibit the making of distributions, the payment of dividends or the making of loans by such subsidiaries to us. We cannot assure you that the agreements governing our current and future indebtedness will permit our
subsidiaries to provide us with sufficient dividends, distributions or loans to fund scheduled interest and principal payments on our indebtedness when due. If we consummate an acquisition, our debt service requirements could increase. We may need
to refinance all or a portion of our indebtedness on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all.



Dividend Policy



We intend to pay quarterly cash dividends on our common stock at an annual rate of $0.50 per share.On April 29, 2005, our board
declared a quarterly dividend on our common stock in the amount of $0.125 per share of common stock. The record date for the dividend payment was May 13, 2005, and the payment date was June 1, 2005.



There are no assurances that we will declare or pay any cash dividends in the future. The
declaration and payment of future dividends to holders of our common stock is at the discretion of our board of directors and depends upon many factors, including our financial condition, earnings, legal requirements, restrictions in our debt
agreements and other factors our board of directors deems relevant. The terms of our indebtedness, including the revolving credit facility and the indentures governing the 81⁄4% Senior Notes and the 103⁄4% Senior Discount Notes, may also
restrict us from paying cash dividends on our common stock under some circumstances. As of May 29, 2005, management believes approximately $52 million of permitted distributions were available to pay dividends under our restricted payment covenant
in our indenture governing the 103⁄4% Senior Discount Notes.



In the past,
cash flow provided by our operating activities has been highly variable, resulting in negative cash flow during certain periods. Because of the variability, if our cash flows from operating activities are insufficient to fund dividend payments at
intended levels, we may need to reduce or eliminate dividends or, to the extent permitted by our debt agreements, fund all or part of the dividends with additional debt or other sources of cash. To the extent we pay dividends, the amount of cash
available to us to pay principal of, and interest on, our outstanding debt will be reduced. A failure to pay principal of, or interest on, our debt would constitute an event of default under the applicable debt agreements, giving the holders of the
debt the right to accelerate its maturity. If any of our debt is accelerated, we may not have sufficient cash available to repay it in full and we may be unable to refinance it on satisfactory terms or at all. An event of default under debt
agreements, or an acceleration of the debt hereunder, could also trigger an event of default under other debt agreements. Furthermore, if we fund dividends with additional debt, our interest expense will increase, which may cause a further reduction
in the amount of cash available to us. Subject to certain restrictions in the indentures governing the 81⁄4% Senior Notes and the 103⁄4% Senior Discount Notes, that additional debt could be secured and therefore effectively senior to the
81⁄4% Senior Notes and the 103⁄4% Senior Discount Notes.



Critical
Accounting Policies



The process of preparing financial statements
requires the use of estimates on the part of management. The estimates used by management are based on our historical experiences combined with managements understanding of current facts and circumstances. Certain of our accounting policies
are considered critical as they are both important to the portrayal of our financial condition and results of operations and require significant or complex judgment on the part of management. There has been no material change in accounting policies
considered critical by our management. However we have refined our methodology for estimating chemical rebates receivable.



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Forward-Looking Statements



This Report includes forward-looking statements that involve risks and uncertainties. Forward-looking statements include
statements concerning our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not
historical information and, in particular, appear under the heading Managements Discussion and Analysis of Financial Condition and Results of Operations. When used in this Report, the words estimates,
expects, anticipates, projects, plans, intends, believes, forecasts, foresees, likely, may, should, goal,
target, and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon information available to us on the date of this Report.



These forward-looking statements are subject to risks, uncertainties and other factors, many
of which are outside of our control that could cause actual results to differ materially from the results discussed in the forward-looking statements including, among other things, the matters discussed in this Report under this Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations. Such risks, uncertainties and other factors may include, among others:



| |  |  | general economic and business conditions;
| | - |  | -----------------------------------------



| |  |  | industry trends;
| | - |  | ----------------



| |  |  | restrictions contained in our debt agreements;
| | - |  | ----------------------------------------------



| |  |  | our substantial leverage, including the inability to generate the necessary amount of cash to service our existing debt and the incurrence of substantial indebtedness in the future;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the seasonality of our business and weather conditions;
| | - |  | -------------------------------------------------------



| |  |  | the possibility of liability for pollution and other damage that is not covered by insurance or that exceeds our insurance coverage;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------



| |  |  | increased competition in the markets in which we operate;
| | - |  | ---------------------------------------------------------



| |  |  | our dependence on rebate programs to attain profitability;
| | - |  | ----------------------------------------------------------



| |  |  | our dependence on a limited number of key executives who we may not be able to adequately replace if they leave our company;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in government regulations, agricultural policy and environmental, health and safety laws and regulations;
| | - |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | changes in business strategy, development plans or cost savings plans;
| | - |  | ----------------------------------------------------------------------



| |  |  | the loss of any of our major suppliers or the bankruptcy or financial distress of our customers;
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | the ability to attain and maintain any price increases for our products;
| | - |  | ------------------------------------------------------------------------



| |  |  | availability, terms and deployment of capital; and
| | - |  | --------------------------------------------------



| |  |  | other factors over which we have little or no control.
| | - |  | ------------------------------------------------------



These risks and certain other uncertainties are discussed in more detail in our Annual Report on Form 10-K for the fiscal year ended February 27, 2005 under the caption
Item 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsRisk Factors.



There may be other factors, including those discussed elsewhere in this Report, which could cause our actual results to differ materially from the results referred to in
the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date of this Report and are expressly qualified in their entirety by the cautionary statements included in this
Report. We undertake no obligation to publicly update



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or revise forward-looking statements to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.



|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|------- | -----------------------------------------------------------



Market risks affecting our business are exposure to changes in energy prices, foreign currency risks, and interest rate risks.



Our average period end borrowings under the revolving credit agreement (net of cash on hand)
for the fifty-two week period ended May 29, 2005, were approximately $100.1 million. The revolving credit facility is affected by changes in interest rates. Based upon the amount of our average period end borrowings (net of cash on hand) for the
fifty-two week period ended May 29, 2005, a one percentage point change in the assumed weighted average interest rate on such credit facility would change our annual interest expense by $1.0 million.



|ITEM 4. | CONTROLS AND PROCEDURES.
|------- | ------------------------



As of the end of the period covered by this Report, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures as
they related to our business (Disclosure Controls). This evaluation (Controls Evaluation) was done under the supervision and with the participation of management, including our Chief Executive Officer (CEO) and
Chief Financial Officer (CFO).



Our management, including the CEO
and CFO, does not expect that our Disclosure Controls or our internal controls over financial reporting (Internal Controls) will prevent all error and all fraud. A control system, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent
limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of
two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent
limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.



Based upon the Controls Evaluation, the CEO and CFO have concluded that the Disclosure Controls are effective as of the end of the period covered by this Report. There
have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to the date we carried out this evaluation. In addition, there have been no changes in our internal control
over financial reporting that have occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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PART II. OTHER INFORMATION



Items 1, 2, 3, 4 and 5
are not applicable and have been omitted.



|ITEM 6. | EXHIBITS
|------- | --------



|     |  |                                                                                                                                                                                  
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|10.1 |  | UAP Holding Corp. Directors Deferred Compensation Program.                                                                                                                       
|     | 
|31.1 |  | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|     | 
|31.2 |  | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|     | 
|32.1 |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                       
|     | 
|32.2 |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                       



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SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: July 8, 2005



UAP HOLDING CORP.(Registrant)By:

/s/ David W. BullockDavid W. BullockExecutive Vice President and Chief Financial Officer(Principal Financial Officer and duly authorized signatory on behalf of Registrant)




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