Agrium Earns $4 Per Share and Over $1-Billion in EBITDA in Second Quarter 2008

Agrium Inc. (TSX: AGU) (NYSE: AGU) announced today its highest ever quarterly earnings, with net earnings for the second quarter of 2008 of $636-million ($4.00 diluted earnings per share) more than double the previous quarterly earnings record of $229-million ($1.70 diluted earnings per share) achieved in the second quarter of 2007. The recent UAP acquisition is estimated to have contributed approximately $0.70 diluted earnings per share for the reported period of May 5 to June 30, 2008. Net earnings for the first six months of the year were a record $831-million ($5.24 diluted earnings per share), almost four times the previous first half record of $218-million ($1.63 diluted earnings per share) set in 2007.

"Agrium's exceptional second quarter earnings are a result of strong performance across all business units and the outlook for all our product lines continues to strengthen. I am especially pleased with the contribution from our UAP acquisition. The timing of this acquisition couldn't be better given continued strength in the industry fundamentals. This quarter's results are a reflection both of the quality of our assets and the benefit of diversifying throughout the agricultural value chain," said Mike Wilson, Agrium President and CEO.

"We anticipate continued strong demand for our products and services that help farmers around the world improve both crop quality and yield. Specifically, the outlook for the second half of the year remains solid with corn, wheat and soybean prices at two to three times historic levels. This should support crop input demand and continued strength in the nutrient markets benefiting our Retail, Wholesale and Advanced Technologies businesses."

Similar to last year, we intend to provide earnings guidance for the second half of the year when we release our third quarter earnings.

KEY RESULTS AND DEVELOPMENTS

- Agrium's EBITDA reached $1,035-million for the quarter and $1,376-million for the first half of 2008 due to higher realized seed, chemical and nutrient prices, supported by solid Wholesale production and sales for all major products and improved Retail margins and ESN volumes. Hedge gains accounted for $161-million ($0.68 diluted earnings per share) net of non-controlling interests in the second quarter of 2008, while stock-based compensation expense for the quarter was $115-million ($0.49 diluted earnings per share). Net of these two factors our earnings would have been $3.81 diluted earnings per share. Our June 11, 2008 earnings guidance assumed we would realize approximately $0.16 diluted earnings per share in hedging gains and $0.21 diluted earnings per share in stock-based compensation expense.

- Agrium Wholesale EBITDA in the second quarter was an all-time high at $682-million due to exceptional crop nutrient pricing and margins for all three major nutrients. Gross margins on a per tonne basis more than tripled for potash and phosphate versus the same quarter last year. Agrium's Retail EBITDA more than doubled to $431-million compared to the same period last year. Our legacy Retail operations reported a 69 percent increase in EBITDA year-over-year. UAP's EBITDA was $177-million, 25 percent higher than the same reported period last year, and their EBITDA for the first half of 2008 was approximately $260-million. Agrium Advanced Technologies EBITDA was 50 percent or $5-million higher than last year reaching $15-million, due to increased ESN sales volumes.

- In July, Agrium announced that it successfully concluded the purchase of a 70 percent equity position in Common Market Fertilizers S.A. ("CMF"), one of Western Europe's largest fertilizer distribution companies, which will further expand our Purchase For Resale business. CMF has annual nutrient sales volumes of 2 to 2.5 million tonnes and operates through subsidiaries across much of Europe.

- Agrium is currently in discussions with the Egyptian government pertaining to the government's decision to force the relocation of the EAgrium nitrogen project. The options proposed by the Government include a merger of EAgrium with an existing fertilizer company, relocation and/or a buy-out of EAgrium's shareholders. We expect to be in a position to provide further information by early September, 2008.

MANAGEMENT'S DISCUSSION AND ANALYSIS

August 6, 2008

The following interim management's discussion and analysis (MD&A) updates our annual MD&A included in our 2007 Annual Report to Shareholders, to which our readers are referred. No update is provided where an item is not material or there has been no material change from the discussion in our annual MD&A.

2008 Second Quarter Operating Results

NET EARNINGS

Agrium's second quarter consolidated net earnings were $636-million, or $4.00 diluted earnings per share, compared to consolidated net earnings of $229-million, or $1.70 diluted earnings per share, for the comparable quarter of 2007. EBIT improved by $609-million over the second quarter of 2007. This improvement in EBIT was made up of the combination of an increase in gross profit of $689-million offset by an increase in expenses of $80-million.