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Improvements Will Increase Company Processing Capacity by 15% and Plant Capacity by 35% KANSAS CITY, Mo., Jan. 3 /PRNewswire-FirstCall/ -- Premium Standard Farms, Inc. (PSF) (Nasdaq: PORK) announced today that its board of directors has approved the expansion of the companys Milan, Missouri hog processing plant. Based on the results from the recently completed engineering and feasibility study, the improvements will increase processing levels to 10,000 head per day versus the current level of 7,400 head per day. This translates into 15% of additional total company processing capacity, or an additional 35% capacity to the Milan plant. The expansion project will increase PSFs capital investments by approximately $23 million, and the planned ramp up of capacity will begin in the second quarter of calendar year 2007. John Meyer, CEO of Premium Standard Farms, said, "The decision to expand our Milan plant is a critical component to our growth strategy. Our integrated system satisfies the needs of our discriminating customers by providing consistent, high quality pork products. This investment will allow us to meet increasing international and domestic demand for our products as we continue to further enhance our export business and expand our domestic customer base." The company will acquire the additional hogs necessary to expand the processing levels at the Milan plant from three sources: * PSFs Missouri farms, which have experienced increased productivity from the existing sow base. * Outside producers that would become part of PSFs Processed Verified Program. This is based on a successful model that was instituted at the companys North Carolina plant, which currently obtains approximately 25% of its head from other Processed Verified suppliers. * The potential also exists for additional hogs to come from PSFs Texas operations. Mr. Meyer continued, "Increasing the processing capacity at the Milan plant illustrates one initiative in our plans to grow PSF both organically and through acquisitions. In addition, the expansion will help us to achieve our strategic goal of moving more of our business mix into the processing segment." PSF is one of the largest vertically integrated providers of pork products in the United States, producing consistent, high quality pork products for the retail, wholesale, foodservice, export, and further processor markets. PSF is the nations second largest pork producer and sixth largest pork processor, with approximately 4,100 employees working at farms and processing facilities in Missouri, North Carolina, and Texas. This news release contains "forward-looking statements" within the meaning of the federal securities laws. Naturally, all forward-looking statements involve risk and uncertainty and actual results or events could be materially different. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our goals will be achieved. Important factors that could cause actual results to differ include: economic conditions generally and in our principal markets; competitive practices and consolidation in the pork production and processing industries; the impact of current and future laws, government regulations and fiscal policies affecting our industry and operations, including environmental laws and regulations, trade embargoes and tariffs; domestic and international transportation disruptions; food safety; the availability of additional capital to fund future commitments and expansion and the cost and terms of financing; outbreaks of disease in our herds; feed ingredient costs; fluctuations in live hog and wholesale pork prices; customer demands and preferences; and the occurrence of natural disasters and other occurrences beyond our control. In light of these risks, uncertainties and assumptions, the forward-looking events discussed might not occur.