1177314--3/17/2006--NORTHERN_GROWERS

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Our financial performance is dependent on corn prices and market prices for ethanol and distillers dried grains, and our financial condition and results of operation are directly affected by changes in these market prices . Hedging transactions involve risks that could harm our profitability. Our business is not diversified because it is limited to the fuel grade ethanol industry, which may limit our ability to adapt to changing business and market conditions. We are heavily dependent upon several Broin-affiliated companies and any termination of or disagreement regarding the services of these affiliates may materially harm our business. We are dependent upon Ethanol Products, LLC to purchase and market all of the ethanol produced at the plant Interruptions in energy supplies could delay or halt production at the plant, which will reduce our profitability. We are dependent upon the Big Stone Plant for steam, and the plant may incur increased operating costs if the steam supply is terminated or interrupted. To produce ethanol, we need a significant supply of water Debt service and restrictive loan covenants limit our ability to make cash distributions to members and could have other important consequences. Increases in the production of ethanol could result in lower prices for ethanol and distillers grains and higher prices for corn We operate in an intensely competitive industry and there is no assurance that we will be able to compete effectively. Competition from the advancement of technology may lessen the demand for ethanol and negatively impact our profitability Corn-based ethanol may compete with cellulose-based ethanol in the future, which could make it more difficult for us to produce ethanol on a cost-effective basis Consumer resistance to the use of ethanol based on the belief that ethanol is expensive, adds to air pollution, harms engines and takes more energy to produce than it contributes, may affect the demand for ethanol which could affect our ability to market our product Competition from ethanol imported from Caribbean basin countries may be a less expensive alternative to the ethanol produced in the United States, which may cause us to lose market share Competition from ethanol imported from Brazil may be a less expensive alternative to ethanol production in the United States, which may cause us to lose market share. Ethanol Plant Technology Improvements and Expansion Risks There are no assurances that the incorporation of new technology at the plant and plant expansion will improve operations or our profitability. Construction related to BPX and expansion at the plant could cost more than anticipated. Delays and defects in construction related to BPX and plant expansion could impair the plant s ability to operate. Government, Regulatory and Other Risks Government regulation costs could increase costs and reduce profitability We have not received from the South Dakota Department of Environment and Natural Resources a notice of renewal and approval of an amendment to the plant s air quality permit The plant may be subject to further scrutiny or a proceeding from the United States Environmental Protection Agency and the South Dakota Department of Environment and Natural Resources. Federal and state laws, regulations and tax incentives concerning ethanol could expire or change, which could harm our business If Northern Growers is treated as a corporation for federal income tax purposes, its capital units could decline in value. A member s tax liabilities may exceed cash distributions. There are significant restrictions on transferring the capital units.

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1177314--3/17/2006--NORTHERN_GROWERS_LLC