Exhibit 99.1

FOR IMMEDIATE RELEASE

For more information, contact:
Greg Keeley, Penford Products
(319) 398-3700


                 UNION REJECTS FIVE-YEAR PENFORD CONTRACT OFFER
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                 UNION WORKFORCE SAYS "NO" TO MORE THAN $40/HOUR
           TOTAL COMPENSATION, INCLUDING DOUBLE PAY FOR REGULAR SHIFT
                WORK ON SUNDAYS, AND A $4,000 RATIFICATION BONUS


CEDAR RAPIDS, IA, August 1, 2004 - Penford Products today announced that the 145
members of Bakery, Confectionary, Tobacco Workers and Grain Millers (BCTGM),
Local 100G rejected a five-year contract offer made by the company on July 28
and are on strike. The company's last, best and final offer included wage
increases totaling 7.5% over the five years, continued double-pay for regularly
scheduled shift work on Sundays, a $4,000 ratification bonus and increased
insurance coverage. The company's salaried workforce began operating the plant
this morning at 6AM, and all operations are running smoothly. Penford's three
potato starch plants are not affected by the walkout.

         In making the announcement, Greg Keeley, president of Penford Products,
said, "We are deeply disappointed that the members have chosen to reject the
company's last, best and final offer. This offer not only would have
strengthened our ability to compete in the intensely competitive North American
industrial starch markets, but also would have continued to make Penford
bargaining unit employees among the best compensated workforce in the Cedar
Rapids area." In addition to total compensation for the average employee of more
than $40 per hour, including continued double-time pay for regular-shift work on
Sundays, union members rejected a $4,000 ratification bonus.

         "The Industrial Starch Division has been working very hard to control
costs throughout its operations, and we're making considerable progress in every
area, except bargaining unit labor costs," said Keeley, citing more than $10
million in annualized savings during the past five years. "We can no longer
support one of the industry's highest-paid workforces. Unless we can






control our future labor costs, we will be unable to compete effectively and
maintain the customer base that makes these good jobs possible."

         "Like every prudent employer faced with the potential for a labor
dispute, Penford put detailed contingency plans in place to continue providing
our customers with the high-quality products they want and need from us," said
Keeley. Initially, Penford is operating the plant with supervisory and salaried
employees, and will add temporary replacements to help meet production needs. In
closing, Keeley indicated that, while the company is willing to listen to union
proposals, it does not anticipate a quick return to the bargaining table.


ABOUT PENFORD CORPORATION:
Penford Corporation develops, manufactures and markets specialty natural-based
ingredient systems for various applications, including papermaking, textiles and
food products.

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