FOR IMMEDIATE RELEASE: MGP INGREDIENTS REPORTS FIRST QUARTER RESULTS

ATCHISON, Kan., November 12, 2002--MGP Ingredients, Inc. (MGPI/Nasdaq)
today reported net income of $6,790,000, or 84 cents per common share, for the
first quarter of fiscal 2003, which ended Sept. 30. That compares to net income
of $2,444,000, or 30 cents per share, for the same period the prior year. The
increase was due to $13 million in non-operating income ($7.9 million after the
effects of income taxes) resulting from the recognition of expected insurance
proceeds in excess of the net recorded costs of assets that were destroyed in a
distillery explosion at the company's Atchison, Kan., plant on Sept. 13, 2002.
This amount more than offset what otherwise would have been a net loss of
$1,110,000 in the current year's first quarter. The company's sales in the first
quarter of fiscal 2003 totaled $42,899,000 compared to sales of $54,294,000 in
the first quarter of fiscal 2002.

According to Ladd Seaberg, president and chief operating officer, the
company's operating results were adversely affected by reduced sales of
distillery products and higher prices for grain, principally corn, compared to a
year ago. The company also experienced a decrease in ingredient sales due to a
planned reduction in sales of commodity ingredients, which consist of vital
wheat gluten and commodity wheat starch. Meanwhile, sales of the company's
specialty ingredients, primarily specialty wheat proteins and starches, grew by
10 percent over the prior year's first quarter level.

The decline in sales of distillery products was attributable to lower
selling prices for both food grade and fuel grade alcohol, commonly known as
ethanol, and lower production resulting from the shutdown of the company's
Atchison, Kansas distillery due to the Sept 13th explosion. Business
interruption insurance proceeds to compensate for the effects of the explosion
amounted to $530,000 in the quarter and helped reduce the operating loss during
that period. The operating loss recognized in the quarter was also partially
reduced by approximately $1,063,000 in net income received during the quarter
from a previously announced United States Department of Agriculture (USDA)
program to provide cash incentives to ethanol producers. The company also
benefited from approximately $621,000 in other operating net income for the
quarter resulting from a USDA program to support the development of products and
markets for value-added wheat proteins and wheat starches.

As previously reported, because of the expiration of the wheat gluten quota
in June, 2001, the company has significantly reduced its production of vital
wheat gluten. This measure was taken in the face of greatly increased
competitive pressures from the European Union. At the same time, the company is
placing greater attention and resources on the development, production and
marketing of its specialty wheat proteins and starches for use in value-added
applications.

"Growth in the specialty ingredients area is our primary focus as we
concentrate our marketing efforts on serving manufacturers of food, personal
care and pet products," Seaberg said. He stated that over the next two years,
the company's goal is to increase sales of specialty ingredients by over 30
percent compared to the $37.4 million that was realized in fiscal 2002. Seaberg
noted that there were a number of factors that could cause actual results to
differ materially from the company's goal identified in this forward-looking
statement, including the company's ability to expand its customer base, customer
acceptance of new products, and competition.

The USDA program to support value-added wheat protein and wheat starch
development was implemented in June, 2001. Administered by the USDA's Commodity
Credit Corporation, it was granted in lieu of an extended quota on imports of
foreign wheat gluten. Over the life of the program, which is scheduled to end
May 31, 2003, Midwest Grain is eligible for approximately $25.6 million of the
program total of $40 million. For the first 12 months of the program,
approximately $17.3 million was allocated to the company. The remaining $8.3
million was allocated to the company in July, 2002. The funds must be used for
capital, research, marketing and promotional costs related to value-added wheat

-more-

ADD 1--MGP INGREDIENTS REPORTS FIRST QUARTER

protein and starch products. Funds received are recognized in income during the
period in which they are expended for a permitted purpose. However, funds that
are used for capital expenditure projects will be recognized in income over the
periods during which those projects are depreciated.

Approximately 75 percent of the program's funds for the two years combined
are expected to be used for capital projects and will be reflected in earnings
over the next seven to 10 years. These projects include a previously announced
$8.3 million expansion project at the company's Atchison plant. The expansion is
slated for completion later this month and involves the installation of
additional processing and drying equipment for the production of specialty wheat
proteins for bakery, pasta and noodle and related food markets, both domestic
and foreign. The remaining 25 percent of the funds are being applied toward
research and marketing-related costs, and hence are reflected in earnings.

The USDA's incentive program for ethanol producers began in December, 2000
and extends through September, 2006. It was initiated to provide a cash
incentive for ethanol producers who increase their grain usage over comparable
quarters in the prior year to raise fuel alcohol production. Funding from the
program is determined on an annual basis. The company's eligibility to
participate in the program is determined from quarter to quarter. However, due
to the reduced production resulting from the distillery shutdown in Atchison,
the company's eligibility through the remainder of fiscal 2003 is questionable.

As a result of the explosion, the company will be unable to produce alcohol
at the Atchison plant for an extended period. Because its ingredient and alcohol
production processes are integrated, the distillery shutdown also affects the
company's ability to produce the base raw material for specialty ingredients at
this location. "Fortunately," Seaberg said, "although our ability to supply spot
business at this time is substantially reduced, production capabilities at our
Pekin, Ill., facility should be adequate to supply alcohol to regular customers.
Additionally, our Illinois operation has been able to produce the base proteins
and starches, which are then transferred to the Atchison facility as raw
material for producing our specialty ingredients."

Seaberg reiterated that the Company is proceeding with plans to restart
alcohol production in Atchison. "While some production could resume within the
next month, the total rebuilding process is expected to take from nine months to
a year to complete," he said. "The goal of this process is to be able to
efficiently make high quality, high purity food grade alcohol when distillery
production fully resumes in Atchison," he added. Seaberg indicated that the
company may also consider plans to further enhance the efficiencies of fuel
alcohol production at the Illinois facility.

"We currently are experiencing slight improvements in selling prices for
our alcohol products compared to the first quarter," Seaberg said. "However," he
added, "grain prices have also risen since that time."

Seaberg emphasized that MGP Ingredients' financial condition "is very
solid," noting that the company has cash and cash equivalents of $28 million,
working capital of approximately $42 million and equity of approximately $110
million. He announced that considering "the substantial increase in grain costs
combined with challenges posed by the Atchison distillery shutdown, "the
company's fiscal 2003 target for operating income, which excludes insurance
gains, is to break even." He also said, "I expect us to emerge from our current
situation as a stronger company and hope to have improved operating income,
resulting in earnings per share in the range of 40 cents to 50 cents in fiscal
2004."

Seaberg added that actual results for fiscal 2003 and 2004 might differ
materially from those in these forward-looking statements due to a number of
factors. The company's ability to reach its 2003 target depends primarily on
some strengthening of alcohol selling prices, over which it has little or no
control, and steady increases in sales of specialty ingredients, which, as noted
above, depend on the company's ability to expand its customer base, customer
acceptance of new products and competition. In addition to these factors,
reaching fiscal 2004 goals will require grain prices that are lower than the
company currently is experiencing and more reflective of historical averages,
conditions which are largely beyond the company's control, and increased alcohol
efficiencies, which the company hopes to achieve as the result of the planned
start-up of rebuilt distillery operations in Atchison in early fiscal 2004.


This news release contains forward-looking statements as well as historical
information. Forward-looking statements are identified by or are associated with
such words as "intend," "believe," "estimate," "expect," "anticipate,"
"hopeful," "should," "may" and similar expressions. They reflect management's
current beliefs and estimates of future economic circumstances, industry
conditions, company performance and financial results and are not guarantees of
future performance. The forward-looking statements are based on many assumptions
and factors, including those relating to grain prices, gasoline prices, energy
costs, product pricing, competitive environment and related marketing
conditions, operating efficiencies, access to capital, actions of governments or
government officials and actions of insurers. Any changes in the assumptions or
factors could produce materially different results than those predicted and
could impact stock values.

###
CONSOLIDATED STATEMENT OF EARNINGS
- ---------------------------------------------------------------------------
(unaudited) Three Months Ended September 30
(Dollars in thousands, except per share) 2002 2001
- ---------------------------------------------------------------------------
NET SALES $ 42,899 $ 54,294
COST OF SALES 42,722 47,304
-----------------------------------
GROSS PROFIT 177 6,990
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (3,321) (4,151)
OTHER OPERATING INCOME 1,522 1,349
-----------------------------------
INCOME FROM OPERATIONS (LOSS) (1,622) 4,188
OTHER INCOME (EXPENSE)
OTHER 13,166 246
INTEREST (321) (394)
-----------------------------------
INCOME BEFORE INCOME TAXES 11,223 4,040
PROVISION FOR INCOME TAXES 4,433 1,596
-----------------------------------
NET INCOME $ 6,790 $ 2,444
-----------------------------------
OTHER COMPREHENSIVE INCOME 385 --
COMPREHENSIVE INCOME 7,175 2,444
===================================
BASIC EARNINGS PER COMMON SHARE $ 0.84 $ .30
DILUTED EARNINGS PER COMMON SHARE $ 0.83 $ .30
DIVIDENDS PER COMMON SHARE $ 0.15 $ 0.15

Weighted average shares outstanding 8,071,410 8,165,325
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CONSOLIDATED BALANCE SHEETS
- ------------------------------------------------------------------------------------------------------------------------
(unaudited) Sept. 30 Sept. 30 (unaudited) Sept. 30 Sept. 30
(Dollars in thousands) 2002 2001 (Dollars in thousands) 2002 2001
- ------------------------------------------------------------------------------------------------------------------------
ASSETS LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT ASSETS: CURRENT LIABILITIES:
Cash and cash equivalents $ 22,447 $ 24,045
Investments 5,483 4,691 Current maturities of
Receivables 19,226 24,071 long-term debt $ 3,201 $ 3,201
Inventories 23,045 20,755 Accounts payable 6,862 8,681
Prepaid expenses 2,049 550 Accrued expenses 3,452 3,745
Deferred income taxes 397 284 Deferred income 18,264 10,971
Refundable Income taxes 1,266 585
--------------------- -----------------------
Total Current Assets 73,913 74,981 Total Current Liabilities 31,779 $ 26,598
PROPERTY AND EQUIPMENT, At Cost 255,515 258,501
Less accumulated depreciation 164,019 167,486 LONG-TERM DEBT 15,927 18,433
--------------------- POST-RETIREMENT BENEFITS 5,904 5,921
91,496 91,015 DEFERRED INCOME TAXES 15,688 10,588
Insurance Receivable 14,000 --- STOCKHOLDERS' EQUITY 110,215 104,678
--------------------- -----------------------
OTHER ASSETS 104 222
===================== =======================
$179,513 $ 166,218 $179,513 $ 166,218
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