BELLEVUE, Wash., June 24, 2002

Penford Corporation to Join Russell 3000^® Index

Annual reconstitution of the Russell indexes captures the 3,000 largest U.S. stocks as of the end of May, ranking them by total market capitalization to create the Russell 3000. The largest 1,000 companies in the ranking comprise the Russell 1000Ò Index, while the remaining 2,000 companies become the widely used Russell 2000Ò Index.

"We're pleased to be included in the Russell 3000 Index." said Thomas D. Malkoski, CEO of Penford. "Growth in our market capitalization sufficient to qualify for inclusion in the Russell 3000 Index is validation of our commitment to building long-term shareholder value. However, we remain mindful that the only way to bring increasing value to our shareholders is by delivering value to our customers. Our focus on developing technically-differentiated products that provide solutions to customer needs makes Penford a recognized leader in the markets we serve."

Membership in Russell's 21 U.S. equity indexes is determined strictly by market capitalization rankings and style attributes rather than by subjective opinion or committee decisions. Russell indexes are widely used by managers for index funds and as benchmarks Penford Corporation to Join the Russell 3000^® Index, for both passive and active investment strategies. About $250 billion is invested in index funds based on Russell's indexes and an additional $850 billion is benchmarked to them. Investment managers who oversee these funds purchase shares of member stocks according to that company's weighting in the particular index.

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

About Frank Russell Company
Frank Russell Company, a global leader in multi-manager investment services, provides investment products and services in more than 35 countries. Russell manages $70 billion in assets and advises clients worldwide representing US$1.8 trillion. Founded in 1936, Russell is a subsidiary of Northwestern Mutual and is headquartered in Tacoma, Wash., with additional offices in New York, Toronto, London, Paris, Singapore, Sydney, Auckland and Tokyo. For more information, go to www.russell.com.

This press release contains forward-looking statements concerning the Company's ability to deliver technically differentiated products. There are a variety of factors (some of which are set forth below) that could adversely affect the Company's ability to deliver technically differentiated products. Among the factors that could adversely affect the performance described in the forward-looking statements are the performance of the economy as a whole (including the economies in markets served by the Company, such as North America and Asia) and the impact of such performance on the Company's customers, customer acceptance of new products or technologies at less than anticipated rates, issues related to lack of increases in or decreases or delays in customer demand or orders, increased competition, the possible ineffectiveness of a recent restructuring, timing and other issues related to introduction of new technologies, decreases in market share, unfavorable changes in product mix, disappointments in product development efforts and introductions, interest rate and energy cost volatility, foreign exchange rate fluctuations and those listed in the Company's SEC reports, including the reports on Form 10-K for the year ended August 31, 2001.