**UNITED STATES**

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

**FORM 10-Q**

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[x ]                                      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                                               OF THE SECURITIES EXCHANGE ACT OF 1934

                                 For the quarterly period ended February 28, 2001

                                                        or

[  ]                                      TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
                                               OF THE SECURITIES EXCHANGE ACT OF 1934

                          For the transition period from _____________ to _____________.

                                          Commission File Number: 2-67985

                                               FARMLAND INDUSTRIES, INC.
                              (Exact name of registrant as specified in its charter)

                        Kansas                                                                   44-0209330
               (State of incorporation)                                             (I.R.S. Employer Identification No.)

             12200 North Ambassador Drive
                Kansas City, Missouri                                                               64163
       (Address of principal executive offices)                                                  (Zip Code)

                         Registrant's telephone number, including area code: 816-459-6000
```

Indicate by check mark whetherthe registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file suchreports), and (2) has been subject to such filing requirements for the past90 days.  Yes [X]   No [ ] 

PART I -FINANCIAL INFORMATION

Item 1.FINANCIAL STATEMENTS

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                                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                                    (UNAUDITED)
                                                      ASSETS

                                                        August 31               February 28
                                                          2000                     2001
                                                     ----------------         ----------------
                                                                (Amounts in Thousands)
  Accounts receivable - trade........................ $      740,026          $        689,403
  Inventories (Note 2)...............................        832,687                 1,058,343
  Other current assets...............................        252,716                   342,016
                                                      -----------------       ------------------

        Total Current Assets......................... $    1,825,429          $      2,089,762
                                                      -----------------       ------------------

Investments and Long-Term Receivables (Note 3)....... $      399,889          $        357,386
                                                      -----------------       ------------------

Property, Plant and Equipment:
  Property, plant and equipment, at cost............. $    1,787,614          $      1,704,327
     Less accumulated depreciation and
     amortization....................................        960,652                   920,396
                                                        ---------------         ----------------

  Net Property, Plant and Equipment.................. $      826,962          $        783,931
                                                      -----------------       ------------------

Other Assets                                          $      229,907          $        248,460
                                                      -----------------       ------------------

Total Assets                                          $    3,282,187          $      3,479,539
                                                      =================       ==================

    See accompanying Notes to Consolidated Financial Statements

                                     FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES

                                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                                    (UNAUDITED)
                                             LIABILITIES AND EQUITIES

                                                                             August 31          February 28
                                                                                2000                2001
                                                                       --------------------- -------------------
                                                                                (Amounts in Thousands)
Current Liabilities:
    Short-term notes payable ........................................  $        689,477       $         752,035
    Current maturities of long-term debt ............................            32,222                  31,148
    Accounts payable - trade.........................................           345,286                 389,531
    Customer advances on product purchases...........................           120,731                 167,898
    Other current liabilities........................................           422,811                 413,658
                                                                       ------------------     ------------------

         Total Current Liabilities...................................  $      1,610,527       $       1,754,270
                                                                       ------------------     ------------------

Long-Term Liabilities:
    Long-term borrowings (excluding current maturities)..............  $        646,160       $         662,447
    Other long-term liabilities......................................            40,134                  38,165
                                                                       ------------------     ------------------

         Total Long-Term Liabilities.................................  $        686,294       $         700,612
                                                                       ------------------     ------------------

Deferred Income Taxes................................................  $         54,676       $          48,048
                                                                       ------------------     ------------------

Minority Owners' Equity in Subsidiaries..............................  $         49,459       $          54,416
                                                                       ------------------     ------------------

Net Income (Note 1)..................................................  $             -0-      $           5,369
                                                                       ------------------     ------------------

Capital Shares and Equities:
    Preferred Shares, Authorized 8,000,000 Shares, 8% Series A
     cumulative redeemable preferred shares, stated
     at redemption value, $50 per share..............................  $        100,000       $         100,000
    Common shares, $25 par value--Authorized
      50,000,000 shares..............................................           522,876                 527,155
    Accumulated Other Comprehensive Income (net of
    deferred taxes of $5,450 at February 28, 2001) (Notes 4
 .........and 5)                                                                     111                  30,789
    Earned surplus and other equities................................           258,244                 258,880
                                                                       ------------------     ------------------

         Total Capital Shares and Equities...........................  $        881,231       $         916,824
                                                                       ------------------     ------------------

Contingent Liabilities and Commitments (Note 6)

Total Liabilities and Equities.......................................  $      3,282,187       $       3,479,539
                                                                       ==================     ==================

    See accompanying Notes to Consolidated Financial Statements

                                    FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES

                                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                         Six Months Ended
                                                              ---------------------------------------
                                                                 February 29         February 28
                                                                     2000                2001
                                                              ------------------- -------------------
                          (Amounts in Thousands)

 Sales.........................................................$    5,848,663     $       5,952,724
 Cost of sales.................................................     5,613,211             5,730,092
                                                               -----------------  --------------------

 Gross income..................................................$      235,452     $         222,632
                                                               -----------------  --------------------

 Selling, general and administrative expenses..................$      237,512     $         193,500
                                                               -----------------  --------------------

 Other income (deductions):
     Interest expense, net.....................................$      (48,806)    $         (60,865)
     Other, net (Note 5).......................................        (4,959)               23,209
                                                               -----------------  --------------------
 Total other income (deductions)..............................$       (53,765)    $         (37,656)
                                                              ------------------  --------------------

  Loss before equity in net income of investees, minority
       owners' interest in net (income) of subsidiaries, income
       tax benefit, and cumulative effect of changes
       in accounting principles, net of income tax expense.....$      (55,825)    $          (8,524)

    Equity in net income of investees (Note 3) ................         5,059                 1,144

    Minority owners' interest in net (income)
         of subsidiaries........................................       (9,385)               (9,090)
                                                                  -----------------  --------------------

    Loss before income tax benefit and cumulative
        effect of changes in accounting principles,
        net of income tax expense..............................$      (60,151)      $       (16,470)

    Income tax benefit.........................................        11,513                 2,063
                                                                  -----------------  --------------------

    Loss before cumulative effect of changes in
        accounting principles..................................$      (48,638)       $      (14,407)

    Cumulative effect of changes in accounting for
        derivative financial instruments and planned major
        maintenance costs, net of $3,313 income
        tax expense (Notes 5 and 7)............................            -0-               19,776
                                                                  -----------------  --------------------

    Net income (loss)..........................................$      (48,638)    $  $        5,369
                                                                  =================  ====================

    Pro forma net loss assuming use of the direct expense
        method of accounting for planned major
        maintenance costs (Note 7).............................       (44,809)    $            (901)                                                                             $
                                                                  =================  ====================

    See accompanying Notes to Consolidated Financial Statements

                                    FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES

                                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                        Three Months Ended
                                                             -----------------------------------------
                                                                  February 29          February 28
                                                                     2000                 2001
                                                             ---------------------- ------------------
                         (Amounts in Thousands)

  Sales........................................................$     2,864,198      $       3,011,397
  Cost of sales.................................................     2,752,563              2,904,514
                                                               -----------------    -------------------

  Gross income.................................................$       111,635      $         106,883
                                                               -----------------    -------------------

  Selling, general and administrative expenses.................$       114,341      $          91,615
                                                               -----------------    -------------------

  Other income (deductions):
      Interest expense, net....................................$       (25,074)     $         (30,472)
      Other, net (Note 5).......................................           465                 20,568
                                                               -----------------    -------------------
  Total other income (deductions).............................$.       (24,609)    $   $       (9,904)
                                                              ------------------   --------------------

   Income (loss) before equity in net income (loss) of
        investees, minority owners' interest in net (income) of
        subsidiaries and income tax                            $       (27,315)     $           5,364
        benefit......................

     Equity in net income (loss) of investees (Note 3) .........         3,982                 (4,149)

     Minority owners' interest in net (income)
         of subsidiaries........................................        (3,254)                (2,876)
                                                                  ------------------   --------------------

     Loss before income tax benefit............................$       (26,587)     $  $       (1,661)

     Income tax benefit.........................................         4,491                    317
                                                                  -----------------    -------------------

     Net loss                                                  $       (22,096)     $  $       (1,344)
                                                                  ==================   ====================

     Pro forma net loss assuming use of the direct expense
     method of accounting for planned major maintenance costs
     (note 7)                                                  $       (21,787)     $          (1,344)
                                                                  ==================   ====================

    See accompanying Notes to Consolidated Financial Statements

                                    FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES

                                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                    (UNAUDITED)

                                                                                            Six Months Ended
                                                                              ---------------------------------------------
                                                                                 February 29                February 28
                                                                                    2000                       2001
                                                                              ------------------         ------------------
                                                                                         (Amounts in Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)............................................................   $      (48,638)            $         5,369
Adjustments to reconcile net income (loss) to net cash provided by
  (used in) operating activities:
      Depreciation and amortization..........................................           55,193                      53,296
      Equity in net (income) of investees....................................           (5,059)                     (1,144)
      Other..................................................................            9,370                       8,878
    Changes in assets and liabilities:
       Accounts receivable...................................................           52,300                      48,261
       Inventories...........................................................          (35,592)                   (171,257)
       Other assets..........................................................            1,809                     (60,809)
       Accounts payable......................................................         (106,120)                     44,246
       Other liabilities.....................................................           80,908                      63,535
                                                                              ------------------         ------------------
Net cash provided by (used in) operating activities..........................   $        4,171             $        (9,625)
                                                                              ------------------         ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.........................................................   $      (48,381)            $       (49,767)
Distributions from joint ventures............................................           11,910                      17,241
Additions to investments and notes receivable................................          (17,846)                    (11,066)
Acquisition of other long-term assets........................................          (10,343)                    (10,200)
Proceeds from disposal of investments and notes receivable...................           12,842                      15,016
Proceeds from sale of fixed assets...........................................            4,395                       6,233
                                                                              ------------------         ------------------
Net cash used in investing activities....................................     $        (47,423)          $         (32,543)
                                                                              ------------------         ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of patronage refunds................................................ $         (6,054)          $              -0-
Payments of dividends........................................................           (4,004)                     (4,000)
Proceeds from bank loans and notes payable...................................          984,297                   2,865,524
Payments on bank loans and notes payable.....................................         (945,920)                 (2,769,103)
Proceeds from issuance of subordinated debt certificates.....................           16,734                      15,328
Payments for redemption of subordinated debt certificates....................          (13,820)                    (26,965)
Increase (decrease) of checks and drafts outstanding.........................           16,916                     (28,790)
Net decrease in demand loan certificates.....................................           (4,210)                     (5,710)
Other                                                                                     (687)                     (4,116)
                                                                              ------------------         ------------------
Net cash provided by financing activities.................................... $         43,252           $          42,168
                                                                              ------------------         ------------------

Net decrease in cash and cash equivalents.................................... $             -0-          $              -0-
Cash and cash equivalents at beginning of period.............................               -0-                         -0-
                                                                              ------------------         ------------------
Cash and cash equivalents at end of period................................... $             -0-          $              -0-
                                                                              ==================         ==================

    On October 1, 2000, we contributed property, plant and equipment and investments with a carrying value of
    approximately $43.8 million in return for an equity interest in Land O'Lakes Farmland Feed, LLC.

    On December 31, 2000, Cooperative Refining LLC was dissolved.   We received inventory with a value of $54.4
    million in exchange for our equity interest in Cooperative Refining.

    See accompanying Notes to Consolidated Financial Statements

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS****(UNAUDITED)****(1)      Interim Financial Statements**
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