UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-Q

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





For Quarter Ended                                      Commission File
November 30,  1996                                      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.)



             3315 North Farmland Trafficway, Kansas City, Missouri
                    (Address of principal executive offices)

                                   64116-0005
                                   (Zip Code)


                                  816-459-6000
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 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 such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes X   No


                  FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                     ASSETS
<TABLE>
<CAPTION>
                                                                  August 31              November 30
                                                                     1996                   1996
                                                                        (Amounts in Thousands)
<S>                                                            <C>                     <C>
Current Assets:
  Accounts receivable - trade................................  $        624,002        $        622,573
  Inventories (Note 2).......................................           736,620                 729,653
  Other current assets.......................................           101,748                  85,799

       Total Current Assets..................................  $      1,462,370        $      1,438,025

Investments and Long-Term Receivables (Note 4)...............  $        241,124        $        249,073

Property, Plant and Equipment:
  Property, plant and equipment, at cost.....................  $      1,506,460        $      1,526,552
     Less accumulated depreciation and
     amortization............................................           789,236                 800,706

  Net Property, Plant and Equipment..........................  $        717,224        $        725,846

Other Assets.................................................  $        147,728        $        154,789


Total Assets.................................................  $      2,568,446        $      2,567,733

FN>
See accompanying Notes to Consolidated Financial Statements.
</TABLE>



                  FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                            LIABILITIES AND EQUITIES
<TABLE>
<CAPTION>
                                                                           August 31            November 30
                                                                              1996                  1996

                                                                              (Amounts in Thousands)
<S>                                                                      <C>                    <C>
Current Liabilities:
    Checks and drafts outstanding...................................     $       30,944         $     132,075
    Demand loan certificates........................................             40,099                37,970
    Short-term notes payable .......................................            315,428               199,355
    Current maturities of long-term debt ...........................             41,080                39,529
    Accounts payable - trade........................................            392,436               368,463
    Customers' allowances on product purchases......................             17,007               119,064

    Other current liabilities.......................................            303,326               216,667

        Total Current Liabilities...................................     $    1,140,320         $   1,113,123

Long-Term Liabilities:
    Long-term borrowings (excluding current maturities).............     $      616,258         $     618,976
    Other long-term liabilities.....................................             35,983                33,359

        Total Long-Term Liabilities.................................     $      652,241         $     652,335

Deferred Income Taxes...............................................     $        6,709         $      10,575

Minority Owners' Equity in Subsidiaries.............................     $       13,845                12,614

Net Income (Note 1).................................................     $            0         $      23,892

Capital Shares and Equities:
  Common shares, $25 par value--Authorized
     50,000,000 shares..............................................            414,503               467,874
    Earned surplus and other equities...............................            340,828               287,320

        Total Capital Shares and Equities...........................     $      755,331         $     755,194

Contingent Liabilities and Commitments (Note 3)

Total Liabilities and Equities......................................     $    2,568,446         $   2,567,733

<FN>
See accompanying Notes to Consolidated Financial Statements.
</TABLE>



                   FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                               Three Months Ended
                                                                       November 30           November 30
                                                                          1995                  1996
                                                                             (Amounts in Thousands)
<S>                                                                  <C>                    <C>
Sales..........................................................      $     2,156,949        $    2,389,279
Cost of sales..................................................            2,009,590             2,272,215

Gross income...................................................      $       147,359        $      117,064

Selling, general and administrative expenses...................      $        81,261        $       94,312

Other income (deductions):
   Interest expense............................................      $       (14,289)       $      (16,019)
   Other, net..................................................                4,185                 9,131

Total other income (deductions)................................      $       (10,104)       $       (6,888)

Income before income taxes, equity in net income of investees
  and minority owners' interest in
    net (income) loss of subsidiaries..........................      $        55,994        $       15,864

Income tax  expense............................................              (12,162)               (3,051)

Income before equity in net income of investees and minority
  owners' interest in net (income) loss
    of subsidiaries............................................      $        43,832        $       12,813
Equity in net income of investees
   (Note 4)....................................................                9,832                10,002

Minority owners' interest in net (income) loss
   of subsidiaries.............................................               (1,380)                1,077

Net income ....................................................      $        52,284        $       23,892

<FN>
See accompanying Notes to Consolidated Financial Statements.
</TABLE>



                   FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                       Three Months Ended
                                                                               November 30 1995    November 30 1996
                                                                                     (Amounts in Thousands)
<S>                                                                              <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income..................................................................     $    52,284          $    23,892
Adjustments to reconcile net income to net cash
  provided by operating activities:
     Depreciation and amortization..........................................          17,749               22,822
     Equity in net income of investees......................................          (9,832)             (10,002)
    Other...................................................................           3,908                4,843
    Changes in operating assets and operating liabilities,
      net of acquisitions:
       Accounts receivable..................................................         (73,314)                (869)
       Inventories..........................................................         (34,934)               6,827
       Other assets.........................................................         (26,599)              22,128
       Accounts payable.....................................................          71,319              (23,973)
       Advances on product purchases........................................          69,613              102,057
       Other liabilities....................................................           3,726              (59,785)

Net cash provided by operating activities...................................     $    73,920          $    87,940

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investments and collection of
  notes receivable..........................................................     $     1,335          $     1,968
Acquisition of investments and notes receivable.............................         (11,878)             (34,251)
Capital expenditures........................................................         (41,905)             (30,163)
Acquisition of other long-term assets.......................................          (3,046)              (6,947)
Proceeds from sale of fixed assets..........................................             799                4,182
Distributions from joint ventures...........................................             487               28,868
Other.......................................................................          (2,145)              (3,515)

Net cash used in investing activities.......................................     $   (56,353)         $   (39,858)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) in demand loan certificates..................................     $      (597)         $    (2,129)
Proceeds from bank loans and notes payable..................................         107,316               88,127
Payments of bank loans and notes payable....................................        (123,171)            (191,217)
Proceeds from issuance of subordinated debt certificates....................          11,525               30,216
Payments for redemption of subordinated debt certificates...................         (11,487)             (16,493)
Net increase in checks and drafts outstanding...............................          58,901              101,130
Payments for redemption of equities.........................................         (23,380)             (25,258)
Payments of patronage refunds and dividends.................................         (32,594)             (32,459)
Other, increase (decrease)..................................................          (4,080)                   1

Net cash used in financing activities.......................................     $   (17,567)         $   (48,082)

Net increase 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-

<FN>
See accompanying Notes to Consolidated Financial Statements.
</TABLE>

                   FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)  INTERIM FINANCIAL STATEMENTS

      Unless the context requires otherwise, (i) "Farmland" or the "Company"
herein refers to Farmland Industries, Inc. and its consolidated subsidiaries,
(ii) all references herein to "year" or "years" are to fiscal years ended August
31 and (iii) all references herein to "members" are to persons eligible to
receive patronage refunds from Farmland including voting members, associate
members and other patrons with which Farmland has a currently effective
patronage refund agreement.

      Operating results for any quarter are not necessarily indicative of the
results expected for the full year.  The principal businesses of the Company are
highly seasonal and subject to price volatility.  Historically, the majority of
farm supply products are sold in the spring.  Sales in the beef business and in
grain marketing historically have been concentrated in the summer.  Summer is
the lowest sales period for pork products.  In view of the seasonality of the
Company's businesses, it must be emphasized that the results for the three
months ended November 30, 1996 should not be annualized to project a full year's
results.

      The information included in these Condensed Consolidated Financial
Statements of Farmland reflects all adjustments (consisting only of normal
recurring accruals) which, in the opinion of management, are necessary for a
fair statement of the results for the interim periods presented.

      In accordance with the bylaws of Farmland and its cooperative
subsidiaries, the member-sourced portion of income before income taxes is
determined annually and distributed as patronage refunds to members of Farmland.
The member-sourced portion of such income is determined on the basis of the
quantity or value of business done by Farmland during the year with or for
members.  As this determination is made only after the end of the fiscal year,
and since the appropriation of earned surplus is dependent on the determination
of the amount of patronage refunds, and in view of the fact that the portion of
the annual patronage refund to be paid in cash and in Farmland equity (common
stock, associate member common stock or capital credits) is determined (by the
Farmland Board of Directors at its discretion) after the amount of the annual
patronage refund has been determined, Farmland makes no provision for patronage
refunds in its interim financial statements.  Therefore, the amount of net
income has been reflected as a separate item in the accompanying November 30,
1996 Condensed Consolidated Balance Sheet.


 (2) INVENTORIES

      Major components of inventories at August 31, 1996 and November 30, 1996
are as follows:
<TABLE>
<CAPTION>
                                                   August 31               November 30
                                                      1996                     1996
                                                         (Amounts in Thousands)
<S>                                            <C>                      <C>
Finished and in-process products..............  $     620,794              $  592,283
Materials.....................................         58,526                  74,459
Supplies......................................         57,300                  62,911

                                                $     736,620              $  729,653

</TABLE>



(3)  CONTINGENCIES

  (A)  TAX LITIGATION

      In July 1983, Farmland sold the stock of Terra Resources, Inc. ("Terra"),
a wholly owned subsidiary engaged in oil and gas exploration and production
operations, and exited its oil and gas exploration and production activities.
The gain from the sale of Terra amounted to $237.2 million for tax reporting
purposes.

      On March 24, 1993, the Internal Revenue Service ("IRS") issued a statutory
notice to Farmland asserting deficiencies in federal income taxes (exclusive of
statutory interest thereon) in the aggregate amount of $70.8 million.  The
asserted deficiencies relate primarily to the Company's tax treatment of the
$237.2 million gain resulting from its sale of the stock of Terra and the IRS's
contention that Farmland incorrectly treated the Terra sale gain as patronage
income against which certain patronage-sourced operating losses could be offset.
The statutory notice further asserts that, among other things, Farmland
incorrectly characterized for tax purposes gains aggregating approximately $14.6
million, and a loss of approximately $2.3 million from dispositions of certain
other assets.

      On June 11, 1993, Farmland filed a petition in the United States Tax Court
contesting the asserted deficiencies in their entirety.  The case was tried on
June 13-15, 1995.  The parties submitted post-trial briefs to the court in
September 1995 and reply briefs were submitted to the court in November 1995.

      If the United States Tax Court decides in favor of the IRS on all
unresolved issues raised in the statutory notice, Farmland would have additional
federal and state income tax liabilities aggregating approximately $85.8 million
plus accumulating statutory interest thereon (approximately $217.2 million,
before tax benefits of the interest deduction, through November 30, 1996), or
$303.0 million in the aggregate at November 30, 1996.  In addition, such a
decision would affect the computation of Farmland's taxable income for its 1989
tax year and, as a result, could increase Farmland's federal and state income
taxes for that year by approximately $5.0 million plus accumulating  statutory
interest thereon (approximately $7.1 million), or $12.1 million in the aggregate
at November 30, 1996.  The asserted federal and state income tax liabilities and
accumulated interest thereon would become immediately due and payable unless the
Company appealed the decision and posted the requisite bond to stay assessment
and collection.

        The liability resulting from an adverse decision by the United States
Tax Court would be charged to current earnings and would have a material adverse
effect on the Company.  In the event of such an adverse determination of the
Terra tax issue, certain financial covenants of the Company's Credit Agreement
(the "Agreement"), dated May 15, 1996, become less restrictive.  Had the United
States Tax Court decided in favor of the IRS on all unresolved issues, and had
the obligation related to such unresolved issues been due and payable on
November 30, 1996, Farmland's borrowing capacity under the Agreement would have
been adequate to finance the liability.  However, Farmland's capacity to finance
such an adverse decision with borrowings under the Agreement will depend
substantially on the financial effects of future operating events and on its
ability to satisfy the financial covenants in the Agreement.

      No provision has been made in the consolidated financial statements for
federal or state income taxes (or interest thereon) in respect of the IRS claims
described above.  Farmland believes that it has meritorious positions with
respect to all of these claims.

      In the opinion of Bryan Cave LLP, Farmland's special tax counsel, it is
more likely than not that the courts will ultimately conclude that Farmland's
treatment of the Terra sale gain was substantially, if not entirely, correct.
Such counsel has further advised, however, that none of the issues involved in
this dispute is free from doubt, and there can be no assurance that the courts
will ultimately rule in favor of Farmland on any of these issues.

  (B)  ENVIRONMENTAL MATTERS

      The Company has been designated by the Environmental Protection Agency as
a potentially responsible party ("PRP") under the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), at various National
Priority List ("NPL") sites.

      The Company currently is aware of probable obligations for environmental
matters at 39 properties.  At November 30, 1996, the Company has an
environmental accrual in its Condensed Consolidated Balance Sheet for probable
and reasonably estimated costs for remediation of contaminated property of
$16.6 million.  The Company periodically reviews and, as appropriate, revises
its environmental accruals.  Based on current information and regulatory
requirements, the Company believes that the accruals established for
environmental expenditures are adequate.

      The Company's actual final costs of addressing certain environmental
matters are not quantifiable, and therefore have not been accrued, because such
matters are in preliminary stages and the timing, extent and costs of various
actions which governmental authorities may require are currently unknown.
Management is aware of other environmental matters for which there is a
reasonable possibility that the Company will incur costs to resolve.  It is
possible that the costs of resolution of the matters described in this paragraph
may exceed the liabilities which, in the opinion of management, are probable and
which costs are reasonably estimable at November 30, 1996.  In the opinion of
management, it is reasonably possible for such costs to be approximately an
additional $21.2 million.

      Under the Resource Conservation Recovery Act of 1976 (''RCRA''), the
Company has four closure and four post-closure plans in place for six locations.
Closure and post-closure plans also are in place for three landfills and two
injection wells as required by state regulations. Such closure and post-closure
costs are estimated to be $5.1 million at August 31, 1996 (and is in addition to
the $16.6 million accrual and the $21.2 million discussed in the prior
paragraphs). Operations are being conducted at these locations and the Company
does not plan to terminate such operations in the foreseeable future. Therefore,
the Company has not accrued these environmental exit costs. The Company accrues
these liabilities when plans for termination of plant operations have been made.


 (4) SUMMARIZED FINANCIAL INFORMATION OF INVESTEES ACCOUNTED FOR BY THE EQUITY
     METHOD

      Summarized financial information of investees accounted for by the equity
method for the three months ended November 30, 1995 and November 30, 1996 is as
follows:
<TABLE>
<CAPTION>
                                                November 30            November 30
                                                    1995                   1996
                                                      (Amounts in Thousands)
<S>                                           <C>                    <C>
Net sales..................................... $     138,236          $      229,080
Net income.................................... $      19,362          $       20,576
Farmland's equity in net income............... $       9,832          $       10,002

</TABLE>


  The Company's investments accounted for by the equity method consist
principally of 50% equity interests in three manufacturers of crop production
products, Farmland Hydro, L.P., SF Phosphates Limited Company and Farmland
MissChem, Limited (expected to commence production in 1998) and a 50% equity
interest in a distributor of crop protection products, WILFARM, LLC.


         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

      The information contained herein and the Condensed Consolidated Financial
Statements and Accompanying Notes presented in this Form 10-Q should be read in
conjunction with information set forth in Part II, Items 7 and 8, in the
Company's Annual Report on Form 10-K for the year ended August 31, 1996.


FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     The Company has historically maintained two primary sources for debt
capital: a substantially continuous public offering of its debt securities (the
''continuous debt program'') and bank lines of credit.

     The Company's debt securities issued under the continuous debt program
generally are offered on a best-efforts basis through the Company's wholly owned
broker-dealer subsidiary, Farmland Securities Company, and through American
Heartland Investments, Inc. (which is not affiliated with Farmland), and also
may be offered by selected unaffiliated broker-dealers.  The types of securities
offered in the continuous debt program include certificates payable on demand
and five- and ten-year subordinated debt certificates.  The total amount of such
debt outstanding and the flow of funds to, or from, the Company as a result of
the continuous debt program are influenced by the rate of interest which
Farmland establishes for each type of debt certificate offered and by options of
Farmland to call for redemption certain of its outstanding subordinated debt
certificates.  During the three months ended November 30, 1996, the outstanding
balance of demand loan and subordinated debt certificates increased $11.7
million.

     In May 1996, Farmland entered into a five year Credit Agreement (the
"Agreement") with various participating banks. The Agreement provides a $1.1
billion facility, subject to compliance with financial covenants as set forth in
the Agreement, consisting of an annually renewable short-term credit of up to
$650.0 million and a long-term credit of up to $450.0 million.

     Farmland pays commitment fees under the Agreement equal to 1/10 of 1%
annually on the unused portion of the short-term  credit and 1/4 of 1% annually
on the unused portion of the long-term credit. In addition, Farmland must comply
with the Agreement's financial covenants regarding working capital, the ratio of
certain debts to average cash flow, and the ratio of equity to total
capitalization, all as defined therein. The short-term credit provisions of the
Agreement are subject to review and renewal annually by the lenders and the
Company.  The next renewal date is in May 1997.  Management believes that the
short-term commitment will be renewed.  The Agreement matures in May 2001.

     At November 30, 1996, under the Agreement the Company had short-term
borrowings of $151.6 million, long-term borrowings of $150.0 million and $61.1
million was being utilized to support letters of credit issued on behalf of
Farmland by participating banks.  As of November 30, 1996, under the short-term
credit the Company had capacity to finance additional working capital of $480.1
million and under the long-term credit provisions the Company had capacity to
borrow up to an additional $257.2 million.

     The Company maintains other borrowing arrangements with banks and financial
institutions. Under such agreements at November 30, 1996, $14.9 million was
borrowed.

     National Beef Packing Company, L.P. ("NBPC") maintains borrowing agreements
with a group of banks which provide financing support for its beef packing
operations. Such borrowings are nonrecourse to Farmland or Farmland's other
affiliates (except to the extent of $10.0 million). At November 30, 1996, $90.0
million was available under this facility of which $62.9 million was borrowed
and $0.6 million was utilized to support letters of credit. In addition, NBPC
has incurred certain long-term borrowings from Farmland. NBPC has pledged
certain assets to Farmland and such group of banks to support its borrowings.

     Tradigrain, which conducts international grain trading operations, has
borrowing agreements with various international banks which provide financing
and letters of credit to support current international grain trading
transactions.  Obligations of Tradigrain under these loan agreements are
nonrecourse to Farmland or Farmland's other affiliates.  At November 30, 1996,
such borrowings totaled $47.7 million.

     Leveraged leasing has been used to finance railcars and a substantial
portion of the Company's fertilizer production equipment.

     In the opinion of management, these arrangements for debt capital are
adequate for the Company's present operating and capital plans.  However,
additional financing arrangements are continuously evaluated.

     Major uses of cash during the three months ended November 30, 1996 include:
$64.4 million for capital expenditures and acquisition of investments;
$32.5 million for patronage refunds and dividends distributed from income of the
1996 fiscal year; $25.3 million for the redemption of equities under the
Farmland base capital plan and for other allocated equity redemptions; and net
payments of bank loans and notes payable of $103.1 million.  Major sources of
cash include: $87.9 million from operations (including receipts of $102.1
million from advanced payments by customers on product purchases, principally
plant nutrients which are expected to be shipped later in the current fiscal
year); $28.9 million in distributions from joint ventures; and $101.1 million
from an increase in the balance of checks and drafts outstanding.

     In 1993, the IRS issued a statutory notice to Farmland asserting
significant deficiencies in federal income taxes and statutory interest thereon.
Farmland filed a petition in the United States Tax Court contesting the asserted
deficiencies in their entirety.  See Note 3 of the Notes to the Condensed
Consolidated Financial Statements (which is incorporated herein by reference).


RESULTS OF OPERATIONS

   GENERAL

     Operating results for any quarter are not necessarily indicative of the
results expected for the full year.  The principal businesses of the Company are
highly seasonal and subject to price volatility.  Historically, the majority of
farm supply products are sold in the spring.  Sales in the beef business and in
grain marketing historically have been concentrated in the summer.  Summer is
the lowest sales period for pork products.  In view of the seasonality of the
Company's businesses, it must be emphasized that the results for the three
months ended November 30, 1996 should not be annualized to project a full year's
results.


RESULTS OF OPERATIONS FOR THREE MONTHS ENDED NOVEMBER 30, 1996 COMPARED TO THREE
MONTHS ENDED NOVEMBER 30, 1995

   SALES

     Sales for the three months ended November 30, 1996 increased $232.3
million, or 10.8%, compared with the prior period primarily reflecting $143.4
million higher sales of agricultural output products and $94.9 million higher
sales of farm production input products.

     The increased sales of output businesses includes $131.1 million higher
sales of the food processing and marketing segment and $12.3 million higher
sales of grain.  Approximately half of the sales increase in the food processing
and marketing business was attributable to acquisitions of additional pork
slaughter and processing facilities subsequent to the first quarter of 1996.
The remainder of this sales increase primarily results from increases in pork
and beef unit prices.  The increased sales of grain reflects primarily higher
grain prices largely offset by a 9.5% decrease in unit sales.

     On the input side of the Company's business, sales of the petroleum and
feed segments in the three months ended November 30, 1996 increased $124.1
million and $24.0 million, respectively, compared with the prior year, and sales
of the crop production segment decreased $53.2 million.  The petroleum sales
increase was the result of increases in unit sales and prices and feed sales
increased primarily due to higher prices.  Crop production sales decreased
primarily due to lower unit sales resulting from a relatively wet and cold fall
season in the geographic area served by the Company.

   NET INCOME

     Net income for the three months ended November 30, 1996 decreased $28.4
million compared with the prior period.  This decrease was principally
attributable to lower operating income in crop production and food processing
and marketing of $25.2 million and $21.1 million, respectively.  The impact of
these decreases on net income was partially offset by a $7.9 million increase in
petroleum's operating income and by a $9.1 million decrease in the provision for
income taxes.

     Operating income in the crop production business decreased reflecting
primarily the adverse impact of higher natural gas prices on nitrogen unit
margins.  The lower nitrogen unit margins, combined with lower unit sales of
nitrogen- and phosphate-based plant nutrients, resulted in lower operating
income.

     Operating income of the food processing and marketing business for the
three months ended November 30, 1996 decreased $21.1 million compared to the
prior period.  This decline resulted primarily from decreased margins and
increased selling and administrative costs related to operating the additional
pork slaughter and processing facilities.

     Operating income for the petroleum business was $6.1 million for the three
months ended November 30, 1996 compared with an operating loss of $1.8 million
for the three months ended November 30, 1995.  This improvement was due, in
part, to the adverse effect on last year's operating income of an extended
turnaround and, in part, to a short-term improvement in the spread between the
cost of crude oil and the selling price of refined products combined with higher
unit sales of refined products.

     Selling, general and administrative ("SG&A") expenses increased
$13.1 million, or 16.1%, over the prior period.  SG&A expenses directly
connected to business segments increased approximately $13.6 million (primarily
food processing and marketing relating to the acquisition of the additional pork
slaughtering and processing facilities) and these expenses have been included in
the determination of net income of the business segments. General corporate
expenses not identified to business segments decreased $0.5 million, or 2.6%.

     The decrease in income before taxes is the primary reason for the $9.1
million decrease in the provision for income taxes.

     The level of operating income in the crop production, petroleum and food
processing and marketing businesses are, to a significant degree, attributable
to the spread between selling prices and raw material costs (natural gas in the
case of nitrogen-based plant nutrients, crude oil in the case of petroleum and
live hogs and cattle in the food processing and marketing business).  These
price and cost factors are beyond the control of the Company's management and
are volatile.  Accordingly, management cannot determine the direction or
magnitude to which these factors will affect the Company's business.  The
Company's cash flow and income may be volatile as conditions affecting
agriculture generally and the costs and markets for the Company's products
change.


RECENT ACCOUNTING PRONOUNCEMENTS

     In the first quarter of 1997, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and For Long-Lived Assets to be Disposed of"
("Statement 121"), which was issued by the Financial Accounting Standards Board
in March 1995.  Statement 121 establishes accounting standards for the
impairment of long-lived assets, certain identifiable intangibles, and goodwill
related to those assets to be held and used and for long-lived assets and
certain identifiable intangibles to be disposed of.  The effect of the Company's
implementation of Statement 121 at September 1, 1996 was insignificant.


CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

      The Company is including the following cautionary statement in this
Form 10-K to make applicable and take advantage of the new "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995 for any
forward-looking statement made by, or on behalf of, the Company.  The factors
identified in this cautionary statement important factors (but not necessarily
all important factors) that could cause actual results to differ materially from
those expressed in any forward-looking statement made by, or on behalf of, the
Company.

      Where any such forward-looking statement includes a statement of the
assumptions or basis underlying such forward-looking statement, the Company
cautions that, while it believes such assumptions or basis to be reasonable and
makes them in good faith, assumed facts or basis almost always vary from actual
results, and the differences between assumed facts or basis and actual results
can be material, depending upon the circumstances.  Where, in any forward-
looking statement, the Company, or its management, expresses an expectation or
belief as to future results, such expectation or belief is expressed in good
faith and believed to have a reasonable basis, but there can be no assurance
that the statement of expectation or belief will result or be achieved or
accomplished.  The words "believe", "expect" and "anticipate" and similar
expressions identify forward-looking statements.

      Taking into account the foregoing, the following are identified as
important factors that could cause actual results to differ materially from
those expressed in any forward-looking statement made by, or on behalf of, the
Company:

1.Weather patterns (flood, drought, frost, etc.) or crop failure.

2.Federal or state regulations regarding agricultural programs and production
  efficiencies.

3.Federal or state regulations regarding the amounts of fertilizer and other
  chemical applications used by farmers.

4.Factors affecting the export of U.S. agricultural produce (including foreign
  trade and monetary policies, laws and regulations, political and governmental
  changes, inflation and exchange rates, taxes, operating conditions and world
  demand).

5.Factors affecting supply, demand and price of crude oil, refined fuels,
  natural gas and other commodities.

6.Regulatory delays and other unforeseeable obstacles beyond the Company's
  control that may affect growth strategies through acquisitions and
  investments in joint ventures.

7.Competitors in various segments which may be larger than the Company, offer
  more varied products or possess greater resources.

8.Unusual or unexpected events such as, among other things, litigation
  settlements, adverse rulings or judgments, and environmental remediation
  costs in excess of reserves.
9.The factors identified in "Business and Properties - Business - Business Risk
  Factors" included in the Company's Annual Report on Form 10-K for the year
  ended August 31, 1996.


                          PART II - OTHER INFORMATION

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K.

   (A)    EXHIBITS

     The exhibits listed below are filed as part of Form 10-Q for quarter ended
November 30, 1996.

        Exhibit No.                         Description of Exhibits


        3.A         Articles of Incorporation and Bylaws of Farmland
                    Industries, Inc. effective December 5, 1996.

         27         Financial Data Schedule

(B)  NO REPORTS ON FORM 8-K WERE FILED DURING THE QUARTER ENDED NOVEMBER 30,
     1996.



                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                 FARMLAND INDUSTRIES, INC.
                                        (Registrant)

                      By:          /s/  TERRY M. CAMPBELL
                                     Terry M. Campbell
                                  Executive Vice President
                                  and Chief Financial Officer

Date:   January 14, 1997