# UNITED STATES

# SECURITIES
AND EXCHANGE COMMISSION

# Washington,
D.C. 20549

# FARMLAND
INDUSTRIES, INC.

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

              3315 North Oak Trafficway
                Kansas City, Missouri                               64116-0005
       (Address of principal executive offices)                     (Zip 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 [ ]

# PART I -
FINANCIAL INFORMATION

## Item 1.
FINANCIAL STATEMENTS

# FARMLAND
INDUSTRIES, INC. AND SUBSIDIARIES

# CONDENSED
CONSOLIDATED BALANCE SHEETS

# (UNAUDITED)

`2000                       2000
                                                                    ---------------           -----------------
                                                                              (Amounts in Thousands)
  Accounts receivable - trade................................ $      740,026        $            680,046
  Inventories (Note 2).......................................        832,687                     906,421
  Other current assets.......................................        252,716                     351,219
                                                              -----------------     ----------------------

        Total Current Assets................................. $    1,825,429        $          1,937,686
                                                              -----------------     ----------------------


Investments and Long-Term Receivables (Note 3)............... $      399,889        $            441,141
                                                              -----------------     ----------------------


Property, Plant and Equipment:
  Property, plant and equipment, at cost..................... $    1,787,614        $          1,717,908
     Less accumulated depreciation and
     amortization............................................        960,652                     923,787
                                                                ---------------        -------------------

  Net Property, Plant and Equipment.......................... $      826,962        $            794,121
                                                              -----------------     ----------------------


Other Assets                                                  $      229,907        $            233,908
                                                              -----------------     ----------------------

Total Assets                                                  $    3,282,187        $          3,406,856
                                                              =================     ======================






    See accompanying Notes to Consolidated Financial Statements.`

# FARMLAND
INDUSTRIES, INC. AND SUBSIDIARIES

# CONDENSED
CONSOLIDATED BALANCE SHEETS

# (UNAUDITED)

`2000                  2000
                                                                       -----------------     -------------------
                                                                                (Amounts in Thousands)
Current Liabilities:
    Short-term notes payable ........................................  $       689,477        $         729,903
    Current maturities of long-term debt ............................           32,222                   34,796
    Accounts payable - trade.........................................          345,286                  400,011
    Customer advances on product purchases...........................          120,731                   84,982
    Other current liabilities........................................          422,811                  408,464
                                                                       -----------------      ------------------

         Total Current Liabilities...................................  $     1,610,527        $       1,658,156
                                                                       -----------------      ------------------

Long-Term Liabilities:
    Long-term borrowings (excluding current maturities)..............  $       646,160        $         663,742
    Other long-term liabilities......................................           40,134                   38,444
                                                                       -----------------      ------------------

         Total Long-Term Liabilities.................................  $       686,294        $         702,186
                                                                       -----------------      ------------------

Deferred Income Taxes................................................  $        54,676        $          54,506
                                                                       -----------------      ------------------

Minority Owners' Equity in Subsidiaries..............................  $        49,459        $          52,753
                                                                       -----------------      ------------------

Net Income (Note 1)..................................................  $           -0-        $           6,713
                                                                       -----------------      ------------------

Capital Shares and Equities:
    Accumulated Other Comprehensive Income
    (Notes 4 and 5)..................................................  $           111        $          51,658
    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                  528,023
    Earned surplus and other equities................................          258,244                  252,861
                                                                       -----------------      ------------------

         Total Capital Shares and Equities...........................  $       881,231        $         932,542
                                                                       -----------------      ------------------


Contingent Liabilities and Commitments (Note 6)



Total Liabilities and Equities.......................................  $     3,282,187        $       3,406,856
                                                                       =================      ==================


    See accompanying Notes to Consolidated Financial Statements.`

# FARMLAND
INDUSTRIES, INC. AND SUBSIDIARIES

# CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS

`-------------------------------------
                                                                 November 30          November 30
                                                                    1999                 2000
                                                               ----------------     ----------------
                       (Amounts in Thousands)

Sales......................................................... $   2,984,465      $      2,941,327
Cost of sales.................................................     2,860,648             2,825,578
                                                               ----------------      ---------------

Gross income.................................................. $     123,817      $        115,749
                                                               ----------------   ------------------

Selling, general and administrative expenses.................. $     123,171      $        101,885
                                                               ----------------   ------------------

Other income (deductions):
    Interest expense, net..................................... $    (23,732)      $       (30,393)
   Other, net (Note 5).......................................        (5,424)                 2,641
                                                               ----------------   ------------------
Total other income (deductions)............................... $    (29,156)      $        (27,752)
                                                               ----------------   ------------------

 Income (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................................ $    (28,510)      $       (13,888)

  Equity in net income of investees (Note 3) ...................        1,077                 5,293

  Minority owners' interest in net (income)
      of subsidiaries...........................................      (6,131)               (6,214)
                                                                ----------------   ------------------

  Loss before income tax benefit and cumulative
      effect of changes in accounting principles,
      net of income tax expense.................................$    (33,564)      $       (14,809)

  Income tax benefit............................................        7,022                 1,746
                                                                  ----------------   ------------------

  Loss before cumulative effect of changes in
        accounting principles...................................$     (26,542)      $       (13,063)

  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).............................................$     (26,542)      $          6,713
                                                                  ================   ==================








    See accompanying Notes to Consolidated Financial Statements.`

# FARMLAND
INDUSTRIES, INC. AND SUBSIDIARIES

# CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS

# (UNAUDITED)

`-------------------------------------------
                                                                                November 30               November 30
                                                                                    1999                      2000
                                                                              -----------------         -----------------
                                                                                        (Amounts in Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)............................................................   $   (26,542)             $        6,713
Adjustments to reconcile net income (loss) to net cash provided by
  (used in) operating activities:
      Depreciation and amortization..........................................         28,038                    24,028
      Equity in net (income) of investees....................................         (1,077)                   (5,293)
      Other..................................................................          9,320                   (18,428)
    Changes in assets and liabilities:
       Accounts receivable...................................................         65,555                    59,980
       Inventories...........................................................         22,654                   (73,734)
       Other assets..........................................................           (765)                  (25,075)
       Accounts payable......................................................        (67,044)                    54,725
       Other liabilities.....................................................        (10,437)                   (45,951)
                                                                              -----------------         -----------------
Net cash provided by (used in) operating activities..........................   $     19,702             $     (23,035)
                                                                              -----------------         -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.........................................................   $   (26,329)             $     (23,750)
Distributions from joint ventures............................................          6,737                      4,911
Additions to investments and notes receivable................................        (9,542)                    (7,183)
Acquisition of other long-term assets........................................        (6,743)                    (5,535)
Proceeds from disposal of investments and notes receivable...................          2,106                        895
Proceeds from sale of fixed assets...........................................          3,322                      1,875
                                                                              -----------------         -----------------
Net cash used in investing activities....................................     $     (30,449)            $      (28,787)
                                                                              -----------------         -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of patronage refunds................................................ $      (6,054)            $           -0-
Payments of dividends........................................................        (2,004)                    (2,000)
Proceeds from bank loans and notes payable...................................        915,172                  1,348,541
Payments on bank loans and notes payable.....................................      (933,017)                (1,285,949)
Proceeds from issuance of subordinated debt certificates.....................          2,751                     15,328
Payments for redemption of subordinated debt certificates....................        (5,720)                   (14,374)
Increase (decrease) of checks and drafts outstanding.........................         41,849                    (3,953)
Net decrease in demand loan certificates.....................................        (1,715)                    (2,845)
Other                                                                                  (515)                    (2,926)
                                                                              -----------------         -----------------
Net cash provided by financing activities.................................... $       10,747            $        51,822
                                                                              -----------------         -----------------

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-
                                                                              =================         =================

    During the three months ended November 30, 2000, we contributed property, plant and equipment and investments
    with a carrying value of approximately $43.5 million for an approximate 31% equity interest in Land O'Lakes
    Farmland Feed, LLC.


    See accompanying Notes to Consolidated Financial Statements`

# NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

# (UNAUDITED)

## (1) Interim
Financial Statements

Unless the context requires
otherwise, (i) Farmland, we, us and
our refer to Farmland Industries, Inc. and its consolidated
subsidiaries, (ii) all references to year or years are
to fiscal years ended August 31 and (iii) all references 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.

In view of the seasonality
of Farmlands businesses, it must be emphasized that the results of
operations for the periods presented are not necessarily indicative of the
results for a full fiscal year.

The information included in
these unaudited 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.

Our sales, margins and net
income or loss depend, to a large extent, on conditions in agriculture and may
be volatile due to factors beyond our control, such as weather, crop failures,
federal agricultural programs, production efficiencies and U.S. imports and
exports. In addition, various federal and state regulations intended to protect
the environment encourage farmers to reduce the use of fertilizers and other
chemicals. Global variables which affect supply, demand and price of crude oil,
refined fuels, natural gas, livestock, grain and other commodities may impact
Farmlands operations. Historically, changes in the costs of raw materials
used in the manufacture of our finished products have not necessarily resulted
in corresponding changes in the prices at which we have sold such products. We
cannot determine the extent to which these factors may impact our future
operations. Our cash flow and net income or loss may be volatile as conditions
affecting agriculture and markets for our products change.

In accordance with the
bylaws of Farmland and its cooperative subsidiaries, we determine annually the
members portion of income or loss before income taxes. From this amount,
patronage refunds are distributed or losses are allocated to our members.

Farmland does not provide
for patronage refunds in our interim financial statements as:

- we  determine  the amount of  members'  income and the amount of  members'  loss only after the end of the
     fiscal year;
- the Board of Directors, in its sole discretion, then determines the amount of
patronage refund, after consideration of member losses (if any), to be paid in
cash and the portion to be paid in Farmland equity (common stock, associate
member common stock and capital credits); and
- the amount of income appropriated to earned surplus is dependent on the amount
of patronage refunds and the handling of members losses (if any).

Therefore, the amount of
net income for the interim period presented is reflected as a separate item in
the accompanying unaudited Condensed Consolidated Balance Sheet as of November
30, 2000.

## (2) Inventories

`2000                    2000
                                               ---------------------   ---------------------
                                                          (Amounts in Thousands)
Finished and in-process products..............  $           750,057    $             829,486
Materials.....................................               16,939                   19,392
Supplies......................................               65,691                   57,543
                                                --------------------   ----------------------
                                                $           832,687    $             906,421
                                                ====================   ======================`

At November 30, 2000, the
carrying values of petroleum inventories (gasoline and distillates) stated under
the LIFO (last-in, first-out) method were $41.7 million, which was approximately
$14.3 million less than the market value of these inventories.

## (3)      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, 1999 and November 30, 2000 is as follows:

`1999                     2000
                                              -----------------------  -----------------------
                                                          (Amounts in Thousands)
Net sales...................................... $           740,840      $          1,694,257
                                              ======================    ======================
Net income..................................... $             2,446      $              (516)
                                              ======================    ======================
Farmland's equity in net income................ $             1,077      $              5,293
                                              ======================    ======================`

- 50%  equity  interests  in  three   manufacturers  of  crop  nutrient  products,   Farmland  Hydro,  L.P.,
     SF Phosphates Limited Company and Farmland MissChem, Limited;
- beginning  January 1, 2000,  an  approximate  50% equity  interest  in UCB LLC,  which in turn holds a 50%
     equity interest in Agriliance LLC, an agronomy distribution and marketing venture;
- an approximate 42% equity interest in Cooperative Refining, LLC, which operates two refineries; and
- beginning  October 1, 2000, an  approximate  31% equity  interest in Land O'Lakes  Farmland  Feed,  LLC, a
     manufacturer of feed products.

At November 30, 2000, our share of the  undistributed  earnings of all ventures  accounted for by the equity method
totaled $61.5 million.

## (4)      Comprehensive Income

Comprehensive  income  (loss) was ($26.5)  million and $58.4 million for the three months ended  November 30,  1999
and 2000,  respectively.  The  difference  between net income and  comprehensive  income is the result of gains and
losses on  derivative  instruments  which qualify as cash flow hedges and changes in foreign  currency  translation
adjustments.  These gains and losses have been  recorded as a  component  of equity and will be  reclassified  as a
component of net income in the same period in which the hedged transaction affects earnings.

## (5)      Derivative Financial Instruments

Farmland uses  derivative  financial  instruments to manage our commodity  price risk in the procurement of natural
gas, the primary input  necessary for the  production of the various  nitrogen-based  crop  production  products we
manufacture.  Our  objective  is to fix the price of a portion of our  forecasted  purchases of natural gas used in
production of crop production products.

To meet this objective,  management enters into various types of derivative  instruments to manage  fluctuations in
cash flows resulting from commodity price risk. These  instruments may include  exchange traded futures  contracts,
over the counter  (OTC) swap  contracts  and OTC option or exchange  traded  option  contracts.  The changes in the
market value of such  contracts  has  historically  been,  and is expected to continue to be,  highly  effective at
offsetting changes in price movements of the hedged item.

Effective  September 1, 2000,  we adopted  Statement  of Financial  Accounting  Standard No. 133,  "Accounting  for
Derivative  Instruments and Hedging  Activities."  This standard imposes  extensive  recordkeeping  requirements in
order to designate a derivative  financial  instrument as a hedge. As a result,  certain of our operating  segments
hold derivative  instruments,  such as grain futures,  foreign  currency  futures and interest rate swaps,  that we
believe  provide an  economic  hedge of future  transactions,  but have not been  designated  as a hedge.  Gains or
losses related to these derivative instruments are classified as a component of other income.

As of November 30, 2000,  the maximum  length of time over which we are hedging our exposure to the  variability in
future cash flows  associated  with  natural gas  forecasted  transactions  is  approximately  one year.  Gains and
losses recorded in accumulated other comprehensive income ("AOCI") will be reclassified,  on a first-in,  first-out
basis,  as a  component  of cost of sales  when the  related  crop  production  product  is sold.  As a result,  we
anticipate  that  substantially  all gains and losses in AOCI as of  November  30, 2000 will be  reclassified  into
earnings  within the next twelve  months.  During the quarter ended November 30, 2000,  approximately  $4.3 million
was  reclassified  into earnings as a result of the  discontinuance  of cash flow hedges because it is probable the
original forecasted transactions will not occur.

## (6)      Contingencies

Farmland is aware of probable  obligations  under state and federal  environmental  laws at a number of properties.
At November 30, 2000,  we had an  environmental  accrual in our Condensed  Consolidated  Balance Sheet for probable
and reasonably  estimated  costs for  remediation of  contaminated  properties of $12.6  million.  We  periodically
review  and, as  appropriate,  revise our  environmental  accruals.  Based on current  information  and  regulatory
requirements, we believe that the accruals established for environmental expenditures are adequate.

Some  environmental  matters  are in  preliminary  stages  and the  timing,  extent  and  costs  of  actions  which
governmental   authorities  may  require  are  currently  unknown.  As  a  result,   certain  costs  of  addressing
environmental  matters are either not probable or not reasonably  estimable and, therefore,  have not been accrued.
In management's  opinion,  it is reasonably  possible that Farmland may incur $14.7 million of costs in addition to
the $12.6 million which has been accrued.

Under the Resource Conservation  Recovery Act of 1976 (`'RCRA "),  Farmland has three closure and four post-closure
plans in place for five  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 $5.0
million at November 30, 2000 (and are in addition to the $12.6 million  accrual and the $14.7 million  discussed in
the prior  paragraphs).  These  liabilities  are accrued when plans for  termination of plant  operations have been
made.  Operations are being  conducted at these  locations and we do not plan to terminate  such  operations in the
foreseeable future. Therefore, these environmental exit costs have not been accrued.

The  Environmental  Protection  Agency  ("EPA")  has issued new rules  limiting  sulfur in gasoline to 30 parts per
million and has  published  a proposed  rule  limiting  sulfur in diesel  fuel to 15 parts per  million.  The rules
affecting  gasoline were  effective  December 1, 1999 with a January 1, 2004  compliance  date.  The proposed rules
for diesel fuel have a June 1, 2006  compliance  date.  Based on  information  currently  available,  we anticipate
that material expenditures will be required to achieve compliance with these new and pending rules.

## (7)      Planned Major Maintenance Costs

Effective  September 1, 2000  Farmland  changed its method of accounting  for certain costs  expected to be incurred in the
next planned major  maintenance of its fertilizer plants from the  accrue-in-advance  method to the direct expense method.  Under the new accounting method, maintenance costs are recognized as expense as maintenance services are performed.  We believe the
new method is preferable in the circumstances because prior to the performance of the  maintenance services, we do not have a present unavoidable duty or responsibility to sacrifice assets in the future nor has there been an obligating event prior to the
maintenance services being performed.  The    effect of this change at September 1, 2000 was
 $6.3 million  (net of income taxes of $1.1  million) and has been  presented  as a  cumulative  effect of an  accounting
change in the accompanying  condensed  consolidated  statements of operations.  Had this new accounting method been
applied in the quarter  ended  November 30,  1999,  the effect would have been to increase net loss by $3.5 million
(net of income taxes of $0.6 million).

## (8) Industry Segment Information

Beginning  September 1, 2000,  Farmland began  allocating  certain interest expense based on net assets employed by
each segment and we began allocating  certain  corporate  service expenses based on estimated use of the service by
each  segment.  Segment  results for the three  months  ended  November  30,  2000 were  restated to conform to our
current operational structure and our current method of allocation.

`Three months ended
November 30, 1999 (Page 1 of 3)
(Amounts in Thousands)

                                   ---------------------------------------------------------------------------
                                                                  Unallocated
                                          Combined             Corporate Expenses
                                          Segments                                            Consolidated
                                       ----------------        -------------------         --------------------
Sales & transfers                    $      3,784,768        $                 -         $          3,784,768
Transfers between segments                   (800,303)                         -                     (800,303)
                                     ------------------     ----------------------      -----------------------
Net sales                            $      2,984,465        $                 -         $          2,984,465
                                     ==================     ======================      =======================

Net income (loss)                    $         (7,670)       $           (18,872)        $            (26,542)
                                     ==================     ======================      =======================


Total assets                         $      2,869,700        $           301,184         $          3,170,884
                                     ==================     ======================      =======================



Three months ended
November 30, 2000 (Page 1 of 3)
(Amounts in Thousands)
                                                             CONSOLIDATED SEGMENTS
                                   ---------------------------------------------------------------------------
                                                                 Unallocated
                                          Combined            Corporate Expenses
                                          Segments                                           Consolidated
                                       ---------------        -------------------         --------------------
Sales & transfers                    $     3,752,208        $                 -         $          3,752,208
Transfers between segments                 (810,881)                           -                    (810,881)
                                     -----------------     ----------------------      -----------------------
Net sales                            $     2,941,327        $                 -         $          2,941,327
                                     =================     ======================      =======================

Net income (loss)                    $        24,037        $          (17,324)         $              6,713
                                     =================     ======================      =======================


Total assets                         $     3,152,718        $           254,138         $          3,406,856
                                     =================     ======================      =======================







Three months ended
November 30, 1999 (Page 2 of 3)
(Amounts in Thousands)
                                                                               INPUT AND OTHER SEGMENTS
                                                     ------------------------------------------------------------------------------
                                                                                                      Other               Total
                                           Crop                                                     Operating           Input and
                                        Production           Petroleum              Feed              Units               Other
                                                                                                                        Segments
                                       -------------       ---------------        ----------       ------------        ------------
Sales & transfers                   $       234,623     $         371,470     $    176,594      $      539,844      $    1,322,531
Transfers between segments                    (930)                   -0-          (17,552)           (465,191)           (483,673)
                                       -------------       ---------------        ---------        ------------        ------------
Net sales                           $       233,693     $         371,470     $     159,042     $       74,653      $      838,858
                                       =============       ===============        =========        ============        ============

Net income (loss)                   $      (33,137)     $          (3,006)    $      4,637      $        1,869      $     (29,637)
                                       =============       ===============        =========        ============        ============


Total assets                        $       666,282     $         385,085     $    145,617      $      111,335      $    1,308,319
                                       =============       ===============        =========        ============        ============



Three months ended
November 30, 2000 (Page 2 of 3)
(Amounts in Thousands)
                                                                         INPUT AND OTHER SEGMENTS
                                             ----------------------------------------------------------------------------------
                                                                                                                 Other                 Total
                                                         Crop                                                    Operating           Input and
                                                      Production           Petroleum            Feed               Units               Other
                                                                                                                                     Segments
                                                     --------------       ------------       ------------        -----------        ------------
                 Sales & transfers                $        145,665     $      422,122     $       50,264     $      545,985      $    1,164,036
                 Transfers between segments                  (929)            (5,068)             (5,191)          (482,267)           (493,455)
                                                     -------------        ------------       -----------        ------------        ------------
                 Net sales                        $       144,736      $      417,054     $      45,073      $       63,718     $       670,581
                                                     =============        ============       ===========        ============        ============

                 Net income (loss)                $         2,108     $         3,651     $       1,444     $         1,475)      $       5,728
                                                     ==============       ============       ============        ===========        ============


                 Total assets                     $       723,043     $       403,802     $       77,963     $      115,857      $    1,320,665
                                                     ==============       ============       ============        ===========        ============












Three months ended
November 30, 1999 (Page 3 of 3)
(Amounts in Thousands)
                                                    OUTPUT SEGMENTS
                                  ----------------------------------------------------
                                                                           Total
                                  Refrigerated          World             Output
                                     Foods              Grain            Segments
                                  -------------     --------------    ----------------
Sales & transfers                 $ 1,271,366       $  1,190,871      $   2,462,237
Transfers between segments           (217,712)          (98,918)          (316,630)
                                  -------------     --------------    ----------------
Net sales                         $ 1,053,654       $  1,091,953      $   2,145,607
                                  =============     ==============    ================

Net income (loss)                 $    19,106       $      2,861      $      21,967
                                  =============     ==============    ================


Total assets                      $   728,852       $    832,529      $    1,561,381
                                  =============     ==============    ================



  Three months ended
  November 30, 2000 (Page 3 of 3)
  (Amounts in Thousands)
                                                   OUTPUT SEGMENTS
                                  --------------------------------------------------
                                                                          Total
                                  Refrigerated          World            Output
                                     Foods              Grain           Segments
                                  -------------     --------------    --------------
Sales & transfers                 $  1,323,681      $   1,264,491     $   2,588,172
Transfers between segments           (217,136)          (100,290)         (317,426)
                                  -------------     --------------    --------------
Net sales                         $  1,106,545      $  1,164,201      $   2,270,746
                                  =============     ==============    ==============

Net income (loss)                 $     14,736      $      3,573     $       18,309
                                  =============     ==============    ==============


Total assets                      $    786,629      $  1,045,424      $   1,832,053
                                  =============     ==============    ==============`

## Item 2.                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information contained
in this discussion and in the unaudited 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
Farmlands Annual Report on Form 10-K for the year ended August 31, 2000.

## Financial
Condition, Liquidity and Capital Resources

Farmland has historically
maintained two primary sources for debt capital: a substantially continuous
public offering of its subordinated debt and demand loan securities (the
continuous debt program) and bank lines of credit.

Farmlands debt
securities issued under the continuous debt program generally are offered on a
best-efforts basis through our wholly owned broker-dealer subsidiary, Farmland
Securities Company, and also may be offered by selected unaffiliated
broker-dealers. The types of debt securities offered in the continuous debt
program include certificates payable on demand and subordinated debenture bonds.
The total amount of debt securities outstanding and the flow of funds to, or
from, Farmland as a result of the continuous debt program are influenced by the
rate of interest which we establish for each type or series of debt security
offered, by the option of Farmland to call for redemption certain of its
outstanding debt securities, and by the option of holders, under certain
circumstances, to request the early redemption of outstanding debt securities.
On October 31, 2000, we suspended sales under our debt program. To sell debt
under our program, we will need to register additional securities with the
Securities and Exchange Commission. Although as of January 12, 2000 we have not
filed to register additional securities, management believes such a filing will
be made during our second quarter.This report on Form 10-Q does not
constitute an offer of securities; such an offering will only be made through a
prospectus. During the three months ended November 30, 2000, the outstanding
balance of demand certificates decreased by $2.8 million, and the outstanding
balance of subordinated debenture bonds increased by $1.0 million.

In May 2000, Farmland
established a 364 day, $750 million, revolving credit facility (the Credit
Facility) with a syndicate of banks. The Credit Facility expires May 9,
2001, and management believes the Credit Facility will be refinanced at that
time or, if the Credit Facility is not refinanced, that we will be able to
obtain adequate credit from alternative sources.

At November 30, 2000,
Farmland had $483.6 million of short-term borrowings under the Credit Facility.
Additionally, $43.6 million of the Credit Facility was utilized to support
letters of credit. Farmland pays commitment fees under the Credit Facility
currently equal to 50 basis points annually on the unused portion of the credit.
Borrowings under the Credit Facility are secured by a substantial portion of our
accounts receivable, inventories and fixed assets. Interest rates under the
credit facility are based on a spread over the base rate (as defined in the
agreement) or a spread over LIBOR. The Credit Facility contains covenants
related to Farmlands ratio of earnings before interest, taxes,
depreciation and amortization to net interest expense, our ratio of total debt
to total capitalization, and our ratio of senior debt to total capitalization,
all as defined in the agreement. In addition to these financial covenants, our
ability to borrow under the Credit Facility may be restricted based on our level
of receivables and inventories. As calculated at November 30, 2000, availability
under the Credit Facility was approximately $118 million.

Farmland National Beef
Packing Company, L.P. (FNBPC) has a $130.0 million credit facility
which expires March 31, 2003. This facility is provided by various participating
banks and these borrowings are nonrecourse to Farmland or Farmlands other
affiliates. At November 30, 2000, FNBPC had borrowings under this facility of
$34.0 million, and $17.9 million of the facility was utilized to support letters
of credit. Assets with a carrying value of $257 million at November 30, 2000
have been pledged by FNBPC to support its borrowings under the facility.

Tradigrain has borrowing
agreements with various international banks which provide financing and letters
of credit primarily to support international grain trading transactions.
Obligations of Tradigrain under these loan agreements are nonrecourse to
Farmland and Farmlands other affiliates. At November 30, 2000, such
borrowings totaled $232.9 million.

Farmland maintains other
borrowing arrangements with banks and financial institutions. Under such
agreements, at November 30, 2000, $6.6 million was borrowed, of which $4.1
million is nonrecourse to Farmland or Farmlands other affiliates.

Leveraged leasing has been
utilized to finance railcars, a significant portion of our crop production
equipment, and certain crop production manufacturing facilities.

Subordinated debenture
bonds have been issued under several indentures. Certain subordinated debenture
bonds may be redeemed prior to maturity at the option of the owner in accordance
with the indenture. Subject to limitations in the indenture, Farmland has
options to redeem certain subordinated debenture bonds in advance of scheduled
maturities. Additionally, upon written request we will redeem subordinated
debenture bonds in the case of death of an owner.

Farmland has issued and
outstanding 2 million shares of 8% Series A Cumulative Redeemable Preferred
Shares (the Preferred Shares) with an aggregate liquidation
preference of $100 million ($50 liquidation preference per share). The Preferred
Shares are not redeemable prior to December 15, 2022. On and after December 15,
2022, the Preferred Shares may be redeemed for cash at our option, in whole or
in part, at specified redemption prices declining to $50 per share on and after
December 15, 2027, plus accumulated and unpaid dividends. The Preferred Shares
do not have any stated maturity, are not subject to any sinking fund or
mandatory redemption provisions and are not convertible into any other security.

In the opinion of
management, these arrangements for debt capital are adequate for our present
operating and capital plans. However, alternative financing arrangements are
continuously evaluated.

Net cash from operating
activities decreased $42.7 million as of November 30, 2000 compared to November
30, 1999, reflecting increases in inventories, other assets and a decrease in
other liabilities, partially offset by a decrease in accounts receivable and an
increase in accounts payable.The major source of cash was provided by
net bank loans and notes payable of $62.6 million.

## Results of
Operations

### General

In view of the seasonality
of Farmlands businesses, it must be emphasized that the results of
operations for the periods presented are not necessarily indicative of the
results for a full fiscal year.

Farmlands sales,
gross margins and net income depend, to a large extent, on conditions in
agriculture and may be volatile due to factors beyond our control, such as
weather, crop failures, federal agricultural programs, production efficiencies
and U.S. imports and exports. In addition, various federal and state regulations
to protect the environment encourage farmers to reduce the use of fertilizers
and other chemicals. Global variables which affect supply, demand and price of
crude oil, refined fuels, natural gas and other commodities may impact our
operations. Historically, changes in the costs of raw materials used in the
manufacture of Farmlands finished products have not necessarily resulted
in corresponding changes in the prices at which such products have been sold.
Management cannot determine the extent to which these factors may impact our
future operations. Farmlands cash flow and net income or loss may be
volatile as conditions affecting agriculture and markets for our products
change.

The level of operating
income in the crop production, petroleum, and refrigerated foods businesses is,
to a significant degree, attributable to the spread between selling prices and
raw material costs (natural gas in the case of nitrogen-based crop nutrients,
crude oil in the case of petroleum products, and live hogs and cattle in the
case of refrigerated foods). We cannot determine the direction or magnitude to
which these factors will affect our cash flow and net income or loss.

Results of Operations
for Three Months Ended November 30, 2000 compared to Three Months Ended November
30, 1999.

During the three months
ended November 30, 2000, we were engaged in feed (Land OLakes Farmland
Feed) and crop production marketing (Agriliance) ventures which were not in
existence during the same period in the prior year. We record income from
ventures on a single line item, Equity in net income of investees,
on the Condensed Consolidated Statements of Operations. As a result, sales,
costs of sales, SG&A expenses and other income generated by these ventures
are not recorded in our Condensed Consolidated Statements of Operations.
Therefore, sales, expenses and other income related to feed and crop production
marketing decreased for the three months ended November 30, 2000 compared with
the prior year.

Sales for the three months
ended November 30, 2000 were approximately the same as sales for the same period
last year. This comparable sales level is the result of a decrease in sales due
to the formation of our Agriliance and Land OLakes Farmland Feed ventures
to sell crop production and feed products, respectively, partially offset by
increased sales in world grain.

For the three months ended
November 30, 2000, we had net income of $6.7 million compared with a net loss of
$26.5 million for the same period last year. This increase is primarily due to a
decrease in selling, general and administrative expenses, increased margins for
refined fuels, propane and nitrogen-based plant foods, and the mark-to-market of
derivative instruments not designated as a hedge, partly offset by an increase
in interest expense due to increased interest rates.

### Crop Production

Sales of the crop
production segment were $145 million for the three months ended November 30,
2000, compared with sales of $234 million for the same period last year. The
decrease is due to a 54% decrease in unit sales, partially offset by a 33%
increase in unit selling prices. The primary reason for the decrease in unit
sales relates to the change in our marketing structure. When we were responsible
for our own marketing, in order to meet demand we would supplement our
production by purchasing, for resale, products from third parties. All marketing
is now accomplished through our 25%-owned marketing venture, Agriliance. We sell
all of our production to Agriliance. If this production is inadequate to meet
demand, then Agriliance will purchase, for resale, product from other
manufacturers. Average unit selling prices of nitrogen-based plant foods have
increased from last year primarily due to decreased supply. Supply decreased
primarily as a result of the temporary closing of certain nitrogen manufacturing
facilities in response to increased natural gas prices. Natural gas represents a
major cost in the production of nitrogen based fertilizer. The price of natural
gas has risen substantially since this same period last year. The average price
of natural gas for the first quarter of fiscal year 2001 was $4.82 compared to
$2.85 for the same period last year. This translates to an increased cost of
producing anhydrous ammonia of approximately $70 per ton. To better manage our
inventory costs, we have temporarily stopped production at two locations. To
meet spring demand, we expect to resume production at these two locations during
our second quarter of 2001.

Income of the crop
production segment increased $35.2 million for the three months ended
November 30, 2000 compared with the prior year. Effective September 1,
2000 we adopted Statement of Financial Accounting Standards (SFAS)
No. 133, Accounting for Derivative Instruments and Hedging
Activities. Under SFAS No. 133, all entities are required to carry all
derivative instruments in the statement of financial position at fair value,
which increased crop productions income by $17 million. Income also
increased due to improved margins for nitrogen-based plant foods and a $4.3
million gain on futures positions closed as a result of anticipated natural gas
purchases which will not occur due to the temporary close of our Lawrence,
Kansas facility. With the formation, effective January 1, 2000, of the
Agriliance venture, a portion of our nitrogen-based plant food income is now
recognized as equity in income of investees, rather than as gross income. Also,
certain of crop productions selling, general and administrative expenses
were transferred to Agriliance.

### Petroleum

Sales of the petroleum
segment in the three months ended November 30, 2000 increased $45.6 million, or
approximately 12%, compared with the same period last year. This increase was
primarily due to an approximate 46% increase in unit prices for refined fuels
and an approximate 61% increase in unit prices for propane, partially offset by
an approximate 8% decline in unit sales of refined fuels and a one-time sale
during the three months ended November 30, 1999 of crude oil.

Income for the petroleum
segment increased $6.7 million for the three months ended November 30, 2000
compared with the prior period. This increase is primarily due to higher refined
fuel and propane product prices combined with lower crude oil prices.

### Feed

Sales of the feed segment
decreased $114 million, or approximately 72%, in the three months ended November
30, 2000 compared with the prior year. This decrease was primarily due to the
feed segment becoming part of the Land OLakes Farmland Feed joint venture
as of October 1, 2000. With the formation of Land OLakes Farmland feed,
our feed income is now recognized as equity in income of investees, rather than
gross income. Also, feeds selling, general and administrative expenses
have been transferred to our venture.

### Refrigerated Foods

Sales in the refrigerated
foods segment increased $52.9 million, or approximately 5%, for the three months
ended November 30, 2000 compared with the same period last year. This increase
is primarily attributable to a 3% increase in unit volume and a 2% increase in
average unit price.

Income in the refrigerated
foods segment for the three months ended November 30, 2000 decreased $4.4
million, or approximately 23%, compared to the prior period. This decrease is
primarily attributable to increased raw materials cost and decreased margins,
partly offset by increased unit volume. Refrigerated foods selling,
general and administrative expenses are approximately the same for the three
months ended November 30, 2000 compared to the same period last year. This is
the result of a continued expansion of our marketing efforts, offset by a
decrease in the storage of product for future sale.

### World Grain

Sales of the world grain
segment increased $72.2 million or approximately 7% for the three month period
ended November 30, 2000 compared with the same period last year primarily due to
an increase in grain prices, partially offset by a decrease in unit sales.

Income for the three months
ended November 30, 2000 increased $0.7 million compared to the same period last
year. This increase is primarily attributable to improved grain margins due to
higher grain prices.

### Selling, General and Administrative Expenses

Selling, general and
administrative (SG&A) expenses decreased $21.3 million, or
approximately 17%, from the same period last year. This decrease is the result
of our company-wide effort to reduce overhead as well as a reduction in SG&A
expense related to the formation of Agriliance and Land OLakes Farmland
Feed joint ventures and the sale of our Dubuque, Iowa pork processing plant.

### Interest Expense

Net interest expense
increased $6.7 million compared with the same period last year due primarily to
an increase in the average interest rate.

## Recent
Developments

The EPA has issued new
rules limiting sulfur in gasoline and has proposed rules limiting sulfur in
diesel fuel. Material expenditures may be required to comply with these rules.
Cooperative Refining, a venture owned by Farmland and NCRA, operated two
refineries. Since these refineries are owned separately by Farmland and NCRA,
the owners believe that decisions regarding regulatory investments must be made
without regard to the impact, if any, on Cooperative Refining. Accordingly,
effective January 1, 2001, Cooperative Refining was dissolved and Farmland is
responsible for administering the operations of our Coffeyville refinery.

Natural gas prices, based
on futures contracts, have continued to increase during the second quarter of
fiscal year 2001. The projected average price of natural gas for the second
quarter is $8.60 compared to $2.36 for the same period last year. This would
translate to an increased cost of producing anhydrous ammonia of approximately
$215 per ton and may result in the temporary closure of additional manufacturing
facilities by nitrogen fertilizer producers.

## Recent
Accounting Pronouncements

Statement of Financial
Accounting Standards (SFAS) No. 140 Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities  was
issued by the FASB and is effective for transfers occurring after March 31, 2001
and for disclosures relating to securitization transactions and collateral for
fiscal years ending after December 15, 2000 (our fiscal year 2001). We are
currently evaluating the impact, if any, that adoption of these provisions would
have on our financial statements.

Staff Accounting Bulletin
No. 101, Revenue Recognition in Financial Statements was issued in
December 1999 by the staff of the SEC and is effective no later than the fourth
fiscal quarter of fiscal years beginning after December 15, 1999. We expect that
the adoption of SAB 101 will not have a significant effect on our financial
statements.

## Item 3.      
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Farmlands market
exposure to derivative transactions, entered into for the purpose of managing
commodity price risk, foreign currency risk and interest rate risk, has not
materially changed since August 31, 2000. Quantitative and qualitative
disclosures about market risk are contained in Item 7A of our Annual Report on
Form 10-K for the year ended August 31, 2000.

Cautionary  Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities  Litigation Reform Act
of 1995



We are including the
following cautionary statement in this Form 10-Q to make applicable and
take advantage of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 for any forward-looking statement made
by, or on behalf of, Farmland. The factors identified in this cautionary
statement include 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, Farmland.

Where any such
forward-looking statement includes a statement of the assumptions or basis
underlying such forward-looking statement, we caution that, while we believe
such assumptions or basis to be reasonable and made in good faith, the assumed
facts or basis almost always vary from actual results, and the differences
between the assumed facts or basis and actual results can be material, depending
upon the circumstances. Where, in any forward-looking statement, Farmland, 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. Such forward
looking statements include, without limitation, statements regarding the
seasonal effects upon our business, the anticipated expenditures for
environmental remediation, our ability to integrate into our operation the
responsibilities previously assumed by Cooperative Refining, the outcome and
consequences of certain litigations, the impact of pending EPA regulations
related to sulfur contact in refined fuels, the projected average price of
natural gas, the future closing of nitrogen fertilizer facilities, our ability
to fully and timely complete modifications and expansions with respect to
certain manufacturing facilities and the sufficiency of our arrangements for
capital. Discussion containing such forward-looking statements is found in the
material set forth herein under Managements Discussion and Analysis
of Financial Condition and Results of Operations and Notes to
Condensed Consolidated Financial 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, Farmland:

`1.       Weather patterns 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 production and demand).

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

6.      Regulatory delays and other unforeseeable obstacles beyond our control that may affect growth
        strategies through unification, acquisitions, investments in joint ventures and operational alliances.

7.      Competitors  in various  segments  may be larger,  may offer more varied  products or may possess  greater
        financial and other resources than Farmland.

8.      Unusual or unexpected events such as, among other things, adverse rulings or judgments in litigation,
        and environmental remediation costs in excess of amounts accrued.

9.      The factors identified in Business and Properties - Business - Business Risk Factors included in our
        Annual Report on Form 10-K for the year ended August 31, 2000.`

# PART II -
OTHER INFORMATION

## Item 6.
Exhibits and Reports on Form 8-K.

## (a) Exhibits

The exhibit listed below is filed as part of Form 10-Q for quarter ended November 30, 2000.

## (b) Reports on
Form 8-K

Farmland fileda
report on Form 8-K, Item 2, Acquisition or Disposition of Assets and
Item 7 Financial Statements and Exhibits on October 13, 2000. The
report described the contribution of our Feed business in return for a partial
interest in a feed venture, as well as the pro forma impact of the transaction
on certain of our previously filed financial statements.

# 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/  JOHN BERARDI
                                   --------------------------------------------------
                                                             John Berardi
                                                       Executive Vice President
                                                      and Chief Financial Officer`