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 the quarterly period ended FEBRUARY 28, 1998

                                       or

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

For the transition period from _____________ to _____________.


Commission File Number:   2-67985


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



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

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



                         PART I - FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

                  FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS
<TABLE>
<CAPTION>
                                                                   August 31               February 28
                                                                     1997                     1998
                                                                         (Amounts in Thousands)
<S>                                                            <C>                     <C>
Current Assets:
  Accounts receivable - trade...............................   $        589,028        $        557,144
  Inventories (Note 2)......................................            745,301                 811,147
  Other current assets......................................             94,239                 122,975


       Total Current Assets.................................   $      1,428,568        $      1,491,266




Investments and Long-Term Receivables (Note 4)..............   $        266,554        $        265,238



Property, Plant and Equipment:
  Property, plant and equipment, at cost....................   $      1,585,824        $      1,622,596
     Less accumulated depreciation and
     amortization...........................................            802,716                 837,227


  Net Property, Plant and Equipment.........................   $        783,108        $        785,369



Other Assets................................................   $        167,082        $        183,677

Total Assets................................................   $      2,645,312        $      2,725,550


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          February 28
                                                                             1997                  1998
                                                                              (Amounts in Thousands)
<S>                                                                      <C>                   <C>
Current Liabilities:
    Checks and drafts outstanding...................................     $       47,243         $      75,806
    Demand loan certificates........................................             50,523                32,169
    Short-term notes payable .......................................            258,342               372,697
    Current maturities of long-term debt ...........................             91,643                98,440
    Accounts payable - trade........................................            366,345               330,595
    Other current liabilities.......................................            372,261               278,883


        Total Current Liabilities...................................     $    1,186,357         $   1,188,590


Long-Term Liabilities:
    Long-term borrowings (excluding current maturities).............     $      580,665         $     530,926
    Other long-term liabilities.....................................             33,480                30,880


        Total Long-Term Liabilities.................................     $      614,145         $     561,806


Deferred Income Taxes...............................................     $        3,974         $       6,840


Minority Owners' Equity in Subsidiaries.............................     $       18,843         $      29,259


Net Income (Note 1).................................................     $            -0-       $      20,427


Capital Shares and Equities:
  Preferred shares--Authorized 8,000,000 shares
       8% Series A cumulative redeemable preferred shares,
          stated at redemption value, $50 per share.................     $            -0-       $     100,000
       Other preferred shares, stated at par value,
          $25 per share.............................................                  72                   72
  Common shares, $25 par value--Authorized
       50,000,000 shares............................................             442,012              502,545
  Earned surplus and other equities ................................             379,909              316,011


        Total Capital Shares and Equities...........................     $       821,993        $     918,628



Contingent Liabilities and Commitments (Note 3)


Total Liabilities and Equities......................................     $    2,645,312         $   2,725,550


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


                   FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                            Six Months Ended
                                                                   February 28           February 28
                                                                      1997                  1998
                                                                         (Amounts in Thousands)
<S>                                                              <C>                    <C>
Sales.........................................................   $    4,523,002         $    4,413,341
Cost of sales.................................................        4,309,445              4,196,543


Gross income..................................................   $      213,557         $      216,798


Selling, general and administrative expenses..................   $      183,196         $      200,955


Other income (deductions):
   Interest expense...........................................   $      (30,406)        $      (35,329)
   Other, net.................................................           15,660                 19,272

Total other income (deductions)...............................   $      (14,746)        $      (16,057)


Income (loss) before income taxes, equity in net income of
  investees and minority owners' interest in
    net (income) loss of subsidiaries.........................   $       15,615         $         (214)

Income tax (expense) benefit..................................           (1,912)                 1,908


Income before equity in net income of investees and minority
  owners' interest in net (income) loss
    of subsidiaries...........................................   $       13,703         $        1,694
Equity in net income of investees
   (Note 4)...................................................           17,106                 18,134

Minority owners' interest in net (income) loss
   of subsidiaries............................................             (375)                   599


Net income ...................................................   $       30,434         $       20,427



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


                   FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                           Three Months Ended
                                                                   February 28           February 28
                                                                      1997                  1998
                                                                         (Amounts in Thousands)
<S>                                                              <C>                    <C>
Sales.........................................................   $    2,133,723         $    2,129,495
Cost of sales.................................................        2,037,230              2,031,868


Gross income..................................................   $       96,493         $       97,627


Selling, general and administrative expenses..................   $       88,884         $      103,307


Other income (deductions):
   Interest expense...........................................   $      (14,387)        $      (18,220)
   Other, net.................................................            6,529                 11,297

Total other income (deductions)...............................   $       (7,858)        $       (6,923)


Loss before income taxes, equity in net income of investees an
  minority owners' interest in
    net (income) loss of subsidiaries.........................   $         (249)        $      (12,603)

Income tax benefit............................................            1,139                  3,996


Income (loss) before equity in net income of investees and
  minority owners' interest in net (income) loss
    of subsidiaries...........................................   $          890         $       (8,607)
Equity in net income of investees
   (Note 4)...................................................            7,104                 11,237

Minority owners' interest in net (income) loss
   of subsidiaries............................................           (1,452)                   464


Net income ...................................................   $        6,542         $        3,094



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


                   FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                         Six Months Ended
                                                                                 February 28         February 28
                                                                                    1997                1998
                                                                                      (Amounts in Thousands)
<S>                                                                               <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income..................................................................      $    30,434        $    20,427
Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
     Depreciation and amortization..........................................           44,741             50,098
     Equity in net (income) of investees....................................          (17,106)           (18,134)
     Other..................................................................            7,459             (5,872)
    Changes in assets and liabilities:
       Accounts receivable..................................................           50,466             29,895
       Inventories..........................................................          (91,536)           (65,846)
       Other assets.........................................................            6,616            (22,674)
       Accounts payable.....................................................          (47,628)           (35,714)
       Advances on product purchases........................................          190,658             17,190
       Other liabilities....................................................          (49,099)           (72,783)

Net cash provided by (used in) operating activities.........................      $   125,005        $  (103,413)


CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................................................      $   (78,030)       $   (73,112)
Distributions from joint ventures...........................................           34,013             22,569
Additions to investments and notes receivable...............................          (45,476)           (21,524)
Proceeds from disposal of investments and notes receivable..................           13,126             40,751
Proceeds from sale of fixed assets..........................................            5,159              3,972
Other.......................................................................           (3,516)              (400)
Net cash used in investing activities.......................................      $   (74,724)       $   (27,744)


CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of dividends and patronage refunds.................................      $   (32,504)       $   (41,096)
Payments for redemption of equities.........................................          (25,285)           (29,163)
Proceeds from bank loans and notes payable..................................          164,481            147,253
Payments on bank loans and notes payable....................................         (211,512)           (74,440)
Proceeds from issuance of subordinated debt certificates....................           49,907             54,697
Payments for redemption of subordinated debt certificates...................          (25,629)           (36,372)
Increase of checks and drafts outstanding...................................           42,258             28,563
Proceeds from issuance of preferred shares..................................               -0-           100,000
Net decrease in demand loan certificates....................................          (12,047)           (18,355)
Other ......................................................................               50                 70

Net cash provided by (used in) financing activities.........................      $   (50,281)       $   131,157


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.

      In view of the seasonality of the Company'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 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.

      The Company's revenues, margins and net income depend, to a large extent,
on conditions in agriculture and may be volatile due to factors beyond the
Company's 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,
livestock, grain and other commodities may impact the Company's operations.
Historically, changes in the costs of raw materials used in the manufacture of
the Company's finished products have not necessarily resulted in corresponding
changes in the prices at which such products have been sold by the Company.
Management cannot determine the extent to which these factors may impact future
operations of the Company.  The Company's cash flow and net income may be
volatile as conditions affecting agriculture and markets for the Company's
products change.

      Farmland operates on a cooperative basis.  In accordance with its bylaws,
Farmland determines its annual net earnings from transactions with members
("member-sourced earnings").  For this purpose, annual net earnings is before
income tax determined in accordance with generally accepted accounting
principles.  Losses, including patronage allocation unit losses, if any, are
handled in accordance with the Company's bylaws.  The remaining member-sourced
earnings are returned to members as patronage refunds in the form of a qualified
or nonqualified written notice of patronage refund allocation.  Each member's
portion of the annual patronage refund is determined by the earnings of Farmland
attributed to the quantity or value of business transacted by the member with
Farmland during the year for which the patronage is paid.  In view of the fact
that the determination of the amount of patronage refund 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 February 28, 1998 Condensed Consolidated Balance Sheet.

(2)  INVENTORIES

      Major components of inventories at August 31, 1997 and February 28, 1998
are as follows:

<TABLE>
<CAPTION>
                                                   August 31               February 28
                                                      1997                     1998
                                                         (Amounts in Thousands)
<S>                                             <C>                     <C>
Finished and in-process products..............  $     625,577           $     672,903
Materials.....................................         62,001                  85,053
Supplies......................................         57,723                  53,191

                                                $     745,301           $     811,147


</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
contention by the IRS that Farmland incorrectly treated the Terra sale gain as
patronage-sourced 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 $261.6 million
through February 28, 1998), or $347.4 million (before tax benefits of the
interest deduction) in the aggregate at February 28, 1998.  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 $15.3 million (including accumulated
statutory interest thereon).  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.

   In March 1998, Farmland received notice from the IRS assessing tax and
accumulated statutory interest thereon totaling $15.3 million related to the
Company's 1989 tax year (as described above).  In order to establish venue and
to stay accumulating interest, the Company deposited funds with the IRS in the
amount of the assessment.  Subsequent thereto, the Company filed for a refund of
the entire amount deposited.

      The liability resulting from an adverse decision of the Terra tax issue 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, certain financial covenants of the Company's Syndicated Credit
Facility (the "Credit Facility"), 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 all related additional federal and state income taxes and
accumulated interest thereon been due and payable on February 28, 1998,
Farmland's borrowing capacity under the Credit Facility was adequate at that
time to finance the liability.  However, Farmland's ability  to finance such an
adverse decision depends substantially on the financial effects of future
operating events on its  borrowing capacity under the Credit Facility.

      No provision has been made in the Condensed 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 currently is aware of probable obligations for environmental
matters under state and federal environmental laws at 33 properties.  At
February 28, 1998, the Company has an environmental accrual in its Condensed
Consolidated Balance Sheet for probable and reasonably estimated costs for
remediation of contaminated properties of $15.9 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 February 28, 1998.  In the opinion of
management, it is reasonably possible for such additional costs to be
approximately $18.8 million.

      The environmental accrual discussed above covers certain matters in
connection with which the Environmental Protection Agency has designated the
Company as a potentially responsible party ("PRP") or a responsible party ("RP")
under the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), at various National Priority List ("NPL") sites.

      Under the Resource Conservation Recovery Act of 1976 (''RCRA''), the
Company has three closure and four post-closure plans in place for multiple
locations. Closure and post-closure plans also are in place for three landfills
and two injection wells as required by certain state regulations. Such future
closure and post-closure costs are estimated to be $4.9 million at February 28,
1998 (and are in addition to the $15.9 million accrual and the $18.8 million
discussed in the prior paragraphs).  The Company accrues these liabilities when
plans for termination of plant operations have been made.  Operations are
ongoing 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.


 (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 six months ended February 28, 1997 and February 28, 1998 is as
follows:

<TABLE>
<CAPTION>
                                                February 28            February 28
                                                    1997                   1998
                                                      (Amounts in Thousands)
<S>                                            <C>                    <C>
Net sales..................................... $      447,147         $      495,358
Net income.................................... $       34,799         $       37,172
Farmland's equity in net income............... $       17,106         $       18,134


</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 the third quarter of
fiscal 1998) and a 50% equity interest in a distributor of crop protection
products, WILFARM, LLC.

ITEM 2.   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, 1997.


FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     The Company 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.

     The Company's debt securities issued under the continuous public debt
offering 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 included in the continuous debt offering include certificates payable
on demand and subordinated debt securities.  The total amount of such debt
outstanding and the flow of funds to, or from, the Company as a result of the
continuous debt offering are influenced by the rate of interest which Farmland
establishes for each type, or series, of debt security offered and by options of
Farmland to call for redemption certain of its outstanding debt securities.
During the six months ended February 28, 1998, the outstanding balance of demand
certificates decreased by $18.4 million and the outstanding balance of
subordinated debt securities increased $4.6 million.

     In May 1996, Farmland entered into a five year Syndicated Credit Facility
(the "Credit Facility") with various participating banks. The Credit Facility
provides (subject to compliance with certain financial covenants) 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 Credit Facility 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 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 in the Credit Facility.  The short-term credit provided under the Credit
Facility is reviewed and/or renewed annually.  The next scheduled review date is
in May 1998.  The revolving long-term credit provided under the Credit Facility
expires in May 2001.

     At February 28, 1998, the Company had $293.6 million of short-term
borrowings under the Credit Facility and $100.0 million of revolving term
borrowings.  Additionally, $57.1 million of the Credit Facility was utilized to
support letters of credit.  At February 28, 1998, under the short-term credit,
the Company had capacity to borrow up to an additional $304.8 million and, under
the long-term credit, the Company had capacity to borrow up to an additional
$344.5 million.

     The Company maintains other borrowing arrangements with banks and financial
institutions. Under such agreements at February 28, 1998, $10.0 million was
borrowed.

     Farmland National Beef Packing Company, L.P. ("FNBPC") 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 February 28, 1998,
$105.0 million was available under this credit facility of which $47.5 million
was borrowed and $0.6 million was utilized to support letters of credit.  In
addition, FNBPC had certain borrowings from Farmland. Subsequent to February 28,
1998, FNBPC replaced its borrowing agreement with a new $130.0 million credit
facility.  All borrowings under this facility are nonrecourse to Farmland or
Farmland's other affiliates.  FNBPC used a portion of this facility to repay in
full the borrowings (approximately $65.3 million at March 31, 1998) from
Farmland.  FNBPC has pledged certain assets to support its borrowings under the
new credit facility.

     The Company's international grain trading subsidiaries (collectively
referred to as "Tradigrain") have 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 February 28, 1998, such borrowings totaled $65.5 million.

     Leveraged leasing has been utilized to finance railcars and a significant
portion of the Company's fertilizer production equipment.  In December 1997, the
Company entered into a series of agreements which provide for the construction
and operation under a long-term lease of facilities adjacent to the Company's
petroleum refinery at Coffeyville, Kansas.  These facilities are designed to
convert petroleum coke by-products into fertilizers.  When the facilities are
completed (presently scheduled for early in fiscal 2000), Farmland will be
obligated to make future minimum lease payments which, at that time, will have
an approximate present value of $223 million.  Alternatively, Farmland  has an
option to purchase the facilities.  The Company's subordinated debt securities
are subordinated in right of payment to the future lease obligations.  In the
event Farmland should default on the obligations described above, future lease
obligations may be accelerated.  If accelerated, obligations due and payable
would total approximately $263 million, all of which would be senior to the
subordinated debt securities and, upon payment of such amount, Farmland would
receive title to the assets.

     Through a private offering, in December 1997, the Company sold 2 million
shares of 8% Series A Cumulative Redeemable Preferred Shares (the "Preferred
Shares") at $50 per Preferred Share 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 the option of the Company, 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, if any, thereon.
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 securities of the Company.  Proceeds from the issuance of the Preferred
Shares have been used to call for early redemption approximately $47.6 million
of principal and accumulated interest on certain subordinated debt securities
and, during March 1998, the Board approved redemption of approximately $49.2
million of certain members' and patrons' equity.

     In the opinion of management, the arrangements for capital described above
are adequate for the Company's present operating and capital plans.  However,
alternative financing arrangements are continuously evaluated.

     Major uses of cash during the six months ended February 28, 1998 include:
$103.4 million used in operations (primarily as a result of a $143.9 million
increase in operating assets, partially offset by $50.1 million of non-cash
depreciation and amortization charges), $73.1 million for capital expenditures,
$41.1 million for patronage refunds and dividends, and $29.2 million for the
redemption of equities.

     Major sources of cash during the six months ended February 28, 1998
include:  $100.0 million of proceeds from the issuance of preferred shares,
$72.8 million of proceeds, net of repayments, from bank loans and other notes
payable, $40.8 million from the disposal of investments and notes receivable and
$28.6 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.



RESULTS OF OPERATIONS

   GENERAL

     In view of the seasonality of the Company'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.  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.

     The Company's revenues, margins and net income depend, to a large extent,
on conditions affecting agriculture and may be volatile due to factors beyond
the Company's 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,
livestock, grain and other commodities may impact the Company's operations.
Historically, changes in the costs of raw materials used in the manufacture of
the Company's finished products have not necessarily resulted in corresponding
changes in the prices at which such products have been sold by the Company.
Management cannot determine the extent to which these factors may impact future
operations of the Company.  The Company's cash flow and net income may be
volatile as conditions affecting agriculture and markets for the Company's
products change.


RESULTS OF OPERATIONS FOR SIX MONTHS ENDED FEBRUARY 28, 1998 COMPARED TO SIX
MONTHS ENDED FEBRUARY 28, 1997


     For the six months ended February 28, 1998, the Company had sales of
$4.4 billion compared with sales of $4.5 billion for the same period last year.
Net income for the six months ended February 28, 1998 was $20.4 million, a
decrease of $10.0 million from the prior year period.

   SALES

     Sales for the six months ended February 28, 1998 decreased $109.7 million,
or 2.4%, compared with the same period last year.

     On the input side of the Company's business, sales of the petroleum, crop
production and feed segments in the six months ended February 28, 1998 decreased
$87.6 million, $17.9 million and $23.4 million, respectively, compared with the
same period last year.  The decrease in petroleum sales primarily reflects a
decline in unit prices that was partially offset by a 12.3% increase in
gasoline, distillates and diesel unit sales.  The unit sales increase resulted
principally from higher production volume at the Company's refinery in
Coffeyville, Kansas.  Sales of crop production products decreased primarily due
to lower unit prices.  Feed business sales decreased primarily due to lower feed
grain unit sales combined with a decrease in unit prices.


     On the output side of the Company's business, sales in the food processing
and marketing business (the "meats group") increased $131.0 million.  This
increase is primarily attributable to higher unit sales due to an increase in
the number of head processed, partially offset by lower unit prices.  Sales in
the grain business decreased by $111.7 million as a result of both lower unit
volume and lower commodity prices.


   NET INCOME

     Net income for the six months ended February 28, 1998 decreased $10.0
million compared with the same period in the prior year.

     Operating income for the petroleum business increased $4.9 million for the
six months ended February 28, 1998 compared with the prior period.  This
increase was primarily due to improvements at the Company's refinery which
increased processing capacity and which enabled the refinery to process a higher
proportion of sour crude.

     Operating income in the crop production business for the six months ended
February 28, 1998 decreased $34.8 million compared to the same period last year
primarily as a result of decreased unit margins.  The decline of unit margins is
mostly attributable to lower nitrogen fertilizer prices, partly offset by a
decrease in raw material costs.

     Operating income in the feed business was approximately the same for the
six months ended February 28, 1998 as compared to the same period last year.

     Operating income in the meats group for the six months ended February 28,
1998 increased $6.3 million compared to the prior period.  This increase is
primarily attributable to increased pork margins due to lower live hog prices,
partly offset by decreased beef unit net margins and by losses in the livestock
production business due to the lower hog prices.

     Operating income in the grain business segment for the six months ended
February 28, 1998 was $13.1 million compared to operating income of $3.9 million
for the six months ended February 28, 1997.  This increase is primarily
attributable to higher income generated on international grain trading
transactions, primarily wheat.

     Selling, general and administrative ("SG&A") expenses increased
$17.8 million, or 9.7%, from the prior period.  SG&A expenses directly connected
to business segments increased approximately $13.5 million and these expenses
have been included in the determination of operating income of the segments.
SG&A expenses not identified to segments increased $4.3 million, primarily as a
result of increased information service expenses.

     Other income increased $3.6 million, or 23.1%, for the six months ended
February 28, 1998 as compared to the same period last year.  This increase is
primarily attributable to a gain of approximately $7.2 million on sale, during
the second quarter, of approximately 3.8% of Farmland's ownership interest in
FNBPC.

     The decrease in the provision for income taxes for the six months ended
February 28, 1998 compared to the six months ended February 28, 1997 is
primarily attributable to a decrease in the Company's effective tax rate
combined with the decrease in income before taxes.

     The level of operating income in the crop production, petroleum and food
processing and marketing 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 plant nutrients, crude oil in the case of petroleum and
live hogs and cattle in the meats group).  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.  Furthermore, 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.

RESULTS OF OPERATIONS FOR THREE MONTHS ENDED FEBRUARY 28, 1998 COMPARED TO THREE
MONTHS ENDED FEBRUARY 28, 1997

   SALES

     Sales for the three months ended February 28, 1998 decreased $4.2 million,
or 0.2%, compared with the prior period.  Changes in sales by operating segment
are primarily as discussed above in the six months operations.

   NET INCOME

     Net income for the three months ended February 28, 1998 decreased $3.4
million compared with the corresponding period of the prior year.  Except for
the meats group, the decrease was principally attributable to the factors
discussed above for the six months comparison.

     Operating income for the meats group for the three months ended February
28, 1998 decreased $7.3 million.  This decrease is attributable to lower beef
unit margins and losses in the livestock production unit due to the impact of
lower live hog market prices on the carrying value of inventory.

     The level of operating income in the crop production, petroleum and food
processing and marketing 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 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.

RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

     The following table sets forth the Company's consolidated ratios of (i)
earnings to fixed charges and (ii) earnings to combined fixed charges and
preferred stock dividends for the six months ended February 28, 1997 and
February 28, 1998.

     The ratios of earnings to fixed charges have been computed by dividing
fixed charges into the sum of (a) income (loss) before taxes for the enterprise
as a whole, less capitalized interest and with adjustments to appropriately
reflect the Company's majority-owned, 50%-owned, and less-than-50%-owned
affiliates, and (b) fixed charges.  Fixed charges consist of interest on all
indebtedness (including amortization of debt issuance expenses) and the
component of operating rents determined to be interest, with adjustments as
appropriate to reflect the Company's 50%-owned and less-than-50%-owned
affiliates.

     The ratios of earnings to combined fixed charges and preferred stock
dividends have been computed by dividing fixed charges and preferred stock
dividends into the sum of (a) income (loss) before taxes for the enterprise as a
whole, less capitalized interest and with adjustments to appropriately reflect
the Company's majority-owned, 50%-owned, and less-than-50%-owned affiliates, and
(b) fixed charges (computed as described above).

     The information below should be read in conjunction with information
appearing in the Company's consolidated financial statements, the notes thereto
and Management's Discussion and Analysis of Financial Condition and Results of
Operations.

                             Six Months Ended          Six Months Ended
                             February 28, 1997         February 28, 1998

Ratio of Earnings to Fixed           1.8                       1.4
Charges............
Ratio of Earnings to Combined
  Fixed Charges and
  Preferred Stock                    1.8                       1.4
Dividends......................


YEAR 2000

      The Company has assessed key financial, informational and operational
systems.  Management does not anticipate that the Company will encounter
significant operational issues related to Year 2000.  Furthermore, the financial
impact of making required systems changes is not expected to be material to the
Company's consolidated financial position, results of operations or cash flows.

RECENT ACCOUNTING PRONOUNCEMENTS

      Statements of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income," No. 131, "Disclosures about Segments of an Enterprise and
Related Information," and No. 132, "Employer's Disclosures About Pensions and
Other Postretirement Benefits" have been issued by the FASB and are effective
for periods beginning after December 15, 1997.  These statements expand or
modify disclosures and, accordingly, will have no impact on the Company's
reported financial position, results of operations or cash flows.




ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The information required under Item 3 is not required for the quarterly
period ended February 28, 1998, because the company's market capitalization was
less than $2.5 billion as of January 28, 1997.



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-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, the Company.  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, 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, 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, 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.  Such forward looking statements include, without
limitation, statements regarding the seasonal effects upon the Company's
business, the anticipated expenditures for environmental remediation, the
consequences of an adverse judgment in certain litigations (including the Terra
litigation), and the Company's ability to fully and timely complete
modifications and expansions with respect to certain of the Company's
manufacturing facilities.  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, 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, movement and/or 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 the Company's
  control that may affect growth strategies through acquisitions and
  investments in joint ventures.
  
7.Competitors in various segments may be larger, may offer more varied products
  or may possess greater financial and other resources than the Company.
  
8.Unusual or unexpected events such as, among other things, litigation
  settlements, adverse rulings or judgments, and environmental remediation
  costs in excess of amounts accrued.
  
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, 1997.



                          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
FEBRUARY 28, 1998.

        Exhibit No.                         Description of Exhibits   

          27        Financial Data Schedule

   (B)    NO REPORTS ON FORM 8-K WERE FILED DURING THE QUARTER ENDED FEBRUARY
28, 1998.



                                   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:   April 14, 1998