<HTML>
<HEAD>
<TITLE>10-Q</TITLE>
</HEAD>
<BODY>
<H1 ALIGN=CENTER><FONT SIZE=3>UNITED STATES</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>SECURITIES AND EXCHANGE COMMISSION</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>Washington, D.C. 20549</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>FORM 10-Q</FONT></H1>

<PRE>
[X]                        QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
                                OF THE SECURITIES EXCHANGE ACT OF 1934

                                 For the quarterly period ended February 29, 2000

                                                        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

</PRE>
<H1 ALIGN=CENTER><FONT SIZE=3>FARMLAND INDUSTRIES, INC.</FONT></H1>

                              <P ALIGN=CENTER>(Exact name of registrant as specified in its charter)
</P>

<PRE>
                        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)
</PRE>
                        <P ALIGN=CENTER> Registrant's telephone number, including area code: 816-459-6000</P>


<P><FONT SIZE=3>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 [ ] </FONT></P>


<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>PART I - FINANCIAL INFORMATION</FONT></H1>

<H2 ALIGN=LEFT><FONT SIZE=3>Item 1. FINANCIAL STATEMENTS</FONT></H2>

<H1 ALIGN=CENTER><FONT SIZE=3>FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>CONDENSED CONSOLIDATED BALANCE SHEETS</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>(UNAUDITED)</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>ASSETS</FONT></H1>

<PRE>
                                                             August 31         February 29
                                                               1999                2000
                                                           --------------    -----------------
                                                                (Amounts in Thousands)

  Accounts receivable - trade...........................   $       794,237    $       741,737
  Inventories (Note 2)..................................           840,504            822,542
  Deferred income taxes.................................            49,495             49,614
  Other current assets..................................           153,833            154,381
                                                           ---------------    ---------------

        Total Current Assets............................   $     1,838,069    $     1,768,274
                                                           ---------------    ---------------


Investments and Long-Term Receivables (Note 4)..........   $       329,729    $       383,367
                                                           ---------------    ---------------


Property, Plant and Equipment:
  Property, plant and equipment, at cost................   $     1,744,252    $     1,777,081
     Less accumulated depreciation and
     amortization.......................................           911,049            943,938
                                                           ---------------    ---------------

  Net Property, Plant and Equipment.....................   $       833,203    $       833,143
                                                           ---------------    ---------------


Other Assets                                               $       256,648    $       250,933
                                                           ---------------    ---------------


Total Assets                                               $     3,257,649    $     3,235,717
                                                           ===============    ===============
----------
See Accompanying Notes to Condensed Consolidated Finacial Statements
</PRE>
                                    <H1 ALIGN=CENTER><FONT SIZE=3>FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES</FONT></H1>

                                       <H1 ALIGN=CENTER><FONT SIZE=3>CONDENSED CONSOLIDATED BALANCE SHEETS</FONT></H1>
                                                   <H1 ALIGN=CENTER><FONT SIZE=3>(UNAUDITED)</FONT></H1>
                                             <H1 ALIGN=CENTER><FONT SIZE=3>LIABILITIES AND EQUITIES</FONT></H1>



<PRE>                                                                1999            2000
                                                                --------------   -------------
                                                                      (Amounts in Thousands)

Current Liabilities:
    Checks and drafts outstanding.............................  $       76,128   $      93,044
    Short-term notes payable .................................         546,180         517,531
    Current maturities of long-term debt .....................          44,771          53,803
    Accounts payable - trade..................................         463,296         357,176
    Other current liabilities.................................         257,255         333,154
                                                                --------------  --------------

         Total Current Liabilities............................  $    1,387,630   $   1,354,708
                                                                --------------  --------------

Long-Term Liabilities:
    Long-term borrowings (excluding current maturities).......  $      808,413   $     864,243
    Other long-term liabilities...............................          40,212          39,976
                                                              ----------------  --------------

         Total Long-Term Liabilities..........................  $      848,625   $     904,219
                                                                --------------  --------------

Deferred Income Taxes.........................................  $       63,058   $      65,394
                                                                --------------  --------------

Minority Owners' Equity in Subsidiaries.......................  $       41,009   $      46,283
                                                                --------------  --------------

Net (Loss) (Note 1)...........................................  $           -0-  $     (48,638)
                                                                --------------- ---------------

Capital Shares and Equities:
    Preferred Shares, Authorized 8,000,000 Shares, 8% Series A
     cumulative redeemable preferred shares, stated
     at redemption value, $50 per share.......................  $      100,000   $     100,000
    Other Preferred Shares, $25 Par Value.....................              69              34
    Common shares, $25 par value--Authorized
      50,000,000 shares.......................................         508,029         527,464
    Earned surplus and other equities.........................         309,229         286,253
                                                                --------------  --------------

         Total Capital Shares and Equities....................  $      917,327   $     913,751
                                                                --------------  --------------



Contingent Liabilities and Commitments (Note 3)



Total Liabilities and Equities................................  $    3,257,649   $   3,235,717

----------
See Accompanying Notes to Condensed Consolidated Finacial Statements                                                               ==============  ==============
</PRE>

<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>(UNAUDITED)</FONT></H1>

<PRE>
                                                          ---------------  ---------------
                                                            February 28      February 29
                                                               1999             2000
                                                          ---------------  ---------------
                     (Amounts in Thousands)

Sales..................................................... $    5,073,898   $    5,848,663
Cost of sales.............................................      4,852,035        5,613,211
                                                           --------------   --------------

Gross income.............................................. $      221,863   $      235,452
                                                           --------------   --------------

Selling, general and administrative expenses.............. $      235,824   $      237,512
                                                           --------------   --------------

Other income (deductions):
    Interest expense, net................................. $      (35,039)  $      (48,806)
    Other, net............................................         12,269           (4,959)
                                                           ---------------  ---------------
Total other income (deductions)........................... $      (22,770)  $      (53,765)
                                                           ---------------  ---------------

Loss before equity in net income of investees, minority
    owners'interest in net (income) of subsidiaries
     and income taxes..................................... $      (36,731)  $      (55,825)

Equity in net income of investees (Note 4)................         24,479            5,059

Minority owners' interest in net (income)
    of subsidiaries.......................................         (4,146)          (9,385)
                                                           ---------------  ---------------

Loss before income taxes.................................. $      (16,398)  $      (60,151)

Income tax benefit                                                 12,104           11,513
                                                           ---------------  --------------

Net loss                                                   $       (4,294)  $      (48,638)
                                                           ===============  ===============

----------
See Accompanying Notes to Condensed Consolidated Finacial Statements
</PRE>

<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS</FONT></H1>

<PRE>
                                                        ---------------  -----------------
                                                          February 28        February 29
                                                             1999                2000
                                                        ---------------  -----------------
                     (Amounts in Thousands)

Sales................................................... $  2,491,648      $    2,864,198
Cost of sales...........................................    2,382,258           2,752,563
                                                         ------------      --------------

Gross income............................................ $    109,390      $      111,635
                                                         ------------      --------------

Selling, general and administrative expenses............ $    117,824      $      114,341
                                                         ------------      --------------

Other income (deductions):
    Interest expense, net............................... $    (17,312)     $      (25,074)
    Other, net..........................................        3,802                 465
                                                         ------------      --------------
Total other income (deductions)......................... $    (13,510)     $      (24,609)
                                                         -------------     ---------------

Loss before equity in net income of investees, minority
     owners'interest in net (income) of subsidiaries
     and income taxes................................... $    (21,944)     $      (27,315)

Equity in net income of investees (Note 4) .............       14,161               3,982

Minority owners' interest in net (income)
    of subsidiaries.....................................       (1,850)             (3,254)
                                                         -------------     ---------------

Loss before income taxes................................ $     (9,633)     $      (26,587)

Income tax benefit......................................       11,739               4,491
                                                         ------------      --------------

Net income (loss)....................................... $      2,106      $      (22,096)
                                                         ============      ===============
----------
See Accompanying Notes to Condensed Consolidated Finacial Statements
</PRE>

<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</FONT></H1>

<H1 ALIGN=CENTER><FONT SIZE=3>(UNAUDITED)</FONT></H1>

<PRE>
                                                             ---------------  ------------------
                                                              February 28        February 29
                                                                 1999                2000
                                                             ---------------   -----------------
                                                                  (Amounts in Thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss..................................................... $      (4,294)      $   (48,638)
Adjustments to reconcile net loss to net cash provided by
  (used in) operating activities:
      Depreciation and amortization..........................        55,795            55,193
      Equity in net (income) of investees....................       (24,479)           (5,059)
      Other..................................................        13,511             9,370
    Changes in assets and liabilities:
       Accounts receivable...................................       (18,177)           52,300
       Inventories...........................................      (126,207)          (35,592)
       Other assets..........................................       (50,443)            1,809
       Accounts payable......................................       (16,058)         (106,120)
       Customer advances on product purchases................        51,435            88,553
       Other liabilities.....................................       (48,987)           (7,645)
                                                              --------------      ------------
Net cash provided by (used in) operating activities.......... $    (167,904)      $     4,171
                                                              --------------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures......................................... $     (49,002)      $   (48,381)
Distributions from joint ventures............................        37,588            11,910
Additions to investments and notes receivable................       (30,323)          (17,846)
Acquisition of other long-term assets........................        (9,096)          (10,343)
Proceeds from disposal of investments and notes receivable...        17,797            12,842
Proceeds from sale of fixed assets...........................         2,089             4,395
Other........................................................            25                -0-
                                                              -------------       ------------
Net cash used in investing activities........................ $     (30,922)      $   (47,423)
                                                              --------------      ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of patronage refunds................................ $     (23,714)      $    (6,054)
Payments for redemption of equities..........................        (8,517)               (9)
Payments of dividends........................................        (2,004)           (4,004)
Proceeds from bank loans and notes payable...................       611,987           984,297
Payments on bank loans and notes payable.....................      (482,332)         (945,920)
Proceeds from issuance of subordinated debt certificates.....        46,804            16,734
Payments for redemption of subordinated debt certificates....        (7,825)          (13,820)
Increase of checks and drafts outstanding....................        64,497            16,916
Net decrease in demand loan certificates.....................        (7,499)           (4,210)
Other                                                                    95              (678)
                                                              -------------       ------------
Net cash provided by financing activities.................... $     191,492       $    43,252
                                                              -------------       -----------


Net decrease in cash and cash equivalents.................... $      (7,334)      $        -0-
Cash and cash equivalents at beginning of period.............         7,334                -0-
                                                              -------------       ------------
Cash and cash equivalents at end of period................... $          -0-      $        -0-
                                                              --------------      ------------

----------
See Accompanying Notes to Condensed Consolidated Finacial Statements
</PRE>


                    <H1 ALIGN=CENTER><FONT SIZE=3>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</FONT></H1>
                                                    <H1 ALIGN=CENTER><FONT SIZE=3>(UNAUDITED)</FONT></H1>

<B>(1)      Interim Financial Statements<BR></B><BR>

Unless the context requires otherwise,  (i) "Farmland",  "we", "us" and "ours" refers 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.<BR><BR>

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.<BR><BR>

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.<BR><BR>

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.<BR><BR>

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.<BR><BR>

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

<UL>
<LI>    we determine the amount of members' income and the amount of members' loss
   only after the end of the fiscal  year;<BR>
<LI>  the Board of  Directors,  in its sole discretion,  then determines the resulting
   amount of patronage,  after consideration  of member losses (if any),  and the
   portion of the refund to be paid in cash  and the  portion  to be paid in
   Farmland  equity  (common stock, associate member common stock and capital
   credits); and<BR>
<LI>  the amount of income  appropriated  to earned  surplus is  dependent  on th
   amount of patronage refunds and the handling of members' losses (if any).
   Therefore, the amount of net (loss) for the interim period presented is
   reflected as a  separate item in the  accompanying  unaudited  Condensed
   Consolidated Balance Sheet as of February 29, 2000.
</UL><BR>
<B>(2)      Inventories</B><BR><BR>

Major components of inventories are as follows:
<PRE>
                                                      1999                     2000
                                                --------------          --------------                                                          (Amounts in Thousands)
Finished and in-process products..............  $      719,118          $      733,969
Materials.....................................          54,387                  17,939
Supplies......................................          66,999                  70,634
                                                --------------          --------------
                                                $      840,504          $      822,542
                                                ==============          ==============
</PRE>
<P><FONT SIZE=3>On September 1, 1999, we contributed our crude oil and
in-process petroleum inventories to Cooperative Refining, LLC in exchange for an
ownership interest in the venture. Cooperative Refining operates refineries at
Coffeyville, Kansas and McPherson, Kansas on behalf of its partners. This
investment is accounted for using the equity method. </FONT></P>

<P><FONT SIZE=3>At February 29, 2000, the carrying value of our remaining
petroleum inventories stated under the LIFO method (gasoline and distillates)
was $38.3 million, which was approximately $22.8 million less than the market
value of these inventories. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>(3) Contingencies</FONT></H2>

         <P>     <I><B>(a)    Tax Litigation</B></I></P><BR><BR>
<P><FONT SIZE=3>On November 29, 1999, the United States Tax Court issued an
opinion holding that the gains and losses we realized in 1983 and 1984 on the
sale of the stock of Terra Resources, Inc. and certain other assets were
patronage-sourced and that we had reported these gains and losses correctly. By
ruling in our favor, the Tax Court rejected claims of the Internal Revenue
Service that would have resulted in material additional federal income taxes
plus accumulated interest. This ruling also means that we do not owe additional
state income tax and accumulated interest related to these transactions. </FONT></P>

<P><FONT SIZE=3>The IRS may decide to appeal the Tax Court decision to the
United States Court of Appeals for the Eighth Circuit. In the event of an
appeal, Farmland’s management believes there is a high probability that
Farmland would ultimately prevail. </FONT></P>

    <P>     <I><B>(b)    Environmental Matters</B></I></P><BR><BR>

<P><FONT SIZE=3>Farmland is aware of probable obligations under state and
federal environmental laws at 41 properties. At February 29, 2000, we had an
environmental accrual in our Condensed Consolidated Balance Sheet for probable
and reasonably estimated costs for remediation of contaminated properties of
$12.7 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. </FONT></P>

<P><FONT SIZE=3>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 $11.9 million of costs in addition to the $12.7 million which
has been accrued. </FONT></P>

<P><FONT SIZE=3>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 February
29, 2000 (and are in addition to the $12.7 million accrual and the $11.9 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. </FONT></P>

 <H2 ALIGN=LEFT><FONT SIZE=3>(4)     Summarized Financial Information of Investees Accounted for by the Equity Method</FONT></H2>

<P><FONT SIZE=3>Summarized financial information of investees accounted for by
the equity method for the six months ended February 28, 1999 and February 29,
2000 is as follows: </FONT></P>

<PRE>
                                                    1999                   2000
                                              ---------------        -----------
                                                      (Amounts in Thousands)
Net sales...................................... $   1,362,129        $ 1,625,852
                                                =============        ===========
Net income..................................... $      42,265        $     7,553
                                                =============        ===========
Farmland's equity in net income................ $      24,479        $     5,059
                                                =============        ===========
</PRE>
Our investments accounted for by the equity method consist principally of <BR>
<UL>
<LI>        50%  equity  interests  in  three   manufacturers  of  crop  nutrient  products,   Farmland  Hydro,  L.P.,
     SF Phosphates Limited Company and Farmland MissChem, Limited;
<LI>        during the six months  ended  February  28, 1999,  a 50% equity  interest in a grain  marketer,  Concourse
     Grain, LLC;
<LI>        during the six months  ended  February 29,  2000,  an  approximately  42% equity  interest in  Cooperative
     Refining, LLC, which operates two refineries; and
<LI>        during the six months ended  February 29,  2000,  an  approximately  25% equity  interest in  VantagePoint
     Network, an Internet-based crop management information system.
</UL>

<PAGE>





 <H2 ALIGN=LEFT><FONT SIZE=3>(5)       Industry Segment Information</FONT></H2>

Six months ended<BR>
February 28, 1999 (Page 1 of 3)<BR>
(Amounts in Thousands)<BR>
                                                        <P ALIGN=CENTER><B>CONSOLIDATED SEGMENTS</B></P>
                              <P ALIGN=CENTER>-------------------------------------------------------------</P>
<PRE>
                                  Segments            Unallocated           Consolidated
                              -----------------     ----------------      -----------------

Sales & transfers             $      5,251,696      $            -        $      5,251,696
Transfers between segments            (177,798)                  -                (177,798)
                              -----------------     ----------------      -----------------
Net sales                     $      5,073,898      $            -        $      5,073,898
                              =================     ================      =================

Net income (loss)             $         71,174      $       (75,468)      $         (4,294)
                              =================     ================      =================


Total assets                  $      2,677,836              315,663       $      2,993,499
                              =================     ================      =================
</PRE>
<H2 ALIGN=LEFT><FONT SIZE=3>Six months ended<BR>
February 29, 2000 (Page 1 of 3)
<BR>(Amounts in Thousands)</FONT></H2>

                                                         <P ALIGN=CENTER><B>CONSOLIDATED SEGMENTS</B></P>
<PRE>
                                  Combined
                                  Segments            Unallocated           Consolidated
                              -----------------     ----------------      -----------------

Sales & transfers             $      6,123,438      $            -        $      6,123,438
Transfers between segments            (274,775)                  -                (274,775)
                              -----------------     ----------------      -----------------
Net sales                     $      5,848,663      $            -        $      5,848,663
                              =================     ================      ================

Net income (loss)             $         49,271      $       (97,909)      $        (48,638)
                              =================     ================      =================


Total assets                  $      2,920,936      $       314,781       $      3,235,717
                              =================     ================      =================

</PRE>

<PAGE>




Six months ended<BR>
February 28, 1999 (Page 2 of 3)<BR>
(Amounts in Thousands)<BR>
                                                     <P ALIGN=CENTER>  <B> INPUT AND OTHER SEGMENTS</B></P>

 <P ALIGN=CENTER>-------------------------------------------------------------------------------</P>
  <PRE>
                                                                                  Other      Total Input
                                                                                 Operating   and other
                              Nutrients   Protection     Petroleum        Feed       Units       Segments
                              ----------- ------------ --------------  ----------- ----------- --------------

Sales & transfers             $ 507,629    $       125  $    394,099    $309,598    $  178,979  $  1,390,430
Transfers between segments      (24,682)           -            (49)      (12,645)    (70,078)     (107,454)
                                          ------------ -------------- ----------  ----------- --------------
                              -----------
Net sales                     $ 482,947   $       125  $    394,050      $  108,901  $  1,282,976
                                                                       $  296,953
                              =========== ============ ==============  =========== =========== ==============

Net income (loss)             $   5,029   $       548  $      2,419    $    8,689  $    2,018  $     18,703
                              =========== ============ ==============  =========== =========== ==============


Total assets                  $702,847    $    22,610  $    415,856    $   77,597  $  178,217  $1,397,127
                              =========== ============ ==============  =========== =========== ==============
</PRE>
<H2 ALIGN=LEFT><FONT SIZE=3>Six months ended<BR>
February 29, 2000 (Page 2 of 3)
<BR>(Amounts in Thousands)</FONT></H2>

                                                              <P ALIGN=CENTER>  <B> INPUT AND OTHER SEGMENTS</B></P>
<PRE>

                                                                                    Other      Total Input
                                Crop         Crop                                  Operating     and Other
                              Nutrients   Protection     Petroleum        Feed       Units       Segments
                              ----------- ------------ --------------  ----------- ----------- --------------

Sales & transfers             $ 435,767    $       107  $    676,770    $340,096    $  212,490  $  1,665,230
Transfers between segments       (1,769)           -              -       (27,513)    (45,402)      (74,684)
                              -----------  ------------ --------------  ----------- ----------- --------------

Net sales                     $ 433,998   $       107  $    676,770    $312,583    $  167,088  $  1,590,546
                              =========== ============ ==============  =========== =========== ==============

Net income (loss)             $ (21,370)  $     1,441  $       (475)   $   10,109  $      274  $    (10,021)
                              =========== ============ ==============  =========== =========== ==============


Total assets                  $700,457    $    19,021  $    379,841    $  125,042  $  126,488  $1,350,849
                              =========== ============ ==============  =========== =========== ==============

</PRE>
<PAGE>



Six months ended<BR>
February 28, 1999 (Page 3 of 3)<BR>
(Amounts in Thousands)<BR>
                                                                  <P ALIGN=CENTER> <B>OUTPUT SEGMENTS</B></P>
                             <P ALIGN=CENTER>---------------------------------------------------------------------------------</P>
<PRE>                                                                                Grain
                                                                      ---------------------------
                               Processing   Livestock     Processing     North                      Output
                             & Marketing   Production   & Marketing    American    International  Segments
                             ------------- ------------ ------------- ------------- ------------- ------------

Sales & transfers            $   705,133   $    25,759  $ 1,099,167   $ 1,158,690   $   872,517   $ 3,861,266
Transfers between segments        (2,360)     (20,014)         (544)       (47,426)          -        (70,344)
                             ------------- ------------ -------------  ------------ ------------- -------------

Net sales                    $   702,773    $    5,745  $ 1,098,623   $ 1,111,264   $   872,517   $3,790,922
                             ============= ============ ============= ============= ============= ============

Net income (loss)            $    39,907   $   (18,432) $    13,806   $ 7,510       $     9,680   $    52,471
                             ============= ============ ============= ============= ============= ============


Total assets                 $   331,263   $    29,764  $   269,346   $ 381,224     $   269,112   $1,280,709
                             ============= ============ ============= ============= ============= ============
</PRE>
<H2 ALIGN=LEFT><FONT SIZE=3>Six months ended<BR>
February 29, 2000 (Page 3 of 3)<BR>
(Amounts in Thousands)</FONT></H2>

                                                                           <P ALIGN=CENTER><B>OUTPUT SEGMENTS</B></P>
 <PRE>                                 Pork                       Beef                Grain                 Total
                                                                       ---------------------------
                                Processing   Livestock     Processing     North                       Output
                              & Marketing   Production  & Marketing    American    International   Segments
                              ------------- ------------ ------------- ------------- ------------- --------------

Sales & transfers             $   775,455   $    49,888  $ 1,320,921   $ 1,200,207   $ 1,111,737   $  4,458,208
Transfers between segments         (2,666)      (36,632)      (3,156)      (157,637)          -        (200,091)
                              ------------- ------------ ------------- -------------  ------------  -------------                        -------------

Net sales                     $   772,789    $   13,256  $1,317,765    $1,042,570    $ 1,111,737
                                                                                                   $4,258,117
                              ============= ============ ============= ============= ============= ==============

Net income (loss)             $    19,837   $    (8,949) $    28,120   $ 13,995      $     6,289   $     59,292
                              ============= ============ ============= ============= ============= ==============


Total assets                  $   347,275   $    52,766  $   301,473   $ 436,041     $   432,532   $1,570,087
                              ============= ============ ============= ============= ============= ==============

</PRE>





<H2 ALIGN=LEFT><FONT SIZE=3>Three months ended<BR>
February 28, 1999 (Page 1 of 3)<BR>
(Amounts in Thousands)</FONT></H2>

                                                               <P ALIGN=CENTER><B>CONSOLIDATED SEGMENTS</B></P>
<PRE>                                   Combined
                                   Segments            Unallocated           Consolidated
                               -----------------     -----------------     ------------------

Sales & transfers              $      2,577,898      $            -        $      2,577,898
Transfers between segments              (86,250)                  -                 (86,250)
                              -----------------      -----------------     ------------------

Net sales                      $      2,491,648      $            -        $      2,491,648
                               =================     ==================    ==================

Net income (loss)              $         33,703      $       (31,597)      $          2,106
                               ==================     =================     ==================


Total assets                   $      2,677,836      $       315,663       $      2,993,499
                               =================     =================     ==================
</PRE>


<H2 ALIGN=LEFT><FONT SIZE=3>Three months ended<BR>
February 29, 2000 (Page 1 of 3)<BR>
(Amount in Thousands)</FONT></H2>

                                                                <P ALIGN=CENTER><B>CONSOLIDATED SEGMENTS</B></P>
<PRE>
                                 Combined
                                 Segments            Unallocated           Consolidated
                             -----------------     -----------------     ------------------

Sales & transfers            $      2,979,176      $            -        $      2,979,176
Transfers between segments           (114,978)                  -                (114,978)
                             -----------------     -----------------     ------------------

Net sales                    $      2,864,198      $            -        $      2,864,198
                             =================    =================      ==================

Net income (loss)            $         24,193      $       (46,289)      $        (22,096)
                              =================   =================     ==================



Total assets                 $      2,920,936      $       314,781       $      3,235,717
                             =================     =================     ==================
</PRE>


<PAGE>



<H2 ALIGN=LEFT><FONT SIZE=3>Three months ended<BR>
February 28, 1999 (Page 2 of 3)<BR>
(Amounts in Thousands)</FONT></H2>

                                                                     <P ALIGN=CENTER><B>INPUT AND OTHER SEGMENTS</B></P>
<PRE>
                                                                                                     Other      Total Input
                                  Crop            Crop                                  Operating     and Other
                               Nutrients       Protection     Petroleum       Feed        Units       Segments
                             ---------------   ------------ -------------- -----------  ----------  --------------

Sales & transfers            $    249,909      $        63  $    178,422   $  151,964   $  86,692   $     667,050

Transfers between segments        (12,359)     -                     (28)      (6,003)    (32,086)        (50,476)
                             ---------------   ------------ -------------- -----------  ---------   --------------

Net sales                    $    237,550      $        63  $    178,394   $  145,961   $  54,606    $    616,574
                             ===============   ============ ============== ===========  ==========  ==============

Net income (loss)            $     (1,096)     $     1,808  $     (1,047)  $    3,699   $    (429)  $       2,935
                             ===============   ============ ============== ===========  ==========  ==============


Total assets                 $    702,847      $    22,610  $    415,856    $  77,597   $178,217    $   1,397,127
                             ===============   ============ ============== ===========  ==========  ==============
</PRE>
<H2 ALIGN=LEFT><FONT SIZE=3>Three months ended<BR>
February 29, 2000 (Page 2 of 3)<BR>
(Amounts in Thousands)</FONT></H2>

                                                                          <P ALIGN=CENTER><B>INPUT AND OTHER SEGMENTS</B></P>
<PRE>
                                                                                           Other       Total Input
                                    Crop            Crop                                 Operating      and Other
                                 Nutrients       Protection     Petroleum       Feed       Units        Segments
                               ---------------   ------------ -------------- ----------- -----------  --------------

Sales & transfers              $    201,197      $        54  $    305,300   $163,502    $  105,825   $     775,878

Transfers between segments             (839)     -                       -       (9,961)    (22,005)        (32,805)
                               ---------------   ------------ -------------- -----------   ----------          --------------

Net sales                      $    200,358      $        54  $    305,300   $  153,541  $   83,830    $    743,073
                               ===============   ============ ============== =========== ===========  ==============

Net income (loss)              $     (1,806)     $     4,031  $     (2,326)  $    4,007  $   (2,201)  $       1,705
                               ===============   ============ ============== =========== ===========  ==============


Total assets                   $    700,457      $    19,021  $    379,841    $125,042   $126,488     $   1,350,849
                               ===============   ============ ============== =========== ===========  ==============

</PRE>

<PAGE>




<H2 ALIGN=LEFT><FONT SIZE=3>Three months ended<BR>
February 28,1999 (Page 3 of 3)<BR>
(Amounts in Thousands)</FONT></H2><BR>

                                                                           <P ALIGN=CENTER><B>OUTPUT SEGMENTS</B></P>
                                     <P ALIGN=CENTER>-----------------------------------------------------------------------------------</P>
<PRE>
                                                                                   Grain
                                                                       ----------------------------
                               Processing   Livestock      Processing     North                       Output
                              & Marketing   Production    & Marketing    American    International   Segments
                             ------------- ------------ -------------- ------------- -------------- ------------

Sales & transfers            $   336,197   $    12,513  $    551,452   $    615,962  $    394,724   $ 1,910,848

Transfers between segments          (824)       (9,506)           21        (25,465)           -        (35,774)
                                        -                              -
                             ------------- ------------ -------------- ------------- -------------- ------------
Net sales                    $   335,373   $     3,007  $    551,473   $    590,497  $    394,724   $1,875,074

                             ============= ============ ============== ============= ============== ============

Net income (loss)            $    20,220   $    (6,702) $      7,155   $      1,525  $      8,570   $ 30,768
                             ============= ============ ============== ============= =============  ============


Total assets                 $   331,263   $    29,764  $    269,346   $    381,224  $    269,112   $ 1,280,709
                             ============= ============ ============== ============= ============== ============
</PRE>
<H2 ALIGN=LEFT><FONT SIZE=3>Three months ended<BR>
February 29, 2000 (Page 3 of 3)<BR>
(Amounts in Thousands)</FONT></H2>

                                                                           <P ALIGN=CENTER><B>OUTPUT SEGMENT</B></P>

                                     <P ALIGN=CENTER>-----------------------------------------------------------------------------------</P>
<PRE>
                                                                                      Grain
                                                                           ----------------------------
                               Processing   Livestock      Processing     North                       Output
                              & Marketing  Production    & Marketing     American    International   Segments
                             ------------- ------------ -------------- ------------- -------------- ------------

Sales & transfers            $   391,451   $    26,085  $    664,688   $    590,544  $    530,530   $ 2,203,298
Transfers between segments        (1,401)      (19,385)       (2,668)       (58,719)           -        (82,173)
                             ------------- ------------ -------------- ------------- -------------- ------------
Net sales                    $   390,050   $     6,700  $    662,020   $    531,825  $    530,530   $ 2,121,125
                             ============= ============ ============== ============= ============== ============

Net income (loss)            $     4,139   $    (3,706) $     12,306   $      6,734  $      3,015   $    22,488
                             ============= ============ ============== ============= ============== ============


Total assets                 $   347,275   $    52,766  $    301,473   $    436,041  $    432,532   $ 1,570,087
                             ============= ============ ============== ============= ============== ============
</PRE>

<PAGE>


<H1 ALIGN=CENTER><FONT SIZE=3>Item 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</FONT></H1>


<P><FONT SIZE=3>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, 1999. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Financial Condition, Liquidity and Capital Resources</FONT></H2>

<P><FONT SIZE=3>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. </FONT></P>

<P><FONT SIZE=3>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 and by options of Farmland to call for
redemption certain of its outstanding debt securities. During the six months
ended February 29, 2000, the outstanding balance of demand certificates
decreased by $4.2 million and the outstanding balance of subordinated debt
securities increased $2.9 million. </FONT></P>

<P><FONT SIZE=3>In May 1996, Farmland entered into a five-year Syndicated Credit
Facility (the “Credit Facility”) with various participating banks. The
Credit Facility provides an annually renewable short-term credit of up to $650.0
million and revolving long-term credit of up to $450.0 million (subject to
compliance with certain financial covenants). </FONT></P>

<P><FONT   SIZE=3>Farmland  pays  commitment  fees  under  the  Credit  Facility
currently  equal to 25 basis points  annually on the unused  portion of both the
short-term  and 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,  unless  renewed,  will expire May 10, 2000.  The revolving  long-term
credit provided under the Credit Facility  expires in May 2001. We are currently
in negotiations to establish a new credit facility.  Management  believes that a
new facility can be established,  or waivers obtained on the existing  facility,
prior to the existing short-term facility becoming due and payable.  However, no
assurance of completion can be given.

 </FONT></P>

<P><FONT SIZE=3>At February 29, 2000, Farmland had $339.3 million of short-term
borrowings under the Credit Facility and $230.0 million of revolving term
borrowings. Additionally, $39.1 million of the Credit Facility was utilized to
support letters of credit. At February 29, 2000, we had capacity to finance
additional current assets of $273.9 million under the short-term credit.
Requirements under the Credit Facility limit current availability under the
long-term credit to $53.4 million. </FONT></P>

<P><FONT SIZE=3>Farmland maintains other borrowing arrangements with banks and
financial institutions. Under such agreements, at February 29, 2000, $45.0
million was borrowed, of which $19.5 million is nonrecourse to Farmland or
Farmland’s other affiliates. </FONT></P>

<P><FONT SIZE=3>Farmland National Beef Packing Company, L.P. (“FNBPC”)
has a five-year $130.0 million credit facility which expires March 31, 2003.
This facility is provided by various participating banks and all borrowings are
nonrecourse to Farmland or Farmland’s other affiliates. At February 29,
2000, FNBPC had borrowings under this facility of $66.0 million and $5.7 million
of the facility was utilized to support letters of credit. FNBPC has pledged
certain assets to support its borrowings under the facility. </FONT></P>

<P><FONT SIZE=3>Our 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
Tradigrain’s international grain trading activities. Obligations of
Tradigrain under these loan agreements are nonrecourse to Farmland and
Farmland’s other affiliates. At February 29, 2000, such borrowings totaled
$141.2 million. </FONT></P>

<P><FONT SIZE=3>
Leveraged  leasing  has been  utilized  to finance  railcars  and a  significant
portion of our  fertilizer  production  equipment.  In December  1997,  Farmland
entered  into a series of  agreements  which  provide for the  construction  and
operation  under a  long-term  lease of  facilities  adjacent  to our  petroleum
refinery  at  Coffeyville,  Kansas.  These  facilities  convert  petroleum  coke
by-products  into  fertilizers.  During April 2000, the conditions  required for
inception of the lease were  satisfied,  and Farmland  became  obligated to make
future minimum lease payments with an approximate present value of $225 million.
We  anticipate  the  facilities'  commissioning  and  start-up  process  will be
completed, and the facilities will be commercially  operational,  by late summer
of 2000. In the event  Farmland  defaults 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.  Upon payment of such amount, we would receive
title to the assets.
 </FONT></P>

<P><FONT  SIZE=3>In the opinion of  management,  our current  negotiations  will
result in a new credit facility  which, in combination  with our other financing
arrangements as described  above,  will provide adequate capital for our present
operating and capital plans.  However,  alternative  financing  arrangements are
continuously evaluated.
 </FONT></P>

<P><FONT SIZE=3>Operating activities generated $4.2 million of cash during the
six months ended February 29, 2000. This cash was generated primarily as a
result of a decrease in receivables and an increase in customer advances on
product purchases, partially offset by a decrease in trade payables. Major uses
of cash during the six months ended February 29, 2000 include: capital
expenditures of $48.4 million; $6.1 million for patronage refunds
distributed from income of the 1999 fiscal year; and $17.8 million for additions
to investments and notes receivable. The major sources of cash were an increase
in the balance of checks and drafts outstanding of $16.9 million and net
proceeds from bank borrowings of $38.4 million. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Results of Operations</FONT></H2>

     <P>     <I><B>General</B></I></P>

<P><FONT SIZE=3>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. Historically,
the majority of farm supply products have been sold in the spring. Sales in the
beef and grain marketing businesses historically have been concentrated in the
summer. Summer is the lowest sales period for pork products. </FONT></P>

<P><FONT SIZE=3>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. </FONT></P>

<P><FONT SIZE=3>The level of operating income in the plant foods, petroleum, and
food processing and marketing businesses is, to a significant degree,
attributable to the spread between selling prices and raw material costs (the
natural gas in nitrogen-based crop nutrients, the crude oil in petroleum
products, and live hogs and cattle in the food processing and marketing
businesses). We cannot determine the direction or magnitude to which these
factors will affect our cash flow and net income or loss. </FONT></P>

<P><FONT SIZE=3><B>Results of Operations for Six Months Ended February 29, 2000
Compared to Six Months Ended February 28, 1999.</B> </FONT></P>

<P><FONT SIZE=3>For the six months ended February 29, 2000, our sales were $5.8
billion compared with sales of $5.1 billion for the same period last year. This
increase is primarily due to a $0.3 billion increase in sales of the petroleum
segment, a $0.2 billion increase in sales of the beef processing and marketing
segment, and a $0.2 billion increase in sales of the international grain
segment. For the six months ended February 29, 2000, Farmland incurred a net
loss of $48.6 million compared with a net loss of $4.3 million for the same
period last year. The net loss in the six months ended February 29, 2000
compares unfavorably with the prior year primarily as a result of the continued
decline of crop nutrient margins combined with an increase in live hog costs,
which has reduced pork processing and marketing margins. </FONT></P>

     <P>     <I><B>Crop Nutrients</B></I></P>

<P><FONT SIZE=3>Sales of the crop nutrients segment decreased $48.9 million, or
approximately 10%, for the six months ended February 29, 2000 compared with the
same period last year. Sales declined approximately 3% as a result of lower unit
selling prices for phosphate-based fertilizers, partially offset by slightly
higher unit selling prices for nitrogen-based fertilizers. Phosphate market
prices have declined due to a relatively high inventory level present in the
industry. The remainder of the sales decrease results from lower unit sales of
both nitrogen- and phosphate-based crop nutrients. </FONT></P>

<P><FONT SIZE=3>The crop nutrients segment had a loss of $21.4 million for the
six months ended February 29 2000 compared with income of $5.0 million the same
period last year. This loss results primarily from a continued excess supply of
crop nutrient products, which has caused market prices for phosphate-based crop
nutrients to decline. Primarily as a result of these market price declines, our
income from crop production ventures declined by $12.7 million for the six
months ended February 29, 2000 compared with the same period last year. Also
contributing to the segment loss were approximately $10.0 million of start-up
costs related to the gasification plant located in Coffeyville, Kansas. </FONT></P>

     <P>     <I><B>Crop Protection Products</B></I></P>

<P><FONT SIZE=3>Sales of the crop protection products segment are conducted
primarily through ventures and are not included in consolidated sales. </FONT></P>

<P><FONT SIZE=3>Income of the crop protection products segment, which primarily
consists of Farmland’s share of venture income, increased $0.9 million for
the six months ended February 29, 2000 compared with the same period last year
primarily due to an earlier season for seed sales. </FONT></P>

      <P>     <I><B>Petroleum</B></I></P>

<P><FONT SIZE=3>Sales of the petroleum segment in the six months ended February
29, 2000 increased $282.7 million, or approximately 72%, compared with the same
period last year. This increase was primarily attributable to a 65% increase in
the average unit selling price for refined fuels and propane. The remainder of
the sales increase primarily results from a 7% increase in unit sales of refined
fuels. </FONT></P>

<P><FONT SIZE=3>Income for the petroleum segment decreased $2.9 million for the
six months ended February 29, 2000 compared with the prior period. This decline
was primarily due to continued weakness in the spread between crude oil costs
and refined products selling prices. With the formation of the Cooperative
Refining venture, a portion of petroleum income is now recognized as equity in
income of investees, rather than as gross income. </FONT></P>

     <P>     <I><B>Feed</B></I></P>

<P><FONT SIZE=3>Sales of the feed segment increased $15.6 million, or
approximately 5%, in the six months ended February 29, 2000 compared with the
prior year. This increase was primarily due to increased unit sales partially
offset by lower unit prices. Income for the feed segment increased $1.4 million
for the six months ended February 29, 2000 compared with the same period last
year primarily due to an increase in feed ingredient and pet/specialty tons and
margins. </FONT></P>

      <P>     <I><B>Pork Processing and Marketing and Livestock Production</B></I></P>

<P><FONT SIZE=3>Sales in the pork processing and marketing segment increased
$70.0 million, or approximately 10%, for the six months ended February 29, 2000
compared with the same period last year. This increase is primarily attributable
to higher unit prices partially offset by an approximately 6% decrease in unit
sales volume. </FONT></P>

<P><FONT SIZE=3>Income in the pork processing and marketing segment for the six
months ended February 29, 2000 decreased $20.1 million compared to the prior
period. This decrease is primarily attributable to lower margins, which result
from higher live hog prices, and to lower unit sales. In addition, the livestock
production segment had a loss of $8.9 million for the six months ended February
29, 2000 compared with a loss of $18.4 million in the prior year. This
improvement is primarily attributable to improved unit margins due to higher
live hog prices. </FONT></P>

      <P>     <I><B>Beef Processing and Marketing</B></I></P>

<P><FONT SIZE=3>Sales of the beef processing and marketing segment increased
$219.1 million, or approximately 20%, for the six months ended February 29,
2000, compared with the same period last year. The increase is due to an
increase of approximately 6% in the number of cattle processed combined with an
approximately 13% increase in unit selling prices. </FONT></P>

<P><FONT SIZE=3>Our share of the income of the beef processing and marketing
segment increased $14.3 million for the six months ended February 29, 2000
compared to the prior period. This increase is primarily attributable to
increased beef unit sales and increased margin per head of cattle processed.
These increases were partially offset by higher per head packaging and
labor-related expenses. </FONT></P>

     <P>     <I><B>North American Grain</B></I></P>

<P><FONT SIZE=3>Sales of the North American grain segment decreased $68.7
million, or approximately 6%, for the six month period ended February 29, 2000
compared with the same period last year primarily as the result of declines in
grain prices largely offset by a significant increase in unit sales of wheat. </FONT></P>

<P><FONT SIZE=3>North American grain segment income for the six months ended
February 29, 2000 increased $6.5 million compared to the same period last year.
This increase is primarily attributable to improved grain margins. Grain margins
improved as a result of increased volume and the capturing of deferred shipment
values, commonly referred to as “carry,” which has exceeded the cost
of holding grain for deferred execution. During 1999, our Concourse Grain
venture was liquidated and certain of Concourse Grain’s marketing
activities were assumed by North American grain. </FONT></P>

      <P>     <I><B>International Grain</B></I></P>

<P><FONT SIZE=3>Sales of the International Grain segment increased $239.2
million, or approximately 27%, for the six month period ended February 29, 2000
compared with the same period last year primarily as the result of increased
unit sales of corn, soybeans, soyameal, and sugar, partially offset by a decline
in wheat sales. </FONT></P>

<P><FONT SIZE=3>International Grain’s income decreased $3.4 million for the
six month period ended February 29, 2000 compared with the same period last year
primarily as the result of decreased margins. </FONT></P>

      <P>     <I><B>Selling, General and Administrative Expenses</B></I></P>

<P><FONT SIZE=3>Selling, general and administrative (“SG&A”)
expenses increased $1.7 million, or approximately 1%, from the same period last
year. SG&A expenses directly connected to segments decreased approximately
$2.1 million and these expenses have been included in the determination of
business segment income. SG&A expenses not identified to business segments
increased $3.8 million, primarily a result of increased costs of management
information services, increased group health plan expenses, and expenses
incurred in connection with the proposed merger with Cenex Harvest States. </FONT></P>

          <P>     <I><B>Interest Expense</B></I></P>

<P><FONT SIZE=3>Interest expense increased $13.2 million due to both an increase
in average borrowings and an increase in average interest rate. </FONT></P>

         <P>     <I><B>Tax Benefit</B></I></P>

<P><FONT SIZE=3>The income tax benefit decreased $0.6 million due to a decrease
in the effective tax rate. The decrease in the effective tax rate is a result of
our current estimate of the percentage of annual income which will be
patronage-sourced in 2000 compared to 1999. </FONT></P>

<P><FONT SIZE=3><B>Results of Operations for Three Months Ended February 29, 2000
compared to Three Months Ended February 28, 1999.</B> </FONT></P>

<P><FONT SIZE=3>For the three months ended February 29, 2000, our sales were
$2.9 billion compared with sales of $2.5 billion for the same period last year.
Net loss for the three months ended February 29, 2000 was $22.1 million compared
with net income of $2.1 million for the same period last year. The changes in
sales and operating income are attributable principally to the factors discussed
above under the caption “Results of Operations for Six Months Ended
February 29, 2000 Compared to Six Months Ended February 28, 1999.” </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Recent Developments</FONT></H2>

<P><FONT SIZE=3>Effective January 1, 2000, Farmland, Cenex Harvest States, and
Land O’Lakes formed Agriliance, an agronomy venture, which markets crop
nutrients, crop protection products, and seed. We anticipate the venture will
enable the partners to achieve enhanced economies of scale and to generate
critical mass in our marketing and distribution. To form the venture, Farmland
contributed, among other assets, our interest in Omnium and Wilfarm. Farmland
retained ownership of our manufacturing facilities and substantially all other
crop nutrient and crop protection assets. </FONT></P>

<P><FONT SIZE=3>During March 2000, we sold, for cash, approximately 9.8% of our
ownership interest in Agriliance to Land O’Lakes. During our third quarter,
we will recognize a gain of approximately $49.6 million on this transaction.
Also during March 2000, we agreed to sell our pork processing plant located at
Dubuque, Iowa to Smithfield Foods. </FONT></P>

<P><FONT SIZE=3>During April 2000, we agreed to invest approximately $1.4
million in return for an approximately 7% interest in a venture which intends to
establish a neutral web-based exchange to allow buyers and sellers of meat and
poultry products to connect with each other. We anticipate the exchange will
promote efficiencies in the market by facilitating faster and more direct
product comparison and price negotiation, reducing paperwork and other
duplication. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Recent Accounting Pronouncements</FONT></H2>

<P><FONT SIZE=3>Statements of Financial Accounting Standards No. 133,
“Accounting for Derivative Instruments and Hedging Activities” was
issued in June 1998 by the FASB and is effective for fiscal periods beginning
after June 15, 2000. We are currently evaluating the impact, if any, that
adoption of the provisions of SFAS No. 133 will have on our financial
statements. </FONT></P>

<H2 ALIGN=LEFT><FONT SIZE=3>Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK</FONT></H2>

<P><FONT SIZE=3>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, 1999.
Quantitative and qualitative disclosures about market risk is contained in Item
7A of our Annual Report on Form 10-K for the year ended August 31, 1999. </FONT></P>

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

<P><FONT SIZE=3>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. </FONT></P>

                    <P><FONT  SIZE=3>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 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, 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,  our
ability  to  consummate  a new credit  facility  or to obtain  adequate  waivers
regarding  our  existing  Credit  Facility,  the  anticipated  expenditures  for
environmental remediation, the impact of seasonal demand on the profitability of
the  crop  production   business,   the  outcome  and  consequences  of  certain
litigations,  the perceived  future  business  benefits  related to our agronomy
marketing  venture,  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”.
 </FONT></P>

<P><FONT SIZE=3>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: </FONT></P>


<PRE>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, 1999.
</PRE>






<H1 ALIGN=CENTER><FONT SIZE=3>PART II - OTHER INFORMATION</FONT></H1>

<H2 ALIGN=LEFT><FONT SIZE=3>Item 6. Exhibits and Reports on Form 8-K.</FONT></H2>

     (a) Exhibits

<P><FONT SIZE=3>The exhibits listed below are filed as part of Form 10-Q for
quarter ended February 29, 2000. </FONT></P>

<PRE>
     10.(iii)A       Employment  Agreement  between  Farmland and Mr. William Fielding
                     dated January 31, 2000

     27              Financial Data Schedule
</PRE>
     (b) No reports on Form 8-K were filed during the quarter ended February 29, 2000.




<H1 ALIGN=CENTER><FONT SIZE=3>SIGNATURES</FONT></H1>

<P><FONT SIZE=3>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. </FONT></P>

<PRE>
                                                              (Registrant)




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

</PRE>
<P>Date:   April 14, 2000</P>
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