UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

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

                For the quarterly period ended November 30, 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)



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


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             November 30
                                                                        1998                   1998

                                                                         (Amounts in Thousands)
<S>                                                            <C>                          <C>
Current Assets:
  Cash and cash equivalents.................................   $          7,334             $        -0-
  Accounts receivable - trade                                           596,415                 621,366
  Inventories (Note 2)......................................            725,967                 950,615
  Other current assets......................................            145,151                 161,680


       Total Current Assets.................................   $      1,474,867             $ 1,733,661




Investments and Long-Term Receivables (Note 4)..............   $        298,402             $   298,871



Property, Plant and Equipment:
  Property, plant and equipment, at cost....................   $      1,680,373             $ 1,696,247
     Less accumulated depreciation and
     amortization...........................................            853,224                 868,899


  Net Property, Plant and Equipment.........................   $        827,149             $   827,348



Other Assets................................................   $        212,356             $   217,503

Total Assets................................................   $      2,812,774             $ 3,077,383


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


                  FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS

                            LIABILITIES AND EQUITIES
<TABLE>
<CAPTION>
                                                                           August 31          November 30
                                                                             1998                  1998

                                                                              (Amounts in Thousands)
<S>                                                                     <C>                    <C>
Current Liabilities:                                                                      
    Checks and drafts outstanding...................................     $           -0-        $      74,498
    Demand loan certificates........................................             28,407                21,250
    Short-term notes payable .......................................            380,232               535,139
    Current maturities of long-term debt ...........................             38,946                63,033
    Accounts payable - trade........................................            330,043               371,892
    Other current liabilities.......................................            323,601               259,373


        Total Current Liabilities...................................     $    1,101,229         $   1,325,185


Long-Term Liabilities:
    Long-term borrowings (excluding current maturities).............     $      728,103         $     772,284
    Other long-term liabilities.....................................             31,942                31,869


        Total Long-Term Liabilities.................................     $      760,045         $     804,153


Deferred Income Taxes...............................................     $        3,333         $       4,486


Minority Owners' Equity in Subsidiaries.............................     $       35,471         $      37,768


Net (Loss) (Note 1).................................................     $           -0-        $      (6,400)


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 ............................                 71                    71
  Common shares, $25 par value--Authorized
     50,000,000 shares..............................................            451,804               505,510
    Earned surplus and other equities...............................            360,821               306,610


        Total Capital Shares and Equities...........................     $      912,696         $     912,191




Contingent Liabilities and Commitments (Note 3)



Total Liabilities and Equities......................................     $    2,812,774         $   3,077,383


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


                   FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                           Three Months Ended

                                                                   November 30           November 30
                                                                      1997                  1998

                                                                         (Amounts in Thousands)
<S>                                                             <C>                    <C>
Sales.........................................................   $    2,283,846         $    2,582,250
Cost of sales.................................................        2,164,675              2,469,777


Gross income..................................................   $      119,171         $      112,473


Selling, general and administrative expenses..................   $       97,648         $      118,000


Other income (deductions):
   Interest expense...........................................   $      (17,109)        $      (19,929)
   Other, net.................................................            7,975                 10,669

Total other income (deductions)...............................   $       (9,134)        $       (9,260)


Income (loss) before income taxes, equity in net income of
  investees and minority owners' interest in
    net (income) loss of subsidiaries.........................   $       12,389         $      (14,787)

Income tax (expense) benefit..................................           (2,088)                   948


Income (loss) before equity in net income of investees and
  minority owners' interest in net (income) loss
    of subsidiaries...........................................   $       10,301         $      (13,839)
Equity in net income of investees (net of allocated tax 
   expense of $1,958 and $584 for the three months 
   ended November 30, 1997 and 1998, respectively)
   (Note 4)...................................................            6,897                  9,734

Minority owners' interest in net (income) loss
   of subsidiaries............................................              135                 (2,295)


Net income (loss).............................................   $       17,333         $       (6,400)



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


                   FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                        Three Months Ended

                                                                                 November 30         November 30
                                                                                     1997                1998

                                                                                      (Amounts in Thousands)
<S>                                                                              <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)...........................................................      $    17,333         $    (6,400)
Adjustments to reconcile net income (loss) to net cash
  used in operating activities:
     Depreciation and amortization..........................................           23,466              30,978
     Equity in net (income) of investees....................................           (6,897)             (9,734)
     Other..................................................................            1,510                 985
    Changes in assets and liabilities:
       Accounts receivable..................................................          (48,287)            (25,597)
       Inventories..........................................................          (31,569)           (224,648)
       Other assets.........................................................          (29,432)             (5,713)
       Accounts payable.....................................................           44,580              41,849
       Other liabilities....................................................          (49,986)             44,200

Net cash used in operating activities.......................................      $   (79,282)        $  (154,080)


CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................................................      $   (28,302)        $   (26,075)
Distributions from joint ventures...........................................            4,046               4,798
Additions to investments and notes receivable...............................           (9,603)            (12,427)
Acquisition of other long-term assets.......................................           (4,415)             (9,253)
Proceeds from disposal of investments and notes receivable..................            3,673               4,834
Proceeds from sale of fixed assets..........................................            2,982               4,189

Net cash used in investing activities.......................................      $   (31,619)        $   (33,934)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of patronage refunds...............................................      $   (40,227)        $   (24,003)
Payments for redemption of equities.........................................          (28,457)             (3,422)
Payments of dividends.......................................................               (4)             (2,000)
Proceeds from bank loans and notes payable..................................          133,342             196,521
Payments on bank loans and notes payable....................................          (19,590)            (60,316)
Proceeds from issuance of subordinated debt certificates....................           17,011              10,333
Payments for redemption of subordinated debt certificates...................           (7,017)             (3,780)
Increase of checks and drafts outstanding...................................           65,574              74,498
Net decrease in demand loan certificates....................................           (9,731)             (7,157)
Other ......................................................................               -0-                  6

Net cash provided by financing activities...................................      $   110,901         $   180,680


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

Cash and cash equivalents at end of period..................................      $        -0-        $        -0-

</TABLE>

[FN]
See accompanying Notes to Consolidated Financial Statements.


                   FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(1)  INTERIM FINANCIAL STATEMENTS

      Unless the context requires otherwise, (i) "Farmland", the "Company",
"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.

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

      The information included in these 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 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,
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 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 our products change.

     In accordance with the bylaws of Farmland and its cooperative subsidiaries,
the members' portion of income before income taxes is determined annually.  From
such amount patronage refunds are distributed to members of Farmland.

     The determination of members' income (and members' loss) is made only after
the end of the fiscal year.  The amount of patronage refunds to be paid from
such member income is then determined by the Board of Directors in their sole
discretion after taking into account and handling  members'  losses of any
patronage allocation unit of the current year as well as  any remaining member
losses from any prior year.  In view of the fact  that the amount of members'
income and the amount of members' loss is determined only after the end of the
fiscal year, and the fact that the handling of members' loss, the resulting
amount of patronage refunds to be paid, the portion of such refund to be paid
either in cash or Farmland equity (common stock, associate member common stock
and capital credits) and the resulting appropriation of member's income to
earned surplus can be made only by the Board of Directors after the end of the
fiscal year, Farmland makes no provision for patronage refunds in its interim
financial statements.  Therefore, the amount of net income (loss) has been
reflected as a separate item in the accompanying November 30,1998 Condensed
Consolidated Balance Sheet.

(2)  INVENTORIES

      Major components of inventories at August 31, 1998 and November 30, 1998
are as follows:

<TABLE>
<CAPTION>
                                                   August 31               November 30

                                                      1998                     1998

                                                         (Amounts in Thousands)
<S>                                            <C>                      <C>
Finished and in-process products..............  $     605,876            $    817,891
Materials.....................................         62,578                  77,849
Supplies......................................         57,513                  54,875



                                                $     725,967            $    950,615


</TABLE>



      At November 30, 1998, the carrying value of petroleum inventories stated
under the LIFO method were $142.4 million and exceeded the market value of such
inventory by approximately $34.3 million.  Management reasonably expects that
this decline will be recovered before the end of the fiscal year and, therefore,
will not impact the Company's income for the full fiscal year.  Accordingly,
this market value decline has not been recognized in the Company's interim
results of operations.  However, given the volatility of the crude oil and
refined fuels markets, no assurance can be provided that this market value
decline will be recovered.

(3)  CONTINGENCIES

  (A)  TAX LITIGATION

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

      On March 24, 1993, the Internal Revenue Service ("IRS") issued a statutory
notice to Farmland asserting deficiencies in federal income taxes (exclusive of
statutory interest thereon) in the aggregate amount of $70.8 million.  The
asserted deficiencies relate primarily to the Company's tax treatment of the
$237.2 million gain resulting from its sale of the stock of Terra and the IRS's
contention that Farmland incorrectly treated the Terra sale gain as patronage-
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 $289.1 million
through November 30, 1998), or $374.9 million (before tax benefits of the
interest deduction) in the aggregate at November 30, 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).  The asserted federal and state income tax liabilities and
accumulated interest 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 the $15.3
million tax and accumulated statutory interest related to the Company's 1989 tax
year (as described above).  In order to establish the trial court in which
initial litigation, if any, of the dispute would occur and to stop the
accumulation of interest, the Company deposited funds with the IRS in the amount
of the assessment.  After making the deposit, the Company filed for a refund of
the entire amount deposited.

      The liability resulting from an adverse decision by the United States Tax
Court would be charged to current earnings and would have a material adverse
effect on the Company.  In the event of such an adverse determination of the
Terra tax issue, certain financial covenants of the Company's 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 been due and payable on November 30, 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 Consolidated Financial Statements for
federal or state income taxes (or interest thereon) in respect of the IRS claims
described above.  The Company believes that it has meritorious positions with
respect to all of these claims.

      In the opinion of Bryan Cave LLP, The Company's special tax counsel, it is
more likely than not that the courts will ultimately conclude that the Company'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 the Company on any of these issues.


  (B)  ENVIRONMENTAL MATTERS

      The Company currently is aware of probable obligations under state and
federal environmental laws at 36 properties.  At November 30, 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 $16.1 million.  The Company periodically reviews and, as
appropriate, revises its environmental accruals.  Based on current information
and regulatory requirements, the Company believes that the accruals established
for environmental expenditures are adequate.

      The Company's actual final costs of addressing certain environmental
matters are not quantifiable, and therefore have not been accrued, because such
matters are in preliminary stages and the timing, extent and costs of various
actions which governmental authorities may require are currently unknown.
Management is aware of other environmental matters for which there is a
reasonable possibility that the Company will incur costs to resolve. It is
possible that the costs of resolution of the matters described in this paragraph
may exceed the liabilities which, in the opinion of management, are probable and
which costs are reasonably estimable at November 30, 1998.  In the opinion of
management, it is reasonably possible for such additional costs to be
approximately $16.3 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 state regulations. Such closure and post-
closure costs are estimated to be $4.9 million at November 30, 1998 (and are in
addition to the $16.1 million accrual and the $16.3 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 three months ended November 30, 1997 and November 30, 1998 is as
follows:

<TABLE>
<CAPTION>
                                                November 30            November 30
                                                    1997                   1998

                                                      (Amounts in Thousands)
<S>                                           <C>                    <C>
Net sales..................................... $      196,604         $      513,294


Net income.................................... $       14,116         $       15,942


Farmland's equity in net income............... $        6,897         $        9,734


</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; a 50% equity interest in a distributor of crop protection
products, WILFARM, LLC; and, during the three months ended November 30, 1998, a
50% equity interest in a grain marketer, Concourse Grain, LLC., which was
organized in July 1998.

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, 1998.



FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

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

      Debt securities issued under the continuous public debt offering generally
are offered on a best-efforts basis through our wholly owned broker-dealer
subsidiary, Farmland Securities Company.  The debt securities are also being
offered by American Heartland Investments, Inc. and Iron Street Securities Inc.
(which are not affiliated with Farmland), and also may be offered by selected
other 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 three months
ended November 30, 1998, the outstanding balance of demand certificates
decreased by $7.2 million and the outstanding balance of subordinated debt
securities increased $6.6 million.


      In May 1996, Farmland entered into a five year Syndicated Credit Facility
(the "Credit Facility") with various participating banks. The Credit Facility
provides a $1.1 billion credit (subject to compliance with certain financial
covenants) consisting of an annually renewable short-term credit of up to $650.0
million and revolving 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 1999.  The revolving long-term credit
provided under the Credit Facility expires in May 2001.

      At November 30, 1998, the Company had incurred $397.1 million of short-
term borrowings under the Credit Facility and $220.0 million of revolving term
borrowings.  Additionally, $48.4 million of the Credit Facility was utilized to
support letters of credit.  At November 30, 1998, we had capacity to finance
additional current assets of $210.3 million under the short-term credit.  
Requirements under the Credit Facility limit current availability under the 
long-term credit to $151.5 million.

      The Company maintains other borrowing arrangements with banks and
financial institutions. Under such agreements at November 30, 1998, $20.5
million was borrowed and Farmland had capacity to borrow up to an additional
$20.0 million.

     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 thereunder are
nonrecourse to Farmland or Farmland's other affiliates.  At November 30, 1998,
FNBPC had borrowings under this facility of $74.1 million and $1.3 million of
the facility was being utilized to support letters of credit.  FNBPC has pledged
certain assets to support its borrowings under the 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 November 30, 1998, such borrowings totaled $111.4 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 our petroleum
refinery at Coffeyville, Kansas.  These facilities are designed to convert
petroleum coke by-products into fertilizers.  When the facilities are completed
in the fall of 1999, Farmland will be obligated to make future minimum lease
payments with an approximate present value of $223 million.  Alternatively,
Farmland has an option to purchase the facilities for a purchase price equal to
the facilities' construction costs less any portion of the original construction
cost previously paid.  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.  Upon payment of such
amount, Farmland would receive title to the assets.

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

      Net cash from operating activities decreased $74.8 million.  The primary
reasons for this decrease are the decrease in net income and increased grain and
fertilizer inventories, partially offset by an increase in trade payables to
support grain inventories.  Major uses of cash during the three months ended
November 30, 1998 include: $154.1 million used in operations, $24.0 million for
patronage refunds distributed from income of the 1998 fiscal year; $12.4 million
for additions to investments and notes receivable and $26.1 million for capital
expenditures.  Major sources of cash include: $136.2 million of proceeds from
bank loans and other notes payable (net of repayments) and $74.5 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 and
grain marketing businesses 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
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,
livestock, grain 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 by us.  Management cannot determine
the extent to which these factors may impact future operations of Farmland.  The
Company's cash flow and net income may be volatile as conditions affecting
agriculture and markets for our products change.


RESULTS OF OPERATIONS FOR THREE MONTHS ENDED NOVEMBER 30, 1998 COMPARED TO THREE
MONTHS ENDED NOVEMBER 30, 1997

      For the three months ended November 30, 1998, the Company had sales of
$2.6 billion compared with sales of $2.3 billion for the same period last year.
Net loss for the three months ended November 30, 1998 was $6.4 million compared
with net income of $17.3 million for the same period last year.

   SALES

      On the input side of the Company's business, sales of the petroleum and
crop production segments in the three months ended November 30, 1998 decreased
$98.5 million and $39.8 million respectively, compared with the same period last
year.  Lower demand for petroleum products combined with an industry wide
building of inventory and strong supply streams of petroleum products created an
environment in which both unit sales and prices declined.  Industry-wide,
nitrogen sales volume for the three months ended November 30, 1998 was
comparable to sales volume for the same period last year while nitrogen unit
selling prices decreased.  The decrease in selling prices is primarily the
result of relatively high domestic inventories combined with additional
industry-wide capacity.  Consistent with these industry-wide trends, our crop
production sales volume increased slightly compared with the same period last
year, but crop production sales in dollars declined due to lower nitrogen
selling prices.  Sales of the feed business increased slightly as higher feed
grain unit sales were offset by 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") decreased $35.8 million.  This
decrease is primarily attributable to lower unit prices partially offset by
higher unit sales.  Sales in the grain business increased by $445.9 million.
This increase in sales reflects the change in Tradigrain's business from grain
brokerage operations to buy/sell operations.  Due to this change, it is
appropriate for Tradigrain to record the full value of each sale as revenue and
the cost of acquisition as cost of goods sold rather than recognizing as revenue
only the net margins on transactions.  This resulted in additional sales of
$471.7 million for the three months ended November 30, 1998.

   NET INCOME (LOSS)

      The net loss for the three months ended November 30, 1998 was $6.4 million
compared with net income of $17.3 million the same period in the prior year.
This decrease was principally attributable to decreased operating income in
Farmland's agricultural input business of $24.8 million and higher general and
administrative expenses not identified to any business segment of $8.5 million,
offset in part by increased operating income of the food processing and
marketing business and the grain business of $3.9 million and $1.3 million,
respectively.

      Operating income in the crop production business for the three months
ended November 30, 1998 decreased $22.1 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.

      Operating income for the petroleum business decreased $2.7 million for the
three months ended November 30, 1998 compared with the prior period.  This
decline was primarily due to a decrease in the spread between crude oil costs
and refined products selling prices.

      Operating income in the meats group for the three months ended November
30, 1998 increased $3.9 million compared to the prior period.  This increase is
primarily attributable to increased pork and beef unit margins due to lower live
hog and cattle prices.  This was partially offset by higher per head selling,
general and administrative costs in this business.

      Operating income in the grain business segment for the three months ended
November 30, 1998 increased $1.3 million compared to the same period last year.
This increase is primarily attributable to higher grain margins and higher
storage revenues.

      Selling, general and administrative ("SG&A") expenses increased $20.3
million, or 21%, from the same period last year.  SG&A expenses directly
connected to segments increased approximately $11.8 million and these expenses
have been included in the determination of operating income of the segments.
SG&A expenses not identified to segments increased $8.5 million, primarily as a
result of increased information service expenses, increased expenses related to
geographic expansion and additional amortization expense.

      Other income increased $3.0 million, or 39%, for the three months ended
November 30, 1998 as compared to the same period last year.  This increase is
primarily attributable to a favorable court decision in a lawsuit filed by
Farmland regarding a third party's failure to fulfill certain contractual
commitments related to handling of crude oil in a pipeline.

      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).
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.


YEAR 2000

      As the end of this century nears, there are concerns about potential
problems which may arise at the turn of the millennium because many current
computer systems and software products are coded to accept only two digit
entries in date code fields. Before the year 2000, these systems and software
products will need an upgrade  in order to recognize differences between dates
in the 21st century and dates in the 20th century. If not adequately addressed,
these technology problems have a potential to cause widespread business
interruptions, litigation and liability. Significant uncertainty exists, as to
whether adequate  resources are available to minimized these potentially serious
problems by the year 2000.

      The Company is assessing, but has not completed assessing, its Year 2000
issues.  Since the mid-1980's, the Company has strived to maintain Year 2000
compliance for all applications developed in-house.  The challenge is that a
substantial percentage of the applications used for normal business processing
have been purchased from outside vendors.  Historically, vendors were not
required to commit to Year 2000 compliance.  However, all new software contracts
include Year 2000 compliance warranties.

      In April 1997, Farmland and Ernst & Young, LLP formed One System Group,
LLC ("OSG"),  a joint venture.  OSG has approximately 400 employees and is the
sole supplier of information technology ("IT") services to the Company.  The
initial focus of OSG involves the implementation of Systems, Applications,
Products in Data Processing ("SAP") software as an enterprise wide solution for
processing the Company's business transactions and for management reporting.
One of the many important benefits of the implementation of SAP is that it is
Year 2000 compliant and, therefore, its installation  will eliminate a large
amount of the Year 2000 risk inherent in the Company's systems and software.
Mission critical (critical to the basic operation of Farmland's businesses) IT
projects have not been deferred because of Year  2000 readiness efforts.

      The Company formalized its Year 2000 program with OSG in the fall of 1997.
Through this program, Year 2000 readiness was defined by criteria which, if
satisfied, would demonstrate that systems and applications programs function
correctly after the turn of the century without abnormal results.  In addition,
systems and applications were categorized as "high risk" or "low risk" according
to the respective level of impact on the continuation of business by the Company
at the turn of the century.  Further, the program established minimum acceptance
testing procedures for evaluating whether systems and applications met Year 2000
compliant criteria.

      A comprehensive IT software inventory and assessment was then completed by
OSG. As a result of this readiness assessment, the Company believes that certain
of its systems and software are Year 2000 compliant and that substantially all
noncompliant systems have been identified.

      To address the state of readiness condition, Farmland established an
Oversight Committee consisting of the Chief Information Officer of OSG, the
Chief Financial Officer and General Counsel of Farmland and a Year 2000 Program
Office.

      The Oversight Committee has responsibility for both IT and non-IT systems
(embedded technologies such as microcontrollers built into machinery) and has a
direct reporting relationship to the Farmland Board of Directors.  The Oversight
Committee has delegated Year 2000 compliance responsibility for non-IT systems
to management of the respective plants or facilities.  Generally, progress with
respect to non-IT systems is in an assessment phase.  However, the Year 2000
issues of many process control systems and other non-IT systems have been
identified and fixed or the respective system or application programs have been
replaced and tested.  The Company has not separately tracked  the replacement
cost and time related to non-IT systems.

      The Program Office organizes and administers Year 2000 projects related to
IT systems. The Program Office maintains a detailed project plan to complete and
test projects within discrete time frames. The Program Office continuously
monitors the status of the SAP implementation and re-assesses the risk areas
depending on movement of that system's implementation schedule. The Program
Office provides a quarterly update of Year 2000 progress to the Oversight
Committee. The Program Office has estimated that overall Year 2000 projects
related to IT systems will require approximately $2.5  million (18,000 hours).
Through October 1998, approximately 4,000 hours of such work had been performed.
The targeted completion of the remaining work is September 1, 1999.

      The Company believes that the quantity and quality of resources it has
committed to address its Year 2000 project are adequate to obtain a Year 2000
state of readiness and it believes all significant modifications required to
reach a state of readiness for Year 2000 will be completed by the year 2000.
However, despite all reasonable efforts of the Company to resolve its Year 2000
issues, as described above, no assurances can be given that the level of Year
2000 readiness actually attained will eliminate all potential material effects
that Year 2000 problems might have on the Company's business, results of
operation, or financial condition.  It is not, and will not, be possible for the
Company to represent that it has achieved complete Year 2000 compliance.

      The Company does not know all of the consequences of its most reasonably
likely worst case Year 2000 scenario. The Company cannot address the virtually
unlimited number of differing circumstances relating to what might be its most
reasonably likely worst case.  The Company is and intends to continue to address
this uncertainty through activities of its Oversight Committee and Program
Office, as described above.

      For all applications that are determined to be mission critical (critical
to the basic operation of Farmland's businesses), a contingency plan will be
developed to outline the actions that will be taken if Year 2000 complications
are encountered.  The plan will describe what will be done, both short-term and
long-term, to minimize any interruption to Farmland's business.

      The Company has distributed a survey of its significant customers and
vendors to determine their state of Year 2000 readiness.  However, responses to
the survey questionnaire have not provided a basis to conclude whether such
customers and vendors are Year 2000 compliant.  Further, the Company has not
conducted and does not plan to conduct tests designed to confirm compatibility
of its information systems as modified for Year 2000 issues with those of its
significant customers and vendors. The Company will rely on the integrity of its
vendors and customers to resolve their Year 2000 issues.

RECENT DEVELOPMENTS

      Farmland, Cenex Harvest States and National Cooperative Refinery
Association ("NCRA") are exploring the potential economic benefits that might be
realized from forming an operating alliance.  The alliance would involve the
Farmland refinery located in Coffeyville, Kansas, the Cenex Harvest States
refinery located in Laurel, Montana and the NCRA refinery located in McPherson,
Kansas, as well as other petroleum assets.

RECENT ACCOUNTING PRONOUNCEMENTS

      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, 1999.  The
Company is currently evaluating the impact, if any, that adoption of the
provisions of SFAS No. 133 will have on its financial statements.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLSOURES ABOUT MARKET RISK

      Farmland's market exposure to derivative transactions, entered into for
the purpose of managing commodity price risk, foreign currency risk and interest
rate risk, has not materially changed since August 31, 1998.  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, 1998.

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, assumed facts or basis almost always vary from actual
results, and the differences between assumed facts or basis and actual results
can be material, depending upon the circumstances.  Where, in any forward-
looking statement, the Company, or its management, expresses an expectation or
belief as to future results, such expectation or belief is expressed in good
faith and believed to have a reasonable basis, but there can be no assurance
that the statement of expectation or belief will result or be achieved or
accomplished.  Such forward looking statements include, without limitation,
statements regarding the seasonal effects upon the Company's business, the
likelihood that the market value of petroleum inventories will exceed the LIFO
value of such inventories at year-end, the effect of environmental legislation,
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, 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.nusual 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, 1998.



                          PART II - OTHER INFORMATION

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

   (A)    EXHIBITS

     The exhibits listed below are filed as part of Form 10-Q for quarter ended
     November 30, 1998.

        Exhibit No.                         Description of Exhibits   


          27        Financial Data Schedule

   (B)    NO REPORTS ON FORM 8-K WERE FILED DURING THE QUARTER ENDED NOVEMBER
          30, 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:   January 13, 1999