UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-Q


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

For the quarterly period ended MAY 31, 1998

                                       or

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

For the transition period from _____________ to _____________.


Commission File Number:   2-67985


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



Kansas                                                              44-0209330
(State of incorporation)                  (I.R.S. Employer Identification No.)
3315 North Oak Trafficway, Kansas City, Missouri                    64116-0005
(Address of principal executive offices)                            (Zip Code)

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes    No 
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                                                   PART I - FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS

                                    FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES

                                               CONDENSED CONSOLIDATED BALANCE SHEETS

                                                               ASSETS
                                                                   August 31                 May 31
                                                                     1997                     1998

                                                                         (Amounts in Thousands)
<S>                                                          <C>                     <C>
Current Assets:
  Accounts receivable - trade...............................   $        589,028        $        611,794
  Inventories (Note 2)......................................            745,301                 668,105
  Other current assets......................................             94,239                 167,088


       Total Current Assets.................................   $      1,428,568        $      1,446,987




Investments and Long-Term Receivables (Note 4)..............   $        266,554        $        282,163



Property, Plant and Equipment:
  Property, plant and equipment, at cost....................   $      1,585,824        $      1,638,137
     Less accumulated depreciation and
     amortization...........................................            802,716                 848,725


  Net Property, Plant and Equipment.........................   $        783,108        $        789,412



Other Assets................................................   $        167,082        $        197,165




Total Assets................................................   $      2,645,312        $      2,715,727


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

<TABLE>
<CAPTION>
                                    FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES

                                               CONDENSED CONSOLIDATED BALANCE SHEETS

                                                      LIABILITIES AND EQUITIES

                                                                           August 31             May 31
                                                                             1997                  1998

                                                                              (Amounts in Thousands)
<S>                                                                   <C>                   <C>
Current Liabilities:
    Checks and drafts outstanding...................................     $       47,243         $      52,763
    Demand loan certificates........................................             50,523                32,904
    Short-term notes payable .......................................            258,342               344,277
    Current maturities of long-term debt ...........................             91,643                44,577
    Accounts payable - trade........................................            366,345               375,339
    Other current liabilities.......................................            372,261               258,559


        Total Current Liabilities...................................     $    1,186,357            $1,108,419


Long-Term Liabilities:
    Long-term borrowings (excluding current maturities).............     $      580,665         $     604,613
    Other long-term liabilities.....................................             33,480                31,103


        Total Long-Term Liabilities.................................     $      614,145         $     635,716


Deferred Income Taxes...............................................     $        3,974         $      15,941
Minority Owners' Equity in Subsidiaries.............................     $       18,843         $      31,426


Net Income (Note 1).................................................     $            -0-       $      55,303


Capital Shares and Equities:
  Preferred shares--Authorized 8,000,000 shares
       8% Series A cumulative redeemable preferred shares,
          stated at redemption value, $50 per share.................     $            -0-       $     100,000
       Other preferred shares, stated at par value,
          $25 per share.............................................                  72                   71
  Common shares, $25 par value--Authorized
       50,000,000 shares............................................             442,012              466,422
  Earned surplus and other equities ................................             379,909              302,429


        Total Capital Shares and Equities...........................     $       821,993        $     868,922



Contingent Liabilities and Commitments (Note 3)


Total Liabilities and Equities......................................     $    2,645,312         $   2,715,727


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

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

                                                                           Nine Months Ended

                                                                     May 31                May 31
                                                                      1997                  1998

                                                                         (Amounts in Thousands)
<S>                                                            <C>                    <C>
Sales.........................................................   $    6,942,766         $    6,650,223
Cost of sales.................................................        6,558,793              6,292,566


Gross income..................................................   $      383,973         $      357,657


Selling, general and administrative expenses..................   $      285,810         $      310,390


Other income (deductions):
   Interest expense...........................................   $      (46,686)        $      (53,506)
   Other, net.................................................           19,384                 29,770

Total other income (deductions)...............................   $      (27,302)        $      (23,736)


Income before income taxes, equity in net income of
  investees and minority owners' interest in
    net income of subsidiaries.........................   $       70,861                $       23,531

Income tax expense............................................            9,252                  1,071


Income before equity in net income of investees and minority
  owners' interest in net income
    of subsidiaries...........................................   $       61,609         $       22,460

Equity in net income of investees
   (Note 4)...................................................           31,044                 34,105

Minority owners' interest in net income 
   of subsidiaries............................................           (2,627)                (1,262)


Net income ...................................................   $       90,026         $       55,303



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

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

                                                                           Three Months Ended

                                                                     May 31                May 31
                                                                      1997                  1998

                                                                         (Amounts in Thousands)
<S>                                                            <C>                    <C>
Sales.........................................................   $    2,419,764         $    2,236,882
Cost of sales.................................................        2,249,348              2,096,023

Gross income..................................................   $      170,416         $      140,859


Selling, general and administrative expenses..................   $      102,614         $      109,435


Other income (deductions):
   Interest expense...........................................   $      (16,280)        $      (18,177)
   Other, net.................................................            3,724                 10,497

Total other income (deductions)...............................   $      (12,556)        $       (7,680)


Income before income taxes, equity in net income of investees an
  minority owners' interest in
    net income of subsidiaries.........................   $       55,246                $       23,744

Income tax expense............................................            7,340                  2,979


Income before equity in net income of investees and
  minority owners' interest in net income
    of subsidiaries...........................................   $       47,906         $       20,765

Equity in net income of investees
   (Note 4)...................................................           13,938                 15,971

Minority owners' interest in net income 
   of subsidiaries............................................           (2,252)                (1,861)


Net income ...................................................   $       59,592         $       34,875



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

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

                                                                                        Nine Months Ended

                                                                                   May 31              May 31
                                                                                    1997                1998

                                                                                      (Amounts in Thousands)
<S>                                                                            <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income..................................................................      $    90,026        $    55,303
Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
     Depreciation and amortization..........................................           67,952             76,735
     Equity in net (income) of investees....................................          (31,044)           (34,105)
     Other..................................................................           18,091              9,107
    Changes in assets and liabilities:
       Accounts receivable..................................................           (1,434)           (25,394)
       Inventories..........................................................          101,052             77,196
       Other assets.........................................................           21,644            (57,430)
       Accounts payable.....................................................          (50,401)             9,030
       Other liabilities....................................................           33,441            (82,347)

Net cash provided by  operating activities.........................      $   249,327        $    28,095


CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................................................      $  (131,609)       $   (98,926)
Distributions from joint ventures...........................................           40,972             34,473
Additions to investments and notes receivable...............................          (45,961)           (31,107)
Proceeds from disposal of investments and notes receivable..................           23,745             43,746
Proceeds from sale of fixed assets..........................................            6,078              2,904
Other.......................................................................           (3,516)              (123)

Net cash used in investing activities.......................................      $  (110,291)       $   (49,033)


CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of patronage refunds...............................................      $   (32,511)       $   (40,337)
Payments for redemption of equities.........................................          (25,320)           (81,623)
Payments of dividends.......................................................               (4)            (2,937)
Proceeds from bank loans and notes payable..................................          229,443            467,251
Payments on bank loans and notes payable....................................         (346,386)          (405,012)
Proceeds from issuance of subordinated debt certificates....................           68,800             84,941
Payments for redemption of subordinated debt certificates...................          (32,651)           (58,770)
Advances made as construction agent.........................................                0            (52,687)
Collection on advances made as construction agent...........................                0             22,060
Increase of checks and drafts outstanding...................................            9,753              5,521
Proceeds from issuance of preferred shares..................................                0            100,000
Net decrease in demand loan certificates....................................          (10,802)           (17,620)
Other ......................................................................              642                151

Net cash provided by (used in) financing activities.........................      $  (139,036)       $    20,938


Net increase in cash and cash equivalents...................................     $        -0-       $        -0-
Cash and cash equivalents at beginning of period............................              -0-                -0-

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

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


                   FARMLAND INDUSTRIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(1)  INTERIM FINANCIAL STATEMENTS

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

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

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

      The Company's revenues, margins and net income depend, to a large extent,
on conditions in agriculture and may be volatile due to factors beyond the
Company's control, such as weather, crop failures, federal agricultural
programs, production efficiencies and U.S. imports and exports.  In addition,
various federal and state regulations to protect the environment encourage
farmers to reduce the use of fertilizers and other chemicals.  Global variables
which affect supply, demand and price of crude oil, refined fuels, natural gas,
livestock, grain and other commodities may impact the Company's operations.

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

      Farmland operates on a cooperative basis.  In accordance with its bylaws,
Farmland determines its annual net earnings from transactions with members
("member-sourced earnings").  For this purpose, annual net earnings is before
income tax determined in accordance with generally accepted accounting
principles.  Losses, including patronage allocation unit losses, if any, are
handled in accordance with the Company's bylaws.  The member-sourced earnings
remaining after patronage allocation unit losses have been handled are returned
to members as patronage refunds in the form of a qualified or nonqualified
written notice of patronage refund allocation.  Each member's portion of the
annual patronage refund is determined by the earnings of Farmland attributed to
the quantity or value of business transacted by the member with Farmland during
the year for which the patronage is paid.  In view of the fact that the
determination of the amount of patronage refund is made only after the end of
the fiscal year, and since the appropriation of earned surplus is dependent on
the determination of the amount of patronage refunds, and in view of the fact
that the portion of the annual patronage refund to be paid in cash and in
Farmland equity (common stock, associate member common stock or capital credits)
is determined (by the Farmland Board of Directors at its discretion) after the
amount of the annual patronage refund has been determined, Farmland makes no
provision for patronage refunds in its interim financial statements.  Therefore,
the amount of net income has been reflected as a separate item in the
accompanying May 31, 1998 Condensed Consolidated Balance Sheet.

(2)  INVENTORIES

<TABLE>
<CAPTION>
         Major components of inventories at August 31, 1997 and May 31, 1998 are as follows:

                                                   August 31                  May 31
                                                      1997                     1998

                                                         (Amounts in Thousands)
<S>                                             <C>                   <C>
Finished and in-process products..............  $     625,577         $  537,312          
                                                                              
Materials.....................................         62,001             76,279       
                                                                               
Supplies......................................         57,723             54,514

                                                $     745,301         $  668,105


</TABLE>



      At May 31, 1998, the carrying value of petroleum inventories was $166.6
million stated under the LIFO method which exceeded the market value of such
inventory by approximately $11.2 million. Management reasonably expects that
the decline  will be recovered during the fourth quarter of fiscal 1998 and,
accordingly, this market value decline has not been recognized in the Company
as interim results of operations. However, given the volatility of the crude
oil and refined fuels markets, no assurance can be provided that the market
value of petroleum inventories will exceed their carrying value at the
Company's year-end.  

(3)  CONTINGENCIES

  (A)  TAX LITIGATION

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

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

things, Farmland incorrectly characterized for tax purposes gains aggregating
approximately $14.6 million, and a loss of approximately $2.3 million from
dispositions of certain other assets.

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

      If the United States Tax Court decides in favor of the IRS on all
unresolved issues raised in the statutory notice, Farmland would have additional
federal and state income tax liabilities aggregating approximately $85.8 million
plus accumulating statutory interest thereon (approximately $270.8 million
through May 31, 1998), or $356.6 million (before tax benefits of the interest
deduction) in the aggregate at May 31, 1998.  In addition, such a decision would
affect the computation of Farmland's taxable income for its 1989 tax year and,
as a result, could increase Farmland's federal and state income taxes for that
year by approximately $15.3 million (including accumulated statutory interest
thereon).  The asserted federal and state income tax liabilities and accumulated
interest thereon would become immediately due and payable unless the Company
appealed the decision and posted the requisite bond to stay assessment and
collection.

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

      The liability resulting from an adverse decision of the Terra tax issue by
the United States Tax Court would be charged to current earnings and would have
a material adverse effect on the Company.  In the event of such an adverse
determination, certain financial covenants of the Company's Syndicated Credit
Facility (the "Credit Facility"), dated May 15, 1996, become less restrictive.
Had the United States Tax Court decided in favor of the IRS on all unresolved
issues, and had all related additional federal and state income taxes and
accumulated interest thereon been due and payable on May 31, 1998, Farmland's
borrowing capacity under the Credit Facility was adequate at that time to
finance the liability.  However, Farmland's ability  to finance such an adverse
decision depends substantially on the financial effects of future operating
events on its  borrowing capacity under the Credit Facility.

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

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


  (B)  ENVIRONMENTAL MATTERS

      The Company currently is aware of probable obligations for environmental
matters under state and federal environmental laws at 34 properties.  At May 31,
1998, the Company has an environmental accrual in its Condensed Consolidated
Balance Sheet for probable and reasonably estimated costs for remediation of
contaminated properties of $15.8 million.  The Company periodically reviews and,
as appropriate, revises its environmental accruals.


      The Company's actual final costs of addressing certain environmental
matters are not quantifiable, and therefore have not been accrued.  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 May 31, 1998.  In the opinion of management, it is reasonably
possible for such additional costs to be approximately $18.5 million.

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

      Under the Resource Conservation Recovery Act of 1976 (''RCRA''), the
Company has three closure and four post-closure plans in place for multiple
locations. Closure and post-closure plans also are in place for three landfills
and two injection wells as required by certain state regulations. Such future
closure and post-closure costs are estimated to be $4.9 million at May 31, 1998
(and are in addition to the $15.8 million accrual and the $18.5 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.

   The Company is currently involved in an administrative proceeding brought by
the Kansas Department of Health and Environment ("KDHE") on April 9, 1998
concerning alleged violations of the state and federal Clean Air Acts at the
Company's refinery in Coffeyville, Kansas.  The KDHE has issued to the Company a
proposed consent agreement which seeks a $150,000 penalty for the alleged
violations.  The Company has been negotiating with KDHE concerning this matter
and anticipates its resolution in the near future.

   The discovery of additional environmental liabilities related to the
Company's historical operations or changes in existing environmental
requirements could have a material adverse effect on the Company's business,
results of operations, or financial condition.

 (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 nine months ended May 31, 1997 and May 31, 1998 is as follows:

<TABLE>
<CAPTION>
                                                   May 31                 May 31
                                                    1997                   1998

                                                      (Amounts in Thousands)
<S>                                           <C>                    <C>
Net sales..................................... $    1,013,802         $    1,137,986


Net income.................................... $       61,310         $       68,497


Farmland's equity in net income............... $       31,044         $       34,105


</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 and a 50% equity interest in a distributor of crop protection
products, WILFARM, LLC.

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


      The information contained herein and the Condensed Consolidated Financial
Statements and Accompanying Notes presented in this Form 10-Q should be read in
conjunction with information set forth in Part II, Items 7 and 8, in the
Company's Annual Report on Form 10-K for the year ended August 31, 1997.


FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

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

     The Company's debt securities issued under the continuous public debt
offering generally are offered on a best-efforts basis through the Company's
wholly owned broker-dealer subsidiary, Farmland Securities Company, and through
American Heartland Investments, Inc. (which is not affiliated with Farmland),
and also may be offered by selected unaffiliated broker-dealers.  The types of
securities included in the continuous debt offering include certificates payable
on demand and subordinated debt securities.  The total amount of such debt
outstanding and the flow of funds to, or from, the Company as a result of the
continuous debt offering are influenced by the rate of interest which Farmland
establishes for each type, or series, of debt security offered and by options of
Farmland to call for redemption certain of its outstanding debt securities.

     During the nine months ended May 31, 1998, the outstanding balance of
demand certificates decreased by $17.6 million and the outstanding balance of
subordinated debt securities increased $25.6 million.


     In May 1996, Farmland entered into a five year Syndicated Credit Facility
(the "Credit Facility") with various participating banks. The Credit Facility
provides (subject to compliance with certain financial covenants) an annually
renewable short-term credit of up to $650.0 million and a long-term credit of up
to $450.0 million.  During May 1998, the short term credit was renewed.

     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 revolving long-term credit provided under
the Credit Facility expires in May 2001.

     At May 31, 1998, the Company had $281.7 million of short-term borrowings
under the Credit Facility and $35.0 million of revolving term borrowings.
Additionally, $61.2 million of the Credit Facility was utilized to support
letters of credit.  At May 31, 1998, under the short-term credit, the Company
had capacity to borrow up to an additional $312.6 million and, under the long-
term credit, the Company had capacity to borrow up to an additional
$409.5 million.

     The Company maintains other borrowing arrangements with banks and financial
institutions. Under such agreements at May 31, 1998, $9.2 million was borrowed.

     During April 1998, Farmland National Beef Packing Company, L.P. ("FNBPC")
replaced its existing borrowing arrangements with a new five year $130.0 million
credit facility.  This facility, which expires March 31, 2003, is provided by
various participating banks and all borrowings thereunder are nonrecourse to
Farmland or Farmland's other affiliates.  FNBPC used a portion of this facility
to repay in full its borrowings (approximately $64.8 million) from Farmland.  At

May 31, 1998, FNBPC had borrowings under this credit facility of $110.2 million
and $0.6 million of the facility was being utilized to support letters of
credit.  FNBPC has pledged certain assets to support its borrowings under the
new credit facility.

     The Company's international grain trading subsidiaries (collectively
referred to as "Tradigrain") have borrowing agreements with various
international banks which provide financing and letters of credit to support
current international grain trading transactions.  Obligations of Tradigrain
under these loan agreements are nonrecourse to Farmland or Farmland's other
affiliates.  At May 31, 1998, such borrowings totaled $46.0 million.

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

     In December 1997, the Company sold 2 million shares of 8% Series A
Cumulative Redeemable Preferred Shares (the "Preferred Shares") at $50 per
Preferred Share with an aggregate liquidation preference of $100 million ($50

liquidation preference per share).  The Preferred Shares are not redeemable
prior to December 15, 2022.  On and after December 15, 2022, the Preferred
Shares may be redeemed for cash at the option of the Company, in whole or in
part, at specified redemption prices declining to $50 per share on and after
December 15, 2027, plus accumulated and unpaid dividends, if any, thereon.  The
Preferred Shares do not have any stated maturity, are not subject to any sinking
fund or mandatory redemption provisions and are not convertible into any other
securities of the Company.  Proceeds from the issuance of the Preferred Shares
have been used to call for early redemption approximately $47.6 million of
principal and accumulated interest on certain subordinated debt securities and
to redeem approximately $50.0 million of capital shares and equity.

     During June 1998, the Company filed a pre-effective amendment covering the
Company's shelf registration of $200 million of Senior Notes.  The Company has
not determined the amount, if any, of these Senior Notes which will be offered
for sale or the timing of such sale, if any.

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

     Major sources of cash during the nine months ended May 31, 1998 include
$467.3 million from bank borrowings, $100.0 million from issuance of preferred
stock, $84.9 million from sales of subordinated debt certificates, $43.8 million
from disposal of investments and collections of notes receivable, $34.5 million
in cash distributed to Farmland by ventures in which Farmland has a 20% to 50%
ownership interest, and $28.1 million from operations.  Cash provided from
operations is net of payments which increased the Company's net operating assets
(primarily working capital) by $78.9 million.

     Major uses of cash include payments of $405.0 million related to bank
borrowings, $98.9 million for capital expenditures, $81.6 million for redemption

of equities, $58.8 million for redemption of subordinated debt certificates,
$40.3 million for payment of patronage refunds, $31.1 million for additions to
investments and notes receivable, $30.6 million of short-term advances, net of
collections, made as construction agent, $17.6 million for redemptions of demand
loan certificates and $2.9 million for payment of dividends on preferred stock.

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



RESULTS OF OPERATIONS

   GENERAL

     In view of the seasonality of the Company's businesses, it must be
emphasized that the results of operations for the periods presented are not
necessarily indicative of the results for a full fiscal year.  Historically, the
majority of farm supply products are sold in the spring.  Sales in the beef
business and in grain marketing historically have been concentrated in the
summer.  Summer is the lowest sales period for pork products.

     The Company's revenues, margins and net income depend, to a large extent,
on conditions affecting agriculture and may be volatile due to factors beyond
the Company's control, such as weather, crop failures, federal agricultural
programs, production efficiencies and U.S. imports and exports.  In addition,
various federal and state regulations to protect the environment encourage
farmers to reduce the use of fertilizers and other chemicals.  Global variables
which affect supply, demand and price of crude oil, refined fuels, natural gas,

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


RESULTS OF OPERATIONS FOR NINE MONTHS ENDED MAY 31, 1998 COMPARED TO NINE MONTHS
ENDED MAY 31, 1997


     For the nine months ended May 31, 1998, the Company had sales of
$6.7 billion compared with sales of $6.9 billion for the same period last year.
Net income for the nine months ended May 31, 1998 was $47.7 million, compared
with net income of $90.0 million in the corresponding period of the  prior year.

   SALES

     Sales for the nine months ended May 31, 1998 decreased $292.5 million, or
4.2%, compared with the same period last year.

     On the input side of the Company's business, sales of the petroleum, crop
production and feed segments in the nine months ended May 31, 1998 decreased
$163.7 million, $95.2 million and $55.3 million, respectively, compared with the
same period last year.  The decrease in petroleum sales primarily reflects a
decline in unit prices that was partially offset by a 6.2% increase in gasoline,
distillates and diesel unit sales.  The unit sales increase resulted principally
from higher production volume at the Company's refinery in Coffeyville, Kansas.
Sales of crop production products decreased primarily due to lower unit prices.

Feed business sales decreased primarily due to lower feed grain unit sales
combined with a decrease in unit prices.

     On the output side of the Company's business, sales in the food processing
and marketing business increased $103.4 million.  This increase is primarily
attributable to higher unit sales due primarily to improvements in operating
efficiencies which resulted in an increase in the number of head processed,
partially offset by lower unit prices.  Sales in the grain business decreased by
$81.0 million as a result of both lower unit volume and lower commodity prices.


   NET INCOME

     Net income for the nine months ended May 31, 1998 decreased $34.7 million
compared with the same period in the prior year.

     Operating income for the petroleum business decreased $1.6 million, or
8.1%, for the nine months ended May 31, 1998 compared with the prior period.
This decrease was primarily due to a decrease in the spread between crude oil
costs and refined products selling prices.

     Operating income in the crop production business for the nine months ended
May 31, 1998 decreased $91.2 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 an industry-wide decline of nitrogen fertilizer prices,
partly offset by a decrease in raw material costs.

     Operating income in the feed business increased approximately $1.2 million
during the nine months ended May 31, 1998 as compared to the same period last
year, primarily as a result of higher unit margins.


     Operating income in the food processing and marketing business for the nine
months ended May 31, 1998 increased $5.3 million compared to the prior
period.  This increase is primarily a result of increased margins on
processed pork which are attributable to lower costs of live hogs.  This
effect was partly offset by charges to reduce the carrying value of the
Company's live hog inventory to the lower market value and by decreased unit
net margins on beef.

     Operating income in the grain business segment for the nine months ended
May 31, 1998 was $20.8 million compared to an operating loss of $15.1 million
for the nine months ended May 31, 1997.  This increase is primarily attributable
to higher income generated on international grain trading transactions and to
higher operating income from domestic grain operations.

     Selling, general and administrative ("SG&A") expenses increased
$24.6 million, or 8.6%, from the prior period.  SG&A expenses directly connected
to business segments increased approximately $19.9 million and these expenses
have been included in the determination of operating income of the segments.
SG&A expenses not identified to segments increased $4.7 million, primarily as a
result of increased information service expenses, partly offset by a decrease in
incentive compensation expense.

     Other income increased $10.4 million, or 53.6%, for the nine months ended
May 31, 1998 as compared to the same period last year.  This increase is
primarily attributable to a gain of approximately $7.2 million on sale of
approximately 3.8% of Farmland's ownership interest in FNBPC and to income of
approximately $5.3 million from a favorable United States Supreme Court ruling
in litigation related to harbor taxes paid in prior years.

     The decrease in the provision for income taxes for the nine months ended
May 31, 1998 compared to the nine months ended May 31, 1997 is primarily
attributable to a decrease in the Company's income before taxes.  Ventures
accounted for by the equity method are generally pass-through entities for tax
purposes, such as a partnership, an LLC, or an LLP.  Farmland allocates a
portion of its consolidated tax expense to its share of income from these pass-
through entities based on the expected effective tax rate on income from each
venture.  For the nine months ended May 31, 1997 and May 31, 1998, Farmland had
allocated to equity  in net income of investees tax expense of approximately
$5.5 million and $6.2 million, respectively.

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

RESULTS OF OPERATIONS FOR THREE MONTHS ENDED MAY 31, 1998 COMPARED TO THREE
MONTHS ENDED MAY 31, 1997

   SALES

     Sales for the three months ended May 31, 1998 decreased $182.9 million, or
7.6%, compared with the prior period.  Sales of the crop production, petroleum
and feed businesses in the three months ended May 31, 1998 decreased $77.3
million, $76.1 million and $31.9 million, respectively, compared with the
corresponding period of the prior year.  These decreases resulted primarily due
to factors discussed above under the heading "Results of Operations for Nine
Months Ended May 31, 1998 Compared to Nine Months Ended May 31, 1997.  In
addition, sales of the food marketing and processing business decreased $27.6
million in the three months ended May 31, 1998 compared with the three months
ended May 31, 1997.  This decrease resulted primarily from lower wholesale
prices of wholesale pork.  Sales of grain in the three months ended May 31, 1998
increased $30.7 million compared with the corresponding period of the prior year
reflecting increased unit sales.

   NET INCOME

     Net income for the three months ended May 31, 1998 decreased $24.7 million
compared with the corresponding period of the prior year.  The decrease was
principally attributable to the factors discussed above for the nine months
comparison.

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

agriculture generally and the costs and markets for the Company's products
change.

YEAR 2000

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

RECENT ACCOUNTING PRONOUNCEMENTS

      Statements of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income," No. 131, "Disclosures about Segments of an Enterprise and
Related Information," and No. 132, "Employer's Disclosures About Pensions and
Other Postretirement Benefits" have been issued by the Financial Accounting
Standards Board ("FASB") and are effective for periods beginning after December
15, 1997.  These statements expand or modify disclosures and, accordingly, will
have no impact on the Company's reported financial position, results of
operations or cash flows.  SFAS No. 133, "Accounting for Derivative Instruments
and Hedging Activities" was issued in June 1998 by the FASB and is effective for
periods beginning after June 15, 1999.  The Company is currently evaluating the
impact, if any, which adoption of the provisions of SFAS No. 133 will have  on
its financial statements.



ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The information required under Item 3 is not required for the quarterly
period ended May 31, 1998, because the company's market capitalization was less
than $2.5 billion as of January 28, 1997.



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

      The Company is including the following cautionary statement in this
Form 10-Q to make applicable and take advantage of the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995 for any forward-looking
statement made by, or on behalf of, the Company.  The factors identified in this
cautionary statement include important factors (but not necessarily all
important factors) that could cause actual results to differ materially from
those expressed in any forward-looking statement made by, or on behalf of, the
Company.  Given these uncertainties, prospective investors are cautioned not to
place undue reliance on such forward looking statements.

      Where any such forward-looking statement includes a statement of the
assumptions or basis underlying such forward-looking statement, the Company
cautions that, while it believes such assumptions or basis to be reasonable and
makes them in good faith, the assumed facts or basis almost always vary from
actual results, and the differences between the assumed facts or basis and
actual results can be material, depending upon the circumstances.  Where, in any
forward-looking statement, the Company, or its management, expresses an
expectation or belief as to future results, such expectation or belief is
expressed in good faith and believed to have a reasonable basis, but there can
be no assurance that the statement of expectation or belief will result or be
achieved or accomplished.  Such forward looking statements include, without
limitation, statements regarding the seasonal effects upon the Company's
business, the anticipated expenditures for environmental remediation, the
consequences of an adverse judgment in certain litigations (including the Terra
litigation), and the impact of operational issues, if any, related to the year
2000.

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 products (including foreign
  trade and monetary policies, laws and regulations, movement and/or political
  and governmental changes, inflation and exchange rates, taxes, operating
  conditions and world production and demand).
  
5.Factors affecting supply, demand and price of crude oil, refined fuels,
  natural gas, livestock, grain and other commodities.
  
6.Regulatory delays and other unforeseeable obstacles beyond the Company's
  control that may affect growth strategies through acquisitions and
  investments in joint ventures.

  
7.Competitors in various segments may be larger, may offer more varied products
  or may possess greater financial and other resources than the Company.
  
8.Unusual or unexpected events such as, among other things, litigation
  settlements, adverse rulings or judgments, and environmental remediation
  costs in excess of amounts accrued.
  
9.The factors identified in "Business and Properties - Business - Business Risk
  Factors" included in the Company's Annual Report on Form 10-K for the year
  ended August 31, 1997.



                          PART II - OTHER INFORMATION

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

   (A)    EXHIBITS

     THE EXHIBITS LISTED BELOW ARE FILED AS PART OF FORM 10-Q FOR QUARTER ENDED
May 31, 1998.

        Exhibit No.                         Description of Exhibits   


          27        Financial Data Schedule

   (B)    NO REPORTS ON FORM 8-K WERE FILED DURING THE QUARTER ENDED May 31,
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:   July 15, 1998