<PAGE>

                                   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 PERIOD ENDED MAY 31, 1998

COMMISSION FILE NUMBER:  33-83868



                                 AMERICAN CRYSTAL SUGAR COMPANY     
                    (Exact name of registrant as specified in its charter)


                   MINNESOTA                                  84-0004720
          (State or other jurisdiction of                   (I.R.S. Employer
          incorporation or organization)                    Identification No.)
                                          
                                        101 NORTH THIRD STREET
                                      MOORHEAD, MINNESOTA  56560
                               (Address of principal executive offices)
                  
                                   TELEPHONE NUMBER (218) 236-4400
                         (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, and (2) has been subject to such filing requirements
for the past 90 days.

                YES    X                          NO    
                     ----                            ----

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.


                                                 OUTSTANDING AT
          CLASS OF COMMON STOCK                   JULY 2, 1998 
          ---------------------                  ---------------
              $10 PAR VALUE                           2,830


<PAGE>


                                          
                           AMERICAN CRYSTAL SUGAR COMPANY

                                     FORM 10-Q

                                       INDEX



                                                           PAGE NO.
                                                           --------

PART I    FINANCIAL INFORMATION


  ITEM 1. FINANCIAL STATEMENTS


          BALANCE SHEETS                                         1


          STATEMENTS OF OPERATIONS                               3


          STATEMENT OF CASH FLOWS                                4


          NOTES TO THE FINANCIAL STATEMENTS                      5


  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
            OF RESULTS OF OPERATIONS AND
            FINANCIAL CONDITION                                  7


PART II   OTHER INFORMATION                                     10


EXHIBIT 3(i) 


SIGNATURES              


<PAGE>



                       AMERICAN CRYSTAL SUGAR COMPANY
                            Balance Sheets
                              (Unaudited)
                        (Dollars in Thousands)

                                ASSETS

<TABLE>
<CAPTION>
                                                May 31    
                                         ----------------------        August 31,
                                          1998           1997            1997
                                        ---------      ---------       --------
<S>                                      <C>           <C>             <C>
Current Assets: *
 Cash and Cash Equivalents               $     35       $     43       $ 11,551
 Accounts Receivable:
  Trade                                    50,390         52,685         60,940
  Members                                   2,738          3,242          2,857
  Other                                     1,667          3,811          5,618
 Advances to Related Parties               29,037         18,892         15,064
 Inventories                              294,374        302,156        140,057
 Prepaid Expenses                           3,547          2,861          2,892
                                        ---------      ---------       --------
Total Current Assets                      381,788        383,690        238,979
                                        ---------      ---------       --------

Property and Equipment:
 Land                                      13,395         12,170         13,101
 Buildings and Equipment                  639,866        612,875        635,671
 Construction-in-Progress                  88,377         35,087         43,938
 Less: Accumulated Depreciation          (434,687)      (412,782)      (413,211)
                                        ---------      ---------       --------
Net Property and Equipment                306,951        247,350        279,499
                                        ---------      ---------       --------

Other Assets:
 Investments in Banks for Cooperatives     15,907         15,795         14,568
 Investments in Marketing Cooperatives      2,510         17,490          1,650
 Investment in ProGold LLC                 35,203         45,844         43,007
 Other Assets                               4,558          3,199          3,801
                                        ---------      ---------       --------

Total Other Assets                         58,178         82,328         63,026
                                        ---------      ---------       --------

Total Assets                            $ 746,917     $ 713,368       $ 581,504
                                        ---------      ---------       --------
                                        ---------      ---------       --------
</TABLE>

* Derived from audited financial statements.
The Accompanying Notes are an Integral Part of These Financial Statements.


                                              1

<PAGE>


                               AMERICAN CRYSTAL SUGAR COMPANY
                                       Balance Sheets
                                        (Unaudited)
                                   (Dollars in Thousands)

                             LIABILITIES AND MEMBERS' INVESTMENTS


<TABLE>
<CAPTION>
                                                May 31    
                                         ----------------------        August 31,
                                           1998           1997            1997
                                         --------       --------       ----------
<S>                                      <C>            <C>            <C>
Current Liabilities:                                                       *
 Short-Term Debt                         $191,527       $184,056       $ 67,960
 Current Maturities of Long-Term Debt      18,800         14,300         17,800
 Accounts Payable:
  Trade                                     7,227          8,068         21,538
  Other                                     8,510          4,918          4,359
 Accrued Continuing Costs                  65,026         72,723            -  
 Other Current Liabilities                 15,397         15,598         15,515
 Amounts Due Members                       26,947         63,733         66,155
                                         --------       --------       --------

Total Current Liabilities                 333,434        363,396        193,327
Long-Term Debt, Excluding Current
 Maturities                               168,000        160,300        186,800
Deferred Income Taxes                       1,540              0          1,540
Other Liabilities                          25,479         23,638         23,909
                                         --------       --------       --------

Total Liabilities                         528,453        547,334        405,576
                                         --------       --------       --------


Members' Investments
 Preferred Stock                           38,263         33,542         33,542
 Common Stock                                  28             26             26
 Additional Paid-in Capital               115,939         63,752         64,596
 Unit Retains                              97,435         88,954        105,450
 Pension Liability Adjustment              (4,131)        (4,519)        (4,131)
 Retained Earnings                        (29,070)       (15,721)       (23,555)
                                         --------       --------       --------

Total Members' Investments                218,464        166,034        175,928
                                         --------       --------       --------
Total Liabilities and Members'
 Investments                             $746,917       $713,368       $581,504
                                         --------       --------       --------
                                         --------       --------       --------
</TABLE>
* Derived from audited financial statements.
The Accompanying Notes are an Integral Part of These Financial Statements.


                                       2

<PAGE>


                          AMERICAN CRYSTAL SUGAR COMPANY
                            Statement of Operations
                                  (Unaudited)
                             (Dollars in Thousands)


<TABLE>
<CAPTION>
                                        For the Nine Months Ended     Three Months Ended
                                                 May 31                     May 31
                                        -------------------------     ------------------------
                                          1998            1997          1998           1997
                                        ---------       ---------     --------        --------
<S>                                      <C>            <C>           <C>            <C> 
Net Revenue                              $506,393       $489,557      $170,147       $189,092
Cost of Product Sold                        9,559        (60,081)       24,022         22,041
                                        ---------       --------      --------       --------

Gross Proceeds                            496,834        549,638       146,125        167,051
Selling, General & Administrative
 Expenses                                 105,063        108,242        33,799         43,078
Accrued Continuing Costs                   65,026         72,723        39,672         27,056
                                        ---------       --------      --------       --------

Operating Proceeds                        326,745        368,673        72,654         96,917
                                        ---------       --------      --------      ---------

Other Income (Expenses)
 Interest Income                              536             62           199         (1,151)
 Interest Expense                          (9,380)       (11,886)       (2,385)        (4,254)
 Other Income (Loss)                          578          8,377         2,779         11,707
 Other Expenses                            (4,531)        (9,669)          941        (11,937)
                                        ---------       ---------     --------        --------
Other Income (Expense)                    (12,797)       (13,116)        1,534         (5,635)
                                        ---------       ---------     --------        --------
Proceeds before Income Taxes              313,948        355,557        74,188         91,282
Income Taxes Provision/Benefit                  0              0             0              0
                                        ---------       --------      --------       --------
Net Proceeds Resulting from
 Member and Non-Member Business          $313,948       $355,557      $ 74,188       $ 91,282
                                        ---------       --------      --------       --------
                                        ---------       --------      --------       --------
Distribution of Net Proceeds:
 Credited/(Charged) to Member's
   Investments:
  Non-Member Business Income/(Loss)      $ (5,515)      $(10,240)     $    707       $ (5,709)
  Unit Retains Declared to Members            -              -              -              -  
                                        ---------      ---------      --------       ---------
Net Credit/(Charge) to Members'
 Investments                               (5,515)       (10,240)          707         (5,709)
Payments to/due Members for
 Sugarbeets, Net of Unit Retains              -              -              -               -  
 Declared                                 319,463        365,797        73,481         96,991
                                        ---------       ---------     --------        --------
Total                                    $313,948       $355,557      $ 74,188       $ 91,282
                                        ---------      ---------      --------       --------
                                        ---------      ---------      --------       --------
</TABLE>

The Accompanying Notes are an Integral Part of These Financial Statements.


                                       3

<PAGE>

                         AMERICAN CRYSTAL SUGAR COMPANY
                            Statement of Cash Flows
                                  (Unaudited)
                             (Dollars In Thousands)


<TABLE>
<CAPTION>
                                                         Nine Months Ended
                                                              May 31
                                                        -----------------------
                                                          1998           1997
                                                        --------       ---------
<S>                                                     <C>            <C>
Cash Used for Operations:
 Net Proceeds Resulting from Member and Non-
  Member Business                                      $ 313,948       $ 355,557
 Payments to/due Members for Sugarbeets,
  Including Unit Retains                                (319,463)       (365,797)
 Add/(Deduct) Noncash Items:
  Depreciation and Amortization                           21,513          21,157
  Loss on Investment Activities                            4,036           9,204
  Deferred Income Taxes                                        0               0
  (Gain)/loss on the Disposition of Property
   and Equipment                                            (377)           (146)
  Noncash Portion of Patronage Dividend from                             
   Banks for Cooperatives                                 (1,338)           (618)
  Deferred Gain Recognition                                 (157)           (142)
 Changes in Certain Elements of Working Capital                          
  Accounts Receivable:                                                   
   Trade                                                  10,550          (1,770)
   Members                                                   119             603
   Other                                                   3,951          (2,412)
  Inventories                                           (154,317)       (229,479)
  Prepaid Expenses                                          (655)            227
  Advances to Related Parties                            (13,973)         (8,584)
  Accounts Payable:
   Trade                                                 (14,311)         (8,992)
   Other                                                   4,151          (4,789)
  Other Current Liabilities                               64,908          73,189
  Amount Due Growers                                     (39,208)         16,615
                                                        --------         -------
Net Cash Used In Operations                             (120,623)       (146,177)
                                                        --------         -------

Cash Used In Investing Activities:
 Purchases of Property and Equipment                     (48,928)        (34,528)
 Proceeds from the Sale of Property and Equipment            377             146
 Investment in Banks for Cooperatives                          0              (0)
 Investment in Marketing Coops                              (704)         (1,880)
 Investment in ProGold LLC                                 3,768          (1,153)
 Changes in Other Assets                                    (794)           (399)
                                                        --------         -------
Net Cash Used In Investing Activities                    (46,281)        (37,814)
                                                        --------         -------

Cash Provided by Financing Activities:
 Net Proceeds (Payments) on Short-Term Debt              123,567         170,413
 Proceeds from Long-Term Debt                                  0          12,866
 Long-Term Debt Repayment                                (17,800)        (29,190)
 Changes in Other Long-Term Liabilities                    1,570           1,999
 Changes in Preferred Stock                                4,721           1,663
 Changes in Common Stock                                       2               2
 Changes in Additional Paid-In Capital                    51,343          30,711
 Payment of Unit Retains                                  (8,015)         (8,237)
                                                        --------         -------
Net Cash Provided by Financing Activities                155,388         180,227
                                                        --------         -------
Decrease in Cash and Cash Equivalents                    (11,516)         (3,764)
Cash and Cash Equivalents Beginning of Period             11,551           3,807
                                                        --------         -------
Cash and Cash Equivalents End of Period                 $     35         $    43
                                                        --------         -------
                                                        --------         -------
</TABLE>

The Accompanying Notes are an Integral Part of These Financial Statements.

                                       4


<PAGE>




                           AMERICAN CRYSTAL SUGAR COMPANY
                         NOTES TO THE FINANCIAL STATEMENTS
                  FOR THE NINE MONTHS ENDED MAY 31, 1998 AND 1997


NOTE 1:  BASIS OF PRESENTATION

The unaudited financial statements contained herein have been prepared pursuant
to the rules and regulations of the Security and Exchange Commission. 
Accordingly, they do not include all the information and footnotes required by
generally accepted accounting principles.  However, in the opinion of
management, all adjustments, consisting of normal recurring accruals, considered
necessary for a fair presentation have been included.

The operating results for the nine month period ended May 31, 1998 are not
necessarily indicative of the results that may be expected for the year ended
August 31, 1998.

The amount paid to growers for sugarbeets (beet payment) depends on the 
future selling prices of sugar and by-products as well as processing and 
other costs to be incurred during the remainder of the fiscal year.  For the 
purposes of this report, the amount of the beet payment, future revenues and 
costs have been estimated.  Therefore, adjustments with respect to these 
estimates may be necessary in the future as additional information becomes 
available.

These financial statements should be read in conjunction with the financial
statements and notes included in the company's annual report for the year ended
August 31, 1997. 


NOTE 2:  INVENTORIES

     The major components of inventories are as follows (In Thousands):

<TABLE>
<CAPTION>
                                         5/31/98        5/31/97        8/31/97
                                         --------       --------       -------
<S>                                      <C>            <C>            <C>
Refined Sugar, Pulp, Molasses,
   CSB and Beet Seed                     $275,235       $279,870       $115,026
Corn                                          -              -            3,758
Maintenance Parts & Supplies               19,139         22,286         21,273
                                         --------       --------       --------
Total Inventories                        $294,374       $302,156       $140,057
                                         --------       --------       --------
                                         --------       --------       --------
</TABLE>


Sugar, pulp, molasses and CSB inventories are valued at estimated net realizable
value.  Maintenance parts & supplies, corn and beet seed inventories are valued
the lower of average cost or market.


NOTE 3:  ACCRUED CONTINUING COSTS

For interim reporting, the Net Proceeds from Member Business is determined based
on the forecasted beet payment and the percentage of the tons of sugarbeets
processed to the total estimated tons of sugarbeets to process for a given crop
year.  Accrued continuing costs represents the difference between the Net
Proceeds from Member Business as determined above and actual member business
crop year revenues realized and expenses incurred through the end of the
reporting period.  Accrued continuing costs are reflected in the Financial
Statements as a cost on the Statements of Operations and as a current liability
on the Balance Sheets. 


                                         5

<PAGE>


NOTE 4:  MEMBERS' INVESTMENTS

<TABLE>
<CAPTION>
                                                        Shares      Shares Issued
                                         Par Value     Authorized   & Outstanding
                                         ----------    ----------   -------------
<S>                                      <C>           <C>          <C>
Preferred Stock:
  July 2, 1998                             $76.77        600,000        498,570
  May 31, 1998                             $76.77        600,000        498,415
  August 31, 1997                          $76.77        600,000        436,915
  May 31, 1997                             $76.77        600,000        436,915

Common Stock:
  July 2, 1998                             $10.00          4,000          2,830
  May 31, 1998                             $10.00          4,000          2,795
  August 31, 1997                          $10.00          4,000          2,585
  May 31, 1997                             $10.00          4,000          2,562
</TABLE>




                                         6
<PAGE>



                        MANAGEMENT'S DISCUSSION AND ANALYSIS
                  OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
             FOR THE THREE AND NINE MONTHS ENDED MAY 31, 1998 AND 1997


RESULTS OF OPERATIONS

COMPARISON OF THE NINE MONTHS ENDED MAY 31, 1998 AND 1997

Revenue for the nine months ended May 31, 1998, was $506.4 million, an 
increase of $16.9 million from 1997.  Revenue from total sugar sales 
increased 4.9 percent reflecting an 8.5 percent increase in hundredweight 
sold partially offset by a 3.3 percent decrease in the average selling price 
per hundredweight. Revenue from pulp sales decreased 13.2 percent due to an 
18.8 percent decrease in the average selling price per ton partially offset 
by a 6.9 percent increase in the volume of pulp sold. Revenue from molasses 
sales decreased 10.6 percent due to a 13.7 percent decrease in the average 
selling price per ton partially offset by a 3.6 percent increase in the 
volume of molasses sold.  Revenue from the sales of Concentrated Separated 
By-Product (CSB), a by-product of the molasses desugarization process, 
increased 1.1 percent mainly due to a 1 percent increase in the volume of CSB 
sold.

Cost of product sold, exclusive of payments for sugarbeets, increased $69.6
million.  Direct processing costs for sugar and pulp increased by 1.4 percent
due to the harvesting of a larger crop.  Fixed and committed expenses decreased
6.2 percent reflecting lower maintenance costs.  Changes in product inventory
levels between 1998 and 1997, affected the cost of product sold unfavorably by
$77.8 million.  The cost associated with sugar purchased to meet customer needs
was down $4.5 million due to the supply of our inventory.

Marketing expenses decreased $1.1 million due primarily to the lower storage
costs for pulp.  General and Administrative expenses decreased $2.1 million
reflecting refunds from flood insurance claims.
 
The decrease in accrued continuing costs was due primarily to changes in the
volume of sugar sales and production, differences in the timing of incurring
processing costs and the amount of unsold inventory on hand.

Interest expense decreased $2.5 million due to lower interest rates and Stock 
Sale.

Non-member activities resulted in the loss of $5.5 million for the nine 
months ended May 31, 1998 as compared to a loss of $10.2 million for the same 
period last year.  The majority of the reduction of this  loss is related to 
reduced net loss of ProGold Limited Liability Company (ProGold) because of 
lease to Cargill, Inc.

Net payments to/due members for sugarbeets decreased by $46.3 million from
$365.8 million for the first nine months in 1997, to $319.5 million for the
first nine months in 1998.  This decrease is due to a lower projected per ton
beet payment this year.


                                         7

<PAGE>


COMPARISON OF THE THREE MONTHS ENDED MAY 31, 1998 AND 1997

Revenue for the three months ended May 31, 1998, was $170.1 million, a decrease
of $18.9 million from 1997.  Revenue from total sugar sales decreased 7.5
percent reflecting a 6 percent decrease in the average selling price per
hundredweight and a 1.6 percent decrease in hundredweight sold.  Revenue from
pulp sales decreased 31.5 percent due to a 7 percent decrease in the volume of
pulp sold and a 26.4 percent decrease in the average selling price per ton. 
Revenue from molasses sales decreased 20 percent due to a 13.9 percent decrease
in the average selling price per ton and a 7.1 percent decrease in the volume of
molasses sold.  Revenue from the sales of Concentrated Separated By-Product
(CSB), a by-product of the molasses desugarization process, decreased 16.9
percent due to a 25 percent decrease in the volume of CSB sold partially offset
by a 10.9 percent increase in the average selling price per ton.

Cost of product sold, exclusive of payments for sugarbeets, increased $2
million.  Direct processing costs for sugar and pulp increased 1.1 percent due
to the harvesting of a larger crop.  Fixed and committed expenses increased 9.8
percent due to higher maintenance costs for this period.  Changes in product
inventory levels between 1998 and 1997, decreased the cost of product sold by
$3.9 million.  The cost associated with sugar purchased to meet customer needs
was up $1.6 million due to increased sales volume of purchased sugar during this
quarter.

Selling expenses decreased $7.2 million due primarily to the lower freight and
storage costs for pulp and lower sales volume of sugar and by-products.  General
and Administrative expenses decreased $2.1 reflecting refunds from flood
insurance claims.
 
The increase in accrued continuing costs was due primarily to changes in the
volume of sugar sales and production, differences in the timing of incurring
processing costs and the amount of unsold inventory on hand.

Interest expense decreased by $1.9 million due to lower interest rates and
Stock Sale.

Non-member activities resulted in a gain of $.7 million for the three months 
ended May, 31, 1998 as compared to a loss of $5.7 million for the same period 
last year.  The gain is a result of improved profits of ProGold due to lease 
to Cargill partially offset by lower profits from the sale of beet seed.

Net payments to/due members for sugarbeets decreased by $23.5 million from $97
million for the third quarter of 1997, to $73.5 million for the same period in
1998.  This decrease is due to a lower projected per ton beet payment this year
and more tons harvested.


LIQUIDITY AND CAPITAL RESOURCES

Because American Crystal operates as a cooperative, payments for member 
delivered sugarbeets, the principal raw material used in producing the sugar 
and agri-products it sells, are subordinated to all member business expenses. 
 In addition, actual cash payments to members are spread over a period of 
approximately one year following delivery of their sugarbeet crops to 
American Crystal and are net of unit retains allocated to them, both of which 
remain available to meet American Crystal's capital requirements. This member 
financing arrangement may result in an additional source of liquidity and 
reduced outside financing requirements in comparison to a similar business 
operated on a non-cooperative basis.

                                         8

<PAGE>


However, because sugar is sold throughout the year (while sugarbeets are
processed primarily in the fall and winter) and because substantial amounts of
equipment are required for its operations, American Crystal has utilized
substantial outside financing on both a seasonal and long-term basis to fund
such operations.  The majority of such financing has been provided by the St.
Paul Bank for Cooperatives ("Bank").  American Crystal has a short-term line of
credit with the Bank in 1998 of $280 million.

The various loan agreements between the Bank and American Crystal obligate
American Crystal to maintain or achieve certain amounts of working capital and
certain financial ratios and impose restrictions on American Crystal.  As of 
May 31, 1998, American Crystal was in compliance with its loan agreements.  
American Crystal anticipates that the funds required to maintain compliance 
with the banks working capital requirements will be derived from depreciation 
and unit retains.

The primary factor for the changes in American Crystal's financial condition 
for the nine months ended May 31, 1998 was due to reduced investing 
activities and proceeds from stock sales.  The cash used in operations of 
$120.6 million and investing activities of $46.3 million was funded through 
the cash provided by financing activities and reduction in cash. The net cash 
provided by financing activities was primarily comprised of the net proceeds 
from short-term debt of $123.6 million and proceeds from a stock sale of $56 
million, partially offset by the repayment on long-term debt of $17.8 million 
and the payment of the unit retains of $8 million.  Working capital has 
increased $2.6 million from $45.7 million at the beginning of the year to 
$48.3 million as of May 31, 1998 primarily due to increased inventories and a 
lower amount due growers, partially offset by higher short-term debt.

Capital expenditures for the nine months ended May 31, 1998 were $48.9 
million. American Crystal expects to obtain funds for future capital 
expenditures from depreciation, unit retains and long-term borrowing.

American Crystal does not guarantee the debt for United Sugars Corporation or 
ProGold Limited Liability Company.  Under the terms of the ProGold Member 
Control Agreement, the ProGold Board of Governors can require American 
Crystal to provide additional capital contributions not to exceed $2.3 
million per year. Any additional capital contributions can only be obtained 
by written consent of American Crystal.  American Crystal guarantees debt 
totaling $2.6 million as of May 31, 1998 for Midwest Agri-Commodities.

The growth in the market for refined sugar in the late 1980's and the mid 
1990's is a reversal of trends in the 1970's and early 1980's which resulted 
in a reduced market for refined sugar.  During the 1970's and early 1980's, 
high fructose corn syrup was increasingly used as a replacement for refined 
sugar in certain food products.  (The prime example of this trend was the use 
of high fructose corn syrup in beverages such as soft drinks.)  In addition, 
non-nutritive sweeteners such as aspartame were developed and used in food 
products. While high fructose corn syrup and non-nutritive sweeteners 
constitute a large portion of the overall sweetener market, the Company 
believes that the recent trend of increased use of refined sugar results from 
population growth and, more importantly, increased acceptance of the use of 
sugar as a desirable natural ingredient in a normal diet.

                                         9

<PAGE>

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

American Crystal is subject to various lawsuits and claims which arise in the
ordinary course of its business.  While the results of such litigation and
claims cannot be predicted with certainty, management believes the disposition
of all such proceedings, individually or in the aggregate, should not have a
material adverse effect on the Company's financial position, results of
operations or cash flows. 


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At the Hillsboro Factory District Meeting on November 10, 1997, an election of a
Board of Director was held.  Francis Kritzberger who sought re-election received
98 of the 98 votes cast. His three year term expires in December, 2000. 

At the Drayton Factory District Meeting on November 11, 1997, an election of a
Board of Director was held.  Wayne Langen who sought re-election received 235 of
the 235 votes cast.  His three year term expires in December, 2000.

At the East Grand Forks Factory District Meeting on November 11, 1997, an
election of a Board of Director was held.  Aime Dufault who sought re-election
received 137 of the 137 votes cast.  His three year term expires in December,
2000.

At the Crookston Factory District Meeting on November 12, 1997, an election of a
Board of Director was held.  Lonn Kiel who sought re-election received 153 of
the 153 votes cast. His three year term expires in December, 2000.

At the Moorhead Factory District Meeting on November 14, 1997, an election of a
Board of Director was held.  Jay Nord received 96 votes and Richard Borgen
received 104 of the 200 votes cast.  Richard Borgen's three year term expires in
December, 2000.  Mr. Borgen replaces Paul Borgen who served the maximum
consecutive terms authorized by the Company's By-Laws. 

By-Law changes were voted on by the Board of Directors.  Exhibit A is attached.


ITEM 5.  OTHER INFORMATION

On June 3, 1998, the company entered into a joint venture (special purpose)
entity with Newcourt Capital U.S.A., Inc. to form Crystech, LLC (Crystech). 
Crystech was formed to acquire, construct, finance, operate, and maintain a
molasses desugarization facility at the company's Hillsboro, North Dakota sugar
factory together with certain sugar processing equipment located at the
Hillsboro, North Dakota and Moorhead and Crookston, Minnesota sugar factories. 
The company acquired an initial 50% ownership interest in Crystech through a
$1,545,000 cash contribution.  The company also funded $3.1 million in
subordinated debt to Crystech, LLC.  The company records its investment in the
joint venture as related equity in net assets of the joint venture.


                                         10

<PAGE>


Daniel J. McCarty resigned as president and chief executive officer of the
company effective June 1, 1998.  James J. Horvath was elected president and
chief executive officer on May 15, 1998, effective immediately.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

By-Law changes were voted on by the Board of Directors.  Exhibit 3(i) is
attached.

The Company did not file any reports on Form 8-K during the nine months ended
May 31, 1998.


                                          11