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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

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|/x/ | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|--- | ---------------------------------------------------------------------------------------

For the period ended February 29, 2000

Commission file number: 33-83868

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

|Minnesota(State or other jurisdiction of
incorporation or organization) |  | 84-0004720(I.R.S. Employer
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.

|Class of Common Stock |  | Outstanding at
March 28, 2000
|--------------------- |  | -----------------------------
|$10 Par Value         |  | 2,940                        

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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       
|           |  | STATEMENTS OF CASH FLOWS                                                              |  | 4       
|           |  | NOTES TO THE FINANCIAL STATEMENTS                                                     |  | 5       
|ITEM 2.    |  | MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION |  | 6       
|PART II    |  | OTHER INFORMATION                                                                     |  |         
|ITEM 1.    |  | LEGAL PROCEEDINGS                                                                     |  | 10      
|ITEM 6.    |  | EXHIBITS AND REPORTS ON FORM 8-K                                                      |  | 11      
|SIGNATURES |  | 15                                                                                   



AMERICAN CRYSTAL SUGAR COMPANY

Balance Sheets

(Unaudited)

(Dollars in Thousands)

|                                                 |  | February 29
2000 |          | February 28
1999 |   | August 31,
1999* |  
|------------------------------------------------ |  | ---------------- | -------- | ---------------- | - | ---------------- | -
|ASSETS                                           | 
|Current Assets:                                  |  |                  |          |                  |   |                  |  
|Cash and Cash Equivalents                        |  | $                | 55       |                  | $ | 56               |  
|Accounts Receivable:                             |  |                  |          |                  |   |                  |  
|Trade                                            |  |                  | 64,212   |                  |   | 70,962           |  
|Members                                          |  |                  | 10       |                  |   | 1                |  
|Other                                            |  |                  | 2,857    |                  |   | 753              |  
|Advances to Related Parties                      |  |                  | 7,274    |                  |   | 21,316           |  
|Inventories                                      |  |                  | 362,971  |                  |   | 406,770          |  
|Prepaid Expenses                                 |  |                  | 520      |                  |   | 2,788            |  
|                                                 |  |                  |          |                  |   |                  |  
|Total Current Assets                             |  |                  | 437,899  |                  |   | 502,646          |  
|                                                 |  |                  |          |                  |   |                  |  
|Property and Equipment:                          |  |                  |          |                  |   |                  |  
|Land                                             |  |                  | 26,068   |                  |   | 14,277           |  
|Buildings and Equipment                          |  |                  | 811,901  |                  |   | 675,099          |  
|Construction-in-Progress                         |  |                  | 11,404   |                  |   | 127,991          |  
|Less: Accumulated Depreciation                   |  |                  | (481,187 | )                |   | (453,553         | )
|                                                 |  |                  |          |                  |   |                  |  
|Net Property and Equipment                       |  |                  | 368,186  |                  |   | 363,814          |  
|                                                 |  |                  |          |                  |   |                  |  
|Other Assets:                                    |  |                  |          |                  |   |                  |  
|Investments in CoBank                            |  |                  | 15,406   |                  |   | 15,858           |  
|Investments in Marketing Cooperatives            |  |                  | 3,170    |                  |   | 2,887            |  
|Investments in ProGold Limited Liability Company |  |                  | 36,184   |                  |   | 35,233           |  
|Investments in Crystech, LLC                     |  |                  | 1,163    |                  |   | 1,574            |  
|Notes ReceivableCrystech, LLC                   |  |                  | 13,905   |                  |   | 8,326            |  
|Other Assets                                     |  |                  | 4,069    |                  |   | 4,528            |  
|                                                 |  |                  |          |                  |   |                  |  
|Total Other Assets                               |  |                  | 73,897   |                  |   | 68,406           |  
|                                                 |  |                  |          |                  |   |                  |  
|Total Assets                                     |  | $                | 879,982  |                  | $ | 934,866          |  
|                                                 |  |                  |          |                  |   |                  |  

*
Derived from audited financial statements.

1



AMERICAN CRYSTAL SUGAR COMPANY

Balance Sheets

(Unaudited)

(Dollars in Thousands)

|                                              |  | February 29
2000 |         | February 28
1999 |   | August 31,
1999* |  
|--------------------------------------------- |  | ---------------- | ------- | ---------------- | - | ---------------- | -
|LIABILITIES AND MEMBERS' INVESTMENTS          | 
|Current Liabilities:                          |  |                  |         |                  |   |                  |  
|Short-Term Debt                               |  | $                | 130,509 |                  | $ | 225,010          |  
|Current Maturities of Long-Term Debt          |  |                  | 18,915  |                  |   | 18,800           |  
|Accounts Payable:                             |  |                  |         |                  |   |                  |  
|Trade                                         |  |                  | 9,459   |                  |   | 7,829            |  
|Other                                         |  |                  | 3,138   |                  |   | 3,787            |  
|Accrued Continuing Costs                      |  |                  | 75,677  |                  |   | 45,785           |  
|Other Current Liabilities                     |  |                  | 18,574  |                  |   | 17,067           |  
|Amounts Due Members                           |  |                  | 132,429 |                  |   | 131,568          |  
|                                              |  |                  |         |                  |   |                  |  
|Total Current Liabilities                     |  |                  | 388,701 |                  |   | 449,846          |  
|Long-Term Debt, Excluding Current             |  |                  |         |                  |   |                  |  
|Maturities                                    |  |                  | 231,335 |                  |   | 232,795          |  
|Deferred Income Taxes                         |  |                  | 1,879   |                  |   | 1,753            |  
|Other Liabilities                             |  |                  | 31,233  |                  |   | 26,135           |  
|                                              |  |                  |         |                  |   |                  |  
|Total Liabilities                             |  |                  | 653,148 |                  |   | 710,529          |  
|                                              |  |                  |         |                  |   |                  |  
|Members' Investments:                         |  |                  |         |                  |   |                  |  
|Preferred Stock                               |  |                  | 38,275  |                  |   | 38,275           |  
|Common Stock                                  |  |                  | 30      |                  |   | 28               |  
|Additional Paid-in Capital                    |  |                  | 130,112 |                  |   | 122,666          |  
|Unit Retains                                  |  |                  | 97,157  |                  |   | 95,597           |  
|Accumulated Other Comprehensive Income/(Loss) |  |                  | (4,088  | )                |   | (2,259           | )
|Retained Earnings/(Deficit)                   |  |                  | (34,652 | )                |   | (29,970          | )
|                                              |  |                  |         |                  |   |                  |  
|Total Members' Investments                    |  |                  | 226,834 |                  |   | 224,337          |  
|                                              |  |                  |         |                  |   |                  |  
|Total Liabilities and Members'                |  |                  |         |                  |   |                  |  
|Investments                                   |  | $                | 879,982 |                  | $ | 934,866          |  
|                                              |  |                  |         |                  |   |                  |  

*
Derived from audited financial statements.

2



AMERICAN CRYSTAL SUGAR COMPANY

Statements of Operations

(Unaudited)

(Dollars in Thousands)

|                                                                     |  | For the Six Months Ended |         | Three Months Ended |  
|-------------------------------------------------------------------- |  | ------------------------ | ------- | ------------------ | -
|
|Net Revenue                                                          |  | $                        | 385,807 |                    | $
|Cost of Product Sold                                                 |  |                          | (20,614 | )                  |  
|                                                                     |  |                          |         |                    |  
|Gross Proceeds                                                       |  |                          | 406,421 |                    |  
|Selling, General & Administrative Expenses                           |  |                          | 82,303  |                    |  
|Accrued Continuing Costs                                             |  |                          | 75,677  |                    |  
|                                                                     |  |                          |         |                    |  
|Operating Proceeds                                                   |  |                          | 248,441 |                    |  
|                                                                     |  |                          |         |                    |  
|Other Income (Expenses)                                              |  |                          |         |                    |  
|Interest Income                                                      |  |                          | 1,132   |                    |  
|Interest Expense                                                     |  |                          | (10,177 | )                  |  
|Other Income                                                         |  |                          | 1,178   |                    |  
|Other Expenses                                                       |  |                          | (636    | )                  |  
|                                                                     |  |                          |         |                    |  
|Other Income (Expense)                                               |  |                          | (8,503  | )                  |  
|                                                                     |  |                          |         |                    |  
|Proceeds before Income Taxes                                         |  |                          | 239,938 |                    |  
|Income Taxes (Provision)/Benefit                                     |  |                          | (52     | )                  |  
|                                                                     |  |                          |         |                    |  
|Net Proceeds Resulting from Member and Non-Member Business           |  | $                        | 239,886 |                    | $
|                                                                     |  |                          |         |                    |  
|Distribution of Net Proceeds:                                        |  |                          |         |                    |  
|Credited/(Charged) to Members' Investments:                          |  |                          |         |                    |  
|Non-Member Business Income/(Loss)                                    |  | $                        | (924    | )                  | $
|Unit Retains Declared to Members                                     |  |                          |        |                    |  
|                                                                     |  |                          |         |                    |  
|Net Credit/(Charge) to Members' Investments                          |  |                          | (924    | )                  |  
|Payments to/due Members for Sugarbeets, Net of Unit Retains Declared |  |                          | 240,810 |                    |  
|                                                                     |  |                          |         |                    |  
|Total                                                                |  | $                        | 239,886 |                    | $
|                                                                     |  |                          |         |                    |  

3



American Crystal Sugar Company

Statements of Cash Flows

(Unaudited)

(In Thousands)

|                                                                   |  | For the Six Months Ended |         
|------------------------------------------------------------------ |  | ------------------------ | --------
|
|Cash Provided By (Used In) Operations:                             |  |                          |         
|Net Proceeds Resulting from Member and Non-Member Business         |  | $                        | 239,886 
|Payments to Members for Sugarbeets, Net of Unit Retains Declared   |  |                          | (240,810
|Add (Deduct) Non-Cash Items:                                       |  |                          |         
|Depreciation and Amortization                                      |  |                          | 22,248  
|(Income) Loss from Equity Method Investees                         |  |                          | (64     
|(Gain) Loss on the Disposition of Property and Equipment           |  |                          | (20     
|Non-Cash Portion of Patronage Dividend from Banks for Cooperatives |  |                          | 21      
|Deferred Gain Recognition                                          |  |                          | (99     
|Changes in Assets and Liabilities:                                 |  |                          |         
|Receivables                                                        |  |                          | 8,812   
|Inventories                                                        |  |                          | (251,013
|Prepaid Expenses                                                   |  |                          | 2,424   
|Advances to Related Parties                                        |  |                          | 15,145  
|Accounts Payable                                                   |  |                          | (13,661 
|Accrued Continuing Costs                                           |  |                          | 75,677  
|Other Liabilities                                                  |  |                          | 1,930   
|Amounts Due Members                                                |  |                          | 96,731  
|                                                                   |  |                          |         
|Net Cash (Used In) Operations                                      |  |                          | (42,793 
|                                                                   |  |                          |         
|Cash Provided By (Used In) Investing Activities:                   |  |                          |         
|Purchases of Property and Equipment                                |  |                          | (14,172 
|Proceeds from the Sale of Property and Equipment                   |  |                          | 530     
|Investments in Marketing Cooperatives                              |  |                          |        
|Investments in Crystech LLC                                        |  |                          | (47     
|Notes ReceivableCrystech LLC                                      |  |                          | (2,022  
|Changes in Other Assets                                            |  |                          | 2,066   
|                                                                   |  |                          |         
|Net Cash (Used In) Investing Activities                            |  |                          | (13,645 
|                                                                   |  |                          |         
|Cash Provided By (Used In) Financing Activities:                   |  |                          |         
|Net Proceeds (Payments) on Short-Term Debt                         |  |                          | 69,665  
|Proceeds from Long-Term Debt                                       |  |                          |        
|Long-Term Debt Repayment                                           |  |                          | (1,800  
|Issuance of Stock                                                  |  |                          | 6,164   
|Payment of Unit Retains                                            |  |                          | (19,692 
|                                                                   |  |                          |         
|Net Cash Provided by Financing Activities                          |  |                          | 54,337  
|                                                                   |  |                          |         
|Increase (Decrease) In Cash and Cash Equivalents                   |  |                          | (2,101  
|Cash and Cash Equivalents, Beginning of Year                       |  |                          | 2,156   
|                                                                   |  |                          |         
|Cash and Cash Equivalents, End of Period                           |  | $                        | 55      
|                                                                   |  |                          |         

4



AMERICAN CRYSTAL SUGAR COMPANY

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED FEBRUARY 29, 2000 AND FEBRUARY 28, 1999

Note 1: Basis of Presentation

The unaudited financial statements contained herein have been prepared pursuant to the rules and regulations of the Securities 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 six month period ended February 29, 2000 are not necessarily indicative of the results that may be expected for the year ended August 31,
2000.

The
amount paid to growers for sugarbeets (beet payment) depends on the future selling prices of sugar and agri-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, 1999.

Certain
reclassifications have been made to the 1999 financial statements to conform with the 2000 presentation.

Note 2: Inventories

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

|                                                 |  | 02/29/00 |         | 02/28/99 |   | 8/31/99
|------------------------------------------------ |  | -------- | ------- | -------- | - | -------
|Refined Sugar, Pulp, Molasses, CSB and Beet Seed |  | $        | 241,756 |          | $ | 249,265
|Unprocessed Sugarbeets                           |  |          | 101,526 |          |   | 138,300
|Maintenance Parts & Supplies                     |  |          | 19,689  |          |   | 19,205 
|                                                 |  |          |         |          |   |        
|Total Inventories                                |  | $        | 362,971 |          | $ | 406,770
|                                                 |  |          |         |          |   |        

Sugar,
pulp, molasses and CSB inventories are valued at estimated net realizable value. Unprocessed sugarbeets are valued at the estimated net beet payment plus estimated unit retains
to be withheld. Maintenance parts & supplies and beet seed inventories are valued at the lower of average cost or market.

Note 3: Accrued Continuing Costs

For interim reporting, the Net Proceeds from Member Business is 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



Note 4: Members' Investments

|                  |  | Par Value |       | Shares
Authorized |         | Shares Issued
& Outstanding
|----------------- |  | --------- | ----- | ----------------- | ------- | ---------------------------
|Preferred Stock:  |  |           |       |                   |         |                            
|March 28, 2000    |  | $         | 76.77 |                   | 600,000 |                            
|February 29, 2000 |  | $         | 76.77 |                   | 600,000 |                            
|August 31, 1999   |  | $         | 76.77 |                   | 600,000 |                            
|February 28, 1999 |  | $         | 76.77 |                   | 600,000 |                            
|Common Stock:     |  |           |       |                   |         |                            
|March 28, 2000    |  | $         | 10.00 |                   | 4,000   |                            
|February 29, 2000 |  | $         | 10.00 |                   | 4,000   |                            
|August 31, 1999   |  | $         | 10.00 |                   | 4,000   |                            
|February 28, 1999 |  | $         | 10.00 |                   | 4,000   |                            

Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition For the Three and Six Months Ended February 29, 2000 and
February 28, 1999

This report contains forward-looking statements that involve risks and uncertainties. Such forward-looking statements include, among others, those statements
including the words "expect", "anticipate", "believe", "may" and similar expressions. The Company's actual results could differ materially from those indicated. Important factors that could cause or
contribute to such differences include, without limitation, market factors, weather and general economic conditions, farm and trade policy, available quantity and quality of sugarbeets. For a more
complete discussion of "Important Factors", please refer to the Company's 1999 Form 10-K.

Comparison of the Six Months Ended February 29, 2000 and February 28, 1999

Revenue for the six months ended February 29, 2000, was $385.8 million, an increase of $9.8 million from 1999. Revenue from total sugar
sales increased 6.7 percent reflecting a 7.5 percent increase in hundredweight sold partially offset by a .7 percent decrease in the average selling price per hundredweight.
Revenue from pulp sales decreased 14.3 percent due to a 26.4 percent decrease in the volume of pulp sold partially offset by a 16.4 percent increase in the average selling price
per ton. Revenue from molasses sales decreased 35.7 percent due to a 27.6 percent decrease in the volume of molasses sold and an 11.1 percent decrease in the average selling price
per ton. Revenue from the sales of Concentrated Separated By-Product (CSB), a by-product of the molasses desugarization process, increased 17.0 percent due to a
82.1 percent increase in sales volume partially offset by a 35.8 percent decrease in the average selling price per ton.

Cost
of product sold for the six months ended February 29, 2000, exclusive of payments for sugarbeets, decreased $8.6 million as compared to the same period in 1999.
Direct processing costs for sugar and pulp increased 2.8 percent due to processing 2.7 percent more sugarbeets partially offset by reduced costs of harvesting fewer tons. Fixed and
committed expenses increased 20.8 percent reflecting higher depreciation and maintenance costs. The cost associated with sugar purchased to meet customer needs was up $6.6 million due to
the increase in purchased sugar activity in distant geographic markets. The change in inventories impacted the cost of product sold favorably by $28.0 million in the first six

6



months
of fiscal 2000 as compared to fiscal 1999. The negative cost of product sold amount is due to the credit from the valuation of product inventories at net realizable value.

Selling,
General and Administrative expenses for the six months ended February 29, 2000, decreased $3.4 million from 1999. Selling expenses decreased $2.3 million
due to lower agri-product freight costs and the suspension of the Commodity Credit Corporation marketing assessment fee as of September 1, 1999. General and Administrative expenses
decreased $1.1 million from 1999, primarily due to lower personnel costs and general cost reductions.

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
income increased $1.7 million in fiscal 2000 primarily due to interest received on the Crystech, LLC note receivable.

Interest
expense decreased $.8 million in fiscal 2000 primarily due to lower average borrowing levels for short-term debt this year along with slightly lower
interest rates.

Other
income decreased $3.4 million from last year primarily due to the gain in fiscal 1999 from the sale of certain beet seed assets to Betaseed Inc. (BETA), a wholly
owned subsidiary of Kleinwanzlebener Saatzucht, Ag.

Other
expense decreased $.6 million between years, with decreased supplemental retiree benefits being partially offset by a loss from the first month of Crystech, LLC
operations. Crystech was formed in 1998 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, Minnesota sugar factories. The Company acquired an initial 50% ownership interest in Crystech through a
$1.5 million cash contribution. The Company accounts for its investment in the joint venture using the equity method. Crystech became operational on February 1, 2000.

Non-member
activities resulted in a loss of $.9 million for the six months ended February 29, 2000 as compared to a gain of $3.3 million for the same
period last year. The majority of the fiscal 1999 gain is related to the sale of beet seed assets to BETA. The loss in fiscal 2000 is primarily comprised of activities related to ProGold, LLC.

Comparison of the Three Months Ended February 29, 2000 and February 28, 1999

Revenue for the three months ended February 29, 2000, was $167.8 million, an increase of $12.5 million from 1999. Revenue from total sugar
sales decreased 3.5 percent reflecting a 1.2 percent decrease in hundredweights sold and a 2.4 percent decrease in the average selling price per hundredweight. Revenue from pulp
sales increased 28.3 percent due to a 1.0 percent increase in volume of pulp sold and a 27.1 percent increase in the average selling price per ton. Revenue from molasses sales
decreased 46.4 percent due to a 47.0 percent decrease in the volume of molasses sold partially offset by a 1.2 percent increase in the average selling price per ton. Revenue from
the sales of Concentrated Separated By-Product (CSB), a by-product of the molasses desugarization process, increased 33.5 percent due to a 115.2 percent increase
in sales volume partially offset by a 38.0 percent decrease in average selling price per ton.

7



Cost
of product sold for the three months ended February 29, 2000, exclusive of payments for sugarbeets, decreased $19.6 million as compared to the same period in 1999.
Direct processing costs for sugar and pulp remained relatively level between years. Fixed and committed expenses increased 23.3 percent this year due to higher depreciation and maintenance. The
cost associated with sugar purchased to meet customer needs was up $.2 million due to the increase in purchased sugar activity in distant geographic markets. Changes in inventory levels between
2000 and 1999, impacted the cost of product sold favorably by $26.4 million. The negative cost of product sold amount is due to the credit from the valuation of product inventories at net
realizable value.

Selling,
general and administrative expenses for the three months ended February 29, 2000, decreased $3.6 million from the same period in 1999. Selling expenses
decreased $2.4 million due to lower agri-product freight costs and the suspension of the Commodity Credit Corporation marketing assessment fee. Administrative expenses were
$1.2 million lower in 2000 primarily due to lower personnel costs and general cost reductions.

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
income increased $.5 million in fiscal 2000 primarily due to interest received on the Crystech, LLC note receivable.

Interest
expense decreased $.3 million in fiscal 2000 primarily due to lower average borrowing levels for short and long term debt this year along with slightly lower interest
rates.

Other
income increased $.3 million due mainly to the gain from the sale of assets from our Nampa, Idaho beet seed facility.

Other
expense remained relatively level between years, with decreased supplemental retiree benefits being partially offset by a loss from the first month of Crystech, LLC operations.
Crystech was formed in 1998 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, Minnesota sugar factories. The Company acquired an initial 50% ownership interest in Crystech through a $1.5 million
cash contribution. The Company accounts for its investment in the joint venture using the equity method. Crystech became operational on February 1, 2000.

Non-member
activities for the three months ended February 29, 2000 and February 28, 1999, remained constant with a loss of $.7 million in both years.
The loss during fiscal 2000 was primarily due to activities related to ProGold, LLC. The loss during fiscal 1999 was due primarily to non-member beet seed activities.

Results of Year 2000 Rollover

As a result of the extensive efforts over the past two years to become year 2000 compliant, the Company, all of its facilities and associated companies
transitioned smoothly into the new year. All production, vendor and customer activities proceeded without incident. The Company remains vigilant and continues to monitor systems and processes to
ensure on-going year 2000 compliance.

8



Current Market Trends

The domestic sugar market is currently experiencing an oversupply of refined sugar. This oversupply is the result of the several factors. First, the World
Trade Organization (WTO) requires imports of sugar, regardless of the domestic supply situation, from approximately 40 foreign nations that produce and export sugar. Second, sugar is currently
entering the United States from Canada each year, over and above the WTO minimum, in the form of "stuffed molasses." "Stuffed molasses" is molasses that contains an extremely high percentage of sugar.
Once the "stuffed molasses" reaches the United States, it is run through a desugarization process that separates the liquid sugar from the molasses. The liquid sugar is then sold in the domestic
market. Third, in addition to the sugar currently being imported into the domestic market this year, Mexico, under the North American Free Trade Agreement (NAFTA), will be allowed, in October, 2000,
to export an additional 5 million hundredweight of sugar, tariff free, into the United States. Fourth, both the sugarbeet crop and sugar cane crop for this year were the largest in history. The
increased size of these crops resulted from an expansion in the acreage planted, the development of higher yielding cane varieties and generally good growing conditions across the country.

Due
to these factors, the supply of refined sugar currently exceeds the domestic demand for refined sugar in the United States. This excess supply has resulted in a decline in
domestic sugar prices. Lower sugar prices adversely impact the profitability of selling refined sugar in the United States, resulting in a direct negative impact on the gross beet payment.

The
Company has a significant amount of sugar pledged as collateral for non-recourse loans through the Commodity Credit Corporation (the "CCC"). The domestic sugar price
may decrease to a level below the forfeiture price for these non-recourse loans. The Company is currently contemplating the forfeiture of sugar.

Liquidity and Capital Resources

Under the Company's Bylaws and Grower Contracts, payments for member delivered sugarbeets, the Company's principal raw material, are subordinated to all member
business expenses. Cash payments to members are spread over a period of approximately one year following delivery of their sugarbeet crops to the Company. All unpaid portions remain available to meet
the Company'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.
Because sugar is sold throughout the year (while sugarbeets are processed primarily in the fall, winter and spring) and because substantial amounts of equipment are required for its operations, the
Company 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 CoBank, ACB. The
Company has a long-term debt commitment with CoBank during 2000 of $201.2 million. In addition, the Company has long-term debt outstanding of $50 million from a
private placement of Senior Notes that occurred in September of 1998, a term loan with US Bank of $3.0 million, a term loan with Bank of North Dakota of $7.2 million, and
$38.2 million from eight separate issuances of Pollution Control and Industrial Development Revenue Bonds. The Company also has a seasonal line of credit with CoBank, ACB of $290 million
that includes a line of credit with Norwest Bank for $3 million and any amounts obtained through issuance of instruments in its commercial paper program. The Company's commercial paper program
provides short-term borrowings of up to $150 million.

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The
various loan agreements between CoBank, ACB and the Company obligate the Company to maintain or achieve certain amounts of working capital and certain financial ratios and impose
restrictions on the Company. As of February 29, 2000, the Company was in compliance with its loan agreements.

The
change in the Company's financial condition from August 31, 1999 to February 29, 2000 is primarily due to normal business seasonality. The first six months of the
Company's fiscal year includes the completion of the sugarbeet harvest, start of the processing campaign, and the initial payments to members for delivered sugarbeets. The cash used in operations of
$42.8 million and investing activities of $13.7 million was funded through the cash provided by financing activities. The net cash provided by financing activities was primarily
comprised of the net proceeds from short-term debt of $69.7 million, and proceeds from the installment sale of stock of $6.2 million, partially offset by the payment of the
unit retains of $19.7 million.

Working
capital has decreased $7.5 million from $56.7 million at the beginning of the year to $49.2 million as of February 29, 2000 primarily due to
additional short-term debt and the amounts due growers partially offset by increased inventories. Working capital as of February 29, 2000 was $49.2 million, a decrease of
$3.6 million when compared to $52.8 million of working capital as of February 28, 1999. This decrease was mainly due to decreased inventory levels, partially offset by a decrease
in short-term debt.

Capital
expenditures for the six months ended February 29, 2000 were $13.7 million.

The
Company anticipates that the funds necessary for working capital requirements and future capital expenditures will be derived from operations, short-term borrowings,
depreciation, unit retains and long-term borrowings.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time and in the ordinary course of its business, the Company is named as a defendant in legal proceedings related to various issues, including
worker's compensation claims, tort claims and contractual disputes. The Company is currently involved in certain legal proceedings which have arisen in the ordinary course of the Company's business.
The Company is also aware of certain other potential claims which could result in the commencement of legal proceedings. The Company carries insurance which provides protection against certain types
of claims. With respect to current litigation and potential claims of which the Company is aware, the Company's management believes that (i) the Company has insurance protection to cover all or
a portion of any judgments which may be rendered against the Company with respect to certain claims or actions and (ii) any judgments which may be entered against the Company and which may
exceed such insurance coverage or which may arise in actions involving potential liabilities not covered by insurance policies are not likely to have a material adverse effect upon the Company, or its
assets or operations.

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Item 6. Exhibits and reports on Form 8-K



|Item No. |  |                                                                                                                              |  | Method of Filing                                                                                                                                            
|-------- |  | ---------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1      |  | Restated Articles of Incorporation of American Crystal Sugar Company                                                         |  | Incorporated by reference to Exhibit 3(i) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.  
|3.2      |  | Restated By-laws of American Crystal Sugar Company                                                                           |  | Incorporated by reference to Exhibit 3(ii) from the Company's Registration Statement on Form S-1 (File No. 333-11693), declared effective November 13, 1996.
|4.1      |  | Restated Articles of Incorporation of American Crystal Sugar Company                                                         |  | See Exhibit 3.1                                                                                                                                             
|4.2      |  | Restated By-laws of American Crystal Sugar Company                                                                           |  | See Exhibit 3.2                                                                                                                                             
|10.1     |  | Growers' Contract (5-year Agreement)                                                                                         |  | Incorporated by reference to Exhibit 10(f) from the Company's Registration Statement on Form S-1 (File No. 333-11693), declared effective November 13, 1996.
|10.2     |  | Growers' Contract (Annual Contract)                                                                                          |  | Incorporated by reference to Exhibit 10(g) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994. 
|10.3     |  | Trademark License Agreement between Registrant and United Sugars Corporation, dated November 1, 1993                         |  | Incorporated by reference to Exhibit 10(l) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994. 
|10.4     |  | Uniform Member Marketing Agreement, Pool Basis between Registrant and Midwest Agri-Commodities Company, dated April 14, 1992 |  | Incorporated by reference to Exhibit 10(m) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994. 
|10.5     |  | Stipulation Agreement between Registrant and State of Minnesota Pollution Control Agency                                     |  | Incorporated by reference to Exhibit 10(n) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994. 
|10.6     |  | Loan Agreement between Registrant and St. Paul Bank for Cooperatives, dated December 20, 1993                                |  | Incorporated by reference to Exhibit 10(p) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994. 
|         |  |                                                                                                                              |  |                                                                                                                                                             

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|10.7   |  | Amended and Restated Loan Agreement between Registrant and First Bank National Association, dated November 22, 1993 |  | Incorporated by reference to Exhibit 10(q) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.  
|------ |  | ------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.8   |  | Pension Contract and Amendments                                                                                     |  | Incorporated by reference to Exhibit 10(r) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.  
|10.9   |  | Form of Operating Agreement between Registrant and ProGold Limited Liability Company                                |  | Incorporated by reference to Exhibit 10(u) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.  
|10.10  |  | Form of Member Control Agreement between Registrant and ProGold Limited Liability Company                           |  | Incorporated by reference to Exhibit 10(v) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.  
|10.11  |  | Administrative Services Agreement between Registrant and ProGold Limited Liability Company                          |  | Incorporated by reference to Exhibit 10(w) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.  
|10.12  |  | Uniform Member Marketing Agreement                                                                                  |  | Incorporated by reference to Exhibit 10(x) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.  
|+10.13 |  | Coal Supply Agreement between Registrant and Spring Creek Coal Company, dated August 25, 1995                       |  | Incorporated by reference to Exhibit 10(y) from the Company's Registration Statement on Form S-1 (File No. 333-11693), declared effective November 13, 1996. 
|+10.14 |  | Coal Transportation Agreement between Registrant and Northern Coal Transportation Company, dated August 25, 1995    |  | Incorporated by reference to Exhibit 10(z) from the Company's Registration Statement on Form S-1 (File No. 333-11693), declared effective November 13, 1996. 
|+10.15 |  | Gas Sales Contract between Registrant and Coastal Gas Marketing Company, dated as of March 20, 1996                 |  | Incorporated by reference to Exhibit 10(aa) from the Company's Registration Statement on Form S-1 (File No. 333-11693), declared effective November 13, 1996.
|+10.16 |  | Trademark License Agreement between Registrant and The Pillsbury Company, dated as of April 9, 1997                 |  | Incorporated by reference to Exhibit 10(dd) from the Company's Registration Statement on Form S-1 (File No. 333-32251), declared effective October 24, 1997. 
|10.17  |  | Pledge Agreement between Registrant and First Union Trust Company, NA                                               |  | Incorporated by reference to Exhibit 10(ee) from the Company's Annual Report on Form 10-K for the year ended August 31, 1998.                                
|       |  |                                                                                                                     |  |                                                                                                                                                              

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|10.18   |  | Indemnity Agreement between Registrant, Newcourt Capital USA Inc., Crystech, LLC and Crystech Senior Lender Trust |  | Incorporated by reference to Exhibit 10(ff) from the Company's Annual Report on Form 10-K for the year ended August 31, 1998.
|------- |  | ----------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------
|10.19   |  | Tolling Services Agreement between Crystech, LLC and Registrant                                                   |  | Incorporated by reference to Exhibit 10(gg) from the Company's Annual Report on Form 10-K for the year ended August 31, 1998.
|10.20   |  | Operations and Maintenance Agreement between Crystech, LLC and Registrant                                         |  | Incorporated by reference to Exhibit 10(hh) from the Company's Annual Report on Form 10-K for the year ended August 31, 1998.
|++10.21 |  | Limited Liability Company Agreement of Crystech, LLC                                                              |  | Incorporated by reference to Exhibit 10(ii) from the Company's Annual Report on Form 10-K for the year ended August 31, 1998.
|10.22   |  | Master Agreement between the Registrant and Bakery, Confectionery, Tobacco Workers & Grain Millers AFL-CIO, CLC   |  | Incorporated by reference to Exhibit 10(ii) from the Company's Annual Report on Form 10-K for the year ended August 31, 1999.
|10.23   |  | Uniform Member Beet Sugar Marketing Agreement                                                                     |  | Incorporated by reference to Exhibit 10.23 from the Company's Annual Report on Form 10-K for the year ended August 31, 1999. 
|10.24   |  | Registrant's Senior Note Purchase Agreement                                                                       |  | Incorporated by reference to Exhibit 10.24 from the Company's Annual Report on Form 10-K for the year ended August 31, 1999. 
|10.25   |  | Registrant's Senior Note Intercreditor and Collateral Agency Agreement                                            |  | Incorporated by reference to Exhibit 10.25 from the Company's Annual Report on Form 10-K for the year ended August 31, 1999. 
|10.26   |  | Registrant's Senior Note Restated Mortgage and Security Agreement                                                 |  | Incorporated by reference to Exhibit 10.26 from the Company's Annual Report on Form 10-K for the year ended August 31, 1999. 
|10.27   |  | Term and Seasonal Loan Agreements between the Registrant and St. Paul Bank for Cooperatives dated March 5, 1999   |  | Incorporated by reference to Exhibit 10.27 from the Company's Annual Report on Form 10-K for the year ended August 31, 1999. 
|10.28   |  | Employment Agreement between the Registrant and James J. Horvath                                                  |  | Incorporated by reference to Exhibit 10.28 from the Company's Annual Report on Form 10-K for the year ended August 31, 1999. 
|        |  |                                                                                                                   |  |                                                                                                                              

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|27 |  | Financial Data Schedule |  | Filed herewith electronically.
|-- |  | ----------------------- |  | ------------------------------



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SIGNATURES

Pursuant to the requirement 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.

|                     |  | AMERICAN CRYSTAL SUGAR COMPANY(Registrant)
|-------------------- |  | ------------------------------------------
|Date: April 13, 2000 |  | By:                                       

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