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


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-Q

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                FOR THE QUARTERLY PERIOD ENDED: NOVEMBER 30, 1998


                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 AND 15(d) OF THE
                         SECURITES EXCHANGE ACT OF 1934

                          Commission file: No. 33-94644

                          MINN-DAK FARMERS COOPERATIVE
                          ----------------------------
             (Exact named of registrant as specified in its charter)


          North Dakota                                      23-7222188
          ------------                                      ----------
(State or other jurisdiction of                          (I.R.S. Employer
 Incorporation or organization)                         Identification No.)

      7525 Red River Road
    Wahpeton, North Dakota                                     58075
    ----------------------                                     -----
    (Address of principal                                    (Zip Code)
     executive offices)

                                 (701) 642-8411
                   -------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
                   -------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

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                     January 11, 1999
         ---------------------                     ----------------
            $250 Par Value                                481

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

<PAGE>


                          MINN-DAK FARMERS COOPERATIVE
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                     ASSETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    NOV 30, 1998   AUGUST 31, 1998
ASSETS                                                               (UNAUDITED)       (AUDITED)
                                                                    ------------     ------------
<S>                                                                 <C>              <C>         
CURRENT ASSETS:
       Cash                                                         $        992     $      1,849
                                                                    ------------     ------------

       Current portion of long-term note receivable                          288              288
                                                                    ------------     ------------
       Receivables:
            Trade accounts                                                12,512           14,045
            Growers                                                          280            3,540
                                                                    ------------     ------------
                                                                          12,792           17,585
                                                                    ------------     ------------

       Advances to affiliate                                               1,364            2,898
                                                                    ------------     ------------
       Inventories:
            Refined sugar, pulp and molasses to be sold
              on a pooled basis                                           39,644           27,804
            Nonmember refined sugar                                          560              326
            Yeast                                                             83               79
            Materials and supplies                                         4,464            5,211
            Beet Inventory                                                37,813               --
            Other                                                             72               72
                                                                    ------------     ------------
                                                                          82,635           33,492
                                                                    ------------     ------------
       Deferred charges                                                      347            1,273
                                                                    ------------     ------------
       Prepaid expenses                                                      199              246
                                                                    ------------     ------------
       Property and equipment available for sale                             588              588
                                                                    ------------     ------------

                 Total current assets                                     99,205           58,218
                                                                    ------------     ------------

PROPERTY, PLANT AND EQUIPMENT:
       Land and land improvements                                         20,161           20,133
       Buildings                                                          35,298           34,736
       Factory equipment                                                 107,328          103,922
       Other equipment                                                     3,515            3,700
       Construction in progress                                              461            4,176
                                                                    ------------     ------------
                                                                         166,763          166,667
            Less accumulated depreciation                                (55,779)         (56,098)
                                                                    ------------     ------------
                                                                         110,983          110,569
                                                                    ------------     ------------
LONG-TERM NOTES RECEIVABLE, NET OF
  CURRENT PORTION                                                          3,151            2,944
                                                                    ------------     ------------

OTHER ASSETS:
       Investments restricted for capital lease projects                       0               --
       Investment in stock of other corporations, unconsolidated
         marketing subsidiaries and other cooperatives                     9,602            9,602
       Deferred income taxes                                               2,652            2,652
       Other                                                                 793              845
                                                                    ------------     ------------
                                                                          13,046           13,099
                                                                    ------------     ------------

See Notes to Consolidated Financial Statements                      $    226,386     $    184,830
                                                                    ============     ============
</TABLE>

<PAGE>


                          MINN-DAK FARMERS COOPERATIVE
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                              NOV 30, 1998    AUGUST 31, 1998
                                                                               (UNAUDITED)       (AUDITED)
                                                                              ------------     ------------
<S>                                                                           <C>              <C>         
LIABILITIES AND MEMBERS' INVESTMENT

CURRENT LIABILITIES:
        Short-term notes payable                                              $     42,420     $     26,855
                                                                              ------------     ------------

        Current portion of long-term debt                                            5,613            5,613
                                                                              ------------     ------------

        Accounts payable:
               Trade                                                                   920            5,124
               Growers                                                              32,075            5,971
                                                                              ------------     ------------
                                                                                    32,995           11,094
                                                                              ------------     ------------


        Accrued liabilities                                                          3,154            3,486
                                                                              ------------     ------------

                      Total current liabilities                                     84,181           47,048

LONG-TERM DEBT, NET OF CURRENT PORTION                                              40,782           42,185

OBLIGATION UNDER CAPITAL LEASE                                                      12,000           12,000

OTHER                                                                                1,297              748

COMMITTMENTS AND CONTINGENCIES                                                          --                0
                                                                              ------------     ------------

                      Total liabilities                                            138,260          101,981
                                                                              ------------     ------------

MINORITY INTEREST IN EQUITY OF SUBSIDIARY                                              827              767
                                                                              ------------     ------------

MEMBERS' INVESTMENT:
        Preferred stock:
               Class A - 100,000 shares authorized, $105 par value;
                 72,200 shares issued and outstanding at November 30, 1998
                 and 66,967 at August 31, 1998                                       7,581            7,581
               Class B - 100,000 shares authorized, $75 par value;
                 72,200 shares issued and outstanding at November 30, 1998
                 and 66,967 at August 31, 1998                                       5,415            5,415
               Class C - 100,000 shares authorized, $76 par value;
                 72,200 shares issued and outstanding at November 30, 1998
                 and 66,967 at August 31, 1998                                       5,487            5,487
                                                                              ------------     ------------
                                                                                    18,483           18,483
        Common stock, 600 shares authorized, $250 par value;
          issued and outstanding, 481 shares at November 30, 1998
          and 481 shares at August 31, 1998                                            120              121
        Paid in capital in excess of par value                                      32,094           32,094
        Unit retention capital                                                       7,584            7,584
        Qualified allocated patronage                                                3,981            3,981
        Nonqualified allocated patronage                                            25,397           20,072
        Retained earnings (deficit)                                                   (361)            (254)
                                                                              ------------     ------------
                                                                                    87,299           82,082
                                                                              ------------     ------------

See Notes to Consolidated Financial Statements                                $    226,386     $    184,830
                                                                              ============     ============
</TABLE>

<PAGE>


PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                          MINN-DAK FARMERS COOPERATIVE
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED
                                                                          NOV 30,
                                                                ---------------------------
                                                                   1998            1997
                                                                -----------     -----------
<S>                                                             <C>             <C>        
REVENUE:
        From sales of sugar, by-products, yeast
          and resale commodities, net of discounts              $    53,349     $    46,078
        Other income                                                    (77)           (787)
                                                                -----------     -----------
                                                                     53,273          45,291
                                                                -----------     -----------

EXPENSES:
        Production costs of sugar, by-products,
          yeast and resale commodities sold                          12,468          10,597
        Marketing (includes freight and storage)                      6,965           5,724
        General and administrative                                    1,369             951
        Interest                                                      1,230           1,060
        (Gain) loss on disposition of property and equipment             25               2
                                                                -----------     -----------
                                                                     22,058          18,334
                                                                -----------     -----------

NET PROCEEDS RESULTING FROM MEMBER AND
   NONMEMBER BUSINESS                                           $    31,215     $    26,957
                                                                ===========     ===========

DISTRIBUTION OF NET PROCEEDS:
        Credited to members' investment:
               Components of net income:
                      Income (loss) from non-member business    $       241     $      (480)
                      Patronage income                                5,325           4,725
                                                                -----------     -----------
                             Net income                               5,566           4,244

               Unit retention capital                                     0             621
                                                                -----------     -----------
                      Net credit to members' investment               5,566           4,865

        Payments to members for sugarbeets, net of unit
         retention capital                                           25,649          22,093
                                                                -----------     -----------

NET PROCEEDS RESULTING FROM MEMBER AND
   NONMEMBER BUSINESS                                           $    31,215     $    26,958
                                                                ===========     ===========
</TABLE>


See Notes to Consolidated Financial Statements.

<PAGE>


                          MINN-DAK FARMERS COOPERATIVE
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                        THREE MONTHS ENDED
                                                                                              NOV 30,
                                                                                    ---------------------------
                                                                                       1998             1997
                                                                                    -----------     -----------
<S>                                                                                 <C>             <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
        Income allocated to members' investment                                     $     5,566     $    11,741
        Add (deduct) noncash items:
               Depreciation and amortization                                              1,573           3,367
               Equipment disposals - loss                                                    25             138
               Discount on estate payout                                                      0
               Net loss allocated from unconsolidated marketing subsidiaries                  0               0
               Noncash portion of patronage capital credits                                   0            (593)
               Retention of nonqualified unit retains                                         0             753
               Changes in operating assets and liabilities:
                      Accounts receivable and advances                                    5,869          (2,120)
                      Inventory and prepaid expenses                                    (49,096)        (41,771)
                      Deferred charges                                                      926             271
                      Other assets                                                           (1)            370
                      Accounts payable, advances, and accrued liabilities                24,225           4,676
                                                                                    -----------     -----------
                             NET CASH (USED IN)/PROVIDED BY OPERATING ACTIVITIES        (10,912)        (23,168)

CASH FLOWS FROM INVESTING ACTIVITIES:
        Proceeds from disposition of property, plant and equipment                            0               5
        Capital expenditures                                                             (1,989)        (12,814)
        Investment in stock of other corporations, unconsolidated
          marketing subsidiaries and other cooperatives                                     207              51
        Minority interest in equity of subsidiaries                                          60             105
                                                                                    -----------     -----------
                             NET CASH USED IN INVESTING ACTIVITIES                       (1,722)        (12,653)
                                                                                    -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
        Net proceeds from issuance of short-term debt                                    15,565          39,505
        Payment of long-term debt                                                        (1,403)        (21,509)
        Payment of unit retains and allocated patronage                                  (2,383)         (2,870)
        Issuance of long-term debt                                                            0           4,500
        Provision for long-term tax                                                           0               0
        Sale and repurchase of common stock, net                                             (1)              0
        Issuance of stock                                                                     0          15,619
        Issuance of long term tax-exempt bonds                                                0               0
                                                                                    -----------     -----------
                             NET CASH PROVIDED BY FINANCING ACTIVITIES                   11,777          35,245
                                                                                    -----------     -----------

NET INCREASE (DECREASE) IN CASH                                                            (857)           (576)

CASH, BEGINNING OF YEAR                                                                   1,849             853
                                                                                    -----------     -----------

CASH, END OF QUARTER                                                                $       992     $       277
                                                                                    ===========     ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
        Cash payments for:
               Interest                                                             $     1,390     $     2,646
                                                                                    ===========     ===========

               Income taxes, net of refunds                                         $         0     $        33
                                                                                    ===========     ===========
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>


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

                          MINN-DAK FARMERS COOPERATIVE
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.    The condensed consolidated financial statements for the three month
      periods ended November 30, 1998 and November 30, 1997 are unaudited and
      reflect all adjustments (consisting only of normal recurring adjustments)
      which are, in the opinion of management, necessary for a fair presentation
      of the financial position and operating results for the interim period.
      The condensed consolidated financial statements should be read in
      conjunction with the consolidated financial statements and notes thereto,
      together with management's discussion and analysis of financial condition
      and results of operations, contained in the Company's Annual Report to
      Stockholders previously submitted in the Company's Annual 10-K for the
      fiscal year ended August 31, 1998. The results of operations for the three
      months ended November 30, 1998, are not necessarily indicative of the
      results for the entire fiscal year ending August 31, 1999.

2.    In August 1998, the company declared a revolvement of 35% of the 1990 crop
      per unit retains and allocated patronage. That amount, $2.4 million, was
      paid to the stockholders on October 17, 1998.

<PAGE>


                      MANAGEMENT'S DISCUSSION AND ANALYSIS

              OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION

              FOR THE THREE MONTHS ENDED NOVEMBER 30, 1998 AND 1997

The following discussion and analysis relates to the financial condition and
results of operations of Minn-Dak Farmers Cooperative ("the Company") for the
three months ended November 30, 1998 (the first quarter of the Company's
1998-1999 fiscal year) and 1997 (the first quarter of the Company's 1997-1998
fiscal year). The Company's fiscal year runs from September 1 to August 31.

This discussion contains the Company's current estimates of the financial
results to be obtained from the Company's processing of the 1998 sugar beet
crop. Given the nature of the estimates required in connection with the payments
to members for their sugar beets, this discussion includes forward-looking
statements regarding the quantity of sugar to be produced from the 1998 sugar
beet crop, the net selling price for the sugar and by-products produced by the
Company and the Company's operating costs. These forward-looking statements are
based largely upon the Company's expectations and estimates of future events; as
a result, they are subject to a variety of risks and uncertainties. Some of
those estimates, such as the selling price for the Company's products and the
quantity of sugar produced from the sugar beet crop are beyond the Company's
control. The actual results experienced by the Company could differ materially
from the forward-looking statements contained herein.


RESULTS FROM OPERATIONS

COMPARISON OF THE THREE MONTHS ENDED NOVEMBER 30, 1998 AND 1997

Revenue for the three months ended November 30, 1998 increased $8.0 million from
the 1997 period, an increase of 18%. Revenue from the sale of finished goods
increased $6.6 million, while the change in the value of finished goods
inventory increased $0.7 million. Other income increased $0.7 million.

Revenue from the sales of sugar increased $6.4 million, or 21%, reflecting a 25%
increase in volume, and offset by a 3% decrease in the price for sugar. The
increase in volume is the result of a slightly higher estimate of sugar to be
produced in fiscal year 1999, and thus more sugar to ship, and generally more
customer orders for the current period versus the last. For the fiscal year
1998-1999 period, inventories of sugar remained above historical levels, but
similar to the previous year's levels. Based on marketing information developed
by United Sugars Corporation, the Company's marketing agent, the Company's
current estimate is that the average net selling price of the Company's sugar
will be approximately $23.06 per hundredweight (CWT.), an increase of less than
1% from the prior year.

Revenue from pulp (wet and dry pelleted) sales increased $0.2 million or 8%,
reflecting a 4% increase in sales volume and a 4% increase in the average gross
selling price. Based upon marketing information developed by Midwest
Agri-Commodities Company, the Company's marketing agent, the Company's current
estimate is that the average net selling price of the Company's pulp will be
approximately $42.00 per ton, a decrease of 25% from the prior year. The
expected decrease in pulp prices is attributable to a combination of tremendous
excess supply of competing products, lower demand in Europe because of reduced
cattle and swine herds, poor economic conditions in Japan and a stronger US
dollar.

Revenue from beet molasses sales decreased $0.1 million or 8%, reflecting a 23%
increase in sales volume, offset by a 25% decrease in the average gross selling
price. The increase in molasses sales volume is due to an estimated 36% more
production of beet molasses for fiscal year 1998-1999 versus the previous year.
The larger volume of beet molasses is the result of a reduction in the quality
of the 1998 crop being processed and a larger volume of beets being processed.
Based upon marketing information developed by Midwest Agri-Commodities Company,
the Company's marketing agent, the Company's current estimate is that the
average net selling price of the Company's beet molasses will be approximately
$36.00 per ton, a decrease of 37% from the prior year. The expected decrease in
beet molasses prices is attributable to abundant, low-priced competing product -
both domestic and international, lower priced corn markets and soft feed market
conditions in the beet molasses marketplace.

<PAGE>


Revenues from yeast sales increased $0.1 million or 4%, reflecting a 7% increase
in sales volume, offset by a 2% decrease in the average selling price. Sales
volume is up because of continued strong demand of bagged fresh yeast from Red
Star Yeast & Products, the company that is contractually obligated annually to
purchase minimum levels of fresh yeast produced by the yeast company.

The other contributing factor to the change in revenues results from the
increase or decrease in finished goods inventories. The increase in the value of
finished goods inventories for the three months ended November 30, 1998 amounted
to $11.9 million or $0.7 million more than the increase in the value of finished
goods inventories for November 30, 1997. For November 30, 1998 the increase in
the value of sugar inventories was $1.5 million more than the increase of that
of the previous year. The increase in sugar inventory values is the result of
more sugar on hand versus the prior period.

In the consolidated statements of operations, Expenses section, depreciation and
interest expenses for fiscal year 1998-1999 are expected to be higher than
fiscal year 1997-1998 due to the Company's large capital expansion program that
was basically competed at the end of fiscal year 1998. The Company's plant
Depreciation expense is expected to increase approximately $0.6 million or 12%
in fiscal year 1998-1999 versus the prior year, while Interest expense is
expected to increase approximately $0.7 million or 14%.

In the section Distribution of Net Proceeds, payments to members for sugarbeets,
net of unit retention capital and unprocessed sugarbeet inventory increased $3.6
million or 16% from the 1997-1998 period. For fiscal year 1998-1999 the Company
is projecting a payment to growers for sugarbeets totaling $63.4 million, which
is $8.3 million or 11% less than the prior fiscal year. The payment is based
upon (i) an average delivered sugar content of 17.43%, (ii) a total sugarbeet
crop to process of 1.971 million tons and (iii) the Company's projected selling
price for its sugar, which is currently estimated at $23.06 per CWT. This
forward-looking material is based on the Company's expectations regarding the
processing of the 1998 sugar beet crop. The actual production results obtained
by processing those sugar beets could differ materially from the Company's
current estimate as a result of factors such as changes in production
efficiencies and storage conditions for the Company's sugar beets.


ESTIMATED FISCAL YEAR 1999 INFORMATION

The agreements between the Company and its members regarding the delivery of
sugar beets to the Company require payment for members' sugar beets in several
installments throughout the year. As only the final payment is made after the
close of the fiscal year in question, the first payments to members for their
sugar beets are based upon the Company's then-current estimates of the financial
results to be obtained from processing the crop in question and the subsequent
sale of the products obtained from processing those sugar beets. This discussion
contains a summary of the Company's current estimates of the financial results
to be obtained from the Company's processing of the 1998 sugar beet crop. Given
the nature of the estimates required in connection with the payments to members
for their sugar beets, this discussion includes forward-looking statements
regarding the quantity of sugar to be produced from the 1998 sugar beet crop,
the net selling price for the sugar and by-products produced by the Company and
the Company's operating costs. These forward-looking statements are based
largely upon the Company's expectations and estimates of future events; as a
result, they are subject to a variety of risks and uncertainties. Some of those
estimates, such as the selling price for the Company's products and the quantity
of sugar produced from the sugar beet crop are beyond the Company's control. The
actual results experienced by the Company could differ materially from the
forward-looking statements contained herein.

The recently completed harvest of the sugar beet crop grown during 1998 produced
a total of 1,772,648 tons of sugar beets. The sugar content on the 1997 crop is
17.43%. As of this filing, no significant sugarbeet storage problems have been
encountered. While unseasonably warm temperatures occurred in the months of
November and most of December, the Company has not been able to ascertain any
significant detrimental effects to the operations of the factory due to the
unusual weather.

The Company expects to produce a total of approximately 4,927,000 CWT. of sugar
from the 1998 sugar beet crop (including sugar produced from the purchase of
another sugar processor's beets). Currently, the factory is averaging a
sugarbeet slice rate of 7,559 tons per day; just below planned slice for the
processing season of 7,600 tons per day.

<PAGE>


Based upon marketing information developed by United Sugars Corporation, the
Company's current estimate is that the average net selling price of the
Company's sugar will be approximately $23.06 per hundredweight.

From the revenues generated from the sale of products produced from each ton of
sugar beets, the Company's operating and fixed costs must be deducted, which are
currently estimated to be $26.61 per ton. The deduction of those operating costs
results in an estimated gross beet payment of $35.80 per ton of sugar beets.

In preparation for the Year 2000, the Company has developed preliminary plans to
address the possible exposures related to the impact on its information systems
and the company as a whole of the Year 2000 issue. Such plans include
identification of software and hardware systems, and equipment and processing
machinery with imbedded technology that may be affected by the Year 2000
problem; determination of the existence of problems; remediation of problems
identified; testing of systems and machinery and equipment where remediation
will be required; and identification of risks of the Year 2000 issue relative to
third parties which have a material relationship with the Company.

The Company expects to complete its plan to deal with the Year 2000 issue before
the end of calendar year 1999. To date the Company has upgraded its information
system and anticipates that its operations systems will also be ready for the
Year 2000. Key customers and suppliers have been contacted, and to date the
Company has identified no significant concerns. However, the Company continues
to bear some risk related to the Year 2000 issue if other entities not directly
affiliated with the Company do not appropriately address their own Year 2000
compliance issues. A contingency plan will be developed to deal with material
vendors and suppliers who are identified as not being Year 2000 compliant.

Based upon its assessment to date, the Company's management presently believes
that problems related to the Year 2000 issue will be not have a material effect
on operations and financial results.

<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

Because the Company operates as a cooperative, payments for member-delivered
sugar beets, 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 sugar beet crops to the Company and
are net of unit retains and patronage allocated to them, all three of which
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. However, because sugar is sold throughout
the year (while sugar beets are processed primarily between September and April)
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 financing has been provided by the
St. Paul Bank for Cooperatives (the "Bank"). The Company has a short-term line
of credit with the St. Paul Bank for Cooperatives for calendars 1998 and 1999 of
$55.0 million.

The loan agreements between the Bank and the Company obligate the company to
maintain the following financial covenants in accordance with GAAP:

1.    Maintain working capital of not less than $8.0 million as of 8-31-99 and
      $9.0 million as of 8-31-00.

2.    Maintain a long-term debt and capitalized leases to equity ratio of not
      greater than 1.05:1.

3.    Maintain a current ratio of not less than 1.0:1.0 based on monthly
      financial statements and attain a current ratio of not less than 1.2:1.0
      based on fiscal year end audits.

As of November 30, 1998 the Company was in compliance with its loan agreements
with the bank.

Working capital increased $3.8 million for the three months ended November 30,
1998. Increased working capital is a result of normal financing, operational and
capital expenditure activities of the Company. The targeted working capital for
August 31, 1999 is approximately $12.0 million dollars and, in the Company's
opinion, will be attained.

The August 31, 1999 working capital estimate of $12.0 million is substantially
higher than historical fiscal year end working capital targets. The working
capital increases are the result of the January 1999 loan agreement with the
Company's primary lender, the St. Paul Bank for Cooperatives, in which lower
interest rate incentives were provided in return for a higher working capital
position. The funding for increased working capital will be generated by
shifting approximately $4.5 million in seasonal debt to long term debt. The net
result for the Company will be savings in annual interest costs, without
incurring added overall debt.

The St Paul Bank for Cooperatives has announced its intent to merge with another
bank, Co-Bank, Denver, Colorado. The vote of the shareholders of the two banks
to merge will take place sometime in calendar year 1999. If this merger takes
place, it is not expected to have any material impact on the borrowing ability
or cost to the Company.

The primary factor for the changes in the Company's financial condition for the
three months ended November 30, 1998 was due to the seasonal needs of the
1998/1999 sugarbeet-processing season. The cash used to provide for operations
of $10.9 million and for investing activities of $1.7 million was funded through
cash flow financing activities, and a reduction in cash. The net cash provided
through financing activities of $11.8 million was primarily provided through
proceeds from the issuance of short term debt of $15.6 million; net of repayment
of long term debt of $1.4 million and 35% payment of the 1990 crop unit retains
and allocated patronage payment of $2.4 million. Working capital as of November
30, 1998 totals $15.0 million compared to $11.2 million at August 31, 1998.

Capital expenditures for the three months ended November 30, 1998 totaled $2.0
million. Capital expenditures for fiscal year 1999 are currently estimated at
$6.2 million, $2.0 million resulting from the carryover of fiscal 1998 projects.

<PAGE>


PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
None

ITEM 2.  CHANGES IN SECURITIES
None

Item 3.  Defaults upon Senior Securities
None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None

ITEM 5.  OTHER INFORMATION
None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
None

<PAGE>


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



                                   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.



                                           MINN-DAK FARMERS COOPERATIVE
                                                   (Registrant)


Date:    January 13, 1999                  /s/ LARRY D. STEWARD
      ---------------------                -------------------------------------
                                           Larry D. Steward
                                           President and Chief Executive Officer



Date:    January 13, 1999                  /s/ STEVEN M. CASPERS
      ---------------------                -------------------------------------
                                           Steven M. Caspers
                                           Executive Vice President, and
                                           Chief Financial Officer