# 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: February 29, 2004

OR

# [   ]     TRANSITION REPORT PURSUANT TO SECTION 13 AND 15(d) OF THE
SECURITIES 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 by checkmark whether the
Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)

YES   _________                         
NO   ____X____

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 |  | March 9, 2004  | 
|$250 Par Value        |  | 491            | 



---

Minn-Dak
Farmers Cooperative has previously registered securities for offer and sale pursuant to
the Securities Act of 1933, as amended (the Securities Act). As a result of
that previous registration under the Securities Act, under Sections 15(d) and 13 of the
Securities Exchange Act of 1934, as amended (the Exchange Act), the
Cooperative is obligated to file quarterly reports on form 10-Q, annual reports on Form
10-K and supplemental reports on Form 8-K. However, the Cooperative has not registered any
of its securities under Section 12(g) of the Exchange Act. The Cooperative is exempt from
any obligation to register its securities under the Exchange Act due to the provisions of
Section 12(g)(2)(E), which exempts from Exchange Act registration any security of an
issuer, such as the Cooperative, which is a cooperative association as defined
in the Agricultural Marketing Act of 1929. As a result, those provisions of the Exchange
Act, which are applicable only to securities registered under Section 12 of that act, do
not apply to shares issued by the Cooperative. The provisions, which do not apply to the
Cooperatives shares, include the regulation of proxies under Section 14 of the
Exchange Act and the reporting and other obligations of directors, officers and principal
stockholders under Section 16 of the Exchange Act.

---

MINN-DAK FARMERS
COOPERATIVENOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

|1. | The condensed consolidated financial statements for the six-month period ended
          February 29, 2004 and 2003 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, 2003. The results of operations for
          the six months ended February 29, 2004 are not necessarily indicative of the
          results for the entire fiscal year ending August 31, 2004.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | In August 2003, the company declared a revolvement of the remaining 17% of the
          unit retains and allocated patronage for the 1992 crop totaling $1,280,562 and
          approximately 75% of the 1993 crop unit retains and allocated patronage totaling
          $2,514,906. These amounts were paid to the stockholders on September 29, 2003.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | The Financial Accounting Standards Board has issued an amendment to Financial
          Accounting Standards No. 132, Employers Disclosure about Pensions and
          Other Postretirement Benefits. Such amendment requires additional disclosures to
          interim and annual financial statements which are effective for the interim
          period ending May 31, 2004, but does not change the recognition requirements
          related to pensions and postretirement benefits. Management is reviewing this
          pronouncement to determine its impact on the disclosures in the interim and
          annual financial statements, but does not expect the implementation of this
          pronouncement to have a significant impact on the interim or annual financial
          statements.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

# CONSOLIDATED BALANCE
SHEETSASSETS(In Thousands)

|ASSETS                                                    | February 29, 2004
(Unaudited) | August 31, 2003
(Audited)
|--------------------------------------------------------- | ----------------------------- | -------------------------
|                                                         
|CURRENT ASSETS:                                           |                               |                          
|Cash                                                      |                               |                          
|                                                          |                               |                          
|Receivables:                                              |                               |                          
|Trade accounts                                            |                               |                          
|Growers                                                   |                               |                          
|Other                                                     |                               |                          
|                                                          |                               |                          
|                                                          |                               |                          
|                                                          |                               |                          
|Advances to affiliate                                     |                               |                          
|                                                          |                               |                          
|Inventories:                                              |                               |                          
|Refined sugar, pulp and molasses to be sold               |                               |                          
|on a pooled basis                                         |                               |                          
|Nonmember refined sugar                                   |                               |                          
|Yeast                                                     |                               |                          
|Materials and supplies                                    |                               |                          
|Beet and Juice Inventory                                  |                               |                          
|Other                                                     |                               |                          
|                                                          |                               |                          
|                                                          |                               |                          
|                                                          |                               |                          
|Deferred charges                                          |                               |                          
|                                                          |                               |                          
|Prepaid expenses                                          |                               |                          
|                                                          |                               |                          
|Other                                                     |                               |                          
|                                                          |                               |                          
|Current deferred income tax asset                         |                               |                          
|                                                          |                               |                          
|Total current assets                                      |                               |                          
|                                                          |                               |                          
|PROPERTY, PLANT AND EQUIPMENT:                            |                               |                          
|Land and land improvements                                |                               |                          
|Buildings                                                 |                               |                          
|Factory equipment                                         |                               |                          
|Other equipment                                           |                               |                          
|Construction in progress                                  |                               |                          
|                                                          |                               |                          
|                                                          |                               |                          
|Less accumulated depreciation                             |                               |                          
|                                                          |                               |                          
|                                                          |                               |                          
|                                                          |                               |                          
|OTHER ASSETS:                                             |                               |                          
|Investments restricted for capital lease projects         |                               |                          
|Investment in stock of other corporations, unconsolidated |                               |                          
|marketing subsidiaries and other cooperatives             |                               |                          
|Other                                                     |                               |                          
|                                                          |                               |                          
|                                                          |                               |                          
|                                                          |                               |                          
|                                                          |                               |                          
|                                                          |                               |                          

See Notes to Consolidated Financial
Statements.



---

# MINN-DAK FARMERS
COOPERATIVECONSOLIDATED BALANCE SHEETSLIABILITIES AND STOCKHOLDERS EQUITY
(In Thousands)

|LIABILITIES AND MEMBERS' INVESTMENT                  | February 29, 2004
(Unaudited) | August 31, 2003
(Audited)
|---------------------------------------------------- | ----------------------------- | -------------------------
|                                                    
|CURRENT LIABILITIES:                                 |                               |                          
|Short-term notes payable                             |                               |                          
|                                                     |                               |                          
|Current portion of long-term debt                    |                               |                          
|Current portion of long-term lease                   |                               |                          
|                                                     |                               |                          
|                                                     |                               |                          
|                                                    
|Accounts payable:                                    |                               |                          
|Trade                                                |                               |                          
|Growers                                              |                               |                          
|                                                     |                               |                          
|                                                     |                               |                          
|                                                     |                               |                          
|Accrued liabilities                                  |                               |                          
|                                                     |                               |                          
|Total current liabilities                            |                               |                          
|                                                    
|LONG-TERM DEBT, NET OF CURRENT PORTION               |                               |                          
|                                                    
|OBLIGATION UNDER CAPITAL LEASE                       |                               |                          
|                                                    
|LONG TERM DEFERRED TAX LIABILITY                     |                               |                          
|                                                    
|OTHER                                                |                               |                          
|                                                    
|COMMITTMENTS AND CONTINGENCIES                       |                               |                          
|                                                     |                               |                          
|Total liabilities                                    |                               |                          
|                                                     |                               |                          
|MINORITY INTEREST IN EQUITY OF SUBSIDIARY            |                               |                          
|                                                     |                               |                          
|                                                    
|MEMBERS' INVESTMENT:                                 |                               |                          
|Preferred stock:                                     |                               |                          
|Class A - 100,000 shares authorized, $105 par value; |                               |                          
|72,200 shares issued and outstanding                 |                               |                          
|Class B - 100,000 shares authorized, $75 par value;  |                               |                          
|72,200 shares issued and outstanding                 |                               |                          
|Class C - 100,000 shares authorized, $76 par value;  |                               |                          
|72,200 shares issued and outstanding                 |                               |                          
|                                                     |                               |                          
|                                                     |                               |                          
|Common stock, 600 shares authorized, $250 par value; |                               |                          
|issued and outstanding, 490 shares at February 29,   |                               |                          
|2004 and 488 shares at August 31, 2003               |                               |                          
|Paid in capital in excess of par value               |                               |                          
|Unit retention capital                               |                               |                          
|Qualified allocated patronage                        |                               |                          
|Nonqualified allocated patronage                     |                               |                          
|Retained earnings (deficit)                          |                               |                          
|                                                     |                               |                          
|                                                     |                               |                          
|                                                     |                               |                          
|                                                     |                               |                          
|                                                     |                               |                          

See Notes to Consolidated Financial
Statements.



---

# MINN-DAK FARMERS
COOPERATIVECONSOLIDATED STATEMENTS OF OPERATIONS(In Thousands)(Unaudited)

|                                                     | Three Months Ended | Six Months Ended
|---------------------------------------------------- | ------------------ | ----------------
|
|
|                                                    
|REVENUE:                                             |                    |                 
|From sales of sugar, co-products, and                |                    |                 
|yeast, net of discounts                              |                    |                 
|Other income                                         |                    |                 
|                                                     |                    |                 
|                                                     |                    |                 
|                                                     |                    |                 
|                                                    
|EXPENSES:                                            |                    |                 
|Production costs of sugar, co-products,              |                    |                 
|and yeast sold                                       |                    |                 
|Marketing (includes freight and storage)             |                    |                 
|General and administrative                           |                    |                 
|Interest                                             |                    |                 
|(Gain) loss on disposition of property and equipment |                    |                 
|                                                     |                    |                 
|                                                     |                    |                 
|                                                     |                    |                 
|                                                    
|NET PROCEEDS RESULTING FROM MEMBER AND               |                    |                 
|NONMEMBER BUSINESS                                   |                    |                 
|                                                     |                    |                 
|                                                    
|DISTRIBUTION OF NET PROCEEDS:                        |                    |                 
|Credited to members' investment:                     |                    |                 
|Components of net income:                            |                    |                 
|Income (loss) from non-member business               |                    |                 
|Patronage income                                     |                    |                 
|                                                     |                    |                 
|Net income                                           |                    |                 
|                                                    
|Unit retention capital                               |                    |                 
|                                                     |                    |                 
|Net credit to members' investment                    |                    |                 
|                                                    
|Payments to members for sugarbeets, net of unit      |                    |                 
|retention capital                                    |                    |                 
|                                                     |                    |                 
|                                                    
|NET PROCEEDS RESULTING FROM MEMBER AND               |                    |                 
|NONMEMBER BUSINESS                                   |                    |                 
|                                                     |                    |                 

See Notes to Consolidated Financial
Statements.



---

# MINN-DAK FARMERS
COOPERATIVECONSOLIDATED STATEMENTS OF CASH FLOWS(In Thousands)(Unaudited)

# 

|                                                                | Six Months Ended
|--------------------------------------------------------------- | ----------------
|
|                                                               
|CASH FLOWS FROM OPERATING ACTIVITIES:                           |                 
|Income allocated to members' investment                         |                 
|Add (deduct) noncash items:                                     |                 
|Depreciation and amortization                                   |                 
|Equipment disposals - loss                                      |                 
|Net income allocated from unconsolidated marketing subsidiaries |                 
|Deferred income taxes                                           |                 
|Noncash portion of patronage capital credits                    |                 
|Retention of nonqualified unit retains                          |                 
|Minority interest in equity of subsidiaries                     |                 
|Changes in operating assets and liabilities:                    |                 
|Accounts receivable and advances                                |                 
|Inventory and prepaid expenses                                  |                 
|Deferred charges and other assets                               |                 
|Accounts payable, accrued liabilities and other liabilities     |                 
|                                                                |                 
|Net cash (used in)/provided by operating activities             |                 
|                                                               
|CASH FLOWS FROM INVESTING ACTIVITIES:                           |                 
|Proceeds from disposition of property, plant and equipment      |                 
|Capital expenditures and other assets                           |                 
|Investment in stock of other corporations, unconsolidated       |                 
|marketing subsidiaries and other cooperatives                   |                 
|Net proceeds from patronage refunds and equity revolvements     |                 
|Issuance of notes receivable                                    |                 
|Proceeds on notes receivable                                    |                 
|Restricted bond/lease fund investment                           |                 
|                                                                |                 
|Net cash used in investing activities                           |                 
|                                                                |                 
|                                                               
|CASH FLOWS FROM FINANCING ACTIVITIES:                           |                 
|Net proceeds from issuance of short-term debt                   |                 
|Payment of long-term debt                                       |                 
|Payment of financing fees                                       |                 
|Payment of unit retains and allocated patronage                 |                 
|Sale and repurchase of common stock, net                        |                 
|Issuance of stock                                               |                 
|                                                                |                 
|Net cash provided by financing activities                       |                 
|                                                                |                 
|                                                               
|NET INCREASE (DECREASE) IN CASH                                 |                 
|                                                               
|CASH, BEGINNING OF YEAR                                         |                 
|                                                                |                 
|                                                               
|CASH, END OF QUARTER                                            |                 
|                                                                |                 
|                                                               
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:              |                 
|Cash payments for:                                              |                 
|Interest                                                        |                 
|                                                                |                 
|Income taxes, net of refunds                                    |                 
|                                                                |                 

See Notes to Consolidated Financial
Statements.



---

MANAGEMENTS
DISCUSSION AND ANALYSIS

OF THE RESULTS OF
OPERATIONS AND FINANCIAL CONDITION

FOR THE THREE MONTHS
ENDED AND SIX MONTHS ENDED FEBRUARY 29, 2004AND FEBRUARY 28, 2003

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 February 29, 2004 (the
second quarter of the Companys 2003-2004 fiscal year) and February 28, 2003 (the
second quarter of the Companys 2002-2003 fiscal year). The Companys fiscal
year runs from September 1 to August 31.

Any statements regarding future
market prices, anticipated costs, agricultural results, operating results and other
statements that are not historical facts contained in this Quarterly Report on Form 10-Q
are forward-looking statements. The words expect, project, estimate,
believe, anticipate, plan, intend, could,
may, predict and similar expressions are also intended to
identify forward-looking statements. Such statements involve risks, uncertainties and
assumptions, including, without limitation, market factors, the effect of weather and
economic conditions, farm and trade policy, the available supply of sugar, available
quantity and quality of sugarbeets and other factors detailed elsewhere in this and other
Company filings with the Securities and Exchange Commission. Should one or more of these
risks or uncertainties materialize, or should underlying assumptions prove incorrect,
actual outcomes may vary materially from those indicated.

RESULTS FROM OPERATIONS

Comparison of the three months
ended February 29, 2004 and February 28, 2003

As a result of sugar storage issues
created by weak seasonal demand and lack of rail car availability, the Company held
400,000 cwt of additional equivalent sugar in the form of standard liquor juice when
compared to the three-month period ended February 28, 2003. Because the sugar is not in
its final form, it is valued at grower delivered cost vs. the companys normal
finished goods net realizable valuation. Had sufficient granulated sugar storage been
available, the increased standard liquor juice would have been converted to marketable
sugar with an increased value of $3.1 million. The Company anticipates converting this
standard liquor juice to sugar during the end of the Companys third quarter and
early fourth quarter.

The 2002 Farm Program that the
Company operates under contains allotment / allocation provisions that may restrict the
marketing of sugar produced by domestic processors. These Farm Program provisions also
allow processors that have more sugar than allocations to sell that sugar without
allocation to another processor that has more allocations than domestic sugar produced,
and to then repurchase a similar amount of sugar with allocations for the marketing to
customers. The Company engaged in $5.3 million of these sales and repurchases during the
three months ended February 29, 2004. The dollars associated with these sales and
repurchase activities for this purpose have been excluded from current and comparative
analysis to the prior periods.



---

Revenue, from the sale of sugar,
co-products, yeast and finished goods inventory valuation changes, for the three months
ended February 29, 2004 increased $2.1 million from the 2003 period, an increase of 3%.
Revenue from the sale of finished goods decreased $.7 million and Change in Inventories
increased $2.8 million.

Revenue from the sales of sugar
decreased $.2 million, or .5%, reflecting a .9% increase in volume and a 1.4% decrease in
the price for sugar.

Revenue from dried pulp and molasses
sales decreased $.9 million or 15.4%, reflecting a 13.6% decrease in sales volume and a
2.8% decrease in the average gross selling price.

Revenue from local sales of beet
tailings and pressed pulp increased $.4 million resulting from a new marketing program
for these products.

Revenues from yeast sales remain
almost unchanged in price and volume from the prior year period.

The other contributing factor to the
change in revenues results from the increase in finished goods inventories. The increase
in the value of finished goods inventories for the three months ended February 29, 2004
amounted to $20.0 million or $2.8 million more than the increase in the value of finished
goods inventories for February 28, 2003. For February 29, 2004 the increase in the value
of sugar inventories was $19.6 million or $2.6 million more than the increase in the
value of sugar inventory for February 28, 2003. The increase in sugar inventory reflects
a higher production level when compared to the prior year. The 2002 Farm Program beet
sugar marketing allotment is less than the available sugar in the beet sugar segment,
which has increased the need to inventory sugar, however, through a combination of
multi-year agreements and single year agreements, MDFC has been able to obtain sufficient
allocations to market the 2003 crop.

In the consolidated Statement of
Operations, Expenses section, production costs of sugar, co-products and yeast totaled
$16.5 million, $.5 million or 2.4% more than the prior year. The increase is mainly
attributable to normal operations and expense accrual timings when comparing the
three-month period ending February 28, 2003. Marketing costs totaled $7.5 million, $.1
million or .9% more than the prior year. In the section Distribution of Net Proceeds,
payments to members for sugarbeets, net of unit retention capital, remained almost
unchanged. For fiscal year 2004 the Company is projecting a payment to growers for
sugarbeets totaling $92.4 million, which is $8.5 million or 8.4% less than the prior
fiscal year. The decrease in payments to members is due to the Companys initial
production and price projections for the 2004 fiscal year payments. These estimates used
historical averages for calculating certain production keys and also lower than prior
year net selling prices for sugar and co-products. If production continues with the
current fiscal year trends, the Company anticipates that actual production of sugar and
co-products could exceed estimates, resulting in an increase in the estimate for payment
to growers for sugarbeets.



---

Comparison of the six months
ended February 29, 2004 and February 28, 2003

As a result of sugar storage issues
created by weak seasonal demand and lack of rail car availability, the Company held
400,000 cwt of additional equivalent sugar in standard liquor juice storage when compared
to the six-month period ended February 28, 2003. Because the sugar is not in its final
form, it is valued at grower delivered cost vs. the companys normal finished goods
net realizable valuation. Had sufficient granulated sugar storage been available, the
increased standard liquor juice would have been converted to salable sugar with an
increased value of $3.1 million. The Company anticipates converting this standard liquor
juice to sugar during the end of the third quarter and early fourth quarter.

The 2002 Farm Program that the
Company operates under contains allotment / allocation provisions that may restrict the
marketing of sugar produced by domestic processors. These Farm Program provisions also
allow processors that have more sugar than allocations to sell that sugar without
allocation to another processor that has more allocations than domestic sugar produced,
and to then repurchase a similar amount of sugar with allocations for the marketing to
customers. The Company engaged in $5.3 million of these sales and repurchases during the
three months ended February 29, 2004. The dollars associated with these sales and
repurchase activities for this purpose have been excluded from current and comparative
analysis to the prior periods.

Revenue, from the sale of sugar,
co-products, yeast and finished goods inventory valuation changes, for the six months
ended February 29, 2004 decreased $1.3 million from the 2002 period, a decrease of 1.0%.
Revenue from the sale of finished goods increased $4.3 million, while the change in the
value of finished goods inventory decreased $5.6 million.

Revenue from the sales of sugar
increased $3.3 million or 4.3%, reflecting a 4.9% increase in volume and a 0.6% decrease
in the price for sugar.

Revenue from dried pulp and molasses
sales remained unchanged, reflecting a 2.0% increase in sales volume and a 2.0% decrease
in the average gross selling price.

Revenue from local sales of beet
tailings and pressed pulp increased $.6 million resulting from a new marketing program
for these products.

Revenues from yeast sales from the
Companys subsidiary yeast production facility, Minn-Dak Yeast Company (MDYC)
increased $0.4 million or 11.4%, reflecting a 15.9% increase in sales volume and a 4.5%
decrease in the average selling price. This increase in volume was anticipated by
Sensient Sales and Service, the Companys sales agent and minority equity partner in
MDYC, in their FY 2004 marketing plan and results from added volume from existing
customers.

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 six months ended February
29, 2004 amounted to $34.6 million or $5.7 million less than the increase in the value of
finished goods inventories for February 28, 2003.



---

In the consolidated statements of
operations, Expenses section, Production costs of sugar, by-products and yeast sold
increased $1.6 million or 5.6%. The increase is mainly attributable to normal operations
and expense accrual timings when comparing the six-month period ending February 28, 2003.

In the section Distribution of Net
Proceeds, payments to members for sugarbeets (net of unit retention capital and
unprocessed sugarbeet inventory) decreased $2.4 million or 3.6% from the prior period.
For fiscal year 2004 the Company is projecting a payment to growers for sugarbeets
totaling $92.4 million, which is $8.5 million or 8.4% less than the prior fiscal year.
The decrease in payments to members is due to the Companys initial production and
price projections for the 2004 fiscal year payments. These estimates used historical
averages for calculating certain production keys and also lower than prior year net
selling prices for sugar and co-products. If production continues with the current fiscal
year trends, the Company anticipates that actual production of sugar and co-products
could exceed estimates, resulting in an increase in the estimate for payment to growers
for sugarbeets.

ESTIMATED FISCAL YEAR 2004
INFORMATION

The agreements between the Company
and its members regarding the delivery of sugarbeets to the Company require payment for
members sugarbeets in several installments throughout the year. As only the final
payment is made after the close of the fiscal year, the first payments to members for
their sugarbeets are based upon the Companys then-current estimates of the
financial results to be obtained from processing the crop and the sale of finished
products. 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 2003 sugar
beet crop. Given the nature of the estimates required in connection with the payments to
members for their sugarbeets, this discussion includes forward-looking statements. 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 may differ
materially from the forward-looking statements contained herein.

The Companys members harvested
2.3 million tons of sugarbeets from the 2003 crop, the second largest crop ever delivered
to the Company. Sugar content of the 2003 crop at harvest was 7% above the average of the
five most recent years. Because of the record size and quality of the crop delivered, the
Companys production of sugar from the 2003 crop sugarbeets is expected to set a new
record for sugar produced. During early October, unseasonably warm temperatures caused
harvest to be halted after main harvest had started. As a result of the Companys
pile management strategy, the beets delivered just prior to the delay of main harvest
have either been processed or are considered to be not at risk. The remaining beets as of
this report are stored in the sheds and are in good storage condition. This
forward-looking material is based on the Companys expectations regarding the
processing of the 2003 sugarbeet crop; the actual production results obtained by
processing those sugarbeets could differ from the Companys current estimate as a
result of factors such as changes in production efficiencies and storage conditions for
the Companys sugarbeets.



---

Currently, the factory is averaging
a sugarbeet slice rate of 9,238 tons per day, and the ending slice rate is expected to be
just under the targeted rate for the fiscal year 2004 plan of 9,300 tons per day. It is
believed that any minor deviation from plan will not have a material detrimental impact
to the bottom line of the Company.

Based upon marketing information
developed by United Sugars Corporation, the Company currently estimates the average net
selling price of the Companys sugar will be less than that of the prior year
because of the volume available for sale (domestic production &foreign imports)
relative to the estimated domestic consumption.

The 2002 farm program contains
marketing allocation provisions that each year could potentially restrict the companys
ability to market all the sugar it produces. However, for FY 2004 the Company anticipates
it will obtain the allocations necessary for the marketing of substantially all of the
2003 crop.

The Companys initial beet
payment estimate totals $40.83 per ton or $.126063 per harvested/bonus pound of sugar,
with the final beet payment determined in October of 2004.

ESTIMATED FISCAL YEAR
2005 INFORMATION

The Board of Directors announced
that the 2004 crop planted acreage will be reduced 7.6% to an estimated 104,600 acres.
This reduction was directly related to the Companys estimate of available
allocations to market the 2004 crop as permitted by the 2002 Farm Program. Sugar sales
for non-human consumption uses and for export consumption do not require marketing
allocations. This FY 2005 marketing plan assumes no major changes to the provisions of
the sugar section of the 2002 Farm Program, and an average size sugarbeet crop.

OTHER INFORMATION

Within the 90 days prior to the date
of this report, the Company carried out an evaluation, under the supervision and with the
participation of the Companys management, including the Companys Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the design and
operation of the Companys disclosure controls and procedures pursuant to Exchange
Act Rule 13a-14. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Companys disclosure controls and procedures
are effective in timely alerting them to material information required to be included in
the Companys periodic SEC filings relating to the Company (including its
consolidated subsidiary).

There were no significant changes in
the Companys internal controls or in other factors that could significantly affect
these internal controls subsequent to the date of our most recent evaluation.



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LIQUIDITY AND CAPITAL RESOURCES

Because the Company operates as a
cooperative, payments for member-delivered sugarbeets, the principal raw material used in
producing the sugar and agri-products it sells, are subordinated to all member business
expenses. In addition, actual cash payments to members are spread over a period of
approximately one year following delivery of sugarbeet 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 sugarbeets 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 Co-Bank (the
Bank). The Company has a short-term line of credit with the Bank for calendar
years 2003 and 2004 of $45.0 million, of which $1.0 million is currently available for a
letter of credit. The seasonal line of credit is scheduled for renewal in May 2004.

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

| |  | Maintain
working capital of not less than $9.0 million as of August 31, 2004.
|- |  | -----------------------------------------------------------------------------

| |  | Maintain
a long-term debt and capitalized leases to equity ratio of not greater than .8:1.
|- |  | ------------------------------------------------------------------------------------------

| |  | Maintain available cash to current long-term debt ratio as defined in the agreement of not
less than 1.25:1.
|- |  | ------------------------------------------------------------------------------------------------------------

As of February 29, 2004 the Company
was in compliance with its loan agreement covenants with the Bank.

Working Capital as of February 29,
2004 totals $30.3 million compared to $17.8 million at August 31, 2003, an increase of
$12.5 million for the period. Increased working capital is a result of normal financing,
operational and capital expenditure activities of the Company.

The targeted working capital for
August 31, 2004 is approximately $14.6 million dollars and, in the Companys
opinion, will be attained.



---

The primary factor for the changes
in the Companys financial condition for the six months ended February 29, 2004 was
due to the seasonal needs of the 2003/2004 sugarbeet-processing season. The cash used to
provide for operations of $37.1 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 $37.4 million was primarily provided through
proceeds from the issuance of short-term debt of $40.8 million; offset by payment of long
term debt of $3.3 million.

|                         
|-------------------------
|
|                         
|Long-Term Debt           
|                         
|Capital Lease Obligations
|                         
|Operating Leases         
|                         
|Unconditional            
|Purchase Obligations     
|                         
|Other Long-Term          
|Obligations              
|                         
|Total Contractual Cash   
|Obligations              
|                         

Capital expenditures for the
six months ended February 29, 2004 totaled $2.2 million.

The board of directors has approved
a $9.3 million capital expenditure project for the installation of a pulp steam dryer.
The company obtained tax -exempt bonds to finance this project. The projected physical
completion date of this project was August 31, 2003. The new steam dryer has achieved the
production capacity guarantee provided by the supplier.



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Item 1. Legal Proceedings
None

Item 2. Changes in
SecuritiesNone

Item 3. Defaults upon
Senior SecuritiesNone

Item 4. Submission of Matters
to a Vote of Security HoldersNone

Item 5. Other InformationNone

Item 6. Exhibits and
Reports on Form 8-K

|a) Exhibits | Item #31.1 | Section 302 Certification of the President & Chief Executive Officer                
|----------- | ---------- | ------------------------------------------------------------------------------------
|            | Item #31.2 | Section 302 Certification of the Executive Vice President & Chief Financial Officer 
|            | Item #31.3 | Section 302 Certification of the Controller & Chief Accounting Officer              
|            | Item #32.1 | Section 906 Certification of the Chief Executive Officer and Chief Financial Officer

b) Reports on Form 8-K

| | The Company filed the following Current Reports on Form 8-K during this quarter:
| | --------------------------------------------------------------------------------

| |  | Filed on March 9, 2004: On March 5th, 2004, Minn-Dak Farmers Cooperatives
Board of Directors modified the planting level for the 2004 crop to 143% of base acres
plus a 2% measuring tolerance for a total planting of 145% of base acres. The Board had
first established plantings for the 2004 crop at 155% of base acres plus 2% measuring
tolerance in November 2003, the same planting level as the prior two crop years.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | There
was no one single reason for this 7.6% reduction in plantings, but rather a number of
factors which the Board considered. The principle reasons for the reduction in acreage
include reduced demand for sugar due to changing dietary habits of Americans and increased
levels of imported sugar containing products, the real prospect of reduced marketing
allocations for Minn-Dak Farmers Cooperative for the 2004 crop and the grower payment risk
associated with producing quantities of sugar far in excess of a marketing allocation.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Filed on December 12th, 2003: The Company announced that at its annual meeting
of shareholders, held December 9th, 2003, two new members were elected to
Minn-Dak Farmers Cooperatives board of directors. Alton Theede, representing
District #1, was elected to replace outgoing director Jerry Meyer. In District #5, Brent
Davison was elected to fill the vacancy left by the resignation of director Jack Lacey.
Also re-elected to the board were incumbents Chuck Steiner from District #6 and Doug Etten
representing District #8. Both were running unopposed.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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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.

|                     | MINN-DAK FARMERS                                                                          
|-------------------- | ------------------------------------------------------------------------------------------
|Date: April 14, 2004 | /s/ DAVID H. ROCHEDavid H. RochePresident and Chief Executive Officer                     
|Date: April 14, 2004 | /s/ STEVEN M. CASPERSSteven M. CaspersExecutive Vice President and Chief Financial Officer