# UNITED STATESSECURITIES AND
EXCHANGE COMMISSIONWASHINGTON, D. C. 20549

---

FORM 10-Q

---

|x |  | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE
ACT OF 1934
|- |  | --------------------------------------------------------------------------------------

# For the quarterly
period ended: November 30, 2005

OR

|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 AND 15(d) OF THESECURITES 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
Incorporation or organization) | (I.R.S. EmployerIdentification No.)

|7525 Red River RoadWahpeton, North Dakota | 58075     
|----------------------------------------- | ----------
|(Address of principalexecutive offices)   | (Zip Code)

(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
o
|----- | ----

Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

|YES
o | NO
x
|----- | ----

Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act).

|YES
o | NO
x
|----- | ----

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

|Class of Common Stock |  | Outstanding at
December 28, 2005
|--------------------- |  | --------------------------------
|$250 Par Value        |  | 477                             





---

MINN-DAK FARMERS
COOPERATIVECONSOLIDATED BALANCE SHEETSASSETS(In Thousands)

|ASSETS                                                        |  | Nov 30, 2005
(Unaudited) |   | Aug 31, 2005
(Audited)
|------------------------------------------------------------- |  | ------------------------ | - | ----------------------
|                                                              |  |                          |   |                       
|CURRENT ASSETS:                                               |  |                          |   |                       
|Cash                                                          |  |                          | $ | 23                    
|                                                              |  |                          |   |                       
|Receivables:                                                  |  |                         
|Trade accounts                                                |  |                          |   | 8,906                 
|Growers                                                       |  |                          |   | 491                   
|Other                                                         |  |                          |   | 21                    
|                                                              |  |                          |   |                       
|                                                              |  |                          |   | 9,419                 
|                                                              |  |                          |   |                       
|Inventories:                                                  |  |                         
|Refined sugar, pulp and molasses to be sold on a pooled basis |  |                          |   | 27,356                
|Nonmember refined sugar                                       |  |                          |   | 570                   
|Yeast                                                         |  |                          |   | 114                   
|Materials and supplies                                        |  |                          |   | 6,842                 
|Beet and Juice Inventory                                      |  |                          |   | 50,198                
|Other Inventory                                               |  |                          |   |                      
|                                                              |  |                          |   |                       
|                                                              |  |                          |   | 85,080                
|                                                              |  |                          |   |                       
|Deferred charges                                              |  |                          |   | 64                    
|                                                              |  |                          |   |                       
|Prepaid expenses                                              |  |                          |   | 678                   
|                                                              |  |                          |   |                       
|Other                                                         |  |                          |   | 436                   
|                                                              |  |                          |   |                       
|Current deferred income tax asset                             |  |                          |   | 541                   
|                                                              |  |                          |   |                       
|                                                             
|Total current assets                                          |  |                          |   | 96,241                
|                                                              |  |                          |   |                       
|                                                             
|PROPERTY, PLANT AND EQUIPMENT:                                |  |                         
|Land and land improvements                                    |  |                          |   | 22,959                
|Buildings                                                     |  |                          |   | 37,264                
|Factory equipment                                             |  |                          |   | 130,803               
|Other equipment                                               |  |                          |   | 3,568                 
|Construction in progress                                      |  |                          |   | 3,450                 
|                                                              |  |                          |   |                       
|                                                              |  |                          |   | 198,044               
|Less accumulated depreciation                                 |  |                          |   | (98,961               
|                                                              |  |                          |   |                       
|                                                              |  |                          |   | 99,083                
|                                                              |  |                          |   |                       
|OTHER ASSETS:                                                 |  |                         
|Investments restricted for bonds payable                      |  |                          |   | 1,393                 
|Investment in stock of other corporations, unconsolidated     |  |                         
|marketing subsidiaries and other cooperatives                 |  |                          |   | 11,041                
|Other                                                         |  |                          |   | 1,215                 
|                                                              |  |                          |   |                       
|                                                              |  |                          |   | 13,650                
|                                                              |  |                          |   |                       
|                                                             
|                                                              |  |                          | $ | 208,973               
|                                                              |  |                          |   |                       

See Notes to Consolidated Financial
Statements.

---

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

|                                                                             |  | Nov 30, 2005
(Unaudited) |   | Aug 31, 2005
(Audited)
|---------------------------------------------------------------------------- |  | ------------------------ | - | ----------------------
|                                                                             |  |                          |   |                       
|LIABILITIES AND MEMBERS INVESTMENT                                          |  |                          |   |                       
|                                                                            
|CURRENT LIABILITIES:                                                         |  |                         
|Short-term notes payable                                                     |  |                          | $ | 34,370                
|                                                                             |  |                          |   |                       
|                                                                            
|Current portion of long-term debt                                            |  |                          |   | 3,600                 
|Current portion of bonds payable                                             |  |                          |   | 1,725                 
|                                                                             |  |                          |   |                       
|                                                                             |  |                          |   | 5,325                 
|                                                                            
|Accounts payable:                                                            |  |                         
|Trade                                                                        |  |                          |   | 3,090                 
|Growers                                                                      |  |                          |   | 31,760                
|                                                                             |  |                          |   |                       
|                                                                             |  |                          |   | 34,850                
|                                                                             |  |                          |   |                       
|                                                                            
|Advances to affiliate                                                        |  |                          |   | 1,364                 
|                                                                             |  |                          |   |                       
|                                                                            
|Accrued liabilities                                                          |  |                          |   | 2,644                 
|                                                                             |  |                          |   |                       
|                                                                            
|Total current liabilities                                                    |  |                          |   | 78,553                
|                                                                            
|LONG-TERM DEBT, NET OF CURRENT PORTION                                       |  |                          |   | 18,700                
|                                                                            
|BONDS PAYABLE                                                                |  |                          |   | 19,230                
|                                                                            
|LONG TERM DEFERRED TAX LIABILITY                                             |  |                          |   | 1,300                 
|                                                                            
|OTHER                                                                        |  |                          |   | 672                   
|                                                                            
|COMMITTMENTS AND CONTINGENCIES                                               |  |                          |   |                      
|                                                                             |  |                          |   |                       
|                                                                            
|Total liabilities                                                            |  |                          |   | 118,455               
|                                                                             |  |                          |   |                       
|                                                                            
|MINORITY INTEREST IN EQUITY OF SUBSIDIARY                                    |  |                          |   | 2,069                 
|                                                                             |  |                          |   |                       
|                                                                            
|MEMBERS INVESTMENT:                                                         |  |                         
|Preferred stock:                                                             |  |                         
|Class A - 100,000 shares authorized, $105 par value;                         |  |                         
|72,200 shares issued and outstanding                                         |  |                          |   | 7,581                 
|Class B - 100,000 shares authorized, $75 par value;                          |  |                         
|72,200 shares issued and outstanding                                         |  |                          |   | 5,415                 
|Class C - 100,000 shares authorized, $76 par value;                          |  |                         
|72,200 shares issued and outstanding                                         |  |                          |   | 5,487                 
|                                                                             |  |                          |   |                       
|                                                                             |  |                          |   | 18,483                
|Common stock, 600 shares authorized, $250 par value; issued and outstanding, |  |                         
|477 shares at November 30, 2005 and 477 shares at August 31, 2005            |  |                          |   | 119                   
|Paid in capital in excess of par value                                       |  |                          |   | 32,094                
|Unit retention capital                                                       |  |                          |   | 1,380                 
|Qualified allocated patronage                                                |  |                          |   | 723                   
|Nonqualified allocated patronage                                             |  |                          |   | 28,531                
|Retained earnings (deficit)                                                  |  |                          |   | 7,119                 
|                                                                             |  |                          |   |                       
|                                                                             |  |                          |   | 88,449                
|                                                                             |  |                          |   |                       
|                                                                            
|                                                                             |  |                          | $ | 208,973               
|                                                                             |  |                          |   |                       

See Notes to Consolidated Financial
Statements.

---

PART I. FINANCIAL
INFORMATIONITEM 1.CONSOLIDATED FINANCIAL STATEMENTS

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

|                                                                                    |  | Three Months Ended
November 30,
|----------------------------------------------------------------------------------- |  | -------------------------------
|
|
|                                                                                    |  |                                
|REVENUE:                                                                            |  |                                
|From sales of sugar, co-products, and                                               |  |                                
|yeast, net of discounts                                                             |  |                                
|Other income (expense)                                                              |  |                                
|                                                                                    |  |                                
|                                                                                    |  |                                
|                                                                                    |  |                                
|EXPENSES:                                                                           |  |                                
|Production costs of sugar, co-products, and yeast sold                              |  |                                
|Sales and distribution costs                                                        |  |                                
|General and administrative                                                          |  |                                
|Interest                                                                            |  |                                
|Loss on disposition of property and equipment                                       |  |                                
|                                                                                    |  |                                
|                                                                                    |  |                                
|                                                                                    |  |                                
|NET PROCEEDS RESULTING FROM MEMBER AND NON-MEMBER BUSINESS BEFORE MINORITY INTEREST |  |                                
|                                                                                    |  |                                
|MINORITY INTEREST IN INCOME OF SUBSIDIARIES                                         |  |                                
|                                                                                    |  |                                
|NET PROCEEDS RESULTING FROM MEMBER AND NON-MEMBER BUSINESS                          |  |                                
|                                                                                    |  |                                
|DISTRIBUTION OF NET PROCEEDS:                                                       |  |                                
|Credited to members investment:                                                    |  |                                
|Components of net income:                                                           |  |                                
|Income from non-member business                                                     |  |                                
|Patronage income                                                                    |  |                                
|                                                                                    |  |                                
|Net income credited to members investment                                          |  |                                
|                                                                                   
|Payments to members for sugarbeets, net of unit retention capital                   |  |                                
|                                                                                    |  |                                
|                                                                                   
|NET PROCEEDS RESULTING FROM MEMBER AND NON-MEMBER BUSINESS                          |  |                                
|                                                                                    |  |                                

See Notes to Consolidated
Financial Statements.

---

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

|                                                                |  | Three Months Ended
November 30,
|--------------------------------------------------------------- |  | -------------------------------
|
|                                                                |  |                                
|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 |  |                                
|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 operating activities                           |  |                                
|                                                               
|CASH FLOWS FROM INVESTING ACTIVITIES:                           |  |                                
|Proceeds from disposition of property, plant and equipment      |  |                                
|Capital expenditures                                            |  |                                
|Issuance of notes receivable                                    |  |                                
|Restricted bond 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                                       |  |                                
|                                                                |  |                                
|Net cash provided by financing activities                       |  |                                
|                                                                |  |                                
|                                                               
|NET 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.

---

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 Company 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 Company has not registered any of its
securities under Section 12(g) of the Exchange Act. The Company 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 Company, 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 Company. The provisions, which do not apply to the
Company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 CONSOLIDATED FINANCIAL STATEMENTS

|1. | The consolidated financial statements for the three-month periods ended November
          30, 2005 and 2004 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, 2005. The results of operations for the three
          months ended November 30, 2005 are not necessarily indicative of the results for
          the entire fiscal year ending August 31, 2006.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | In September 2005, the company declared a revolvement of the remaining 92% of
          the unit retains and allocated patronage for the 1995 crop totaling $2,533,591
          and approximately 45% of the 1996 crop unit retains and allocated patronage
          totaling $2,008,115. These amounts were accrued as of August 31, 2005 and paid
          to the stockholders on September 30, 2005.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | In October 2005, the company allocated to members $5,191,808 of patronage from
          the 2004 crop in the form of non-qualified allocated patronage credits.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | 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 November 30, 2005, but does not change the recognition
          requirements related to pensions and postretirement benefits.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Components of
Net Periodic Benefit Cost for the Three Months Ended 11-30-05
| | ---------------------------------------------------------------------------

| | 000s                              |  | Pension
2006 |   | Benefits
2005 |   | Other
2006 |      | Benefits
2005
| | ---------------------------------- |  | ------------ | - | ------------- | - | ---------- | ---- | -------------
| |                                    |  |              |   |               |   |            |      |              
| | Service Cost                       |  |              | $ | 215           |   | $          | 198  |              
| | Interest Cost                      |  |              |   | 350           |   |            | 312  |              
| | Expected return on plan assets     |  |              |   | (311          | ) |            | (252 | )            
| | Amortization of prior service cost |  |              |   | 22            |   |            | 22   |              
| | Amortization of transition cost    |  |              |   | 0             |   |            | (2   | )            
| | Amortization of net (gain)loss     |  |              |   | 54            |   |            | 61   |              
| | Net periodic benefit cost          |  |              | $ | 330           |   | $          | 339  |              

| | As of
the three months ended 11-30-05, the Company has made $.28 million of contributions vs.
$.25 million through the three months ended 11-30-04. The Company anticipates
contributing an additional $.84 million to fund its pension plan in FY 2006 for a total
of $1.12 million. Contributions in FY 2005 totaled $1.21 million.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

MANAGEMENTS
DISCUSSION AND ANALYSIS

OF THE RESULTS OF
OPERATIONS AND FINANCIAL CONDITION

FOR THE THREE MONTHS
ENDED NOVEMBER 30, 2005 AND NOVEMBER 30, 2004

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, 2005 (the
first quarter of the Companys 2005-2006 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 November 30, 2005 and 2004

Revenue for the three months ended
November 30, 2005 decreased $12.1million from the 2004 period, a decrease of 19.5%.
Revenue from the sale of finished goods decreased $2.8 million and the change in the value
of inventories decreased $9.3 million.

Revenue from the sales of sugar
decreased $2.6 million, or 6.4%, reflecting a 9.0% increase in price and a 15.3% decrease
in the sales volume. Sugar prices have been higher on a spot market basis vs. prior years
due to spot shortages of sugar, primarily resulting from damage to the United States cane
sugar industry from the 2005 hurricane season, and a strengthening of consumption in the
U.S. The Company did not start processing sugarbeets until October 3, 2005 vs. September
9, 2004, resulting in less finished product produced during the first quarter 2005. The
late start-up was due to a below average crop size.

Revenue from dried beet pulp sales
increased by $0.3 million, or 12%. The increase is made up of a 10% increase in price
combined with a 2% increase in volume. Prices increased in the first quarter due to the
continued relative strength of both the European Euro and the Japanese Yen against the
U.S. dollar and a lower ocean freight rate market resulting in lower costs to move beet
pulp overseas. Volume increased slightly over the prior year as higher than normal
carryover inventories offset a late start up for new crop production. Beet molasses sales
decreased by $0.7 million, or 34%. This decrease is made up of a 10% increase in pricing
offset by a 44% decrease in volume. Beet molasses prices increased in the first quarter
due to continued reduced beet and cane molasses supplies worldwide. The tightening supply
situation has resulted in higher prices in the market. Volume decreased significantly
versus the prior year due to low carryover inventories and a late start up for new crop
production. These factors combined to limit the amount of molasses available to ship
during the period.

Revenues from pressed pulp and
tailing sales decreased less than $.1 million, reflecting a 52% decrease in sales volume.
The reduced sales volume is primarily due to the Companys pulp steam dryer operating
on a more consistent basis in 2005, resulting in almost no excess pressed pulp to be
marketed.

Revenues from yeast sales increased
$0.2 million or 11.9%, reflecting an 8.8% increase in sales volume and a 3.0% increase in
the average selling price. The average selling price is based upon a formula between
Minn-Dak Yeast Company and Sensient whereby average selling prices to customers along with
average costs of production are taken into account in establishing the price Sensient pays
Minn-Dak Yeast for product. As sales volumes increase or decrease, the efficiencies of
production costs will cause the formula to decrease or increase the formula selling price.
Marketplace prices are somewhat higher, a reflection of much higher factory input and
freight costs experienced by yeast suppliers, necessitating some pass-through of these
costs to customers.

---

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 November 30, 2005
amounted to $5.6 million or $9.3 million less than the increase in the value of finished
goods inventories for November 30, 2004.

In the Consolidated Statements of
Operations, Expenses section, production costs of sugar, co-products and yeast totaled
$14.6 million, $1.2 million or 7.8% less than the prior year. The decrease is mainly
attributable to the delay in starting plant operations when comparing the three-month
period ending November 30, 2004. Marketing costs totaled $8.3 million, $3.9 million or
31.8% less than the prior year. The decrease is due to: (1) reduced costs for additional
sugar allocations, allocations needed in order to ship all of the Companys produced
sugar under the sugar act of the current Farm Bill; (2) the cost of sugar purchased to
supplement pooled sugar production for customer order requirements in the month of
September; and (3) current crop freight and packaging costs. In the section Distribution
of Net Proceeds, payments to members for sugarbeets, net of unit retention capital and
unprocessed sugarbeet inventory, decreased $7.0 million or 22.0% from the fiscal year 2005
period. This decrease is a combination of less sugar being produced during the same time
period and a lower estimated payment per pound for the growers sugar during the same
time period. For fiscal year 2006 the Company is projecting a payment to growers for
sugarbeets totaling $65.2 million, which is $17.4 million or 21.0% less than the prior
fiscal year. The decrease in payments to members is due to: (1) the result of a 21.2%
decrease in tons of beets delivered by members versus the prior year, (2) 1.3% decrease in
sugar per ton of the beets delivered versus the prior year, and (3) offset somewhat by a
9.1% increase in sales prices for sugar sold. The payment is based upon (i) an average
delivered sugar content of 16.29%, (ii) a total sugarbeet crop to process of 1.8 million
tons and (iii) the Companys projected selling price for its sugar, which is
currently estimated to be higher than the previous year.

ESTIMATED FISCAL YEAR
2006 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 2005 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
1.8 million tons of sugarbeets from the 2005 crop, the smallest harvested crop since the
completion of the Companys expansion completion in 1998. Sugar content of the 2005
crop at harvest was 7% below the average of the five most recent years and lower than any
individual year during that period. The Company is projecting the sugar production from
the 2005 crop at the lowest levels since the completion of the expansion in 1998.
Unusually high levels of rainfall from May through July caused significant tonnage and
quality reductions. Because of the below average yields from the 2005 crop, the Company
has purchased approximately 156,000 tons of sugarbeets from a neighboring sugarbeet
cooperative that had experienced a record harvest, and was interested in reducing its
processing season risks associated with the large crop. The purchase of additional tons of
sugarbeets is expected to have a positive impact to the operations of the Company. Due to
a number of beet storage and operational factors that are subject to change when a
processing season is extended, the exact amount of the positive impact is not known at
this time. This forward-looking material is based on the Companys expectations
regarding the processing of the 2005 sugar beet crop (excluding the impact of the purchase
of additional tons of sugarbeets by the Company); the actual production results obtained
by processing those sugarbeets 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 sugarbeets. The Companys initial beet payment
estimate totals $36.00 per ton or $.13050932 per harvested/bonus pound of sugar, with the
final beet payment determined in October of 2006.

As of the date of this report, the
condition of the beets in storage and factory operations has been satisfactory.

---

The 2002 Farm Bill contains marketing
allocations for sugar that could potentially restrict the companys ability to market
all the sugar it produces. The Company believes it has obtained the allocations necessary
for the marketing of its entire 2005 crop. However, there are no assurances that the
Company will be able to secure enough marketing allocations for crop years 2006 and 2007
(the crop years covered by the current Farm Bill) to market all of the production from the
those crops. For each crop year left under the Farm Bill, the Companys Board of
Directors and Management team will be assessing the level of anticipated allocations that
the Company will be receiving from the United States Department of Agriculture
(USDA). Based upon that estimated level of assessment, the measurement of the
risk involved in trying to secure additional allocation from other sugar processors, if
needed, and the value of selling non-allocation sugar into other markets, will ultimately
determine the level of planted acreage that the Company decides upon. The company has
announced to its shareholder/growers it intends to authorize the planting of 117,000 acres
of beets for the 2006 crop.

OTHER INFORMATION

# Federal programs,
regulations and trade agreements

Provisions of the current Farm Bill
and existing trade agreements between the United States (U.S.) and various
foreign countries regulate domestic and imported sugar sales in the U.S. Currently,
imports provide about 20% of the total domestic consumption of sugar in the U.S., and it
is the opinion of the Company and the sugar industry as a whole that any significant
increase in the amount of imported sugar to the U.S. marketplace will result in serious
adverse sugar pricing consequences. The United States government is pursuing an aggressive
agenda on international trade.  It is seeking to negotiate new free trade agreements
with a number of countries and regions that are major producers of sugar.  The
Company believes these agreements, if they are realized, could negatively impact the
Companys profitability.  The primary agreements under consideration, to the
Companys knowledge, are the Free Trade Area of the Americas, the Andean Free Trade
Agreement, the Thailand Free Trade Agreement, the U.S.-Panama Free Trade Agreement and the
South African Customs Union Free Trade Agreement. Many of the countries included in these
agreements are major sugar producers and exporters.  If increases in guaranteed
access or reductions in sugar tariffs are included in these agreements, excess sugar from
these regions could enter the U.S. market and put pressure on domestic sugar prices.

The Company and the U.S. sugar
industry recognize the potential negative impact that would result if these agreements are
entered into by the United States and are taking steps to actively oppose any agreement
that calls for unneeded additional sugar access to domestic market place. The Company and
the sugar industry intend to continue to focus significant attention on trade issues in
the future.

The current Farm Bill provides price
support provisions for sugar. However, if that price support program, including the Tariff
Rate Quota system for imported sugar, were eliminated in its entirety, or if the
protection the United States price support program provides from foreign competitors
were materially reduced, the Company could be materially and adversely affected. In such a
situation, if the Company were not able to adopt strategies that would allow it to compete
effectively in a greatly changed domestic market for sugar, the adverse affects could
impact the Companys continued viability and the desirability of grower sugarbeets
for delivery to the Company.

# Audit Committee,
Sarbanes Oxley regulations

The Companys Audit Committee
and management are working toward meeting all required SEC documentation, certification
and best business practices as required in recently passed federal legislation (the
Sarbanes Oxley law). As the SEC adopts new rules and proposes future rules, the Company is
positioning itself to continue being in compliance. The Companys Audit Committee and
management have been seeking guidance from the SEC and experts in the appropriate areas as
needed.

The Company considers its Chief
Executive Officer, Chief Financial Officer and Chief Accounting Officer to be its
disclosure committee, responsible to the Audit Committee for presenting material facts
relative to the financial statements and how they are to be disclosed in the SEC filings
prior to those filings.

The Company has 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.

LIQUIDITY AND CAPITAL
RESOURCES

Because the Company operates as a
cooperative, payment 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 2005 and 2006 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 2006.

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, 2006.
- Maintain a long-term debt and capitalized
leases to equity ratio of not greater than .8:1.
- Maintain available cash flow to current
long-term debt ratio as defined in the agreement of not less than
1.25:1.

As of November 30, 2005 the Company
was in compliance with its loan agreement covenants with the Bank.

Working Capital as of November 30,
2005 totals $17.7 million compared to $12.4 million at August 31, 2005, an increase of
$5.3 million for the period. Increased working capital is a result of normal financing,
operational and capital expenditure activities of the Company. The Companys normal
working capital position pattern is to increase during the first, second and third
quarters of its fiscal year and decline during the fourth quarter. The fourth quarter
decline is normally attributed to inter-campaign maintenance costs, a higher level of
capital spending during the non-operating period, and the recording of shareholder equity
revolvements.

The targeted working capital for
August 31, 2006 is approximately $10.4 million dollars and, in the Companys
opinion, will be attained. The Company funds its capital expenditure and debt retirement
needs primarily from operating activities. The Company has approximately 5-years of
Co-Bank long-term debt remaining and it has two tax exempt bond issues, one with $7.0
million remaining and one with $14.0 million remaining. During the year ended August 31,
2005, the Company began recording certain of the $14.0 million bonds from long-term to
short-term liabilities to reflect the bond amortization schedule. With a combined bank
long-term debt payment and two long-term bond payments, the Companys working
capital position has been decreasing, and as a result, has anticipated re-structuring its
remaining $19.9 million long term debt package with Co-Bank when working capital
requirements show a need for doing so. The Company has held preliminary discussions with
Co-Bank regarding the future restructuring of its long-term debt package and does not
anticipate difficulty in achieving debt restructuring in the future.

The primary factor for the changes in
the Companys financial condition for the three months ended November 30, 2005 was
due to the seasonal needs of the 2005/2006 sugarbeet-processing season. The cash used to
provide for operations of $23.0 million and investing activities of $1.1 million was
funded through financing activities of $23.4 million. The net cash provided through
financing activities of $23.4 million was primarily provided through proceeds from the
issuance of short-term debt of $24.6 million; offset by payment of long-term debt of $1.2
million.

---

|Contractual Obligations            |  | Total |   | Less
Than 1
Year |  | 1 - 3
Years |       | 4 -5
Years |   | After 5
Years
|---------------------------------- |  | ----- | - | ---------------- |  | ----------- | ----- | ---------- | - | -------------
|Long-Term Debt                     |  |       | $ | 22.3MM           |  | $           | 3.6MM |            | $ | 14.4MM       
|Bonds Payable                      |  |       | $ | 21.0MM           |  | $           | 1.7MM |            | $ | 5.7MM        
|Operating Leases                   |  |       | $ | 2.2MM            |  | $           | .8MM  |            | $ | 1.4MM        
|Unconditional Purchase Obligations |  |       |   | 0                |  |             | 0     |            |   | 0            
|Other Long-Term Obligations        |  |       |   | 0                |  |             | 0     |            |   | 0            
|Total Contractual Cash Obligations |  |       | $ | 45.5MM           |  | $           | 6.1MM |            | $ | 21.5MM       

Capital expenditures for the three
months ended November 30, 2005 totaled $1.1 million. Capital expenditures for fiscal year
2006 are currently estimated at $4.1 million, which is less than the amount spent on
average in the prior four years.

---

# PART II. OTHER
INFORMATION

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 Information
None

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:
| | --------------------------------------------------------------------------------

September 27, 2005: Minn-Dak Farmers
Cooperatives Board of Directors has determined that the planting level for the 2006
crop will be 160% of base acres plus a 2% measuring tolerance for a total planting of 162%
of base acres. The 2005 crop planted acres were approved by the Board of Directors at the
level of 150% of base acres.

October 14, 2005:  Minn-Dak
Farmers Cooperative has announced that the board of directors, following the completion of
the 2005 fiscal year audit, has approved the final payment for the 2004 crop of $35.96 per
ton of beets harvested (12.598566 cents per pound of sugar). The Board of Directors has
also declared and allocated to shareholders of record, for the 2004 crop, non-qualified
allocated patronage totaling $5,191,808 or $2.26 per ton of beets harvested.

October 27, 2005: Minn-Dak Farmers
Cooperative (the Company) has announced that its board of directors has reviewed and
approved the 2005-crop business plan. The 2005-crop business plan, based upon 99.5% of the
2005-crop harvest being completed, provided a beet payment to shareholder / growers of
approximately $35.75 per ton of harvested beets (13.0350 cents per pound of extractible
sugar). Upon completion of the harvest the Company anticipates that the business plan will
yield a beet payment to shareholder / growers of approximately $36.00 per ton (13.0587
cents per pound of extractible sugar), based upon the current estimated yield of 1,810,000
tons of beets.

---

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, 2006 | /s/ DAVID H. ROCHE                                                                                                                 
|                       |                                                                                                                                    
|                       | David H. Roche
                                                                               President and Chief Executive Officer
|                      
|Date: January 13, 2006 | /s/ STEVEN M. CASPERS                                                                                                              
|                       |                                                                                                                                    
|                       | Steven M. Caspers
Executive Vice President and Chief Financial Officer                                                             

---