# 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:   May 31, 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 |  | July 6, 2004   | 
|$250 Par Value        |  | 488            | 



---

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 COOPERATIVE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|1. |  | The consolidated
financial statements for the nine-month period ended May 31, 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 nine
months ended May 31, 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.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Components of Net Periodic Benefit Cost for the Nine Months Ended 5-31-04
| | -------------------------------------------------------------------------

|000s                              | Pension Benefits |  | Other Benefits
|---------------------------------- | ---------------- |  | --------------
|
|Service Cost                       |                  |  | $             
|Interest Cost                      |                  |  |               
|Expected return on plan assets     |                  |  |               
|Amortization of prior service cost |                  |  |               
|Amortization of transition cost    |                  |  |               
|Amortization of net (gain)loss     |                  |  |               
|                                   |                  |  |               
|Net periodic benefit cost          |                  |  | $             
|                                   |                  |  |               

| | As of the nine
months ended 5-31-04, the Company has made $1.023 million of contributions
vs $.523 million through the nine months ended 5-31-03. The Company
anticipates contributing an additional $.25 million to fund its pension
plan in FY 2004 for a total of $1.273 million.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

# CONSOLIDATED BALANCE SHEETS
ASSETS
(In Thousands)

|ASSETS                                                    | May 31, 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 COOPERATIVE
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS EQUITY
(In Thousands)

|LIABILITIES AND MEMBERS INVESTMENT                  | May 31, 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, 488 shares at May 31,       
|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.



---

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

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

|                                                     | Three Months Ended |  | Nine 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 COOPERATIVE
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)

|                                                                | Nine 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) 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)/provided by 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 NINE MONTHS ENDED MAY 31, 2004 AND MAY 31 , 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 May 31, 2004 (the third
quarter of the Companys 2003-2004 fiscal year) and May 31, 2003 (the third 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 May 31, 2004 and May 31, 2003

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 $6.0 million of these sales and repurchases during the
three months ended May 31, 2004. Because of the nature of how the dollars associated with
these sales and repurchase activities have been recorded for financial statement purposes,
these transactions have been excluded from current and comparative analysis to the prior
periods. This accounting methodology is consistent with guidance given by SEC
interpretations for sale/repurchase transactions. Also, costs associated with these
transactions having an economic benefit for a future crop year are recorded as an asset to
be amortized in the year of economic benefit.

Revenue, from the sale of sugar,
co-products, yeast and finished goods inventory valuation changes, for the three months
ended May 31, 2004 increased $4.6 million from the 2003 period, an increase of 9%. Revenue
from the sale of finished goods increased $4.1 million and Change in Inventories increased
$.5 million.

The 400,000 cwt of additional
equivalent sugar held in standard liquor juice at the end of the second quarter was
processed into sugar in its final form resulting in an additional $3.1 million of revenue
in the third quarter ended 5-31-04. Had this inventory storage management technique not
been used, the revenue for the three months ended 5-31-04 would have been $1.5 million
greater than the period ended 5-31-03 vs. the $4.6 million actual revenue differential
shown in the results.

Revenue from the sales of sugar
increased $2.0 million, or 4.2%, reflecting an 8.6% increase in volume and a 4.3% decrease
in the price for sugar.

Revenue from dried pulp and molasses
sales increased $2.1 million or 72.4%, reflecting a 69.7% increase in sales volume and a
..7% decrease in the average gross selling price. The increase in sales volume was the
result of a combination of additional production in the third quarter and a stronger
demand for product from the marketplace.

Revenue from local sales of beet
tailings and pressed pulp increased $.3 million resulting from a new marketing program for
these products, which were either given away or sold for a nominal fee in prior years.



---

Revenues from yeast sales decreased
$.2 million or 11.4% reflecting an 8.2% decrease in sales volume and a 3.2% decrease in
sales the price of yeast.

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 May 31, 2004
amounted to $.2 million or $.5 million more than the increase in the value of finished
goods inventories for May 31, 2003

In the consolidated Statement of
Operations, Expenses section, production costs of sugar, co-products and yeast totaled
$11.2 million, $.5 million or 3.9% less than the prior year. The decrease is mainly
attributable to normal operations and expense accrual timings when comparing the
three-month period ending May 31, 2003. Marketing costs totaled $6.7 million, $1.2 million
or 22.1% more than the prior year period. The marketing costs increased due to the
increased volume of dried pulp and molasses sales.

In the section Distribution of Net
Proceeds, payments to members for sugarbeets, net of unit retention capital totaled $27.8
million, $3.9 million or 16.5% more than the prior year. The increase in the Distribution
of Net Proceeds was largely related to the additional standard liquor juice carried over
from the second quarter. For fiscal year 2004 the Company is projecting a payment to
growers for sugarbeets totaling $97.4 million, which is $3.6 million or 3.5% less than the
prior fiscal year. The decrease in payments to members is due to the Companys
increase in production being more than offset by a greater decrease in the price it is
receiving for that production.

# Comparison of the nine months ended May 31, 2004 and May 31, 2003

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 $11.3 million of these sales and repurchases during the
nine months ended May 31, 2004. Because of the nature of how the dollars associated with
these sales and repurchase activities have been recorded for financial statement purposes,
these transactions have been excluded from current and comparative analysis to the prior
periods. This accounting methodology is consistent with guidance given by SEC
interpretations for sale/repurchase transactions. Also, costs associated with these
transactions having an economic benefit for a future crop year are recorded as an asset to
be amortized in the year of the economic benefit.

Revenue, from the sale of sugar,
co-products, yeast and finished goods inventory valuation changes, for the nine months
ended May 31, 2004 increased $3.3 million from the 2003 period, an increase of 1.8%.
Revenue from the sale of finished goods increased $8.4 million, while the change in the
value of finished goods inventory decreased $5.1 million.

Revenue from the sales of sugar
increased $5.4 million or 4.3%, reflecting a 6.3% increase in volume and a 2.0% decrease
in the price for sugar.

Revenue from dried pulp and molasses
sales increased $2.1 million or 16.7%, reflecting a 17.9% increase in sales volume and a
1.2% decrease in the average gross selling price. The increase in sales volume was the
result of a combination of additional production through the third quarter and a stronger
demand for product from the marketplace.

Revenue from local sales of beet
tailings and pressed pulp increased $.9 million resulting from a new marketing program for
these products, which were either given away or sold for a nominal fee in prior years.

Revenues from yeast sales from the
Companys subsidiary yeast production facility, Minn-Dak Yeast Company
(MDYC) increased $0.2 million or 3.2%, reflecting a 7.0% increase in sales
volume and 3.8% 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 nine months ended May 31,
2004 amounted to $34.8 million or $5.1 million less than the increase in the value of
finished goods inventories for May 31, 2003.

In the consolidated statements of
operations, Expenses section, Production costs of sugar, by-products and yeast sold
increased $1.2 million or 2.9%. The increase is mainly attributable to normal operations
and expense accrual timings



---

when comparing the nine-month period
ending May 31, 2003. Marketing costs totaled $21.4 million, $.7 million or 3.0% less than
the prior year period.

In the section Distribution of Net
Proceeds, payments to members for sugarbeets (net of unit retention capital and
unprocessed sugarbeet inventory) increased $1.5 million or 1.7% from the prior period. For
fiscal year 2004 the Company is projecting a payment to growers for sugarbeets totaling
$97.4 million, which is $3.6 million or 3.5% less than the prior fiscal year. The decrease
in payments to members is due to the Companys increase in production being more than
offset by a greater decrease in the price it is receiving for that production.

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 to set a new record for
sugar produced.

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 obtained the allocations necessary for the marketing of the entire 2003 crop.

The Companys initial beet
payment estimate totaled $40.83 per ton or $.126063 per harvested/bonus pound of sugar,
with the final beet payment determined in October of 2004. On June 22, after a regularly
scheduled board meeting, the board of directors announced following the review and
approval of the updated 2003-crop business plan, the beet payment estimate for the 2003
crop will be increased to $43.00 per ton or $.132763 per harvested/bonus pound of sugar.
This increase was primarily due to improved revenues over the original 2003-crop business
plan resulting from an overall increase in both prices and volume.

ESTIMATED FISCAL YEAR 2005 INFORMATION

The Board of Directors announced that
the 2004 crop planted acreage would 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.

Planting of the 2004 crop was
essentially completed in the month of April. Cold, windy and dry conditions persisted from
early April until late May. Those factors contributed to a replant of 10,700 (10%) of the
crop. Some much needed, and in some cases, excessive moisture occurred the final ten days
of May. June saw continued cool temperatures that have limited crop growth. As of mid June
the crop is estimated to be two weeks behind the past two years in crop development.
Insect and diseases have had minimal impact up to this point.



---

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, 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 2004 and 2005 of
$45.0 million, of which $1.0 million is currently available for a letter of credit. The
seasonal line of credit was scheduled for renewal in May 2004 but at the request of the
Bank, the existing loan was extended for 30 days and the renewal took place in
June 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 May 31, 2004 the Company was in
compliance with its loan agreement covenants with the Bank.

Working Capital as of May 31, 2004
totals $37.6 million compared to $17.8 million at August 31, 2003, an increase of $19.8
million for the period. Increased working capital is a result of normal financing,
operational and capital expenditure activities of the Company. The June 22 beet payment
increase announcement will reduce working capital by $4.9 million.

The Company anticipates a working
capital position of approximately $14.6 million at its August 31, 2004 fiscal year end.

The primary factor for the changes in
the Companys financial condition for the nine months ended May 31, 2004 was due to
the seasonal needs of the 2003/2004 sugarbeet-processing season. The cash used to provide
for operations of $16.1 million and for investing activities of $3.2 million was funded
through cash flow financing activities, and a reduction in cash. The net cash provided
through financing activities of $18.0 million was primarily provided through proceeds from
the issuance of short-term debt of $22.9 million; offset by payment of long term debt of
$4.5 million.

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

Capital expenditures for the nine months ended May 31, 2004 totaled $3.0 million.



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The steam dryer for pulp
capital expenditure that was completed in August 2003, and which utilized
$9.3 million of tax-exempt bonds as a financing tool, achieved the
guaranteed production capacity during the nine months ended May 31, 2004.

PART II.   OTHER INFORMATION

Item 1.   Legal ProceedingsNone

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 the past nine months:
| | ----------------------------------------------------------------------------------------

| |  |  | Filed
on June 22, 2004: Minn-Dak Farmers Cooperative has announced that the board of directors,
following the review and approval of the updated 2003-crop business plan, has determined
that the beet payment estimate for the 2003 crop will be increased from $40.83 per ton to
$43.00 per ton. This increase was primarily due to improved revenues over the original
2003 crop business plan, which resulted from an overall increase in both prices and
volume.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | 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 COOPERATIVE                                         
|----- | ---------------------------------------------------------------------
|      |                                                                      
|      | (Registrant)                                                         
|     
|     
|Date: | July 14, 2004                                                        
|      |                                                                      
|      | David H. RochePresident and Chief Executive Officer                  
|     
|Date: | July 14, 2004                                                        
|      |                                                                      
|      | Steven M. CaspersExecutive Vice President and Chief Financial Officer

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