UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549



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FORM 10-Q

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xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: November 30, 2006



OR



oTRANSITION REPORT PURSUANT TO SECTION 13 AND 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934



Commission file: No. 33-94644



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MINN-DAK FARMERS COOPERATIVE

(Exact name of registrant as specified in its charter)



|North Dakota                                                  | 23-7222188                         
|------------------------------------------------------------- | -----------------------------------
|(State or other jurisdiction ofIncorporation 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)



SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

NONE



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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 atJanuary 4, 2007$250 Par Value
        
        480




Minn-Dak Farmers Cooperative
(The Company) 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.





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PART I.   FINANCIAL INFORMATION



ITEM 1.   FINANCIAL STATEMENTS



MINN-DAK FARMERS COOPERATIVE

CONSOLIDATED BALANCE SHEETS

ASSETS

(In Thousands)



ASSETS
        Nov 30, 2006(Unaudited)
        
        Aug 31, 2006(Audited)CURRENT ASSETS:Cash
        $
        172
        
        $
        224Receivables:Trade accounts
        
        11,529
        
        
        15,141Growers
        
        1,508
        
        
        4,552Other
        
        24
        
        
        11013,061
        
        
        19,803Inventories:Refined sugar, in-process sugar, pulp and molasses to be sold on a pooled basis
        
        63,730
        
        
        20,223Non-member refined sugar
        
        19
        
        
        35Sugarbeets
        
        74,480
        
        
        2,018Yeast
        
        145
        
        
        166Materials and supplies
        
        7,290
        
        
        7,116145,664
        
        
        29,558Deferred charges
        
        58
        
        
        1,506Prepaid expenses
        
        573
        
        
        575Other
        
        611
        
        
        436Deferred income tax asset
        
        607
        
        
        607Total current assets
        
        160,746
        
        
        52,709PROPERTY, PLANT AND EQUIPMENT:Land and land improvements
        
        24,637
        
        
        24,637Buildings
        
        37,474
        
        
        37,474Factory equipment
        
        134,604
        
        
        134,313Other equipment
        
        3,663
        
        
        3,954Construction in progress
        
        1,729
        
        
        933202,107
        
        
        201,311Less accumulated depreciation
        
        (105,957
        )
        
        (103,991
        )96,150
        
        
        97,320OTHER ASSETS:Investment in stock of other corporations, unconsolidated marketing subsidiaries and other cooperatives
        
        11,022
        
        
        11,017Other
        
        1,556
        
        
        2,08312,578
        
        
        13,100$
        269,474
        
        $
        163,129






See Notes to Consolidated Financial Statements.

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MINN-DAK FARMERS COOPERATIVE

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS EQUITY

(In Thousands)



Nov 30, 2006(Unaudited)
        
        Aug 31, 2006
(Audited)LIABILITIES AND MEMBERS INVESTMENTCURRENT LIABILITIES:Short-term notes payable
        
        $
        61,264
        
        $
        14,445Current portion of long-term debt
        
        
        2,493
        
        
        2,493Current portion of bonds payable
        
        
        1,665
        
        
        1,6654,158
        
        
        4,158Accounts payable:Trade
        
        
        1,786
        
        
        2,141Growers
        
        
        60,348
        
        
        14,48362,134
        
        
        16,624Advances to affiliates
        
        
        761
        
        
        533Accrued liabilities
        
        
        2,800
        
        
        2,924Total current liabilities
        
        
        131,117
        
        
        38,684LONG-TERM DEBT, NET OF CURRENT PORTION
        
        
        19,114
        
        
        19,945BONDS PAYABLE
        
        
        17,415
        
        
        17,415LONG TERM DEFERRED TAX LIABILITY
        
        
        1,781
        
        
        1,840OTHER
        
        
        1,277
        
        
        1,295COMMITMENTS AND CONTINGENCIES
        
        
        
        
        
        Total liabilities
        
        
        170,704
        
        
        79,179MEMBERS INVESTMENT:Preferred stock:Class A  100,000 shares authorized, $105 par value;72,200 shares issued and outstanding
        
        
        7,581
        
        
        7,581Class B  100,000 shares authorized, $75 par value;72,200 shares issued and outstanding
        
        
        5,415
        
        
        5,415Class C  100,000 shares authorized, $76 par value;72,200 shares issued and outstanding
        
        
        5,487
        
        
        5,48718,483
        
        
        18,483Common stock, 600 shares authorized, $250 par value;issued and outstanding, 480 shares at Nov 30,2006 and 480 shares at August 31, 2006
        
        
        120
        
        
        120Paid in capital in excess of par value
        
        
        32,094
        
        
        32,094Unit retention capital
        
        
        
        
        
        Qualified allocated patronage
        
        
        
        
        
        Nonqualified allocated patronage
        
        
        40,894
        
        
        26,077Retained earnings
        
        
        7,179
        
        
        7,17698,770
        
        
        83,950$
        269,474
        
        $
        163,129




See Notes to Consolidated Financial Statements.

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MINN-DAK FARMERS COOPERATIVE

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands)

(Unaudited)





Three Months EndedNovember 30,2006
        
        2005REVENUE:Sales of sugar, co-products and yeast, net of discounts
        
        $
        47,382
        
        $
        42,392Changes in finished goods inventory and in-process sugar at NRV
        
        
        43,507
        
        
        7,594Other income
        
        
        24
        
        
        4690,913
        
        
        50,032EXPENSES:Production costs of sugar, in-process sugar, co-products and yeast sold
        
        
        18,741
        
        
        14,560Sales and distribution costs
        
        
        8,374
        
        
        8,332General and administrative
        
        
        1,271
        
        
        1,490Interest
        
        
        768
        
        
        683Gain on disposition of property and equipment
        
        
        
        
        
        (2
        )29,154
        
        
        25,063NET PROCEEDS RESULTING FROM MEMBER AND NON-MEMBERBUSINESS BEFORE MINORITY INTEREST
        
        $
        61,759
        
        $
        24,969MINORITY INTEREST IN INCOME OF SUBSIDIARIES
        
        
        
        
        
        (50
        )NET PROCEEDS RESULTING FROM MEMBER AND NON-MEMBER BUSINESS
        
        $
        61,759
        
        $
        24,919DISTRIBUTION OF NET PROCEEDS:Credited to members investment:Components of net income:Income from non-member business
        
        $
        3
        
        $
        203Patronage income
        
        
        14,817
        
        
        3,735Net income credited to members investment
        
        
        14,820
        
        
        3,938Payments to members for sugarbeets, net of unit retention capital
        
        
        46,939
        
        
        20,981NET PROCEEDS RESULTING FROM MEMBER AND NON-MEMBER BUSINESS
        
        $
        61,759
        
        $
        24,919




See Notes to Consolidated Financial Statements.

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MINN-DAK FARMERS COOPERATIVE

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)





Three Months Ended
November 30,2006
        
        2005CASH FLOWS FROM OPERATING ACTIVITIES:Income allocated to members investment
        
        $
        14,820
        
        $
        3,938Add (deduct) noncash items:Depreciation and amortization
        
        
        2,056
        
        
        1,967Equipment disposals - loss
        
        
        
        
        
        (2
        )Net income allocated from unconsolidated marketing subsidiaries
        
        
        (3
        )
        
        (2
        )Minority interest in equity of subsidiaries
        
        
        
        
        
        50Changes in operating assets and liabilities:Accounts receivable and advances
        
        
        6,970
        
        
        4,017Inventory and prepaid expenses
        
        
        (116,279
        )
        
        (56,375
        )Deferred charges and other assets
        
        
        1,825
        
        
        1,817Accounts payable, accrued liabilities and other liabilities
        
        
        48,986
        
        
        26,167Net cash used in operating activities
        
        
        (41,625
        )
        
        (18,423
        )CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from disposition of property, plant and equipment
        
        
        
        
        
        2Capital expenditures
        
        
        (796
        )
        
        (1,134
        )Restricted bond fund investment
        
        
        1
        
        
        99Net cash used in investing activities
        
        
        (795
        )
        
        (1,033
        )CASH FLOWS FROM FINANCING ACTIVITIES:Net proceeds from issuance of short-term debt
        
        
        46,819
        
        
        24,570Payment of long-term debt
        
        
        (831
        )
        
        (1,200
        )Payment of unit retains and allocated patronage
        
        
        (3,620
        )
        
        (4,542
        )Net cash provided by financing activities
        
        
        42,368
        
        
        18,828NET DECREASE IN CASH
        
        
        (52
        )
        
        (629
        )CASH, BEGINNING OF YEAR
        
        
        224
        
        
        651CASH, END OF QUARTER
        
        $
        172
        
        $
        23SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash payments for:Interest
        
        $
        722
        
        $
        622Income taxes, net of refunds
        
        $
        1
        
        $
        1




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MINN-DAK FARMERS COOPERATIVE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.
        The consolidated financial statements of the Company and that of its subsidiary company Minn Dak Yeast Company (Minn Dak Yeast) for the three-month periods ended November 30, 2006 and 2005 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, 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, 2006. The results of operations for the three months ended November 30, 2006 are not necessarily indicative of the results for the entire fiscal
year ending August 31, 2007.




2.
        Inventories of refined sugar, in-process sugar, pulp and molasses to be sold on a pooled basis are valued at net realizable value, while third-party purchased refined sugar to be sold on a pooled basis is valued at the lower of cost or market. Inventory of yeast is valued at the lower of average cost or market. Materials and supplies are valued at most recent purchase that approximates cost. During the periods when sugarbeets are purchased from growers, but not yet converted into bin sugar or in-process sugar, that inventory is valued at grower payment cost. In valuing inventories at net realizable value, the Company, in effect sells the remaining inventory to the subsequent periods sugar and co-product pool. Pooled product inventories will normally increase to a peak valuation at the end of the processing campaign and decrease to a low point of valuation at or
near fiscal year end.




3.
        In September 2006, and effective as of August 31, 2006, the Company declared a revolvement of the remaining 55% of the unit retains and allocated patronage for the 1996 crop totaling $2,490,804, 100% of the unit retains and allocated patronage for the 1997 and 1998 crops totaling $867,847 and $2,243 respectively, and approximately 6% of the 2000 crop unit retains and allocated patronage totaling $259,452, (there were no unit retains or allocated patronage for the 1999 crop). These amounts were accrued as of August 31, 2006 and paid to the stockholders on September 29, 2006.




4.
        In October 2006, the company allocated to members $4,220,538 of patronage from the 2005 crop in the form of non-qualified allocated patronage credits.




5.
        As of November 30, 2006, the Company had  $103.8 million of seasonal credit capacity, with $61.3 million being utilized, leaving a remaining seasonal credit capacity of $42.5 million. As of August 31, 2006, the Company had  $45.0 million of seasonal credit capacity, with $14.4 million being utilized, leaving a remaining seasonal credit capacity of $30.6 million. The increase in seasonal debt from August 31, 2006 to November 30, 2006 is due to normal seasonal operations and an above average November crop payment to growers.




6.
        In October 2006, the Company made the final payment to shareholders for the 2005-crop sugarbeets. The Companys shareholders harvested 3,019,475 tons of sugarbeets from the 2006 crop, which created an estimated payment liability of $121,419,671. The Companys initial payment for the 2006-crop sugarbeets, made in November of 2006, totaled $61,071,636, leaving a balance payable to shareholders of $60,348,035.




7.
        The Financial Accounting Standards Board has issued an amendment to Financial Accounting Standards No. 132, Employers Disclosure about Pensions and Other Post-Retirement Benefits. Such amendment requires additional disclosures to interim and annual financial statements, which are effective and adopted for the interim period ending November 30, 2006, but does not change the recognition requirements related to pensions and post-retirement benefits.




Components of Net Periodic Benefit Cost for the Three Months Ended November 30, 2006





In 000sPension Plan
        
        Other ThanPension Plan2007
        
        2006
        
        2007
        
        2006Service Cost
        
        $
        246
        
        $
        215
        
        $
        0
        
        $
        0Interest Cost
        
        
        385
        
        
        350
        
        
        0
        
        
        0Expected return on plan assets
        
        
        (341
        )
        
        (311
        )
        
        0
        
        
        0Amortization of prior service cost
        
        
        15
        
        
        22
        
        
        0
        
        
        0Amortization of transition cost
        
        
        0
        
        
        0
        
        
        0
        
        
        0Amortization of net (gain) loss
        
        
        60
        
        
        54
        
        
        0
        
        
        0Net periodic benefit cost
        
        $
        365
        
        $
        330
        
        $
        0
        
        $
        0


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As of the three months ended November 30, 2006, the Company has made $0.28 million of contributions vs. $0.28 million through the three months ended November 30, 2005. The Company anticipates contributing an additional $0.79 million to fund its pension plan in FY 2007 for a total of $1.07 million. Contributions in FY 2006 totaled $1.12 million.



8. Recently Issued Accounting Pronouncements:

FAS 157  Fair Value Measurements  -  This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This statement does not require any new fair value measurements. However the application of this statement may change the accounting practice regarding future mergers and acquisitions at the Company.



FAS 158  Employers Accounting for Defined Benefit Pension Plans and other Post Retirement Plans  -  This statement requires an employer that is a business entity and sponsors one or more single-employer defined benefit plans to recognize the funded status of a benefit plan, measured as the difference between plan assets at fair value and the benefit obligation in the financial statement.



This pronouncement is anticipated by the Company to cause other comprehensive income/loss in future years. The Company believes, had this pronouncement been effective for fiscal year ending August 31, 2006, the Company would need to recognize $5.4 million in additional unfunded liabilities, $0.3 million in additional recognition of the period May 31, 2006 through August 31, 2006, offset by a $2.3 million deferred tax benefit for a net other comprehensive loss of $3.4 million. The Company expects to adopt the requirement to recognize the unfunded liabilities for its fiscal year ending August 31, 2007. The Company currently measures its liability as of May 31, 2006, however, the new measurement date for liability would be August 31, 2006, this change will cause a one time addition to liability equal to one fourth of the Companys annual pension liability accrual. The additional
requirement to measure plan assets and benefit obligations as of the end of the fiscal year-end statement of financial position is expected to be adopted by the Companys for its fiscal year ending August 31, 2009.

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ITEM 2.   MANAGEMENTS DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND                 FINANCIAL CONDITION



OVERVIEW



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, 2006 (the first quarter of the Companys 2006-2007 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.



Critical Accounting Policies



Preparation of the Companys consolidated financial statements requires estimates and judgments to be made that affect the amounts of assets, liabilities, revenues and expenses reported. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. Management continually evaluates these estimates based on historical experience and other assumptions it believes to be reasonable under the circumstances.



The difficulty in applying these policies arises from the assumptions, estimates and judgments that have to be made currently about matters that are inherently uncertain, such as future economic conditions, operating results and valuations as well as management intentions. As the difficulty increases, the level of precision decreases, meaning that actual results can and probably will be different from those currently estimated.



Estimates are considered to be critical if they meet both of the following criteria:  (1) the estimate requires assumptions about material matters that are uncertain at the time the accounting estimates are made, and (2) other materially different estimates could have been reasonably made or material changes in the estimates are reasonably likely to occur from period to period. The Companys critical accounting estimates include the following:



Inventory Valuation



Sugar, pulp, molasses and other agri-product inventories are valued at estimated net realizable value. The Company derives its estimates from sales contracts, recent sales and evaluations of market conditions and trends. Changes in market conditions may cause managements estimates to differ from actual results.

Property and Equipment, Property and Equipment Held for Lease, and Depreciation



Property and equipment, and property and equipment held for lease are depreciated for financial reporting purposes principally using straight-line methods with estimated useful lives ranging from 3 to 40 years. Economic circumstances or other factors may cause managements estimates of expected useful lives to differ from actual.



The Company reviews its property and equipment, and property and equipment held for lease for impairment whenever events indicate that the carrying amount of the asset may not be recoverable. An impairment loss is recorded when the sum of the future cash flows is less than the carrying amount of the asset. An impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value. There were no impairment losses incurred during the fiscal year covered by this report. However, considerable management judgment is necessary to estimate future cash flows and may differ from actual results.

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Defined Benefit Pension Plan



The Company maintains and administers a defined benefit pension plan. The annual cost of this plan can be significantly affected by changes in assumptions and differences between expected and actual experience. The Company utilizes actuarial methods required by SFAS No. 87, Employers Accounting for Pensions, (SFAS No 87) to account for it defined benefit pension plan. The actuarial methods require numerous assumptions to calculate the net periodic pension benefit expense and the related projected benefit obligations for our defined benefit pension plan. Two of the most significant assumptions are the discount rates and expected long-term rate of return on plan assets. In making these assumptions, we are required to consider current market conditions, including changes in interest assumptions.



Key assumptions used to determine annual pension expense are as follows:



2006
        
        2005Discount Rate
        6.50%
        
        6.50%Expected return on plan assets
        8.0%
        
        8.0%Rate of total Compensation Increase
        4.3%
        
        4.5%




Discount Rate:  An assumed discount rate is required to be used in the pension plan actuarial valuation. The discount rate is a significant assumption. The Companys methodology for selecting the discount rate for the companys plan is to seek guidance from outside pension experts for an appropriate discount rate.



Expected Return on Plan Assets:  The expected long-term rate of return on plan assets should, over time, approximate the actual long-term returns on pension plan assets. The Companys methodology for selecting the Expected Return on Plan Assets is to seek guidance from outside pension experts for an appropriate rate.



In September of 2006, the FASB issued FAS No. 158 Employers Accounting for Defined Benefit Pension Plans and other Post Retirement plans.



This pronouncement is anticipated by the Company to cause other comprehensive income/loss in future years. The Company believes, had this pronouncement been effective for fiscal year ending August 31, 2006, the Company would need to recognize $5.4 million in additional unfunded liabilities, $0.3 million in additional recognition of the period May 31, 2006 through August 31, 2006, offset by a $2.3 million deferred tax benefit for a net other comprehensive loss of $3.4 million. The Company expects to adopt the requirement to recognize the unfunded liabilities for its fiscal year ending August 31, 2007. The Company currently measures its liability as of May 31, 2006, however, the new measurement date for liability would be August 31, 2006, this change will cause a one time addition to liability equal to one fourth of the Companys annual pension liability accrual. The additional requirement to measure
plan assets and benefit obligations as of the end of the fiscal year-end statement of financial position is expected to be adopted by the Companys for its fiscal year ending August 31, 2009.



Income Taxes



Determining the consolidated provision for income tax expense, income tax liabilities and deferred tax assets and liabilities involves judgment. The company calculates income taxes in each of the tax jurisdictions in which we operate. This involves estimating current tax exposures in each jurisdiction as well as making judgments regarding the recoverability of deferred tax assets.



There have been no material changes to the Companys critical accounting policies since the filing of its Annual Report on form 10-K for the year ended August 31, 2006.

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RESULTS OF OPERATIONS

Comparison of the three months ended November 30, 2006 and November 30, 2005

In the section Distribution of Net Proceeds, payments to members for sugarbeets, net of unit retention capital, totaled $46.9 million, an increase of $26.0 million or 123.7%.  For fiscal year 2007 the Company is projecting a payment to growers for sugarbeets totaling $121.4 million, which is $49.8 million or 69.5% more than the prior fiscal year. The increase in payments to members is primarily due to an increase of 1.2 million additional tons of sugarbeets harvested or a 66.8% increase in the number of delivered tons of sugarbeets. The payment is based upon (i) an average delivered sugar content of 17.10%, (ii) a total sugarbeet crop to process of 3.0 million tons and (iii) the Companys projected selling price for its sugar, which is currently estimated to be lower than the previous year.



Revenues for the quarter ended November 30, 2006 were comprised of Sugar 88%, Pulp 6%, Yeast 3% and Molasses 3%.



Revenue and inventory changes for the three months ended November 30, 2006 increased  $40.9 million from the 2005 period. Revenue from the sale of finished goods increased $5.0 million and the change in the value of inventories increased $35.9 million.



Revenue from the sale of sugar increased $2.8 million, or 7.7% reflecting a 7.2% decrease in volume and a 14.9% increase in the sales price for sugar. Because the 2005-crop sales were materially contracted prior to the fall of 2005 general price increase, 2005-crop sales for the quarter ended 11-30-05 reflected lower than spot price values. 2006-crop sales for the period ened November 30, 2006 were contracted during a higher price marketing period. The volume reduction was due to the timing of customer orders, and is expected to be offset by a higher level of orders in the 2nd quarter.



Revenue from dried pulp sales increased  $0.3 million or 12.2%, reflecting a 9.0% increase in sales volume and a 3.2% increase in the average gross selling price. The increase in volume is primarily the result of a larger crop and the earlier start of processing. Volume to the domestic market increased by 21% and was partially offset by a 10% reduction in volume to Europe and a 2% reduction in sales to Asia. The increase in average gross selling price was primarily a result of a greater percentage of delivered sales for the three months ended November 30, 2006 versus the same period last year.



Revenue from molasses sales increased $0.9 million or 65.0%, reflecting a 33.8% increase in sales volume and a 31.2% increase in the average gross selling price. The increase in volume is primarily the result of a larger crop and the earlier start of processing. Sugarbeet molasses prices continued to benefit from tight global supplies of cane and the reduction of sugarbeet molasses production in the European Union.



Revenues from yeast sales increased  $1.0 million or 49.0%, reflecting a 35.5% increase in the average selling price and a 13.5% increase in the sales volume.  The average selling price for the quarter ending November 30, 2005 was based upon a contract formula between Minn Dak Yeast and its marketing and equity partner, Sensient Technologies Corp., 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. For the quarter ending November 30, 2006 the Company owned 100% of Minn Dak Yeast and the formula involving Sensient was terminated, and as a result, sales are recorded at the customer selling price (market price). Also, 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, 2006 amounted to $43.5 million or $35.9 million more than the increase in the value of finished goods inventories for the three months ended November 30, 2005.  The primary cause of change in finished goods inventories is volume related. The Company began its campaign September 1, 2006 vs. October 1, 2005; in addition, the daily throughput of the Company has been at a higher level than in previous years.



In the consolidated Statement of Operations, Expenses section, production costs of sugar, in-process sugar, co-products and yeast totaled $18.7 million, $4.2 million or 28.7% more than the prior year. The increase is mainly attributable to the September 1, 2006 plant start-up vs. the October 1, 2005 plant start-up.  Marketing costs totaled $8.4 million, $0.1 million or 0.5% more than the prior year.

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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).  Due to the record size 2006 crop of sugarbeets, in November the Company increased its short-term line of credit with the Bank for the remaining calendar year 2006 through the scheduled renewal in May 2007. An 8-k filed December 11, 2006 inadvertently referred to the increased credit line as $70.0 million vs. the correct number of $75.0 million.



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


        Maintain a current ratio of no less than 1.10 for the first quarter of a fiscal year and 1.15 for all other quarter and fiscal year ends;



        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, 2006 the Company was in compliance with its loan agreement covenants with the Bank.



Working Capital as of November 30, 2006 totals $29.6 million compared to $14.0 million at August 31, 2006, an increase of $15.6 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, 2007 is approximately $12.9 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 7-years of Co-Bank long-term debt remaining and it has two tax exempt bond issues, one with $5.9 million remaining and one with $13.1 million remaining.



The primary factor for the changes in the Companys financial condition for the three months ended November 30, 2006 was due to the seasonal needs of the 2006/2007 sugarbeet-processing season. The cash used to provide for operations of $41.6 million and investing activities of $0.8 million was funded through financing activities of $46.0 million. The net cash provided through financing activities of $42.4 million was primarily provided through proceeds from the issuance of short-term debt of $46.8 million, offset by payment of long-term debt of $0.8 million and payment of unit retains and allocated patronage of $3.6 million.

Below is a table detailing the Companys loan and lease payment obligations:



Contractual Obligations
        
        Total
        
        LessThan 1Year
        
        1 - 3Years
        
        4 5Years
        
        After 5YearsLong-Term Debt
        
        $
        21.6 MM
        
        $
        2.5 MM
        
        $
        10.0 MM
        
        $
        5.0 MM
        
        $
        4.1 MMBonds Payable
        
        $
        19.1 MM
        
        $
        1.7 MM
        
        $
        6.0 MM
        
        $
        3.2 MM
        
        $
        8.2 MMOperating Leases
        
        $
        3.6 MM
        
        $
        1.2 MM
        
        $
        2.4 MM
        
        
        0
        
        
        0Unconditional Purchase Obligations
        
        
        0
        
        
        0
        
        
        0
        
        
        0
        
        
        0Other Long-Term Obligations
        
        
        0
        
        
        0
        
        
        0
        
        
        0
        
        
        0Total Contractual Cash Obligations
        
        $
        44.3 MM
        
        $
        5.4 MM
        
        $
        18.4 MM
        
        $
        8.2 MM
        
        $
        12.3 MM






Capital expenditures for the three months ended November 30, 2006 totaled $0.8 million.  Capital expenditures for fiscal year 2007, net of restricted bond related investments, are currently estimated at $4.8 million, which is less than the amount spent on average in the prior four years.

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ESTIMATED FISCAL YEAR 2007 INFORMATION



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 2006 sugarbeet crop. Given the nature of the estimates required in connection with the payments to members for their sugarbeets, this discussion includes forward-looking statements regarding the quantity of sugar to be produced from the 2006 sugarbeet crop, the net selling price for the sugar and co-products produced by the Company and the Companys operating costs. These forward-looking statements are based largely upon the Companys expectations and estimates of future events; as a result, they are subject to a variety of risks and uncertainties. Some of those estimates, such as the selling price for the Companys products, the quantity of sugar produced from the sugarbeet crop, changes in plant production efficiencies and sugarbeet
storage conditions are beyond the Companys control. The actual results experienced by the Company could differ materially from the forward-looking statements contained herein.



The Companys members harvested 3.0 million tons of sugarbeets from the 2006 crop, the largest harvested crop in Company history. Sugar content of the 2006 crop at harvest was 17.10%, or 1% below the most recent five years average of 17.26%. Because of the high volume crop, the Company is projecting the sugar production from the 2006-crop to be 34% more than the most recent five years average. Very good growing conditions at the start of, and at the end of, the growing season resulted in the harvesting of the high-volume crop by the Companys grower-shareholders. The Companys initial sugarbeet payment estimate totals $40.21 per ton or $.13484408 per harvested/bonus pound of sugar, with the final sugarbeet payment to be determined in October of 2007.



Factory operations currently show that the average sugarbeet slice rate of approximately 11,600 tons per day is well above long-term averages. Assuming the same tons of sugarbeets to be sliced as provided for in the Companys operating plan, this higher than planned slice rate should result in fewer operating days. This may in turn help reduce the amount of sugarbeet degradation that occurs as a result of long-term sugarbeet storage, thereby increasing the amount of sugar to be produced from the sugarbeets to be sliced.



Based upon marketing information developed by United Sugars Corporation, the Companys sugar marketing subsidiary, estimates of the average net selling price of the Companys sugar will be less than that of the prior year because of the high volume available for sale (domestic production plus foreign imports) relative to the amount of estimated domestic consumption. The higher supply of sugar available to the domestic marketplace results from much higher levels of imported foreign sugar and a larger-than-average domestic beet sugar crop. The high levels of imported foreign sugar results from the United States Department of Agricultures (USDA) determination that the domestic marketplace was in need of these high levels of imports in order to have adequate sugar to meet consumption requirements. The domestic sugar industry made numerous attempts to encourage the
USDA to announce lower, more reasonable levels of sugar quotas, but to no avail. This forward-looking material is based upon the Companys results of the processing of the 2006 sugarbeet crop and the expected revenues and expenditures for the remainder of fiscal year 2007. Results from operations could differ materially from the Companys current estimate as a result of various estimates, such as the cost to the Company of its inter-campaign maintenance and the final net selling prices for its finished goods.



The 2002 Farm Bill contains marketing allocations for sugar that could potentially restrict the companys ability to market all the sugar it produces. Because of the amount of sugar allocation available to the Company, and because of the expected amount of sugar to be produced from the 2006 sugarbeet crop, the Company believes it must obtain additional marketing allocations in order to market all of its sugar domestically during the fiscal year. The Company is also studying other ways in which to handle any sugar produced that will exceed its marketing allocations for the current year and will ultimately choose the most viable option for the Company.  The Company has sold 300,000 cwt of sugar without allocations and repurchased 300,000 cwt of sugar with allocations to/from another sugarbeet company for the allocation period ending 9-30-07.



Also, there are no assurances that the Company will be able to secure enough marketing allocations for crop year 2007 (the last crop year covered by the current Farm Bill) to market all of the production from the that crop. The Company will apply the same level of assessment to that crop in order to determine the correct direction for the Company should there be sugar produced above the marketing allocations available to it.

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ESTIMATED FISCAL YEAR 2008 INFORMATION



On September 26, 2006, the Companys Board of Directors determined that the planting level for the 2007 crop will be 150% of member preferred shares plus a 2% measuring tolerance for a total planting of 152% of member preferred shares. The 2006 crop planted acres were approved by the Board of Directors at the level of 162% of member-preferred shares.



OTHER INFORMATION



Federal Programs, regulations and trade agreements



Domestic sugar prices are supported under a program administered by the United States Department of Agriculture (USDA). Under the current program, which was initiated in 1981 and extended under the Food Security Act of 1985, the Food, Agriculture, Conservation and Trade Act of 1990, the Federal Agriculture Improvement and Reform Act of 1996 and now The Farm Security and Rural Investment Act of 2002 (the Farm Bill), the price of sugar is required to be maintained above the price at which producers could forfeit sugar to repay non-recourse loans obtained through the Commodity Credit Corporation (CCC). The USDA maintains sugar prices without cost to the U.S. Treasury by regulating the quantity of sugar imports. The U.S. currently imports approximately 22% of its domestic needs.



Farm Security and Rural Investment Act of 2002



The Farm Bill was enacted on May 13, 2002. It contains several provisions related to the domestic sugar industry, with the ultimate goal of such provisions to achieve balance and stability in the U.S. sugar market while minimizing the cost to the Federal government. The Farm Bill applies to the 2002 through 2007 crop years. Generally, the Farm Bill restricts imports of foreign sugar, maintains the previous non-recourse loan program, and establishes a system of marketing allocations for sugarbeet and sugar cane producers in an attempt to balance the supply and demand for sugar in the U.S. domestic sugar market.



The USDA has historically maintained sugar prices above the forfeiture price without cost to the U.S. Treasury by regulating the supply of sugar in the U.S. market through regulating the quantity of sugar imports. Under the Tariff Rate Quota (TRQ) implemented October 1, 1990, sugar-producing countries are allowed to export a fixed quantity of sugar into the United States duty-free or subject to minimal duties. Unlimited additional quantities may be exported to the United States upon payment of a tariff of 15.36 cents per pound prior to shipment. To date, only immaterial quantities of sugar have been imported under this higher tariff level.



The Farm Bill sets an 18 cent per pound loan rate for raw cane sugar and a 22.90 cent per pound loan rate for refined beet sugar. Both loan rates were effective for the 2005 year crop.



In order to reduce the risk of sugar forfeitures to the CCC and to provide balance in the marketplace, the Farm Bill establishes annual flexible marketing allotments for both cane and beet sugar processors. The USDA determines the overall allotment quantity (OAQ) for the U.S. domestic sugar market for each crop year. Once the USDA has determined the OAQ for a crop year, it then determines each allotment for beet and cane sugar. An individual processors allocation of the allotment for a crop year is determined by formula set forth in the Farm Bill. Each domestic processor of sugar, which includes the Company, is provided an allocation whenever allotments are in effect, based upon that formula. The USDA annually establishes individual processors allocations.



Under the Farm Bill, a processor may market sugar in excess of its allocation if such sales (i) enable another processor to meet its allocation, (ii) facilitate the export of sugar or (iii) are made for nonhuman consumption. Or any sugar in excess of a processors allocation may be held until such time that allotments are lifted or additional allocations become available.



The marketing allotments and allocations set forth under the Farm Bill affect the sugar processed from the 2002 crop through the 2007 crop. On an annual basis, the marketing allotments, and the corresponding allocation to the Company, will determine the amount of sugar the Company can sell into the domestic market. The Companys allocation may reduce the amount of sugar the Company can market for a given year, thus reducing the number of acres of sugarbeets required for processing. The Company anticipates that it may have to adjust its production of sugar each year to more closely match its anticipated allocation.

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North American Free Trade Agreement



The Company believes the North American Free Trade Agreement (NAFTA) currently presents a serious public policy challenge to itself and the domestic sugar industry. Under the terms of the original NAFTA text, Mexico would have been allowed to ship any excess production of sugar into the United States if Mexico were to achieve net surplus producer status two years in a row. Concerned that Mexicos productive capabilities and possible conversion to the use of high fructose corn sweeteners could quickly change Mexico from a net sugar importer to a net sugar exporter, the U.S. sugar industry insisted that NAFTA be changed to delay Mexicos access to the U.S. market. To embody these changes, a side agreement on sugar was reached prior to passage of NAFTA to give Mexico incrementally larger but capped volumes of duty-free access, and an ability to send additional quantities if it were to pay a
gradually descending second tier tariff. The side agreement establishes a common market between the United States and Mexico in sugar by 2008. The side agreement has been contested by Mexico as invalid, contending that the side agreement was not signed by Mexico. To date, the United States has contended that the side agreement is valid and has dealt with sugar imports from Mexico accordingly.



The Company is concerned that low world sugar prices and a trade conflict between the United States and Mexico over sweeteners could permit de facto acceleration of the second tier tariffs under the side letter agreement. Under the NAFTA tariff schedule, second tier sugar tariffs were set at approximately 12 cents for 2000 and decline by approximately 1.5 cents per year until reaching zero in 2008. Low world raw sugar prices and the current second tier tariff make it economically viable for Mexican sugar to enter the United States this year, if the Mexican interests so choose.



In July 2006 the United States and Mexico announced an agreement that resolves these disputes that relate to each nations interpretation of the sweetener provisions in the NAFTA. Under the agreement, the United States provides for duty-free access to 250,000 metric tons raw value (MTRV) of Mexican sugar for fiscal year 2007, and duty-free access to between 175,000 and 250,000 MTRV of Mexican sugar for the period of October 1, 2007 and December 31, 2007. In turn, Mexico provides for duty-free access to equivalent amounts of United States high fructose corn syrup (HFCS) corresponding to the same periods. Also, the United States can ship 7,258 MTRV of sugar duty-free to Mexico for each of the marketing years 2006, 2007 and 2008. Effective on January 1, 2008, under NAFTA, there will be no duties or quantitative restraints between the two countries on all sugar and HFCS trade.



It is possible that the passage of this announced agreement could have a material adverse effect on the Company through a reduction in acreage that can be planted by the Companys shareholders, and/or a reduction in sugar selling prices, and a corresponding reduction in the beet payment to the shareholders and to the Company earnings. The magnitude of the impact cannot be determined at this time.



World Trade Organization



Under the General Agreement on Tariffs and Trade Act o f 1990 (GATT), tariff rate quotas were implemented for certain sugar producing countries that provided for a fixed quantity of sugar imports duty-free or subject to minimal duties. Unlimited additional quantities may be imported upon payment of a tariff of 15.36 cents per pound of refined sugar prior to shipment (to date, very little sugar has been imported under this higher tariff level). Further, imports of sugar under the tariff rate quota are based upon the difference between domestic sugar consumption and domestic sugar production, with one exception. Under the terms of the GATT the minimum imports of sugar are established at 1,257,000 short tons, raw value. Therefore, even if the difference between domestic sugar consumption and production are less than 1,257,000 short tons, raw value, GATT will require that 1,257,000 short tons be
imported into the United States from the quota holding foreign countries.



The World Trade Organization (WTO) met in November, 2001 in Doha, Qatar where members launched new multilateral trade negotiations aimed at improving market access, reducing and eventually phasing out all forms of export subsidies and substantial reductions in trade-distorting domestic support. Any agreements reached during the Doha Round could present a threat to the domestic sugar industry because sugar is one of the most highly protected sectors within world agricultural trade and is thus a target for reform.



The 147 members of the WTO reached an agreement July 31, 2004, on a framework for the final phase of the Doha Development Agenda of global trade talks. The original deadline to complete talks by January 1, 2005, has been postponed a number of times. The latest deadline to complete the final phase of the WTO Doha talks has been established as the end of calendar year 2006. However talks have stalled and currently there appears to be little chance of WTO countries meeting this latest deadline date. The effect of any final WTO agreement on United States farm programs and the sugar program in particular and the Company will depend largely on the details of the agreement, which have not yet been fully negotiated.

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Dominican Republic  Central American Free Trade Agreement



The Dominican Republic - Central American Free Trade Agreement (DR-CAFTA) was signed into law on August 2, 2005 and was substantially implemented starting on January 1, 2006. As a result, the Company has seen an increase in the amount of sugar that will be imported into the United States as a result of this agreement. The impact of this trade agreement on the Company cannot be fully assessed at this time. It is possible, however, that the trade agreement could have a material adverse effect on the Company through a reduction in acreage that can be planted by the Companys shareholders, and/or a reduction in sugar selling prices, and a corresponding reduction in the beet payment to the shareholders and the Company earnings. The magnitude of the impact cannot be determined at this time.



Regional and Bilateral Free Trade Agreements



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 reach fruition, 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; 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 U.S. sugar industry and the Company recognize
the potential negative impact that would result if these agreements were entered into by the United States.



The impact of the various trade agreements on the Company can not be assessed at this time due to the uncertainty concerning the terms of the agreements and whether they will ultimately be implemented. It is possible, however, that the passage of various trade agreements could have a material adverse effect on the Company through a reduction in acreage that can be planted by the Companys shareholders, and/or a reduction in sugar selling prices, and a corresponding reduction in the beet payment to the shareholders and to the Company earnings. The magnitude of the impact cannot be determined at this time.



The Farm Bill provides price support provisions for sugar. However, if the price support program including the Tariff Rate Quota system described above were eliminated in its entirety, or if the effectiveness that 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 by 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 Sarbanes-Oxley Act continues to have the interpretation of its rules reviewed and changed. The
Companys intent is to be in compliance with the rules and interpretations of these rules as they are promulgated. As of this
writing, compliance with all applicable Sarbanes-Oxley rules for the Company has been deferred until August 31, 2008. 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.

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ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Market risk is the risk of loss to future earnings, to fair values or to future cash flows that may result from changes in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, exchange rates, commodity prices, equity prices and other market changes. Market risk is attributed to all market-risk sensitive financial instruments, including long-term debt.



The Companys long-term debt interest costs are stabilized through use of multi-year interest rate locks on various amounts and terms through its primary lender CoBank. This strategy allows the Company to project future interest costs and cash flows with a reasonable degree of accuracy.



The Company will from time to time have a purchase obligation in foreign currency as a result of approved capital expenditure projects, and may reduce the risk of currency exchange fluctuation by forward purchasing the applicable foreign currency required for the expenditure.



The Company does not believe that it is subject to any material market risk exposure with respect to interest rates, exchange rates, commodity prices, equity prices and other market changes that would require disclosure under this item. Also, the Company did not experience any material changes in market rate exposures for the period ended November 30, 2006, that affect the quantitative and qualitative disclosures presented in its Annual Report on Form 10-K for the year ended August 31, 2006.



ITEM 4.   CONTROLS AND PROCEDURES



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. During the quarter ended November 30, 2006, there were changes in internal controls for interim financial reporting. Those changes were described in the Companys 10-k for the period ended August 31, 2006 Item 9A Controls and Procedures.



EXTERNAL RISK FACTORS THAT MAY AFFECT THE COMPANY



The company does not believe its external risk factors have changed materially since the filing of its Annual Report on form 10-K for the year ended August 31, 2006.

---





PART II. OTHER INFORMATION



Item 1.   Legal Proceedings

None



Item 2.   Changes in Securities

None



Item 3.   Defaults upon SeniorSecurities

None



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

None



Item 5.   Other Information

None



Item 6.   Exhibits and Reports on Form 8-K

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




Reports on Form 8-K



September 27, 2006:On September 26, 2006, Minn-Dak Farmers Cooperatives Board of Directors determined that the planting level for the 2007 crop will be 150% of member preferred shares plus a 2% measuring tolerance for a total planting of 152% of member preferred shares. The 2006 crop planted acres were approved by the Board of Directors at the level of 162% of member-preferred shares.



October 23, 2006:Minn-Dak Farmers Cooperative has announced that the board of directors, following the completion of the 2006 fiscal year audit, has approved the final payment for the 2005-crop of $39.56 per ton of sugarbeets harvested (14.341654 cents per delivered/bonus pound of sugar). The Board of Directors has also declared and allocated to shareholders of record, for the 2005-crop, non-qualified allocated patronage totaling $4,220,538 or $2.33 per ton of sugarbeets harvested.



November 2, 2006:Minn-Dak Farmers Cooperative (the Company) has announced that its Board of Directors has approved an estimated sugarbeet payment for the 2006 crop of $40.21 per ton of harvested sugarbeets (13.57017 cents per pound of extractible sugar). The estimated sugarbeet payment is based upon the best information available on October 30, 2006.  The estimated sugarbeet payment may be changed, modified or amended as additional information becomes available during the companys fiscal year.



December 11, 2006:On November 28, 2006 the Company increased its short-term line of credit that it has with its primary lender from $45 million to $70 million. The increased line of credit, which will be in place from November 28, 2006 through May 31, 2007, was necessary to cover the Companys cash flow requirements associated with the size of the 2006 sugarbeet crop. The Company does not anticipate difficulty in servicing the larger line of credit with its lender.

---

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 12, 2007
        
        /s/   DAVID H. ROCHEDavid H. RochePresident and Chief Executive OfficerDate:
        January 12, 2007
        
        /s/   STEVEN M. CASPERSSteven M. CaspersExecutive Vice President and Chief Financial Officer


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