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

                                    FORM 10-K
              [X] Annual Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934
                            For the fiscal year ended
                                 AUGUST 31, 2001
                                       Or
            [ ] Transition Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934
                            -------------------------
                                 Commission File
                                  No. 33-94644
                            -------------------------

                          MINN-DAK FARMERS COOPERATIVE
             (Exact name of registrant as specified in its charter)
                 North Dakota                           23-7222188
          (State of incorporation)       (I.R.S. Employer Identification Number)
            7525 Red River Road
         Wahpeton, North Dakota 58075                 (701) 642-8411
   (Address of principal executive offices)  (Registrant's telephone number)


           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      NONE
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                                      NONE

         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 (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES _X_ NO ___

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in part III of this Form 10-K or any
amendment to this Form 10-K. [X]

         As of November 26, 2001, 497 shares of the Registrant's Common Stock
and 72,200 "units" of the Registrant's Preferred Stock, each consisting of 1
share of Class A Preferred Stock, 1 share of Class B Preferred Stock and 1 share
of Class C Preferred Stock, were outstanding. There is only a limited, private
market for shares of the Company's Common or Preferred Stock, as such shares may
be held only by farmer-producers who are eligible for membership in the Company.
The Company's shares are not listed for trading on any exchange or quotation
system. Although transfers of the Company's shares may occur only with the
consent of the Company's Board of Directors, the Company does not verify
information regarding the transfer price in connection with such transfers. A
number of stock transfers, representing approximately 6% of available stock,
were not arms length (estate settlements, estate planning from one generation to

<PAGE>


the next, etc.) and an accurate value for that stock was not available.
Management believes that less than 1% of the Company's available stock was
traded at arm's length during the fiscal year ended August 31, 2001. Of the
stock transferred at arms length, the transfers were made during the first,
second and third quarters of the Company's fiscal year and range in price from
$1,450 to $1,600 per unit.



                       DOCUMENTS INCORPORATED BY REFERENCE

         None



ITEM 1.     BUSINESS

         Minn-Dak Farmers Cooperative ("Minn-Dak" or the "Company") is a North
Dakota agricultural cooperative that was formed in 1972 and has 497 members.
Membership in the Company is limited to sugarbeet growers located in those areas
of North Dakota and Minnesota within an approximate fifty (50) mile radius of
the Company's offices and sugarbeet processing facilities in Wahpeton, North
Dakota. The Company's facilities allow the members to process their sugarbeets
into sugar and other products. The products are pooled and then marketed through
the services of a marketing agent under contract with the Company. The sugar
marketing agent, United Sugars Corporation, is a cooperative association owned
by its members, the Company, American Crystal Sugar Company, Southern Minnesota
Beet Sugar Cooperative and United States Sugar Corporation. The Company's beet
molasses and beet pulp are also marketed through a marketing agent, Midwest
Agri-Commodities Company. Midwest Agri-Commodities Company is a cooperative
association owned by its members, the Company, American Crystal Sugar Company
and Southern Minnesota Beet Sugar Cooperative.

         Minn-Dak's corporate headquarters are located at 7525 Red River Road,
Wahpeton, North Dakota 58075 (telephone number (701) 642-8411). Its fiscal year
ends August 31.


PRODUCTS AND PRODUCTION

         Any statements regarding future market prices, anticipated costs,
agricultural results, operating results and other statements that are not
historical facts contained in this annual report 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.

         The Company is engaged primarily in the production and marketing of
sugar from sugarbeets. The Company also markets certain co-products of the sugar
it produces, such as beet molasses and beet pulp pellets. The Company also owns
an 80% interest in Minn-Dak Yeast Company, Inc., which has facilities located
near the Company's sugar production location. Minn-Dak Yeast Company, Inc.
produces fresh baker's yeast and provided revenues totaling approximately 3% of
the Company's gross revenues for the fiscal year ended August 31, 2001.

<PAGE>


         The Company processes sugarbeets grown by its members at its sugar mill
located in Wahpeton, North Dakota. The period during which the Company's plant
is in operation to process sugarbeets into sugar and co-products is referred to
as the "campaign." The campaign is expected to begin in September of each year
and continues until the available supply of beets has been depleted, which
generally occurs in March or April of the following year, depending on the size
of the crop. Based on current processing capacity, an average campaign lasts
approximately 210-225 days, assuming normal crop yields.

         Once the sugarbeets are harvested, rapid processing is important to
maximize sugar extraction and minimize spoilage. Members transport their crop by
truck to receiving stations designated by the Company. Beets are then stored in
the Company's factory yard and at outlying piling stations until processed.
Under the Company's "growers agreement" with its members, the Company furnishes
all loading equipment at loading stations and, after delivery of the beets to
the Company, pays all freight and mileage charges for hauling the sugarbeets
from the piling stations to the factory for processing.

         The Company's total sugar production is influenced by the amount and
quality of sugarbeets grown by its members, by the processing capacity of the
Company's plant and by the ability to store harvested beets. Most of the beet
harvest is stored in piles. Although piled sugarbeets that have been frozen by
the winter temperatures may be stored for extended periods, beets stored in
unprotected piles at temperatures above freezing must be processed within
approximately 160 days.

         Sugarbeets deteriorate in storage due to the organic nature of their
existence. Beets harvested prior to obtaining a root temperature of fifty
degrees or less must be processed as soon as possible or sugar loss will occur
and they will deteriorate. The plant start up in the fall is timed to the
anticipated end of processing in the spring. The plan of the Company is to
finish processing unprotected beets prior to March 10, ventilated beets prior to
March 31, and storage shed beets as soon thereafter as is possible.

         Unprotected beets are "split" by processing the center of the piles
first. This method allows the processing of the center beets, which do not
freeze and therefore deteriorate more rapidly, at the earliest possible date.

         Ventilated beets have culverts with air holes running every eleven feet
into the pile. Prior to freezing of the beets, air is blown into the piles to
bring the pile temperature to an average temperature of approximately
thirty-five degrees Fahrenheit. When a week or more of sub zero temperatures are
forecast, the fans are turned on when the temperature reaches zero degrees and
continues to ventilate until the pile temperature reaches zero to five degrees.

         Storage shed beets are handled in the same manner as the ventilated
beets. The difference between the processes is the building itself, which
insulates the beets from sun, wind, and warmer spring temperatures. With the
buildings, storage of the beets can run as late as mid May of each year.

         In addition, unprotected and ventilated beets will, in long campaigns,
have extra steps taken to extend their life. Beets can be sprayed with lime to
create a reflectant and reduce the harmful impact from the sun's rays in the
spring. Straw can also be applied to the sides of some later processed piles to
further insulate the beets from sun, wind, and temperature.

<PAGE>


         Once the sugarbeets arrive in the factory, the basic steps in producing
sugar from them include: washing; slicing into thin strips called "cossettes";
extracting the sugar from the cossettes in a diffuser; purifying the resulting
"raw juice" and boiling it, first in an evaporator to thicken it and then in
vacuum pans to crystallize the sugar; separating the sugar crystals in a
centrifuge; drying the sugar; and storing sugar in bulk form for bulk and bag
shipping.

         The Company's sugarbeet co-products include beet molasses and beet pulp
pellets. After the extraction of raw juice from the cossettes, the remaining
pulp is dried and processed into and sold as animal feeds. The beet molasses is
the sugar juice left after all economical means have been taken to extract the
sugar from the sugar juice. The beet molasses is sold primarily to yeast and
pharmaceutical manufacturers and for use in animal feeds. The beet molasses and
beet pulp pellets are marketed through Midwest Agri-Commodities Company.


RECENT CROPS

         The Company's members harvested 1.7 million tons of sugarbeets from the
2001 crop. In the late summer of 2001, the USDA instituted a government cost
savings program called Payment In Kind (PIK) that compensated growers for
destroying sugarbeet acres. Of the 106,000 planted acres, 9% were converted to
the PIK program and 4% were lost due to adverse growing conditions making the
2001 crop harvested acres 3% below the 2000 crop harvested acres. Sugar content
of the 2001 crop at harvest was 2% below the average of the five most recent
years. The Company's projected production of sugar from the 2001 crop sugarbeets
is expected to be well below the five-year average of sugar produced. This
forward-looking material is based on the Company's expectations regarding the
processing of the 2001 sugarbeet crop; the actual production results obtained by
processing those sugarbeets could differ materially from the Company's current
estimate as a result of factors such as changes in production efficiencies and
storage conditions for the Company's sugarbeets.

         For a discussion of the 2000, 1999 and 1998 crops and results of
operations for fiscal years 2001, 2000 and 1999, see "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."


MARKETING, CUSTOMERS AND PRICING

         Since January 1, 1994 United Sugars Corporation, a common marketing
agency operating on a cooperative basis, owned by the Company and three other
sugar producing companies (American Crystal Sugar Company, Southern Minnesota
Beet Sugar Cooperative and United States Sugar Corporation) to market sugar
produced by the four member owners, has marketed the Company's sugar.

         At August 31, 2001 the Company had an ownership interest in United
Sugars Corporation (year to date contributed capital) totaling $1.2 million,
which represented approximately 13% of the total.

          The Company, as well as the other members of United Sugars
Corporation, has entered into a "Uniform Member Marketing Agreement" with United
Sugars Corporation. Under that agreement, the sugar produced by the Company is
pooled with sugar produced by the other sugar-producing member owners and is
then sold through the efforts of United Sugars Corporation. The Company receives
payment for its sugar by receiving its pro rata share of the net proceeds from
the sale of the pooled sugar. The net proceeds of such sales represent the gross
proceeds of the sale of the sugar, adjusted for the various costs and expenses
of marketing the pooled sugar, including the Company's pro rata share of the
marketing and sales expenses incurred by United Sugars Corporation. Any net
proceeds from the operation of United Sugars Corporation are distributed to the
various members on a patronage basis.

<PAGE>


         United Sugars Corporation sells industrial bulk sugar, industrial
bagged sugar, and retail bagged sugar and specialty sugars. It is able to
distribute both cane sugar and beet sugar, and distribute sugar to customers
over a large geographical area. United Sugars Corporation markets the Company's
sugar primarily to industrial users such as confectioners, breakfast cereal
manufacturers and bakeries. The customer base of United Sugars Corporation
includes most of the large industrial sugar users. The customer base also
includes retail grocery and wholesalers. The Company has no single customer,
which accounts for more than ten percent (10%) of its consolidated revenues. For
the fiscal year ended August 31, 2001, 95% of the Company's sugar was shipped in
bulk form, mostly to industrial users, and 5% in bagged powdered sugar.

         The prices at which United Sugars Corporation sells the Company's sugar
fluctuate periodically based on changes in domestic sugar supply and demand.
Bulk sugar, the largest portion of the Company's sales, is contracted one or
more quarters in advance, with the effect of stabilizing fluctuations in revenue
from quarter to quarter. Retail (grocery) products are sold on a spot basis.
Current net selling prices for sugar are forecast to be higher than the prior
two years because (1) the domestic market supply for sugar is down due to
reduced production from beet processors and (2) government ownership of sugar
(Commodity Credit Corporation) has been reduced, thereby not being as great a
negative influence on sugar pricing as in the previous year.

         The Company markets its co-products, dried beet pulp and beet molasses,
through Midwest Agri-Commodities Company, a cooperative whose members are the
Company, American Crystal Sugar Company and Southern Minnesota Beet Sugar
Cooperative. Midwest Agri-Commodities Company markets beet pulp, beet molasses
and other liquid livestock feed for its member owners as well as non-members.
Beet pulp is marketed to livestock feed mixers and livestock feeders in the
United States and foreign markets.

         A "Uniform Member Marketing Agreement" evidences the sales and
marketing arrangement with Midwest Agri-Commodities Company. Under that
agreement, the beet pulp and beet molasses produced by the Company is pooled
with beet pulp and beet molasses produced by the other producing member owners
and is then sold through the efforts of Midwest Agri-Commodities Company. The
Company receives payment for its beet pulp and beet molasses by receiving its
pro rata share of the net proceeds from the sale of the pooled beet pulp and
beet molasses. The net proceeds of such sales represent the gross proceeds of
the sale of the beet pulp and beet molasses, adjusted for the various costs and
expenses of marketing the pooled beet pulp and beet molasses, including the
Company's pro rata share of the marketing and sales expenses incurred by Midwest
Agri-Commodities Company. Any net proceeds from the operation of Midwest
Agri-Commodities Company are distributed to the various members on a patronage
basis.

         For the year ended August 31, 2001, approximately 70% of the Company's
beet pulp production was exported to Japan and Europe, and the remaining 30% was
sold domestically. The market for beet pulp is affected by the availability and
quality of competitive feedstuffs. Dried beet pulp prices increased in FY 2000
and again in FY 2001 due to improvement in the Asian economy, reduced
availability of dried beet pulp, and overall improvements in competitive
feedstuffs prices. Beet molasses is marketed primarily to yeast manufacturers,
pharmaceutical houses, livestock feed mixers and livestock feeders. Beet
molasses prices increased as well in FY 2000 and again in FY 2001 due to
shrinking supplies of domestically produced molasses and improvement in
worldwide prices for beet molasses and competitive commodities.

<PAGE>


         Co-product sales accounted for approximately 8% of the Company's total
consolidated net sales revenues during FY 2001. This relationship is primarily a
function of the average market prices for sugar, beet pulp, beet molasses and
fresh yeast and is not necessarily indicative of future relationships between
co-product, fresh yeast and sugar revenues, because prices of these products
fluctuate independently of each other.

         The Company is an eighty percent (80%) equity owner of Minn-Dak Yeast
Company, Inc. Minn-Dak Yeast Company, Inc. manufactures fresh baker's yeast in a
plant located adjacent to the Company's sugar plant in Wahpeton, North Dakota.
The Company started the yeast business in 1989 in order to add value to its
co-product beet molasses. Beet molasses is the main ingredient (growth medium)
in the fermentation process used to grow baker's yeast to commercial volumes. A
portion of the Company's beet molasses production is used in the Minn-Dak Yeast
Company, Inc.'s process and is sold through a supply agreement between the two
companies. Sensient Technologies Corporation, Milwaukee, Wisconsin, holds the
remaining twenty percent (20%) equity stake. Minn-Dak Yeast Company, Inc. also
has a long-term marketing agreement whereby Sensient Technologies Corporation
will buy all production of yeast produced by Minn-Dak Yeast Company, Inc. in
return for certain guaranteed sales volumes.


JOINT VENTURE WITH PROGOLD LIMITED LIABILITY COMPANY

         Minn-Dak is a five percent (5%) equity owner in ProGold Limited
Liability Company ("ProGold"). ProGold was formed in 1994 by three entities for
the purpose of building a plant to produce from corn and market high fructose
corn syrup; and to produce and market corn gluten feed, corn gluten meal and
corn germ, all co-products produced by the plant. The other two equity owners
are American Crystal Sugar Company, Moorhead, Minnesota (46% ownership share)
and Golden Growers Cooperative, Fargo, North Dakota (49% ownership share). The
Company has contributed approximately $5.2 million in exchange for its 5%
ownership position.

         Because of unexpected market conditions that were expected to generate
significant losses for several years, ProGold signed a 10 year lease agreement
with Cargill, Inc. ("Cargill") on November 1, 1997, to lease ProGold's corn
wet-milling plant. Under the lease arrangement, which expires on October 31,
2007, the Company and the other ProGold members would retain ownership of the
plant, while Cargill will operate the plant and sell the finished products.
ProGold will receive rental payments in a base amount fixed for each year during
the term of the lease. ProGold would also receive supplemental rent equal to
fifty percent (50%) of the amount by which earnings before taxes from operations
of the facility exceed a specified base.

         The arrangement between ProGold and Cargill also specifies a variety of
alternatives that may take effect upon expiration of the initial lease. These
alternatives include agreeing to enter into another long-term lease upon
mutually agreeable terms and conditions, or ProGold could offer to sell to
Cargill, at fair market value, a fifty percent (50%) or one hundred percent 100%
ownership interest in ProGold.

         To date the lease with Cargill has provided ProGold, as an entity, with
(i) rental payments of a fixed amount, with the opportunity to receive
supplemental rental payments in the event that the ProGold facility is operated
profitably. As a result, the lease arrangement has provided protection from the
exposure of the risks of participation in the corn sweetener market, including a
risk of future, material financial losses by ProGold and the necessity of
additional capital investment from the Company to cover such future losses.

<PAGE>


GROWERS' AGREEMENTS

         The Company purchases virtually all of its sugarbeets from members
under contract with the Company. All members have three-year contracts with the
Company covering the growing seasons of 2001 through 2003 (the "Growers'
Agreements"). At the end of each year, the Growers Agreement automatically
extends for an additional year, so that such agreements always have a remaining
term of three years, unless the Company prior to the automatic renewal has given
notice of termination. In that situation, the agreement will not renew, but will
continue in effect for the two year period then remaining under the agreement.
Each Unit of Preferred Stock currently entitles a member to grow 1.35 acres of
sugarbeets for sale to the Company. The Company's Board of Directors has the
discretion to adjust the acreage, which may be planted for each Unit of
Preferred Stock held by the members. For the 2001 crop year the Company's Board
of Directors authorized members to plant 1.45 acres per unit.

         Under the terms of the Growers Agreement, each member receives payment
for his or her sugarbeets based on a price per pound of extractable sugar. The
price per pound of extractable sugar is determined by dividing the total grower
distribution of net proceeds (less the amount credited to members investment
from member patronage and credited to retained earnings from non-member
patronage) by the total of members' pounds of extractable sugar. Extractable
pounds of sugar are obtained by the processing of beet samples taken from
members' sugarbeets during harvest. Each member's grower payment is obtained by
multiplying that member's total pounds of extractable sugar times the price per
pound of extractable sugar as determined above.

         Under the Growers Agreement, each member receives an initial
installment of the payment for his or her sugarbeets on or about November 15,
soon after delivery of his or her crop to the Company. That initial installment
is subject to adjustment by the Cooperative's Board of Directors and management,
but will not exceed 65% of the estimated price per pound of extractable sugar. A
second installment is paid in early February; that installment, in combination
with the first installment, will not exceed 70% of the estimated price per pound
of extractable sugar. A third installment is paid in early April, with the
aggregate of all installments paid to that date not to exceed 80% of the
estimated price per pound of extractable sugar. A fourth installment payment is
paid in early July, with the total of installment payments to that date not to
exceed 95% of the estimated price per pound of extractable sugar. The final
payment is determined after the end of the Company's fiscal year, ending on
August 31, and is in an amount necessary to bring the total of all payments to
the price to be paid per pound of extractable sugar to all growers during the
applicable fiscal year. In addition, the Company's annual patronage net income,
which is equal to the Company's sales less all expenditures and member beet
payments, is distributed to the members on the basis of the pounds of
extractable sugar obtained from each of the members' sugarbeets; such amounts
are distributed in either cash payments or in the form of patronage credits to
the member's patronage credit account on the books of the Company.


COMPANY DISTRICTS

         The Company's by-laws provide that the Company's members are to be
divided into districts for the purposes of voting and the election of members of
the Board of Directors. Those districts do not have specific geographic
boundaries but, instead, contain a loosely defined area representing the area
served by a particular piling station to which members deliver their sugarbeets
for storage until the sugarbeets are to be processed. When a member joins the
Company, he or she is assigned to a particular district based upon criteria
including: (i) the physical location of the shareholder's sugarbeet growing
acres relative to a piling site, (ii) if the previous criteria do not clearly
indicate the district to which the

<PAGE>


shareholder should be assigned, then the physical location of the shareholder's
base of farming operations relative to a piling site (some members deliver
sugarbeets to more than one piling site due to the locations of their various
fields, even though they are assigned to membership in only one district) and
(iii) if the first two criteria do not provide a clear indication of the
district to which the shareholder should be assigned, then the shareholder is
given the option of being assigned to the district which would best serve the
needs of that shareholder.

         Given that shareholders are assigned to districts based upon ease of
delivery of harvested sugarbeets and because shareholders own different numbers
of Units of Preferred Stock, each district includes a different number of acres
of sugarbeet production and, therefore, a different quantity of sugarbeets
delivered to the Company. However, none of the districts provides the Company
with a materially disproportionate quantity of the sugarbeets produced by the
Company's members. While the allocation of members to the various districts has
a significant impact on the election of directors, the Company does not believe
that the districts represent a significant factor in the day-to-day business
operations of the Company.


RESEARCH AND DEVELOPMENT

         The Company is not involved in its own research and development
activities, but does participate in some sugar industry research and development
activities. Any research findings are then shared by the entire sugar industry.
Participatory research and development is accomplished through such
organizations as Beet Sugar Development Foundation, Sugar Association, and North
Dakota/Minnesota Research and Education Board. The Company participates in the
organizations listed above through the efforts of its representatives to the
boards of directors of those entities. The Company's representatives, either a
member of the Company's Board of Directors or a management employee of the
Company, allow the Company to participate in and help direct agricultural and
factory operations research and development activities carried out by the listed
organizations. Those organizations also have established various committees on
which the Company has placed certain of its employees. That practice is designed
to provide the company with direct access to any research and development
information available from the applicable committees. (Through its employees,
the Beet Sugar Development Foundation also provides some legislative and
lobbying efforts on a national level. Those efforts are directed at maintaining
funding for the various federal sugarbeet research facilities.) None of the
Company's employees or directors devotes a significant portion of their time and
energies to the activities described in this section; instead, such efforts are
a minor portion of their continuing duties on behalf of the Company.

         During the fiscal year ended on August 31, 2001, the Company
contributed approximately $83,000 to the North Dakota/Minnesota Research and
Education Board to fund that entity's research and development activities.
$16,000 was given to the Beet Sugar Development Foundation in connection with
their research activities, and $87,000 to the Sugar Association for their
research activities and membership dues.

         The Company also has established a sugarbeet seed committee, which
reviews the performance of new and existing sugarbeet seed varieties. The
committee then advises the Board of Directors with regard to those sugarbeet
seed varieties that should be approved for use by the Company's shareholders.

<PAGE>


ENVIRONMENTAL MATTERS

         The Company is subject to many federal, state and local regulations
that govern air and water emissions, and solid and hazardous waste storage and
disposal. Currently, the Company is meeting all its obligations in water, solid
waste and hazardous waste.

         The Company has approved a budget of $1.6 million to be spent on
environmental capital projects during the fiscal year ended on August 31, 2002.

         The Company cannot accurately predict the extent to which future
changes in environmental laws or regulations will affect the cost of operating
its facilities and conducting its business. However, any changes could have
adverse financial consequences for the Company and its members.


EMPLOYEES

         As of November 16, 2001, the Company had 243 full-time employees, of
whom 209 were hourly and 34 were salaried. It also employs approximately 320
additional hourly seasonal workers during the sugar beet harvest and processing
campaign. In August 2000 the Company concluded the negotiations for a collective
bargaining agreement with the American Federation of Grain Millers (AFL-CIO)
union for its factory employee group. The written contract is in effect from
June 1, 2000 through May 31st of the year 2005. Office, clerical, management and
harvest employees are not unionized. Full time employees are provided with
health and dental insurance, a defined benefit pension retirement plan, a 401(k)
retirement savings plan, a short and long-term disability plan, term life
insurance, and vacation and holiday pay plans. Seasonal workers are provided
some of the above employee benefits. The Company considers its employee
relations to be excellent.


ITEM 2.     PROPERTIES

         The Company operates a single sugarbeet processing factory at Wahpeton,
North Dakota that is located in the Red River Valley. The Company owns the
factory, receiving sites, and the land on which they are located.

         Minn-Dak Yeast Company, Inc. of which the Company is an 80% owner,
operates a single yeast processing factory at Wahpeton, North Dakota which is
located in the Red River Valley. Minn-Dak Yeast Company, Inc. owns the factory
and the land on which it is located. During fiscal 2001, fresh yeast was
produced and sold into the domestic yeast marketplace.

         All properties are held subject to a mortgage by the Company's primary
lendor.


ITEM 3.     LEGAL PROCEEDINGS

         From time to time and in the ordinary course of its business, the
Company is named as a defendant in legal proceedings related to various issues,
including worker's compensation claims, tort claims and contractual disputes.
Other than as provided herein, the Company is not currently involved in legal
proceedings which have arisen in the ordinary course of its business, and the
Company is also unaware of certain other potential claims which could result in
the commencement of legal proceedings. The Company carries insurance that
provides protection against certain types of claims.

<PAGE>


         The Company is subject to extensive federal and state environmental
laws and regulations with respect to water and air quality, solid waste disposal
and odor and noise control. The Company conducts an ongoing and expanding
control program designed to meet these environmental laws and regulations. As
disclosed under "ENVIRONMENTAL MATTERS" above, there currently are no pending
regulatory enforcement actions and the Company believes that it is in
substantial compliance with applicable environmental laws and regulations.


ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         There were no matters submitted to a vote of the Company's shareholders
during the quarter ended August 31, 2001.

         At the Annual Meeting of Shareholders which is to be held on December
4th, 2001, the following seats on the board of directors will be up for
election: District #9, District #2, and District #3. A brief biography of each
of the candidates for the open seats follows.


DISTRICT #9

         VICTOR KRABBENHOFT (incumbent) has been a director since 1989,
currently serves as board chairman, and is a former vice chairman. Mr.
Krabbenhoft has been farming near Glyndon, MN since 1971. He also serves on the
board of directors for Midwest Agri-Commodities Company, United Sugars
Corporation, and Minn-Dak Yeast Company; and is one of Minn-Dak's
representatives to the American Sugarbeet Growers Association in Washington, DC.
Mr. Krabbenhoft is running unopposed.


DISTRICT #2

         RUSSELL MAUCH (incumbent) has been a director since 1998. Mr. Mauch
graduated from North Dakota State University in 1977 with a B.S. in agriculture.
From 1979 to 1981 Mr. Mauch was a commercial and ag loan officer for First Bank
Corporation in Valley City, ND. Mr. Mauch has been farming near Barney, ND since
1981. Mr. Mauch also serves on the board of directors for Minn-Dak Yeast Company
and on the board of directors for Midwest Agri-Commodities Company. Mr. Mauch is
running unopposed.


DISTRICT #3

         EDWARD MOEN, JR. (incumbent) has been a director since 1989 and is
currently serving as board treasurer. Mr. Moen has been farming near Galchutt,
ND since 1945. Mr. Moen is running unopposed.

<PAGE>


                                     PART II

ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
            STOCKHOLDER MATTERS

         There is only a limited, private market for shares of the Company's
Common or Preferred Stock, as such shares may be held only by farmer-producers
who are eligible for membership in the Company. The Company's shares are not
listed for trading on any exchange or quotation system. Although transfers of
the Company's shares may occur only with the consent of the Company's Board of
Directors, the Company does not verify information regarding the transfer price
in connection with such transfers. A number of stock transfers, representing
approximately 6% of available stock in the fiscal year ended August 31, 2001 and
approximately 4% of available stock in the fiscal year ended August 31, 2000,
were not arms length (estate settlements, estate planning from one generation to
the next, etc.) and an accurate value for that stock was not available.
Management believes that less than 1% of the Company's available stock was
traded at arm's length during the fiscal year ended August 31, 2001 and less
than 2% was traded during the fiscal year ended August 31, 2000. Of the stock
transferred at arms length, the transfers were made during the first, second and
third quarters of each of the Company's last two fiscal years and they ranged in
price from $1,450 to $1,600 per unit during the fiscal year ended August 31,
2001, and from $2,200 to $1,600 per unit in the fiscal year ended August 31,
2000 with the prices early in fiscal year 2000 ranging from $2,200 to $1,800 per
unit while prices in the third and final quarter of fiscal year 2000 ranged from
$1,800 to $1,600 per unit.

<PAGE>


ITEM 6.     SELECTED FINANCIAL DATA

         The following table summarizes selected financial data for each of the
last five completed fiscal years. The selected financial data of the Company
should be read in conjunction with the financial statements and related notes
included elsewhere in this Report.

<TABLE>
<CAPTION>
                                           Fiscal Year Ended August 31,
FINANCIAL DATA
(Numbers in Thousands)                          2001          2000          1999          1998          1997
<S>                                         <C>           <C>           <C>           <C>           <C>
Revenues                                    $  177,899    $  170,151    $  152,742    $  149,574    $  139,730
Net Proceeds(1)                                 94,620        86,604        63,352        72,084        74,239
Total Assets                                   161,737       173,001       174,296       184,830       171,896
Long-term Debt, including current
maturities, Net of bond investments,
1998 & 1997                                     53,205        58,193        61,185        59,798        58,252
Members' Investment(2)                          76,203        75,336        79,394        82,082        73,646
Property and Equipment Additions, net
of Retirements                                     914         2,404         2,962        10,893        24,547
Working Capital                                 11,974        12,234        13,403        11,170        10,163

Ratio of Long-Term Debt to Equity(3)               .63           .71           .71           .65           .75
Ratio of Net Proceeds to Fixed Chgs(4)           20.25         17.68         13.05         13.92         14.92
Dividends Paid on Common Stock                       0             0             0             0             0

PRODUCTION DATA(5)
Acres harvested                                 94,856       102,086        97,336        91,374        82,575
PIK Acres                                        8,620             0             0             0             0
Tons purchased (members)                     2,062,162     2,201,776     1,772,648     1,721,240     1,506,646
Tons purchased (non-member)                                                198,770        44,065
Tons purchased per acre harvested                21.74         21.57         18.21         18.84         18.25
Net beet payment paid to members per
ton of sugarbeets delivered, plus
allocated patronage and unit retains(6)     $    42.34    $    39.19    $    35.34    $    41.68    $    49.97

Sugar hundredweight
         Produced, including PIK sugar       6,310,374     5,739,893     4,750,921     4,788,131     4,136,172
         Sold, including purchased sugar     6,757,402     5,220,321     5,324,764     4,672,631     3,794,313

Beet pulp pellet tons
         Produced                               97,731        97,541       100,215        89,263        77,042
         Sold                                   89,282        96,452       127,160       105,270        82,705

Beet molasses tons
         Produced                               92,333        87,417       103,127        78,077        64,377
         Sold                                   73,782        75,029        80,325        51,939        45,182
           Used for Yeast Production            17,123        17,745        17,652        18,651        17,282

Yeast pounds (in thousands)
         Produced                               25,582        26,062        26,198        27,191        23,127
         Sold                                   25,421        26,034        26,240        27,227        23,193
</TABLE>

<PAGE>


(1) Net Proceeds are the Company's gross revenues, less the costs and expenses
of producing, purchasing and marketing sugar, sugar by-products, and yeast, but
before payments to members for sugar beets. (For a more complete description of
the calculation of Net Proceeds, see "Description of Business-Growers'
Agreements".)

(2) Members' investment includes preferred and common stock, unit retention
capital, allocated patronage and retained earnings (deficit).

(3) Calculated by dividing the Company's long-term debt, exclusive of the
current maturities of such debt, by equity.

(4) Computed by dividing (i) the sum of Net Proceeds plus fixed charges, plus
amortization of capitalized interest by (ii) the sum of interest expense and
interest capitalized. The Company does lease certain items, such as some office
equipment. Due to the proportionately small amounts involved, an interest factor
on lease payments has not been included in the total of the Company's fixed
charges or the calculation of this ratio. See Exhibit 12.

(5) Information for a fiscal year relates to the crop planted and harvested in
the preceding calendar year (e.g., information for the fiscal year ended August
31, 2001, relates to the 2000 crop).

(6) Reflects the total amount paid in cash and allocated to individual grower
equity accounts for each ton of beets delivered.

<PAGE>


ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS:

         The following discussion of the financial condition and results of
operations of the Company should be read in conjunction with the Company's
financial statements and notes included elsewhere in this Report. This
discussion contains forward-looking statements that involve risks and
uncertainties. The Company's actual future results may differ materially from
those anticipated in the forward-looking statements contained in this section;
such differences could arise as a result of a variety of factors including, but
not limited to, the market and regulatory factors described elsewhere in this
Report.


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 co-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 majority of such financing has been
provided by Co-Bank (the "Bank"). The Company has a short-term line of credit
with the Bank in 2001 of $45,000,000. Additional short-term financing
requirements are provided through the Department of Agriculture's CCC sugar loan
program.

         The loan agreement between the Bank and the Company obligate the
Company to the following significant loan conditions: invest in Class C or other
stock of the bank, as may be designated, in such amounts as may be prescribed by
the board of directors of the bank; maintain working capital of not less than
$9.0 million; maintain a current ratio of not less than 1.2:1.0; maintain
long-term debt to equity ratio of no greater than 0.8:1; and maintain an
available cash to current long-term debt ratio as defined in the agreement of
not less than 1.25:1.0. As of August 31, 2001, the Company was in compliance
with all loan covenants in its loan agreement. The loan agreement is secured
with a first lien on substantially all property and equipment and current assets
of the Company. Sources for future Long-Term Debt payments are primarily plant
depreciation resulting from normal operations.

         During fiscal year 2000, the Company sold certain notes receivable with
recourse. The Company's contingent liability related to these notes totaled $2.6
million as of August 31, 2001.

         Working capital decreased $0.3 million for fiscal year 2001. As of
August 31, 2001, the Company achieved its targeted working capital position.

         The company has protected itself from interest rate fluctuations
through the use of tax exempt financing and a term debt portfolio that fixes
rates into the future for set amounts of debt. The current term debt portfolio
is expected to provide the company stable term debt interest rates over the next
four years at approximately 150 basis points over current market rates for
similar maturities. An increase or decrease in the interest rate market of 100
basis points is expected to have little or no impact on the profitability of the
company.

<PAGE>


         Capital expenditures for fiscal year 1999 were $5.2 million, fiscal
year 2000 was $4.7 million and fiscal year 2001 was $3.1 million. Capital
expenditures for fiscal year 2002 are currently estimated at $3.1 million.


COMPARISON OF THE YEARS ENDED AUGUST 31, 2001 AND 2000

         Revenue for the year ended August 31, 2001 increased 5% or $7.75
million from 2000. Revenue from total sugar sales increased $25.46 million or
18% reflecting a 29% increase in cwt. sold, partially offset by an 11% decrease
in the average selling price per cwt. Revenue from co-products increased $1.61
million or 13% reflecting an increase of 18% in the average selling price per
ton, partially offset by a 5% decrease in volume.

         Revenues from yeast sales increased $0.28 million or 5% reflecting a
price increase of 7%, partially offset by a decrease in volume of 2%.

         The value of finished product inventories in fiscal year 2001 decreased
$19.60 million more than they decreased in fiscal year 2000 primarily due to the
change in the value of ending sugar inventory. The change in the value of ending
sugar inventory vs. the prior year was the result of less sugar on hand than in
the prior year, and at a lower price. The ending sugar inventory was higher in
fiscal year 2000 as a result of market conditions and anticipated Commodity
Credit Corporation sugar loan forfeitures.

         Cost of product produced, exclusive of grower payments for sugarbeets,
decreased $0.4 million. The decrease is primarily due to a 3% decrease in
processing and maintenance costs, partially offset by a 7% increase in beet
costs - those costs incurred by the cooperative in the growing and delivering of
sugarbeets. Sales and Distribution costs increased $1.49 million or 6%.
Increases are the result of a 29% increase in the volume of sugar sold for the
year. However, unit sales and distribution costs of sugar and co-products
decreased for the year. General and Administrative expenses increased less than
1%. Interest expense decreased $0.3 million or 5% due to reduced rates of
interest and lower levels of debt. Overall, the cost per cwt of sugar produced
decreased 3%, primarily due to the quality of the crop.

         Other business expense decreased $1.15 million in fiscal year 2001.
This decrease was primarily due to higher patronage dividends from other
cooperatives, and lower write-downs and losses on disposal of equipment.

         Net payments to members for sugarbeets, which include payments for
payment-in-kind certificates from the Commodity Credit Corporation, increased by
$3.3 million in fiscal year 2001. This increase was primarily due to a higher
per ton beet payment coupled with the payment-in-kind certificates; and
partially offset by decreased tons harvested.


COMPARISON OF THE YEARS ENDED AUGUST 31, 2000 AND 1999

         Revenue for the year ended August 31, 2000 increased 11.4% or $17.4
million from 1999. Revenue from total sugar sales decreased 1.6% reflecting a
2.5% decrease in the average selling price per cwt and a 0.9% increase in cwt.
sold. Revenue from co-products decreased 5.1% reflecting an increase of 12.3% in
the average selling price per ton and 17.4% decrease in volume.

<PAGE>


         Revenues from yeast sales decreased 11.4% reflecting a price decrease
of 10.6% and a decrease in volume of 0.8%.

         Finished product inventories increased $10.5 million in fiscal year
2000 primarily due to higher volumes of ending sugar inventory resulting from
market conditions and anticipated sugar loan forfeitures.

         Cost of product produced, exclusive of payments for sugarbeets and
grower trucking increased $0.6 million. The increase is primarily due to an
11.7% increase in sugarbeets processed and an increase in non-allocated costs
such as plant depreciation, taxes and insurance of 4.0%. Sales and Distribution
costs, net of CCC assessment fees, decreased less than $0.1 million or 0.2%.
Fiscal year 2000 had no CCC assessment fees compared to fiscal year 1999 with
$1.3 million. General and Administrative expenses increased $0.4 million or
7.4%. Interest expense decreased $0.1 million or 1.3%. The cost per cwt produced
decreased 15.5%, primarily due to the quality of the crop.

         Non-member business income decreased $0.4 million in fiscal year 2000.
This decrease was primarily due to lower fresh yeast selling prices and cost
allocations associated with the Company's investment in Minn-Dak Yeast Company.

         Net payments to members for sugarbeets increased by $23.7 million in
fiscal year 2000. This increase for 2000, vs. 1999 was primarily due to 24.2%
higher volume of sugarbeets delivered, higher quality sugarbeets delivered,
better storage conditions and higher selling prices for co-products. This was
partially offset by lower selling prices for sugar.


ESTIMATED FISCAL YEAR 2002 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 in question, 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 in question and the
subsequent sale of the products obtained from processing those sugarbeets. 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 2001
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 2001 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 and the quantity of sugar produced from the sugarbeet crop
are beyond the Company's control. The actual results experienced by the Company
could differ materially from the forward-looking statements contained herein.

         The recently completed harvest of the sugarbeet crop grown during 2001
was less that of the prior year in total tons delivered due to lower yields and
the PIK program, which resulted in less harvested acres (see section entitled
"Recent Crops"). The sugar content of the 2001 crop was less than that of the
prior year and the five year average for sugar. The Company expects to produce
less hundredweight of sugar from the 2001sugarbeet crop than the prior year, and
also less than the five year average production of sugar, due to the lower tons
of beets delivered and the lower sugar content of those beets.

<PAGE>


         From the revenues generated from the sale of products produced from
each ton of sugarbeets must be deducted the Company's operating and fixed costs.
Revenues for the crop year 2001 are expected to be significantly below the 2000
crop year due to reduced production of sugar and co-products. The deduction of
those operating costs results in a 2001 crop gross payment to growers estimated
to be less than that of the prior crop year.


OTHER INFORMATION

The Company is not aware of any impact resulting from new FASB, GAAP, or SEC
rules.


ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

MARKET AND COMPETITION

         Current US Government statistics estimate total US sugar consumption at
189.3 million cwt for the year beginning 1 October 2000 and ending 30 September
2001. For the same period ending in 2000, total consumption was 188.3 million
cwt. Comparing the two years shows demand growth of 1.0% for US sugar sellers.

         The US government forecasts growth between 2001 and 2002 to be slightly
less than 2%, at 192.9 million cwt., which approximates trend line and includes
consumption increases due to population growth. The Company believes that
domestic consumption growth will trend to growth rates of 1 to 2% per year due
to population growth. Given the size of the domestic market, the Company's sugar
production and sales represent between 2 and 3% of the total domestic market for
refined sugar in 2000. United Sugars, which sells the Company's production
through a sugar marketing pool, represents approximately 25% share of the US
sugar market.

         The US refined sugar market has continued to grow over the past twenty
years, despite the enormous amount of demand lost to the substitution of high
fructose corn syrups for sugar in beverages and certain food products.
Non-nutritive sweeteners such as aspartame have also been developed to
substitute for sugar. The substitution of corn sweeteners for sugar not only
reduced demand for sugar in the United States, but also resulted in a high
degree of sugar industry consolidation. For example, in 1978 there were 28 sugar
producers and sellers in the US market. Today there are eight sugar sellers,
with over 75% of US sugar market share concentrated in the top three sellers,
all of which are fully integrated beet and cane suppliers. The Company's main
competitors in the domestic market are Imperial Sugar Company, Tate & Lyle North
America, Amalgamated Sugar Company, and California and Hawaii Sugar Company.
Competition in the US sugar industry, because sugar is a fungible commodity, is
primarily based upon price, customer service and reliability as a supplier.

         According to United States Department of Agriculture (USDA) statistics,
the Red River Valley is generally one of the most cost efficient sugar beet
producing areas in the nation. As a result, the Company's management believes
that it possesses the ability to compete successfully with other American
producers of sugar. In spite of this competitive advantage, substitute sweetener
products and sugar imports could have a material adverse effect on the Company's
operations in the future.

<PAGE>


GOVERNMENT PROGRAMS AND REGULATION

         Domestic sugar prices are supported under a program administered by the
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 and the Federal Agriculture Improvement and Reform Act of 1996 (the
"FAIR Act"), 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 FAIR
Act maintains the basic 18 cent per pound loan rate for raw sugar and puts in
place a 22.90 cent per pound loan rate for refined beet sugar. Both loan rates
are effective for crop years 1996 through 2002. Price support loans are made on
a non-recourse basis provided that United States sugar imports for domestic
usage exceed 1.5 million short tons raw value in a given fiscal (October through
September) year. Loans made on a non-recourse basis enable the sugar processor
to forfeit sugar to Commodity Credit Corporation ("CCC") if sugar prices are
below the loan rate.

         If imports during a given year fall below the 1.5 million short tons
raw value, loans must be made on a recourse basis, meaning that processors will
not be able to forfeit sugar to CCC at its full loan value. In order to recover
the full value of a recourse loan, the CCC could require that cash or other
assets be provided in addition to the sugar used as collateral when the loan is
made.

         Another provision of the FAIR Act is a one cent per pound penalty paid
by processors if the processor defaults on sugar price support loans. Such
support prices for sugar are in effect as long as the "Tariff Rate Quota" for
imports of sugar is 1.5 million short tons, raw value or more.

         Under the tariff rate quota implemented October 1, 1990, certain sugar
producing countries are assigned a fixed quantity of imports duty-free or
subject to minimal duties. Unlimited additional quantities may be imported upon
payment of a tariff of 14.45 cents per pound prior to shipment (to date, very
little sugar has been imported under this higher tariff level). (Note: the
tariff schedule was established at 17 cents on July 1, 1995, 16 cents July 1,
1996 and was reduced by .31 cents each year for years 1997 through 2001, until
it reached 14.45 cents per pound of sugar). 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 General Agreement on Tariffs and Trade (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.

         In November 1999, the so-called Millennium Round of the World Trade
Organization (WTO) began in Seattle, Washington with the goal of continuing to
move toward multilateral free trade in all sectors. Any agreements reached at
the Millennium Round could represent a threat to the sugar industry because
sugar is one of the most highly protected sectors within world agricultural
trade and is thus a target for reform. The trend toward liberalization will most
likely focus on the minimum import requirement of 1,257,000 short tons. There
will likely be a movement to raise the minimum import requirement, and if
successful, such a movement could cause additional supply/demand pressure in the
United States.

<PAGE>


         The Company believes the North American Free Trade Agreement ("NAFTA")
represents the most 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 recently 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 two countries continue
to negotiate over this issue and the Company cannot predict the outcome of those
negotiations. However, should Mexico prevail on this issue with the United
States, the Company believes that imports from Mexico could increase
dramatically and therefore adversely affect the domestic price of sugar.

         The Company is concerned that low world sugar prices and a trade
conflict between the U.S. and Mexico over high fructose corn sweeteners could
permit de facto acceleration of the side agreement under NAFTA. Under the NAFTA
tariff schedule, second tier sugar tariffs are set at approximately 10.89 cents
in 2000 but decline by approximately 1.5 cents per year until reaching zero in
2008. Low world raw sugar prices could make it feasible for Mexican sugar to
enter the United States earlier than 2008. In contrast to Mexico's duty free
access to the United States sugar market (which rises from 25,000 metric tons to
250,000 metric tons per year in fiscal year 2001) NAFTA contains no restrictions
on second tier imports.

         Under the current terms of NAFTA and the side agreement, the Company is
concerned that imports from Mexico could oversupply the U.S. market forcing
sugar prices significantly lower. Any fluctuation in the price of sugar has a
direct impact on any sugarbeet payments that are made to members. The Company,
along with the domestic sugar industry, is seeking improvements to NAFTA and is
also pursuing legal remedies to address the matter. If the sugar industry is
unsuccessful in these or any other endeavors it pursues to prevent the influx of
Mexican sugar into the U.S. market, there could be adverse financial
consequences to the Company and its members.

         From fiscal years 1990 to 1996, the sugar industry was required to
remit to the Commodity Credit Corporation a nonrefundable marketing assessment
equivalent to 1.1794 percent of the raw cane sugar loan rate of 18 cents per
pound. The Federal Agriculture Improvement and Reform Act of 1996 increased the
assessment for fiscal year 1997 though 2003 to 1.47425 percent of the raw cane
sugar loan rate of 18 cents per pound. In response to the downturn in the
agriculture economy, congress included a provision in the fiscal year 2000
federal agricultural appropriations bill to alleviate the sugar industry from
paying the assessment for fiscal years 2000 and 2001. Thus, from October 1, 1999
to September 30, 2001, the Company was not required to pay a marketing
assessment to the Commodity Credit Corporation. The Senate recently passed an
appropriations bill that includes provisions to defer payment of the assessment
fee for the period of October 1, 2001 to September 30, 2002 until September 30,
2002. No such provision exists for the House of Representatives appropriation
bill, so a conference committee of both houses, and ultimately the full Senate
and House and the President will decide if the provision to defer payment is
maintained in the final passage of the bill.

         The current sugar program will expire after the 2002 crop and the
nature and scope of future legislation and United States trade policy affecting
the sugar market cannot be accurately predicted and there can be no assurance
that price supports will continue in their present form beyond the 2002 crop
year,

<PAGE>


or that there will even be enacted a sugar program beyond the existing program.
Recently, the House of Representatives passed a new ten year farm bill to
replace the farm bill that is due to expire in 2002. At this writing the Senate
Agriculture Committee has also passed a new five year farm bill to replace the
farm bill expiring in 2002, but the bill has not yet been debated or voted on by
the full Senate. While both versions of the new proposed farm bill contain a
sugar provision that includes most of what the sugar industry desires in a new
farm bill for sugar, there can be no assurances as to what the final version of
a new farm bill might look like or if it will contain favorable price supports.
If the price support program including the Tariff Rate Quota system described
above, were eliminated in its entirety, or if the protection the United States'
price support program provides from foreign competitors were materially reduced,
the Company could be materially and adversely effected. 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.

<PAGE>


ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEPENDENT AUDITOR'S REPORT

The Board of Directors
Minn-Dak Farmers Cooperative
Wahpeton, North Dakota

We have audited the accompanying consolidated balance sheets of Minn-Dak Farmers
Cooperative (a North Dakota cooperative) as of August 31, 2001, 2000, and 1999,
and the related consolidated statements of operations, changes in members'
investments and cash flows for the years then ended. These financial statements
are the responsibility of the cooperative's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Minn-Dak Farmers
Cooperative as of August 31, 2001, 2000, and 1999, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.


Eide Bailly, LLP

Fargo, North Dakota
October 2, 2001

<PAGE>


MINN-DAK FARMERS COOPERATIVE
CONSOLIDATED BALANCE SHEETS
AUGUST 31, 2001, 2000, AND 1999

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------

                                                                     2001            2000            1999
                                                                 ------------    ------------    ------------
<S>                                                              <C>             <C>             <C>
ASSETS

CURRENT ASSETS
    Cash                                                         $    459,046    $  2,504,566    $    546,345
                                                                 ------------    ------------    ------------

    Current portion of long-term note receivable                        2,551           2,551         311,677
                                                                 ------------    ------------    ------------

    Receivables
       Trade accounts                                              13,868,003      11,115,705      16,236,385
       Growers                                                      3,796,044       3,996,356       4,056,821
       Other                                                        1,398,926         632,549       3,066,400
                                                                 ------------    ------------    ------------
                                                                   19,062,973      15,744,610      23,359,606
                                                                 ------------    ------------    ------------

    Advances to affiliates - Midwest Agri-Commodities Co.
      and  United Sugars Corporation                                  414,046              --              --
                                                                 ------------    ------------    ------------

    Inventories
       Refined sugar, pulp and molasses
         to be sold on a pooled basis                              18,648,520      27,737,385      17,218,658
       Nonmember refined sugar                                          4,199           2,642           1,389
       Yeast                                                          120,575          87,511          62,965
       Materials and supplies                                       5,886,136       5,561,471       5,004,645
       Beet                                                                --              --         710,000
                                                                 ------------    ------------    ------------
                                                                   24,659,430      33,389,009      22,997,657
                                                                 ------------    ------------    ------------

    Deferred charges                                                1,085,108       1,122,838       1,194,291
                                                                 ------------    ------------    ------------

    Prepaid expenses                                                  289,866         251,628         232,021
                                                                 ------------    ------------    ------------

    Other                                                             527,000         543,000         587,550
                                                                 ------------    ------------    ------------

          Total current assets                                     46,500,020      53,558,202      49,229,147
                                                                 ------------    ------------    ------------

PROPERTY, PLANT AND EQUIPMENT
    Land and land improvements                                     21,187,079      20,968,468      20,423,153
    Buildings                                                      35,969,830      35,591,877      35,377,950
    Factory equipment                                             112,347,634     111,922,358     110,134,188
    Other equipment                                                 3,415,648       3,527,618       3,463,000
    Construction in progress                                           25,866          21,980         229,981
                                                                 ------------    ------------    ------------
                                                                  172,946,057     172,032,301     169,628,272
       Less accumulated depreciation                               70,058,956      65,281,136      60,441,602
                                                                 ------------    ------------    ------------
                                                                  102,887,101     106,751,165     109,186,670
                                                                 ------------    ------------    ------------
LONG-TERM NOTES RECEIVABLE,
  NET OF CURRENT PORTION                                               25,508          28,058       2,915,360
                                                                 ------------    ------------    ------------

OTHER ASSETS
    Investment in stock of other corporations, unconsolidated
       marketing subsidiaries and other cooperatives               11,183,783      10,407,956      10,043,102
    Deferred income taxes                                              89,000       1,240,000       1,962,000
    Other                                                           1,052,014       1,015,827         960,220
                                                                 ------------    ------------    ------------
                                                                   12,324,797      12,663,783      12,965,322
                                                                 ------------    ------------    ------------

                                                                 $161,737,426    $173,001,208    $174,296,499
                                                                 ============    ============    ============
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>


<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------

                                                                   2001            2000            1999
                                                               ------------    ------------    ------------
<S>                                                            <C>             <C>             <C>
LIABILITIES AND MEMBERS' INVESTMENT

CURRENT LIABILITIES
    Short-term notes payable                                   $ 10,965,000    $ 15,458,800    $ 17,780,000
                                                               ------------    ------------    ------------

    Current portion of long-term debt                             3,610,417       3,012,500       3,012,500
    Current portion of capital lease                                815,000         775,000         730,000
                                                               ------------    ------------    ------------
                                                                  4,425,417       3,787,500       3,742,500
                                                               ------------    ------------    ------------

    Accounts payable
       Trade                                                      1,842,796       2,223,574       2,891,768
       Growers                                                   14,816,615      16,927,545       8,340,333
                                                               ------------    ------------    ------------
                                                                 16,659,411      19,151,119      11,232,101
                                                               ------------    ------------    ------------

    Advances to affiliates - Midwest Agri-Commodities Co.
      and United Sugars Corporation                                      --         201,242         374,589
                                                               ------------    ------------    ------------

    Accrued liabilities                                           2,476,011       2,725,105       2,696,649
                                                               ------------    ------------    ------------

          Total current liabilities                              34,525,839      41,323,766      35,825,839

LONG-TERM DEBT, NET OF CURRENT PORTION                           39,100,000      43,910,416      46,172,917

OBLIGATION UNDER CAPITAL LEASE                                    9,680,000      10,495,000      11,270,000

OTHER                                                               964,617         846,765         686,463

COMMITMENTS AND CONTINGENCIES (NOTE 11)                                  --              --              --
                                                               ------------    ------------    ------------

          Total liabilities                                      84,270,456      96,575,947      93,955,219
                                                               ------------    ------------    ------------

MINORITY INTEREST IN EQUITY OF SUBSIDIARY                         1,263,581       1,089,320         946,924
                                                               ------------    ------------    ------------

MEMBERS' INVESTMENT
    Preferred stock
       Class A - 100,000 shares authorized, $105 par value;
          72,200 shares issued and outstanding                    7,581,000       7,581,000       7,581,000

       Class B - 100,000 shares authorized $75 par value;
          72,200 shares issued and outstanding                    5,415,000       5,415,000       5,415,000

       Class C - 100,000 shares authorized, $76 par value;
         72,200 shares issued and outstanding                     5,487,200       5,487,200       5,487,200
                                                               ------------    ------------    ------------
                                                                 18,483,200      18,483,200      18,483,200

    Common stock, 600 shares authorized, $250 par value;
       497, 484, and 473, shares issued and outstanding
       in 2001, 2000, and 1999, respectively                        124,250         121,000         118,250
    Paid in capital in excess of par                             32,094,407      32,094,407      32,094,407
    Unit retention capital                                        6,476,360       7,148,159       7,560,034
    Qualified allocated patronage                                 3,415,570       3,816,607       3,854,558
    Nonqualified allocated patronage                             14,466,641      12,894,627      16,822,063
    Retained earnings                                             1,142,961         777,941         461,844
                                                               ------------    ------------    ------------
                                                                 76,203,389      75,335,941      79,394,356
                                                               ------------    ------------    ------------

                                                               $161,737,426    $173,001,208    $174,296,499
                                                               ============    ============    ============
</TABLE>

<PAGE>


MINN-DAK FARMERS COOPERATIVE
CONSOLIDATED STATEMENTS OF OPERATIONS
AUGUST 31, 2001, 2000, AND 1999

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------

                                                          2001               2000              1999
                                                      -------------     -------------     -------------
<S>                                                   <C>               <C>               <C>
REVENUE
     From sales of sugar, sugar by-products,
       and yeast, net of discounts                    $ 177,898,591     $ 170,151,248     $ 152,741,993
                                                      -------------     -------------     -------------

EXPENSES
     Production costs of sugar,
       by-products, and yeast sold                       44,492,963        44,866,025        50,330,497
     Sales and distribution costs                        28,099,266        26,610,203        27,913,271
     General and administrative                           5,465,219         5,418,727         5,002,270
     Interest                                             4,920,260         5,198,876         5,264,307
                                                      -------------     -------------     -------------
                                                         82,977,708        82,093,831        88,510,345
                                                      -------------     -------------     -------------

OTHER EXPENSE                                              (301,011)       (1,453,810)         (879,326)
                                                      -------------     -------------     -------------

NET PROCEEDS RESULTING FROM
   MEMBER AND NON-MEMBER BUSINESS                     $  94,619,872     $  86,603,607     $  63,352,322
                                                      =============     =============     =============

DISTRIBUTION OF NET PROCEEDS
     Credited to members' investment
         Components of net income
             Income from
               non-member business                    $     365,020     $     316,097     $     715,515
             Patronage income                             4,624,324                --                --
                                                      -------------     -------------     -------------

                 Net income                               4,989,344           316,097           715,515

         Unit retention capital                                  --                --             4,630
                                                      -------------     -------------     -------------

                 Net credit to members' investment        4,989,344           316,097           720,145

     Payments to members for sugarbeets,
       net of unit retention capital                     82,696,795        86,287,510        62,632,177
     Payments to members for PIK certificates             6,933,733                --                --
                                                      -------------     -------------     -------------
             Total payments to members                   89,630,528        86,287,510        62,632,177

NET PROCEEDS RESULTING FROM
  MEMBER AND NONMEMBER BUSINESS                       $  94,619,872     $  86,603,607     $  63,352,322
                                                      =============     =============     =============
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>


MINN-DAK FARMERS COOPERATIVE
CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS' INVESTMENT
AUGUST 31, 2001, 2000, AND 1999

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------

                                                                           Paid in Capital     Unit
                                                   Preferred      Common     in Excess of    Retention
                                                     Stock        Stock       Par Value       Capital
                                                  -----------  ----------- --------------- ------------
<S>                                                <C>             <C>       <C>           <C>
BALANCE, AUGUST 31, 1998                           18,483,200      121,000   $ 32,094,407  $  7,584,237
  Stock
      Sales - common (3 shares)                                        750
      Repurchases - common (14 shares)                              (3,500)
  Unit retention capital
      Revolvement                                                                               (28,833)
      Proceeds                                                                                    4,630
  Revolvment of prior years' allocated patronage
  Net income for the year ended August 31, 1999
                                                  -----------  -----------   ------------  ------------
BALANCE, AUGUST 31, 1999                           18,483,200      118,250     32,094,407     7,560,034
  Stock
      Sales - common (22 shares)                                     5,500
      Repurchases - common (11 shares)                              (2,750)
  Revolvement of unit retention capital                                                        (411,875)
  Revolvment of prior years' allocated patronage
  Net income for the year ended August 31, 2000
                                                  -----------  -----------   ------------  ------------
BALANCE, AUGUST 31, 2000                           18,483,200      121,000     32,094,407     7,148,159
  Stock
      Sales - common (26 shares)                                     6,500
      Repurchases - common (13 shares)                              (3,250)
  Revolvement of unit retention capital                                                        (671,799)
  Revolvment of prior years' allocated patronage
  Net income for the year ended August 31, 2001
                                                  -----------  -----------   ------------  ------------

BALANCE, AUGUST 31, 2001                           18,483,200      124,250   $ 32,094,407  $  6,476,360
                                                  ===========  ===========   ============  ============
</TABLE>

[WIDE TABLE CONTINUED FROM ABOVE]

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------

                                                   Qualified   Non-Qualified    Retained
                                                   Allocated     Allocated      Earnings
                                                   Patronage     Patronage      (Deficit)       Total
                                                  ------------  ------------  ------------  ------------
<S>                                               <C>           <C>           <C>           <C>
BALANCE, AUGUST 31, 1998                          $  3,981,031  $ 20,071,517  $   (253,671) $ 82,081,721
  Stock
      Sales - common (3 shares)                                                                      750
      Repurchases - common (14 shares)                                                            (3,500)
  Unit retention capital
      Revolvement                                                                                (28,833)
      Proceeds                                                                                     4,630
  Revolvment of prior years' allocated patronage      (126,473)   (3,249,454)                 (3,375,927)
  Net income for the year ended August 31, 1999                                    715,515       715,515
                                                  ------------  ------------  ------------  ------------
BALANCE, AUGUST 31, 1999                             3,854,558    16,822,063       461,844    79,394,356
  Stock
      Sales - common (22 shares)                                                                   5,500
      Repurchases - common (11 shares)                                                            (2,750)
  Revolvement of unit retention capital                                                         (411,875)
  Revolvment of prior years' allocated patronage       (37,951)   (3,927,436)                 (3,965,387)
  Net income for the year ended August 31, 2000                                    316,097       316,097
                                                  ------------  ------------  ------------  ------------
BALANCE, AUGUST 31, 2000                             3,816,607    12,894,627       777,941    75,335,941
  Stock
      Sales - common (26 shares)                                                                   6,500
      Repurchases - common (13 shares)                                                            (3,250)
  Revolvement of unit retention capital                                                         (671,799)
  Revolvment of prior years' allocated patronage      (401,037)   (3,052,310)                 (3,453,347)
  Net income for the year ended August 31, 2001                    4,624,324       365,020     4,989,344
                                                  ------------  ------------  ------------  ------------

BALANCE, AUGUST 31, 2001                          $  3,415,570  $ 14,466,641  $  1,142,961  $ 76,203,389
                                                  ============  ============  ============  ============
</TABLE>

<PAGE>


MINN-DAK FARMERS COOPERATIVE
CONSOLIDATED STATEMENTS OF CASH FLOWS
AUGUST 31, 2001, 2000, AND 1999

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------

                                                                            2001             2000             1999
                                                                        ------------     ------------     ------------
<S>                                                                     <C>              <C>              <C>
OPERATING ACTIVITIES
     Income allocated to members' investment                            $  4,989,344     $    316,097     $    715,515
     Add (deduct) noncash items
        Depreciation and amortization                                      6,806,781        6,731,225        6,591,016
        Equipment disposals - loss                                           321,305          528,422          155,761
        Discount on redemption of estate payout                                   --               --          (40,820)
        Net (income) allocated from
          unconsolidated marketing subsidiaries                             (165,514)        (142,870)        (214,375)
        Noncash portion of patronage capital credits                        (779,627)        (273,292)        (313,463)
        Deferred income taxes                                              1,151,000          709,000          730,000
        Increase in cash surrender of officer life insurance                 (42,646)          (7,730)         (87,628)
        Stock cancellation - St. Paul Bank for Cooperatives                       --           51,138          131,196
     Changes in operating assets and liabilities:
        Accounts receivable and advances                                  (3,933,651)       7,441,649       (2,502,362)
        Inventory and prepaid expenses                                       126,579      (10,410,959)      10,508,284
        Deferred charges and other                                            53,730           84,453           38,748
        Other assets                                                              --           44,550               --
        Accounts payable, accrued liabilities, and other liabilities      (2,645,050)       8,031,619         (777,654)
                                                                        ------------     ------------     ------------

NET CASH FROM OPERATING ACTIVITIES                                         5,882,251       13,103,302       14,934,218
                                                                        ------------     ------------     ------------
INVESTING ACTIVITIES
     Proceeds from disposition of
       property, plant and equipment                                              --           59,391           12,494
     Capital expenditures                                                 (3,100,142)      (4,709,902)      (5,185,083)
     Investment in stock of other corporations, unconsolidated
       marketing subsidiaries and other cooperatives                              --               --         (110,716)
     Capital adjustment of marketing subsidiary                               68,078               --               --
     Issuance of note receivable                                                  --          (30,609)        (283,017)
     Proceeds on note receivable                                               2,550        3,227,037          288,093
     Net proceeds from patronage
       refunds and equity revolvements                                       101,236              133           66,196
     Minority interest in equity of subsidiaries                             174,261          142,396          179,443
                                                                        ------------     ------------     ------------

NET CASH USED FOR INVESTING ACTIVITIES                                    (2,754,017)      (1,311,554)      (5,032,590)
                                                                        ------------     ------------     ------------
FINANCING ACTIVITIES
     Sale and repurchase of common stock, net                                  3,250            2,750           (2,750)
     Net proceeds from issuance of short-term debt                         4,070,962       (2,321,200)      (9,075,000)
     Proceeds from issuance of long-term debt                                     --        1,750,000        2,800,000
     Payment of financing fees                                              (135,321)        (145,314)        (154,726)
     Payment of long-term debt                                            (4,987,499)      (4,742,501)      (1,412,500)
     Retention of nonqualified unit retains                                       --               --            4,630
     Payment of unit retains and allocated patronage                      (4,125,146)      (4,377,262)      (3,363,940)
                                                                        ------------     ------------     ------------

NET CASH FROM FINANCING ACTIVITIES                                        (5,173,754)      (9,833,527)     (11,204,286)
                                                                        ------------     ------------     ------------

NET CHANGE IN CASH                                                        (2,045,520)       1,958,221       (1,302,658)

CASH, BEGINNING OF YEAR                                                    2,504,566          546,345        1,849,003
                                                                        ------------     ------------     ------------

CASH, END OF YEAR                                                       $    459,046     $  2,504,566     $    546,345
                                                                        ============     ============     ============


SUPPLEMENTAL DISCLOSURES
  OF CASH FLOW INFORMATION
     Cash payments for
        Interest                                                        $  4,959,743     $  4,583,074     $  4,971,812
                                                                        ============     ============     ============

SUPPLEMENTAL DISCLOSURES
  OF NON CASH FLOW INFORMATION
     Reduction of short-term notes payable through
     the forfeiture of sugar inventory                                  $  8,564,762
                                                                        ============
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED AUGUST 31, 2001, 2000, and 1999

NOTE 1 - PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES

PRINCIPAL BUSINESS ACTIVITY

Minn-Dak Farmers Cooperative (Minn-Dak) is a North Dakota cooperative
association owned by its member-growers for the purpose of processing sugar
beets and marketing sugar and by-products. Minn-Dak Yeast Company, Inc.
(Minn-Dak Yeast) is a North Dakota corporation engaged primarily in the
production and marketing of bakers yeast.

The majority of the net proceeds from Minn-Dak are from member business, whereas
Minn-Dak Yeast is considered non-member business.

PRINCIPLES OF CONSOLIDATION

The financial statements include the accounts of Minn-Dak and its subsidiary,
Minn-Dak Yeast, which is 80% owned by the cooperative.

CREDIT RISK

The cooperative and subsidiary grant credit to food processors located
throughout the United States. In addition, the cooperative grants credit to
members for sugar beet seed, located in North Dakota and Minnesota.

INVENTORIES

Inventories of refined 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 which approximates cost.

In valuing inventories at net realizable value, the cooperative, in effect sells
the remaining inventory to the subsequent years sugar and by-product pool.

DEFERRED CHARGES

Agricultural development and labor procurement costs incurred in connection with
the beet crop to be harvested in September and October are deferred and
subsequently charged to expense during the ensuing processing period.

PROPERTY, PLANT, EQUIPMENT AND DEPRECIATION

Property, plant and equipment are stated at cost. Additions, renewals and
betterments are capitalized, whereas expenditures for maintenance and repairs
are charged to expense. The cost and related accumulated depreciation of assets
retired or sold are removed from the appropriate asset and depreciation accounts
and the resulting gain or loss is reflected in income.

<PAGE>


It is the policy of the cooperative to provide depreciation based on methods
designed to amortize the cost of the properties over their estimated useful
lives. Property, plant and equipment are depreciated for financial reporting
purposes, principally using declining balance methods, with estimated useful
lives ranging from 8 to 40 years. Statutory lives and methods are used for
income tax reporting purposes.

Indirect costs capitalized were $63,827, $124,490, and $168,399 for the years
ended August 31, 2001, 2000 and 1999. There were no construction period-interest
capitalized for the years ended August 31, 2001, 2000 and 1999.

EQUITY VALUE INVESTMENTS

The investments in United Sugars Corporation, Midwest Agri-Commodities Company
and ProGold Limited Liability Company are accounted for using the equity method,
wherein the investment is recorded at the amount of the underlying equity in the
net assets of the investments and adjusted to recognize the cooperative's share
of the undistributed earnings or losses.

INVESTMENTS IN OTHER COOPERATIVES

The investments in stocks and capital credits of other cooperatives are stated
at cost, plus the cooperative's share of allocated patronage and capital
credits.

INCOME TAXES

A consolidated federal income tax return is filed for the cooperative and its
subsidiary. Deferred income taxes are provided for in the timing of certain
temporary deductions/increases for financial and income tax reporting purposes.
Significant temporary differences are as follows:

    1.  When non-qualified unit retention capital and allocated patronage are
        elected by the board of directors, the cooperative is not allowed an
        income tax deduction until they are distributed in cash to the
        member-producers, whereas qualified unit retention capital and allocated
        patronage are deducted when declared.

    2.  Depreciation - For financial reporting purposes, the companies use
        straight-line and accelerated methods of depreciation with lives of 8 to
        40 years, while, for income tax purposes, the companies use required
        statutory depreciable lives and methods.

    3.  Non-qualified patronage credits from investments in other cooperatives -
        For financial statement purposes, the companies recognize income when
        the patronage credit notification is received while, for income tax
        purposes, the companies recognize income when the patronage is received
        in cash.

    4.  Inventory capitalization - For income tax reporting purposes, certain
        overhead costs are included as a part of inventory costs in accordance
        with inventory capitalization rules. These costs are charged to expense
        as incurred for financial reporting purposes.

    5.  Deferred compensation - For financial reporting purposes, deferred
        compensation is charged to expense as amounts are accrued. For income
        tax purposes, deferred compensation is deductible when paid.

<PAGE>


    6.  Recognition of vacation pay - For financial reporting purposes, vacation
        pay is charged to expense as accrued, whereas, for income tax purposes,
        vacation pay is deducted when paid.

ACCOUNTING ESTIMATE

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

UNINSURED CASH BALANCE

The Company maintains cash balances at various financial institutions throughout
the United States. Accounts at each institution are insured by the Federal
Deposit Insurance Corporation up to $100,000. At times during the year, the
company's balances exceeded this limit.

RECLASSIFICATIONS

Certain amounts have been reclassified in the 2000 and 1999 financial statements
to conform with the 2001 presentation. The reclassifications have no effect on
the results of operations.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board has recently issued pronouncements
regarding Business Combinations, Goodwill and Other Intangible Assets, and
Accounting for Asset Retirement Obligations. Management is reviewing these
pronouncements, but does not expect the implementation of these to have a
material effect on the financial statements.


NOTE 2 - NOTES RECEIVABLE

The cooperative's notes receivable total $28,058, $30,609 and $3,227,037 as of
August 31, 2001, 2000 and 1999, respectively. They are due from United Sugars
member processors. The notes receivable are unsecured, with a variable interest
rate, currently 8.25%. The notes will be received in equal annual installments
through August 31, 2012. The notes are subordinated to CoBank in 2001, 2000, and
1999. The current portion of the notes are $2,551, $2,551, and $311,677 as of
August 31, 2001, 2000 and 1999, respectively.

During 2000, the cooperative sold certain notes receivable with recourse. The
cooperative's contingent liability related to these notes totaled $2,603,682 and
$2,915,360 as of August 31, 2001 and 2000, respectively.


NOTE 3 - INVESTMENTS

The investment in stock of other corporations, unconsolidated marketing
subsidiaries and other cooperatives consists of the following:

<PAGE>


<TABLE>
<CAPTION>
                                               2001           2000           1999
                                           -----------    -----------    -----------
<S>                                        <C>            <C>            <C>
United Sugars Corporation                  $   871,944    $   985,876    $ 1,007,957
Midwest Agri-Commodities                        51,823         47,576         43,225
ProGold, LLC                                 3,842,378      3,635,255      3,474,655
CoBank                                       3,215,036      2,851,355      2,902,494
Dakota Valley Electric (R.S.R. Electric
  Cooperative in 1999)                       3,071,726      2,758,642      2,486,798
Other                                          130,876        129,252        127,973
                                           -----------    -----------    -----------

                                           $11,183,783    $10,407,956    $10,043,102
                                           ===========    ===========    ===========
</TABLE>


NOTE 4 - SHORT-TERM DEBT

Information regarding short-term debt for the years ended August 31, is as
follows:

<TABLE>
<CAPTION>
                                               2001           2000          1999
                                           -----------    -----------    -----------
<S>                                        <C>            <C>            <C>
Seasonal loan with CoBank,
  due June 1, 2002, interest
  variable, currently at 4.5%              $10,965,000    $ 4,980,000    $17,780,000

CCC notes                                           --     10,478,800             --
                                           -----------    -----------    -----------

                                           $10,965,000    $15,458,800    $17,780,000
                                           ===========    ===========    ===========
</TABLE>

The cooperative has a $45,000,000 seasonal line of credit with CoBank. The line
is secured with a first lien on substantially all property and equipment and
current assets of Minn-Dak.

Maximum borrowings, average borrowing levels and average interest rates for
short-term debt for the years ended August 31, is as follows:

<TABLE>
<CAPTION>
                                               2001           2000           1999
                                           -----------    -----------    -----------
<S>                                        <C>            <C>            <C>
Maximum borrowings                         $45,000,000    $42,030,000    $53,817,000
                                           ===========    ===========    ===========

Average borrowing levels                   $22,452,092    $23,484,062    $34,660,931
                                           ===========    ===========    ===========

Average interest rates                            6.38%          6.84%          6.06%
                                           ===========    ===========    ===========
</TABLE>

<PAGE>


NOTE 5 - LONG-TERM DEBT

Information regarding long-term debt at August 31, is as follows:

<TABLE>
<CAPTION>
                                                   2001            2000            1999
                                               -----------     -----------     -----------
<S>                                            <C>             <C>             <C>
Term loan with CoBank, due in varying
  principal repayments through
  November 20, 2010, interest variable,
  currently at 6.5%, with a first lien on
  substantially all property and equipment
  and current assets of Minn-Dak located in
  Wahpeton, North Dakota                       $42,700,000     $46,900,000     $49,150,000

Long-term interest free note with
  Dakota Valley Electric Cooperative                10,417          22,916          35,417
                                               -----------     -----------     -----------
                                                42,710,417      46,922,916      49,185,417
     Less current maturities                    (3,610,417)     (3,012,500)     (3,012,500)
                                               -----------     -----------     -----------

                                               $39,100,000     $43,910,416     $46,172,917
                                               ===========     ===========     ===========
</TABLE>

Minn-Dak has complied with the terms of its loan agreement for the years ended
August 31, 2001, 2000 and 1999.

In addition, Minn-Dak can make special advance payments on its term loans with
CoBank after its seasonal loans have been paid in full, with the understanding
that the special advance payments will be readvanced subject to the
reinstatement provisions, prior to the granting of any new seasonal loans. Any
such advance payments are subject to a commitment fee of .25% of the daily
unadvanced commitment.

Interest expense totaled $4,959,743, $5,198,896, and $5,264,307 for 2001, 2000
and 1999, respectively.

Principal amounts due on all the cooperative's long-term debt are as follows:

<TABLE>
<CAPTION>
     Years ending August 31,
   ---------------------------
<S>                                                            <C>
             2002                                              $ 3,610,417
             2003                                                4,800,000
             2004                                                4,800,000
             2005                                                4,800,000
             2006                                                4,800,000
             Thereafter                                         19,900,000
                                                               -----------

                                                               $42,710,417
                                                               ===========
</TABLE>

<PAGE>


NOTE 6 - OBLIGATIONS UNDER CAPITAL LEASE

The cooperative has a capital lease with Richland County, North Dakota for
equipment relating to solid waste disposal. The county has financed the leased
assets with a bond issue and accordingly has structured the cooperative's lease
payments to correspond with the bond issue's interest and principal
requirements. Details relative to the cooperatives obligations under the lease
agreement are as follows:

<TABLE>
<CAPTION>
                                               2001
                        ----------------------------------------------------

                                        FINAL       CURRENT                        2000           1999
       Payee            INTEREST      MATURITY      PORTION         TOTAL          Total          Total
-----------------      ----------    ----------    ----------    -----------    -----------    -----------
<S>                       <C>           <C>        <C>           <C>            <C>            <C>
Richland County,
  North Dakota            2.35%         1/11       $1,048,864    $11,795,451    $14,510,078    $15,763,935

    Less amount representing interest                 233,864      1,300,451      3,240,078      3,763,935
                                                   ----------    -----------    -----------    -----------

                                                   $  815,000    $10,495,000    $11,270,000    $12,000,000
                                                   ==========    ===========    ===========    ===========
</TABLE>

Minimum future principal payments required on the obligations under capital
lease are as follows:

<TABLE>
<CAPTION>
     Years ending August 31,
   ---------------------------
<S>                                                            <C>
             2002                                              $   815,000
             2003                                                  860,000
             2004                                                  905,000
             2005                                                  960,000
             2006                                                1,010,000
              Thereafter                                         5,945,000
                                                               -----------

                                                               $10,495,000
                                                               ===========
</TABLE>

The Company has letter of credit arrangements with a bank that provide for
short-term secured borrowings totaling approximately $11,000,000 at August 31,
2001. There were no outstanding advances under these letter of credit
arrangements at August 31, 2001.


NOTE 7 - MEMBERS' INVESTMENT AND GROWER PAYMENTS

The ownership of nondividend bearing common stock is restricted to a
"member-producer," as defined in the bylaws of Minn-Dak. Each member-producer
shall own only one share of common stock and is entitled to one vote at any
meeting of the members. Each member-producer is required to purchase one unit of
preferred stock for each 1.35 planted acres of sugar beet crops grown under a
grower's contract with Minn-Dak. A unit consists of one share each of Class A,
Class B and Class C preferred stock. The preferred shares are nonvoting and
nondividend bearing. All transfers and sales of stock must be approved by the
board of directors.

Minn-Dak's net income, determined in accordance with generally accepted
accounting principles consistently applied, shall be distributed annually on the
basis of dollar volume of patronage, in cash or in the form of credits to each
member-producer's patronage credit account as established on the books of the
cooperative. In the event of a loss in any one year, the cooperative shall act
in such a manner as to first recoup the loss from those patrons who were patrons
in the year in which the loss occurred.

<PAGE>


Under the terms of Minn-Dak's beet growing contracts with each of its
member-producers, Minn-Dak is obligated to pay the member-producers for beets
delivered at a price per pound of extractable sugar. However, if, in the opinion
of CoBank, the working capital position of the cooperative is insufficient,
Minn-Dak shall retain from the price to be paid per ton for beets such amounts
as are deemed by the bank to be necessary for operations, the deductions to be
made at such time as the bank shall require. The amount so retained shall be
evidenced in the records of Minn-Dak by equity credits in favor of the growers.
The board of directors has the power to determine whether such retains shall be
"qualified" or "nonqualified" for income tax purposes.

For the years ended August 31, 2001 and 2000, Minn-Dak did not deduct unit
retention capital from the members. For the year ended August 31, 1999, Minn-Dak
had retained $4,630 for frozen beet storage. For 1999 the retainage is based on
$.50 per ton of beets delivered up to the maximum obligation required.

For the year ended August 31, 2001, Minn-Dak allocated patronage of $4,624,324
to the members. For the years ended August 31, 2000 and 1999, Minn-Dak did not
allocate patronage to the members.

During the year ended August 31, 2001, Minn-Dak revolved the remaining 30% of
the unit retains and allocated patronage for the fiscal year ended August 31,
1992 and 35% of the unit retains and allocated patronage for the fiscal year
ended August 31, 1993, totaling $1,475,742 and $2,647,922, in each respective
year, for a total of $4,123,664. In addition, unit retains and allocated
patronage owned by certain estates were redeemed at a discount. The discount
represented the difference between the book value of these items, totaling
$1,482, and the present value of the estimated future redemptions.

During the year ended August 31, 2000, Minn-Dak revolved the remaining 15% of
the unit retains and allocated patronage for the fiscal year ended August 31,
1991 and 70% of the unit retains and allocated patronage for the fiscal year
ended August 31, 1992, totaling $1,148,214 and $3,229,049, in each respective
year, for a total of $4,377,263.

During the year ended August 31, 1999, Minn-Dak revolved 50% of the unit retains
and allocated patronage for the fiscal year ended August 31, 1991, totaling
$3,254,163. In addition, unit retains and allocated patronage owned by certain
estates were redeemed at a discount. The discount represented the difference
between the book value of these items, totaling $150,596, and the present value
of the estimated future redemptions.


NOTE 8 - INCOME TAXES

Minn-Dak Farmers Cooperative is a nonexempt cooperative as described under
Section 1381(a)(2) of the Internal Revenue Code of 1986. Accordingly, net
margins from business done with member patrons, which are allocated and paid as
prescribed in Section 1382 of the Code, will be taxable to the members and not
to the cooperative. To the extent that net margins are not allocated and paid as
stated above or arise from business done with non-members, the cooperative shall
have taxable income subject to corporate income tax rates.

<PAGE>


The significant components of deferred tax assets and liabilities included on
the balance sheet at August 31, is as follows:

<TABLE>
<CAPTION>
                                                       2001             2000             1999
                                                   ------------     ------------     ------------
<S>                                                <C>              <C>              <C>
Deferred tax assets
     Non-qualified unit retains and
       allocated partonage due to members          $  8,377,000     $  8,017,000     $  9,753,000
     Net operating loss carryforwards                 4,641,000        4,379,000        2,730,000
     Other                                            1,137,000        1,560,000          866,000
                                                   ------------     ------------     ------------

         Gross deferred tax assets                   14,155,000       13,956,000       13,349,000
             Less valuation allowance                (1,058,000)        (799,000)        (607,000)
                                                   ------------     ------------     ------------

                 Total deferred tax assets           13,097,000       13,157,000       12,742,000
                                                   ------------     ------------     ------------

Deferred tax liabilities
     Depreciation                                    10,161,000        9,351,000        8,544,000
     Other                                            2,520,000        2,223,000        1,906,000
                                                   ------------     ------------     ------------

                 Total deferred tax liabilities      12,681,000       11,574,000       10,450,000
                                                   ------------     ------------     ------------

                                                   $    416,000     $  1,583,000     $  2,292,000
                                                   ============     ============     ============

Classified as follows
     Current asset                                 $    327,000     $    343,000     $    330,000
     Long-term asset                                     89,000        1,240,000        1,962,000
                                                   ------------     ------------     ------------

         Net deferred tax asset                    $    416,000     $  1,583,000     $  2,292,000
                                                   ============     ============     ============
</TABLE>

A provision for income taxes related to non-member income from Minn-Dak Yeast
Company, totaling $659,000, $560,000 and $700,000, for the year ended August 31,
2001, 2000 and 1999, respectively, is included in other expense.

The deferred tax asset valuation allowance reduces the estimated amount of the
net operating loss carryforwards that will be ultimately realized.


NOTE 9 - EMPLOYEES' PENSION PLAN

The cooperative has a non-contributory defined benefit plan which covers
substantially all employees who meet certain requirements of age, length of
service and hours worked per year. The benefits provided are based upon the
employee's average monthly compensation during the previous three highest
consecutive years multiplied by a formula and the participant's service ratio.
It is the cooperative's funding policy to contribute to the plan at least the
minimum amount required by ERISA as determined by the actuarial firm.

The assets of the cooperative plan are maintained via insurance contracts with
Lincoln National Life Insurance Company of Fort Wayne, Indiana, and mutual funds
with Strong Funds of Milwaukee, Wisconsin.

<PAGE>


The following table sets forth the plan's funded status at August 31, is as
follows:

<TABLE>
<CAPTION>
                                                         2001              2000            1999
                                                     ------------     ------------     ------------
<S>                                                  <C>              <C>              <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year              $ 12,447,749     $ 11,857,238     $ 10,125,507
Service cost                                              628,658          577,611          581,912
Interest cost                                             942,881          838,130          793,722
Experience (gain)/loss due to participant changes         256,902         (564,471)         566,160
Benefits paid                                            (306,778)        (260,759)        (210,063)
                                                     ------------     ------------     ------------

     Benefit obligation at end of year                 13,969,412       12,447,749       11,857,238
                                                     ------------     ------------     ------------

CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year         10,963,942        9,553,497        8,205,618
Actual return on plan assets                               81,933          881,175          698,039
Employer contribution                                     506,983          790,029          859,903
Benefits paid                                            (306,778)        (260,759)        (210,063)
                                                     ------------     ------------     ------------

     Fair value of plan assets at end of year          11,246,080       10,963,942        9,553,497
                                                     ------------     ------------     ------------

Funded status                                          (2,723,332)      (1,483,807)      (2,303,741)
Unrecognized net actuarial loss                         1,434,769          805,973        1,474,612
Unrecognized prior service cost                           693,263          355,070          409,943
Unrecognized transition asset                             (44,949)         (63,215)         (81,481)
                                                     ------------     ------------     ------------

     Prepaid (accrued) benefit cost                  $   (640,249)    $   (385,979)    $   (500,667)
                                                     ============     ============     ============
</TABLE>

<PAGE>


<TABLE>
<CAPTION>
                                                    2001              2000              1999
                                                ------------      ------------      ------------
<S>                                                      <C>               <C>               <C>
WEIGHTED-AVERAGE ASSUMPTIONS AS OF AUGUST 31
Discount rate                                            7.5%              7.5%              7.5%
Expected return on plan assets                           8.0%              8.0%              8.0%
Rate of compensation increase                            5.0%              5.0%              5.0%
</TABLE>

The net periodic pension cost for the years ended August 31, 2001, includes the
following components:

<TABLE>
<CAPTION>
                                                    2001              2000              1999
                                                ------------      ------------      ------------
<S>                                             <C>               <C>               <C>
COMPONENTS ON NET PERIODIC BENEFIT COST
Service cost                                    $    628,658      $    577,611      $    581,912
Interest cost                                        942,881           838,130           793,722
Expected return on plan assets                      (878,925)         (777,007)         (667,728)
Amortization of prior service cost                    86,905            54,873            54,873
Amortization of transition amount                    (18,266)          (18,266)          (18,266)
Amortization of other                                     --                --            38,412
                                                ------------      ------------      ------------

     Net periodic benefit cost                  $    761,253      $    675,341      $    782,925
                                                ============      ============      ============
</TABLE>


NOTE 10 - ENVIRONMENTAL MATTERS

Minn-Dak is subject to extensive federal and state environmental laws and
regulations with respect to water and air quality, solid waste disposal and odor
and noise control. Minn-Dak conducts an ongoing and expanding control program
designed to meet these environmental laws and regulations. While Minn-Dak will
continue to have ongoing environmental compliance issues, currently there are no
pending regulatory enforcement actions and Minn-Dak believes that it is in
substantial compliance with applicable environmental laws and regulations.

Minn-Dak cannot predict whether future changes in environmental laws or
regulations might increase the cost of operating its facilities and conducting
its business. Any such changes could have financial consequences for Minn-Dak
and its members.


NOTE 11 - COMMITMENTS AND CONTINGENCIES

Minn-Dak is subject to various lawsuits and claims which arise in the ordinary
course of its business. While the results of such litigation and claims cannot
be predicted with certainty, management believes the disposition of all such
proceedings, individually or in aggregate, should not have a material adverse
effect on the company's financial position, results of operations or cash flows.

<PAGE>


NOTE 12 - INVESTMENT IN MARKETING COOPERATIVES

Minn-Dak has formed common marketing agency agreements with United Sugars
Corporation (United Sugars) and Midwest Agri-Commodities (Midwest) to be the
exclusive marketing agents for all products produced by them and other member
processors.

Minn-Dak's ownership requirement in United Sugars is calculated periodically and
is based on the average volume of sugar produced during the five previous fiscal
years. The investment is accounted for on the equity method and the amount of
sales and related costs recognized by each member processor is allocated based
on their pro-rata share of production for the year. Minn-Dak provided United
Sugars with cash advances on an ongoing basis for operating and marketing
expenses incurred. During the years ended August 31, 2001, 2000 and 1999,
Minn-Dak had advanced $22,204,411, $21,501,838 and $19,645,387, respectively.
Minn-Dak had outstanding advances due from United Sugars of $128,764, $249,117
and $117,870, for the years ended August 31, 2001, 2000 and 1999, respectively.
During 2001, a distribution of capital of $68,078 was received.

Minn-Dak has a one-third ownership interest in Midwest. The amount of the
investment is accounted for using the equity method. All beet pulp and a portion
of the molasses produced is sold by Midwest as an agent for Minn-Dak. The amount
of sales and related costs to be recognized by each owner is allocated based on
their pro-rata share of production for the year. The owners provide Midwest with
cash advances on an ongoing basis for operating and marketing expenses incurred
by Midwest. Minn-Dak advanced Midwest $1,974,466, $1,611,326 and $1,543,175,
respectively, during the years ended August 31, 2001, 2000 and 1999. Minn-Dak
had outstanding advances due from (to) Midwest of $285,282, $(450,359) and
$(492,459), as of August 31, 2001, 2000 and 1999, respectively. The owners are
guarantors of the short-term line of credit Midwest has with CoBank.


NOTE 13 - OPERATING LEASES

The cooperative is a party to various operating leases for vehicles and
equipment. Future minimum payments for the years ending August 31, under these
obligations, are approximately as follows:

<TABLE>
<CAPTION>
     Years ending August 31,
   ---------------------------
<S>                                                            <C>
             2002                                              $ 1,320,000
             2003                                                  937,000
             2004                                                  620,000
             2005                                                  266,000
             2006                                                  139,000
             Thereafter                                            492,000
</TABLE>

Operating lease and contract expenses for the years ended August 31, 2001, 2000
and 1999, totaled approximately $1,105,000, $1,206,000 and $1,417,000,
respectively.

<PAGE>


NOTE 14 - STOCK TRANSFER RESTRICTION

The cooperative has entered into an agreement with Minn-Dak Yeast's minority
shareholder, whereby neither party shall sell, option or transfer its interest
in Minn-Dak Yeast to any person, firm or corporation (third party) without first
offering, in writing, the other party the right to acquire such interest on the
same terms. If the offer is not accepted by the offeree within 30 days, the
offeror may sell, option or transfer its interest to the third party within 120
days after expiration of the 30-day period.


NOTE 15 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of a financial instrument is generally defined as the amount at
which the instrument could be exchanged in a current transaction between willing
parties, other than in a forced liquidation sale. Quoted market prices are
generally not available for the company's financial instruments. Accordingly,
fair values are based on judgments regarding anticipated cash flows, future
expected loss experience, current economic conditions, risk characteristics of
various financial instruments and other factors. Changes in the assumptions
could significantly affect the estimates.

The following methods and assumptions were used by the company to estimate fair
value of the financial instruments, and the estimated fair values of the
company's financial instruments as of August 31, 2001, 2000 and 1999, are as
follows:

    INVESTMENTS - The investments in CoBank, Dakota Valley Electric Cooperative,
    Inc. and all other cooperatives are stated at cost, plus the cooperative's
    share of allocated patronage and capital credits. The investments in United
    Sugars Corporation, Midwest Agri-Commodities and ProGold Limited Liability
    Company are accounted for using the equity method, wherein the investments
    are recorded at the amount of the underlying equity in the net assets of the
    investments and adjusted to recognize the cooperative's share of the
    undistributed earnings or losses. Minn-Dak Farmers Cooperative believes it
    is not practicable to estimate the fair value without incurring excessive
    costs because there is no established market for this stock and it is
    inappropriate to estimate future cash flows which are largely dependent on
    future patronage earnings of the investment.

    LONG-TERM DEBT - The fair value of obligations under long-term debt are
    estimated based on the quoted market prices for the same or similar issues
    or on the current rates offered for debt of similar maturities.

    OBLIGATIONS UNDER CAPITAL LEASE - The fair value of obligations under
    capital lease was based on present value models using current financing
    rates available to the cooperative. At August 31, 2001, the carrying value
    of obligations under capital leases was $10,495,000 and the estimated fair
    value was $8,200,000. At August 31, 2000, the carrying value of obligations
    under capital leases was $11,270,000 and the estimated fair value was
    $9,200,000. At August 31, 1999, the carrying value of obligations under
    capital leases was $12,000,000 and the estimated fair value was $9,800,000.

<PAGE>


ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE

         None


ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT IDENTIFICATION
            OF DIRECTORS

         The table below lists the current directors of Minn-Dak Farmers
Cooperative. The Board of Directors consists of one director from each district.
Directors must be common shareholders or representatives of common shareholders
belonging to the district they represent and are elected by the members of that
district. In the case of a common shareholder who is other than a natural
person, a duly appointed or elected representative of such common shareholder
may serve as a director. The directors have been elected to serve three-year
terms expiring in December of the years indicated in the table below. One
director is elected each year from three selected districts. Brief biographies
for each of the directors and directors-elected are included after the table.

<TABLE>
<CAPTION>
                                                                                  Term Expires
Name and Address                  Age    District               Director Since    in December
----------------                  ---    --------               --------------    -----------
<S>                               <C>    <C>                    <C>               <C>
Douglas Etten                     50     District #8 -          1997              2003
     3138 370th ST                       Lyngaas
     Foxhome, MN 56543

Michael Hasbargen                 56     District #4 -          1993              2002
     2553 360th ST                       East Factory
     Breckenridge, MN 56520

Victor Krabbenhoft                52     District #9 - Peet     1989              2001(1)
     416 44th AV S
     Moorhead, MN 56560

Jack Lacey                        59     District #5 -          1993              2002
     32936 320th AV                      Hawes
     Wendell, MN 56590-9750

Russell Mauch                     46     District #2 -          1998              2001(2)
     16305 Hwy 13                        Factory West
     Barney, ND 58008

Jerry Meyer                       63     District #1 - Tyler    1994              2003
     1433 15th Street North
     Wahpeton, ND 58075
</TABLE>

<PAGE>


<TABLE>
<CAPTION>
                                                                                  Term Expires
Name and Address                  Age    District               Director Since    in December
----------------                  ---    --------               --------------    -----------
<S>                               <C>    <C>                    <C>               <C>
Edward Moen                       75     District #3 -          1989              2001(3)
     17060 County Road 8                 Gorder
     Colfax, ND 58018

Charles Steiner                   51     District #6 -          2000              2003
     2851 310th AV                       Yaggie
     Foxhome, MN 56543-9312
</TABLE>


1)  Mr. Krabbenhoft's term as a director of the Company from District #9-Peet
    expires on December 4, 2001.
2)  Mr. Mauch's term as a director of the Company from District #2-Factory West
    expires on December 4, 2001.
3)  Mr. Moen's term as director of the Company from District #3-Gorder expires
    on December 4, 2001.


         DOUGLAS ETTEN has been a director since 1997. Mr. Etten has been
farming near Foxhome, MN since graduating from Concordia College in Business and
Math in 1974. Etten also serves on the board of directors for United Sugars
Corporation.

         MICHAEL HASBARGEN has been a director since 1993 and is currently
serving as board vice chairman. Mr. Hasbargen has been farming near
Breckenridge, MN since graduating from NDSU in Ag Economics in 1967. Mr.
Hasbargen also serves on the board of directors of United Sugars Corporation and
it one of Minn-Dak's representatives to the American Sugarbeet Growers
Association in Washington, DC. Mr. Hasbargen is the brother-in-law of Mr. Steven
Caspers, Executive Vice President & Chief Financial Officer.

         VICTOR KRABBENHOFT has been a director since 1989, currently serves as
board chairman, and is a former vice chairman. Mr. Krabbenhoft has been farming
near Glyndon, MN since 1971. He also serves on the board of directors for
Midwest Agri-Commodities Company, United Sugars Corporation, and Minn-Dak Yeast
Company; and is one of Minn-Dak's representatives to the American Sugarbeet
Growers Association in Washington, DC.

         JACK LACEY has been a director since 1993. Mr. Lacey has been farming
with his wife, Sharon, near Wendell, MN since 1963. He serves as one of
Minn-Dak's representatives to the American Sugarbeet Growers Association in
Washington, DC.

         RUSSELL MAUCH has been a director since 1998. Mr. Mauch graduated from
North Dakota State University in 1977 with a B.S. in agriculture. From 1979 to
1981 Mr. Mauch was a commercial and ag loan officer for First Bank Corporation
in Valley City, ND. Mr. Mauch has been farming near Barney, ND since 1981. Mr.
Mauch also serves on the board of directors for Minn-Dak Yeast Company and on
the board of directors for Midwest Agri-Commodities Company.

<PAGE>


         JERRY MEYER has been a director since 1994. Mr. Meyer has been farming
near Fairmount, ND since 1958. He also serves on the board of directors for
Minn-Dak Yeast Company.

         ED MOEN has been a director since 1989 and is currently serving as
board treasurer. Mr. Moen has been farming near Galchutt, ND since 1945.

         CHARLES STEINER has been a director since 2000. Mr. Steiner has been
farming near Foxhome, MN since 1969. Mr. Steiner graduated from the Northwest
School of Agriculture, University of Minnesota at Crookston, MN. He also serves
on the board of directors for Minn-Dak Yeast Company.

         PAUL SUMMER has been a director since 1993 and is currently serving as
board secretary. Mr. Summer has been farming near Herman, MN since 1963.

         The Board of Directors meet monthly. The Company provides its directors
with minimal compensation, consisting of (i) a payment of $225.00 per meeting
for regular and special board meetings, (ii) the greater (a) $112.50 for any day
in which directors partake in activities on the Company's behalf that take less
than five hours or (b) $225.00 for any day in which directors partake in
activities on the Company's behalf that take five hours or more. The Chairman of
the Board of Directors also receives a flat $200.00 per month to compensate for
the extra duties associated with that position.




EXECUTIVE OFFICERS

         The table below lists the principal officers of the Company, none of
whom owns any common or preferred shares. The president/chief executive officer
is appointed annually by the Board of Directors to serve on the board. Brief
biographies for each of the officers are included after the table.

         Mr. Larry Steward retired effective September 30, 2000 and as a result,
the Board of Directors appointed Mr. Steven M. Caspers to the position of
Interim President and Chief Executive Officer. Mr. Caspers appointed Mr. Allen E
Larson as Interim Chief Financial Officer. A search was undertaken for a
permanent President and Chief Executive Officer and Mr. David H. Roche was
hired, effective March 1, 2001 to fill the position of President and Chief
Executive Officer. As of March 1, 2001, Mr. Caspers and Mr. Larson also resumed
their previous duties.

Name                         Age   Position
----                         ---   --------

David H. Roche               54    President and Chief Executive Office

Larry D. Steward             62    President and Chief Executive Officer-retired
                                   9-30-00

<PAGE>


Steven M. Caspers            51    Executive Vice President and Chief Financial
                                   Officer

Allen E. Larson              46    Controller

Thomas D. Knudsen            47    Vice President, Agriculture

John E. Groneman             65    Vice President, Engineering-retired 11-2-01

Richard K. Richter           61    Vice President, Operations

Jerald W. Pierson            62    Director of Human Resources

Jeffrey L. Carlson           46    Director of Technical Services

John S. Nyquist              45    Purchasing Manager

Patricia J. Keough-Wilson    61    Director of Communications

Kevin R. Shannon             46    Safety Director

John Haugen                  49    Director of Engineering


         DAVID H. ROCHE is Minn-Dak Farmers Cooperative's third president and
CEO. He joined the Wahpeton, ND based sugar cooperative on March 1, 2001. He
serves on the boards of United Sugars Corporation and Midwest Agri-Commodities.
In addition, he is a trustee of the United States Beet Sugar Association,
Washington, D.C. Mr. Roche began his 25-year sugar industry career as a
controller for Michigan Sugar Company in 1976. He progressed through the ranks
until he was named president in 1994. In 1996 he became president of Savannah
Foods Industrial and was appointed senior vice president of Savannah Foods &
Industries. He retained his position at Michigan Sugar Company, which was owned
by Savannah Foods & Industries, during this period. Imperial Sugar Company
acquired controlling interest in Savannah in 1998. He was named as a managing
director and senior vice president. Mr. Roche holds an MBA in accounting from
Michigan State University and became a certified public accountant in 1974.

         LARRY D. STEWARD joined the Company in December 1990 as president and
chief executive officer. Mr. Steward served on the boards of United Sugars
Corporation, and Midwest Agri-Commodities. Mr. Steward was a trustee of United
States Beet Sugar Association and a director on the board of the National
Council of Farmer Cooperatives based in Washington, DC. Prior to joining the
Company, Mr. Steward was midwest sales manager for Harborlite Corporation. From
1963 to 1988 Mr. Steward was employed by Great Western Sugar Company, Denver,
Colorado and from 1984 to 1988 he served as its vice president. Mr. Steward
holds a degree in chemistry and math from the University of Nebraska, Kearney,
Nebraska. He retired from the Company effective September 30, 2000.

         STEVEN M. CASPERS is a graduate of the University of North Dakota with
a Bachelor of Science in business administration and a major in accounting. He
has been employed with the Company since May 5, 1974. Mr. Caspers is president
of Minn-Dak Yeast Company and serves as governor for ProGold, LLC. He also is
active in national industry related boards and committees. Mr. Caspers was named
interim President and Chief Executive Officer October 1, 2000. Prior to this
interim appointment, Mr. Caspers was serving as the Company Executive Vice
President and Chief Financial Officer, which is now his current position. Mr.
Caspers is the brother-in-law of Mr. Michael Hasbargen, Director and Vice
Chairman.

<PAGE>


         ALLEN E. LARSON is a graduate of Moorhead State University with a
Bachelor of Science in Business administration and a major in accounting. He has
been employed with the Company since October 26, 1981. Mr. Larson was appointed
to the position of Interim Chief Financial Officer October 1, 2000. Prior to
this interim appointment, Mr. Larson was serving the Company as Controller,
which is now his current position.

         JOHN E. GRONEMAN is a graduate of Colorado State University with a
Bachelor of Science in engineering. He began his experience in the sugar
industry in 1960; this includes five years as a factory manager. Mr. Groneman
began employment with the Company on March 1, 1974. He retired, effective
November 2, 2001.

         THOMAS D. KNUDSEN is a graduate of North Dakota State University with a
Bachelor of Science in horticulture and has attended the Beet Sugar Institute at
Fort Collins, Colorado. He began employment with the Company on May 24, 1977.

         RICHARD R. RICHTER has completed both the beet and sugar end coursework
of the Beet Sugar Institute of Fort Collins, Colorado. He began his sugar
industry experience in 1958 with employment with the Company beginning in August
of 1976.

         JERALD W. PIERSON is a graduate of Black Hills State University with
human resources experience beginning in 1968. He is active in numerous local
civic and fraternal organizations including North Dakota Workers Compensation
and the North Dakota Job Service Employer Committee. He began his employment
with the Company on March 15, 1982.

         JEFFREY L. CARLSON is a graduate of the University of Minnesota-Morris
with a Bachelor of Arts in chemistry and the University of North Dakota with a
Ph.D. in physical chemistry. He began his career as a research chemist and an
assistant professor in 1986. Mr. Carlson began his employment with the Company
on June 4, 1990.

         JOHN S. NYQUIST attended the North Dakota State College of Science,
majoring in accounting and computer programs. Mr. Nyquist began his purchasing
and inventory control experience in 1975 in the Company storeroom. Mr. Nyquist
is active in local civic and fraternal organizations and the National
Association of Purchasing Managers. Mr. Nyquist began employment with the
Company on September 15, 1975.

         PATRICIA J. KEOUGH-WILSON is a graduate of Moorhead State University
with a Bachelor of Science in mass communications and Master of Arts in liberal
arts. Mrs. Keough-Wilson is active in local civic organizations and began her
publication-communications experience in 1973. Mrs. Keough-Wilson began
full-time employment with the Company on December 26, 1989.

         KEVIN R. SHANNON attended Taylor Institute and Vanguard Vo-Tech,
majoring in instrumentation. He is active in local civic organizations. Mr.
Shannon began his technical and supervisory career in 1974. His employment with
the Company began on June 1, 1983. Prior to becoming the safety director in
September of 1992, Mr. Shannon was the Company's tare lab supervisor.

<PAGE>


         JOHN R. HAUGEN was promoted to the position of Director of Engineering
on November 2, 2001. He has been with the Company for 25 years. He started his
career with Minn Dak Farmers Cooperative in 1976 as an Assistant Engineer and
prior to this promotion held the position of Senior Engineer. John is a graduate
of the University of North Dakota and holds a BS in Mechanical Engineering.


ITEM 11. EXECUTIVE COMPENSATION

         The following table summarizes the amount of compensation paid for
services rendered to the Company during the fiscal year ended August 31, 2001
and the two prior fiscal years to those persons serving as the Company's Chief
Executive Officer and to the other most highly compensated executive officers of
the Company whose cash compensation exceeded $100,000 per annum.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Name and                                            Other Annual     All Other       Total
Principal Position    Year     Salary      Bonus    Compensation   Compensation   Compensation
------------------    ----     ------      -----    ------------   ------------   ------------
                                                         (1)            (2)
<S>                   <C>     <C>         <C>          <C>            <C>           <C>
David Roche           2001    $128,346    $     0      $27,598                      $155,945
President & CEO       2000    $      0    $     0      $     0                      $      0
                      1999    $      0    $     0      $     0                      $      0

Larry Steward         2001    $ 59,622    $     0      $23,088        $      0      $ 82,710
President & CEO-      2000    $219,665    $86,100      $25,281        $ 37,101      $368,147
Retired 9-30-00       1999    $211,178    $69,798      $20,304        $ 30,944      $332,224

Steven Caspers        2001    $180,787    $30,000      $21,991                      $232,779
Executive Vice        2000    $129,147    $30,000      $13,165                      $172,312
President & CFO       1999    $125,221    $     0      $14,679                      $139,900

Thomas Knudsen        2001    $ 97,557    $14,500      $ 4,302                      $116,359
VP Agriculture        2000    $ 94,624    $14,500      $11,380                      $120,504
                      1999    $ 91,813    $     0      $ 6,405                      $ 98,218

Richard Richter       2001    $ 97,350    $14,500      $ 5,729                      $117,579
VP Operations         2000    $ 94,457    $14,500      $ 5,196                      $114,153
                      1999    $ 91,663    $     0      $ 4,796                      $ 96,459

John Groneman         2001    $ 92,240    $13,500      $ 4,053                      $109,793
VP Engineering-       2000    $ 89,546    $13,500      $ 3,972                      $107,018
Retired as of         1999    $ 86,950    $     0      $ 4,329                      $ 91,279
11-2-01
</TABLE>

<PAGE>

-----------------------------

1) In addition to the salary and bonus described above, Mr. Roche, Mr. Steward,
Mr. Caspers, Mr. Knudsen, Mr. Richter, and Mr. Groneman are provided with "Other
Annual Compensation," which includes the value of the excess life insurance
cost, individual LTD plan, sold vacation, and Company match of the 401(k) plan.
The company has a policy whereby Supervisory, Professional and Management
employees are required to maintain their vacation and floating holiday hour
combined balance at two hundred and forty (240) hours or less. While not
encouraged, the cash optioning of vacation and floating holiday accrued hours is
allowable. Employees with account balances in excess of 240 hours may elect to
cash option up to fifty percent (50%) of the number of hours exceeding 240.
Employees at or below the 240 hour limit may elect to cash option fifty percent
(50%) of their combined vacation and floating holiday annually accrued hours.

         Management employees are eligible for performance bonuses, which are
partially based upon on the performance of the Company and partially on
achievement of certain management performance objectives. The President/CEO
determines those performance objectives for officers and significant other
management employees of the Company and the Board of Directors determines
performance objectives for the President/CEO. If minimum Company performance is
not achieved in any given year (that performance based upon returns to the
Company's shareholders), performance bonuses are not paid to employees.

         The Company has entered into an employment agreement with Mr. Roche,
which establishes his salary and benefits as an employee of the Company. The
agreement has an initial term of eighteen months, commencing March 1, 2001 and
expiring August 31, 2002. Thereafter, upon renewal of this agreement by the
parties, employment shall extend until terminated by the parties. Either party
may terminate this agreement by giving written notice to the other party at
least ninety days prior to the expiration of any twelve month term.

         As of September 30, 2000, the Company entered into an employment
agreement with Mr. Caspers, which established his salary and benefits while he
temporarily filled the position of President and Chief Executive Officer. The
agreement continued until April 30, 2001. At the time of the termination of the
agreement, Mr. Caspers assumed his previous duties as Executive Vice President
and Chief Financial Officer with the same pay and benefits as he had prior to
September 30, 2000.

         On a periodic basis, the Company undertakes a compensation review study
to determine that its employees' compensation is commensurate with
responsibilities of the various Company positions, and that the compensation is
equitable between jobs within the Company and externally competitive with other
comparable jobs and responsibilities within the Company's geographic region. A
national compensation consultant called Hay Management consultants performs the
compensation review study. This study is made of all management employees,
including the president, and non-union employees. In June of 1997 the company
made a range shift and from time to time individual employees have had a restudy
based upon changes in their areas of responsibilities. As of August 31, 2001 all
employees' wages had been adjusted to levels consistent with the Hay Management
Consultants findings and recommendations.

<PAGE>


2) Beginning in fiscal year 1997 and continuing until his retirement,
supplemental executive retirement plan obligations were recorded onto the
Company's books on behalf of Mr. Steward. Mr. Roche will be eligible for the
plan, pending approval by the board of directors, upon completion of one year of
service. Mr. Caspers is also eligible for the plan, however, no obligations have
been recorded on his behalf by the Company. See the section below on Retirement
Plans for further details on the supplemental executive retirement plan.


RETIREMENT PLANS

         Management employees are also eligible to participate in the Company's
defined benefit retirement plan as well as its 401(k) retirement savings plan,
each of which are described below.

         The Company has established a noncontributory, defined benefit
retirement plan, which is available to all eligible employees of the Company.
The benefits of the plan are funded by periodic contributions by the Company to
a retirement trust that invests the contributions and earnings from such
contributions to pay benefits to employees. The plan provides for the payment of
a monthly retirement benefit determined under a formula based on years of
service and each employee's compensation level. See "Executive
Compensation--Qualified Benefits Table." Benefits are paid to the employees upon
reaching early (age 55 or older) or normal (age 65) retirement age. The plan
also provides for the payment of certain disability and death benefits.

         The Company maintains a Section 401(k) retirement savings plan that
permits employees to elect to set aside, on a pre-tax basis, a portion of their
gross compensation in trust to pay future retirement benefits. The Company
provides a matching contribution of 75% of each employee's first 4% of
compensation that is set aside under the plan. The amounts set aside by each
employee and the Company vests immediately and are paid to each employee upon
the happening of certain events, all as more fully described in the master plan
document. Federal law limited employee pre-tax income contributions to $10,500
for each participating employee in the calendar years 2001 and 2000. Benefits
under the 401(k) plan begin to be paid to the employee: (i) upon the attainment
of normal retirement age (65), or if the employee chooses, any time after
attaining early retirement date (age 55); (ii) the date the employee terminates
employment with the Company; or (iii) a pre-retirement distribution equal to the
value of the employees 401(k) account, provided the employee has attained age
59 1/2 and provided a written consent of the spouse (if married).

         Effective September 1, 1996 certain executive employees of the Company
became eligible to participate in a "Supplemental Executive Retirement Plan."
The Company's Board of Directors adopted that plan on January 21, 1997. Subject
to the

<PAGE>


discretion of the Board of Directors, the plan provides for the Company to
credit to the account of each executive eligible to participate in the
Supplemental Plan amounts equal to the difference between the benefits actually
payable to the executive under the provisions of the defined benefit retirement
plan and the amounts which would have been payable under the defined benefit
retirement plan if certain provisions of the Internal Revenue Code did not
prohibit the payment of such benefits.


QUALIFIED BENEFITS TABLE

         The following table reflects the estimated annual benefits payable to a
fully-vested executive officer of the Cooperative under the defined benefit
retirement plan upon retirement at age 65, after 15, 20, 25, 30, and 35 years of
annual service at the compensation levels set forth hereon:

---------------------------------------------------------------------------
                                Years of Service
---------------------------------------------------------------------------
Pension
Compensation         15          20          25          30          35
--------------- ----------- ----------- ----------- ----------- -----------
     $ 125,000     $28,147     $37,529     $46,911     $56,293     $65,675
--------------- ----------- ----------- ----------- ----------- -----------
     $ 150,000     $34,334     $45,779     $57,224     $68,668     $80,113
--------------- ----------- ----------- ----------- ----------- -----------
     $ 175,000     $39,284     $52,379     $65,474     $78,568     $91,663
--------------- ----------- ----------- ----------- ----------- -----------
     $ 200,000     $39,284     $52,379     $65,474     $78,568     $91,663
--------------- ----------- ----------- ----------- ----------- -----------
     $ 225,000     $39,284     $52,379     $65,474     $78,568     $91,663
--------------- ----------- ----------- ----------- ----------- -----------
     $ 250,000     $39,284     $52,379     $65,474     $78,568     $91,663
--------------- ----------- ----------- ----------- ----------- -----------
     $ 275,000     $39,284     $52,379     $65,474     $78,568     $91,663
--------------- ----------- ----------- ----------- ----------- -----------
     $ 300,000     $39,284     $52,379     $65,474     $78,568     $91,663
--------------- ----------- ----------- ----------- ----------- -----------
     $ 325,000     $39,284     $52,379     $65,474     $78,568     $91,663
--------------- ----------- ----------- ----------- ----------- -----------
     $ 350,000     $39,284     $52,379     $65,474     $78,568     $91,663
--------------- ----------- ----------- ----------- ----------- -----------
     $ 375,000     $39,284     $52,379     $65,474     $78,568     $91,663
--------------- ----------- ----------- ----------- ----------- -----------

         Mr. Caspers has 27 years of service under the plan.

<PAGE>


ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table presents certain information with respect to the
ownership of shares of preferred stock as of November 16, 2001, by each
director. Each shareholder has direct ownership with respect to the share shown
as beneficially owned, except as otherwise indicated in a footnote. To the
Company's knowledge, as of November 16, 2001, no person owned beneficially more
than 5% of the Company's outstanding shares and none of the principal officers
listed above owned any such shares.

Name              Position with Company     No. of Shares     % of Shares
----              ---------------------     -------------     -----------

Douglas Etten            Director           450               less than 1%

Michael Hasbargen        Director           375               less than 1%

Victor Krabbenhoft       Director           245               less than 1%

Jack Lacey (1)           Director           250               less than 1%

Russell Mauch (2)        Director           354               less than 1%

Jerry Meyer              Director           260               less than 1%

Ed Moen                  Director           180               less than 1%

Paul Summer (3)          Director           222               less than 1%

Charles Steiner(4)       Director           356               less than 1%

All Directors                               2692              3.73%

(1)      Mr. Lacey's shares are held and grown under the name of Jack Lacey
         Company.

(2)      Mr. Mauch's shares are held and grown under the name of RCM Limited
         Partnership.

(3)      Mr. Summer's shares are grown under the name of P V Unlimited Corp.

(4)      Mr. Steiner's share are held and grown under the name of Steiner and
         Sons Limited Partnership.

<PAGE>


ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Each of the Company's directors is also a sugarbeet grower or a
shareholder member or representative of a shareholder member. By virtue of their
status as such members of the Company, each director or the member he represents
sells sugarbeets to the Company and receives payments for those sugarbeets. Such
payments for sugarbeets often exceed $60,000. However, such payments are
received by the directors, or the entities they represent, on exactly the same
basis as payments are received by other members of the Company for the delivery
of their sugarbeets. Except for the sugarbeet sales described in the preceding
sentences, none of the directors or executive officers of the Company have
engaged in any other transactions with the Company involving amounts in excess
of $60,000.

<PAGE>


                                    PART IV.

ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


ITEM 14(a)  FINANCIAL STATEMENT SCHEDULES

         None

ITEM 14(b)  REPORTS ON FORM 8-K

         The Company was not required to and did not file any reports on Form
8-K during the three months ended August 31, 2001.

<PAGE>


ITEM 14(c)   EXHIBITS

Index
-----
  ** 3(i)    Articles of Amendment to the Articles of Incorporation of Minn-Dak
             Farmers Cooperative

   * 3(ii)   Articles of Incorporation of Minn-Dak Farmers Cooperative

 *** 3(iii)  Amended Bylaws of Minn-Dak Farmers Cooperative

  **10(a)    Growers' Agreement (three-year Agreement) (example of agreement
             which each Shareholder is required to sign)

****10(b)    Uniform Member Marketing Agreement by and between United Sugars
             Corporation and Minn-Dak Farmers Cooperative

   *10(d)    Capitalization Agreement by and among Southern Minnesota Beet Sugar
             Cooperative, Minn-Dak Farmers Cooperative, American Crystal Sugar
             Company, and United Sugars Corporation

   *10(e)    Memorandum of Understanding and Uniform Member Agreement by and
             between Midwest Agri-Commodities Company and Minn-Dak Farmers
             Cooperative

   *10(f)    Molasses Purchase Contract by and between Minn-Dak Farmers
             Cooperative and Universal Foods Corporation (Confidential Treatment
             for certain sections)

   *10(g)    Yeast Purchase Contract by and between Universal Foods Corporation
             and Minn-Dak Yeast Company, Inc. (Confidential Treatment for
             certain sections)

   *10(i)    Operating Agreement of ProGold Limited Liability Company

   *10(j)    ProGold Limited Liability Company Member Control Agreement

   *10(k)    Agreement for Electrical Service

  **10(l)    Agreements for Coal Supply, Transportation, and Oiling Service
             (Confidential Treatment Requested as to certain provisions)

   *10(m)    Minn-Dak Farmers Cooperative Pension Plan

   *10(n)    Larry D. Steward Employment Agreement

   *10(o)    Management Consulting Agreement between Minn-Dak Yeast Company and
             Universal Foods Corporation, (Confidential Treatment for certain
             sections)

 ***10(p)    Amendment to Minn-Dak Farmers Cooperative Pension Plan

    10(q)    Amendment to Minn-Dak Farmers Cooperative Pension Plan

    10(r)    David H. Roche Employment Agreement

    10(s)    Agreement with Universal Foods regarding sale of Red Star Yeast &
             Products Division, (Confidential Treatment requested for certain
             sections)

    12       Statement re Computation of Ratio of Net Proceeds to Fixed Charges

   *21       Subsidiaries of the Registrant

---------------------------

*   Incorporated by reference from the Company's Registration Statement on Form
S-1 (File No. 33-94644), declared effective September 11, 1995.

<PAGE>


**  Incorporated by reference from the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1996 as filed on November 21, 1996.

*** Incorporated by reference from the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1997 as filed on November 25, 1997.

****Incorporated by reference from the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1998 as filed on November 24, 1998.

<PAGE>


                                   SIGNATURES

         PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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

                                        BY /S/       David H. Roche
                                           -------------------------------------
                                               DAVID H. ROCHE, PRESIDENT
                                               AND CHIEF EXECUTIVE OFFICER

         PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DUTIES INDICATED.

          SIGNATURE                         TITLE                  REPORT DATE
          ---------                         -----                  -----------

/s/  David H. Roche                      President and               11-29-01
----------------------------       Chief Executive Officer        --------------
David H. Roche

/s/  Steven M. Caspers           Executive Vice President and        11-29-01
----------------------------       Chief Financial Officer        --------------
Steven M. Caspers

/s/  Allen E. Larson                                                 11-29-01
----------------------------              Controller              --------------
Allen E. Larson

/s/  Victor Krabbenhoft                                              11-29-01
----------------------------               Director               --------------
Victor Krabbenhoft

/s/  Douglas Etten                                                   11-29-01
----------------------------               Director               --------------
Douglas Etten

/s/  Edward Moen, Jr.                                                11-29-01
----------------------------               Director               --------------
Edward Moen, Jr.

/s/  Mike Hasbargen                                                  11-29-01
----------------------------               Director               --------------
Mike Hasbargen

/s/  Charles Steiner                                                 11-29-01
----------------------------               Director               --------------
Charles Steiner

/s/  Jack Lacey                                                      11-29-01
----------------------------               Director               --------------
Jack Lacey

/s/  Russell Mauch                                                   11-29-01
----------------------------               Director               --------------
Russell Mauch

/s/  Jerry Meyer                                                     11-29-01
----------------------------               Director               --------------
Jerry Meyer

/s/  Paul Summer                                                     11-29-01
----------------------------               Director               --------------
Paul Summer