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

                         FORM 10-K/A

                          SF SERVICES, INC. 
    (Exact name of registrant as specified in its Charter)

                          AMENDMENT NO. 2

This Form 10-K/A is being filed to amend previously filed MD&A
and financial information.  Accordingly, Registrant hereby 
amends Items 7 and 8 of its Annual Report on Form 10-K, and
Items 7 and 8, as amended, appear below in their entirety.


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

Results of Operations

The primary products sold by SF Services, Inc., include 
processed catfish, farm supply products, animal and fish 
feeds, agricultural fertilizers, seeds and chemicals, and 
petroleum products.  These products are sold primarily to 
125 local cooperative retail stores serving the individual 
farmer producer, and other non-member customers.  Weather, 
federal farm programs, and commodity prices impact the 
unit demand for the products sold by SF Services, Inc.  
Primarily the seed, fertilizer, chemical and animal feed 
divisions may be impacted by seasonal changes, as well 
as variations in ingredient prices which create changes 
in the dollar volume of sales.  SF Services, Inc.'s 
business cycle is highly seasonal and can be advanced 
or delayed by wet, dry, hot, or cold weather conditions.

Total 1996 sales increased approximately 11.2% over the
previous year.  Increased sales were realized in Feed, 

<PAGE>
Fertilizer, Seed, and Petroleum, while decreases in sales
were realized in Animal Health, Farm and Ranch, Chemicals,
TBA, and Catfish Processing.  Further analysis of 
departmental sales is included under the comparative 
analysis between fiscal years which follows.

Cost of sales were 94.2% of sales in 1996 compared to 94.3%
in the previous year.  Further analysis of cost of sales
by department is included under the comparative analysis 
between fiscal years which follows.

As a result of the factors described in the two preceding
paragraphs, gross profit for the year ended October 31,
1996 increased approximately $4.4 million (14%).  Further
analysis of gross profit is included under the comparative
analysis between fiscal years which follows.

Other operating revenue increased approximately 260% over
the previous year.  This increase was due to additional 
service income generated by the retail locations due to 
increased business activities, additional revenue generated
by the finance subsidiary, and increased revenue generated
by moving more product through the Company's facilities.

Net savings decreased $631,102 (23%).  This decrease was
due primarily to increased operating expenses and increased
income tax expense, offset by the gain on sales of MCC stock.

During 1996, the Company initiated a Company-wide review
of accounts receivable at the direction of the new Chief
Executive Officer.  As a result of the review and the 
Company's current marketing emphasis, the Company revised
its approach to estimating losses from uncollectible
accounts and made additional write-offs and increased the
reserve for losses.

On August 22, 1994, Mississippi Chemical Corporation ("MCC"),
formerly a Cooperative, became a public entity and the
Company's investment in common stock and allocated equities 
of MCC were converted to common stock in the new entity.  
Effective July 1, 1994, the Company ceased to receive 
patronage refunds from MCC on business done with MCC 
subsequent to July 1, 1994.

During 1996, the Company sold 1,525,720 shares of MCC stock.
The sales resulted in a gain of $17,863,024 on proceeds of 
$34,027,573.

<PAGE>
Subsequent Events

On December 31, 1996, the Company purchased the assets of
Matthews of Monette, Inc., a wholesale and retail fuel 
business located in Arkansas, for approximately $9.4 
million. This acquisition is expected to add approximately
$45 million in annual sales to the Company.  The new 
operation will be operated under the name "Northeast 
Arkansas Oil Company, LLC", a newly formed, wholly-owned 
subsidiary.

Comparative Analysis of the Fiscal Year Ended October 31, 1996
to the Fiscal Year Ended October 31, 1995

Net sales for the fiscal year ended October 31, 1996 
increased approximately 11.2% over the prior year.  This 
increase was attributable to the following factors:

Farm and Ranch sales decreased approximately 8% due to the
severe decline in the price of beef cattle, which caused
producers to reduce their purchases.  Gross margin
increased to 9.4% of sales compared to 9.1% in the prior
year.  This increase was mainly due to better purchasing
and product positioning.

Feed sales increased approximately 27% over the previous year
due primarily to increased feed prices caused by the higher
cost of ingredients.  Total tons sold increased approximately
25,000 tons (5.6%) due to a gain in market share.  Gross 
margin decreased approximately $926,000 due to higher 
ingredient costs which were not passed on to the customer.

Animal Health sales decreased approximately 4% due to 
the lower livestock prices, which caused producers to reduce
their purchases.  The lower live stock prices also caused
significant liquidation of cow/calf units in the trade area.
Gross margin as a percent of sales decreased to 10.25% from
10.5% in the previous year.  This decrease was due to 
competitive pressure for the fewer livestock units in the
market.

TBA sales decreased approximately 3% due to the late passing
of the Farm Bill which caused producers to reduce purchases.
The decrease was also caused by some loss of market share due
to strong competitive pricing from tire manufacturers.  Gross
margin as a percent of sales remained approximately the same
as experienced in the previous year.

<PAGE>
Petroleum sales increased approximately 86%.  This increase
was due to a gain in market share which was lost in previous
years because of competitive pricing and  a lack of sufficient
transportation.  Also, sales of diesel fuel used in irrigation
wells realized a strong increase due to the dry summer
weather.  Total gallons sold increased approximately 65% to 
115 million gallons.  Gross margin as a percent of sales 
decreased to 2.0% from 2.7% in the previous year.  This 
decrease was due to changes in suppliers' volume rebate 
purchase programs.

Fertilizer sales increased approximately 7% due to a gain
in market share.  Total tons sold increased approximately
104,000 tons (13%).  Gross margin as a percent of sales was
5.1% compared to 2.6% in the previous year.  This increase was
due to more favorable market conditions than were experienced 
in the previous year.  Also, more product was sold through 
the Company's facilities, which generates more margin.

Chemical sales decreased approximately 11% due to changes in
cropping patterns in the trade area.  More corn acres were
planted at the expense of cotton, which requires more
chemical applications.  Gross margin as a percent of sales
increased to 6.3% from 5.9% in the previous year.  This
increase was due to an effort to increase margins to offset
the decline in sales volume.

Seed sales increased approximately 21% because of cotton being
replaced by corn, which has a higher unit value than cotton.
Also, sales of soybean and wheat seed increased.  Gross margin
as a percent of sales increased to 10.0% from 9.1% in the 
previous year.  This increase was due to increased 
proprietary seed sales, which carry a higher margin than 
public variety products.  The introduction of biotechnology
seed products also provided the opportunity to increase 
margins.

Processed catfish sales decreased approximately 3% due to 
lower processing levels caused by a lack of quality fish
available for processing.  Gross margin decreased 
approximately $2.1 million due to higher live fish cost
caused by the inadequate supply of quality fish, and a
higher per unit processing cost caused by the inefficiency
of lower processing levels.

<PAGE>
Operating expenses increased approximately 49.2% over the
previous year.  This increase was due to the following 
factors.

*    $826,000 of increased expenses due to the addition of 
     two new locations, including $370,000 of additional
     payroll and related costs, $129,000 of additional rent
     expenses, $81,000 of additional maintenance costs, 
     $36,000 of additional vehicle costs, and $44,000 in 
     additional depreciation.

*    $1.5 million of increases at existing retail locations
     including $391,000 of additional payroll and related
     costs, $221,000 of additional rent expenses, $85,000
     of additional maintenance costs, and $344,000 of
     increased bad debt expense.

*    $1.1 million of increased expenses associated with the 
     implementation of a new computer system, including
     $320,000 of additional payroll and related costs for
     additional analysts, $90,000 of additional rent expense,
     $70,000 of additional employee training costs, $100,000
     of additional telecommunications costs, and $310,000 for
     a computer maintenance and operating contract with an
     outside firm.

*    $1.1 million associated with new fertilizer terminal
     operations, including $300,000 of additional payroll and
     related costs, $284,000 of additional demurrage and
     storage costs, $20,000 of additional rent expense, $64,000
     of additional maintenance costs, and additional utilities of
     $50,000, and $25,000 of additional insurance expense.

*    $487,000 of increased costs due to additional petroleum
     transportation operations which added six units, including
     $220,000 of payroll and related costs, $80,000 of fuel costs,
     and $56,000 in rent costs.

*    $273,000 of increased costs due to the addition of a new 
     office building, including $98,000 of additional
     maintenance costs, and $100,000 in additional utilities.

*    $5.5 million of increased costs due to asset impairment
     adjustments as more fully described in Note 19 to the
     Financial Statements.

<PAGE>
During 1996, the Company recognized expenses of approximately
$5.0 million to reduce the carrying value of the Eudora, 
Arkansas catfish processing plant and the Greenville, 
Mississippi feed mill, the values of which have been impaired
due to continued losses resulting from excessive operating
costs.  Also, during 1996 the Company recognized expenses of
approximately $516,000 to reduce the carrying value of various
abandoned properties.  The amount of the impairments were 
estimated based on appraisals performed during the year and
expected future cash flows.  These estimates could change 
materially in the future.

Comparative Analysis of the Fiscal Year Ended October 31, 1995
to the Fiscal Year Ended October 31, 1994

Net sales for the fiscal year ended October 31, 1995 
increased approximately 20.9% over the prior year.  This 
increase was attributable to the following factors:

Farm and Ranch sales increased approximately 13% due to 
gaining additional business with existing accounts and the
establishment of new accounts in the Texas, Oklahoma, and
Kansas regions.  Gross margins increased due to economies
gained from more business in certain groups, primarily
fencing and livestock feeding and handling equipment.

Feed sales increased approximately 2.4% over the previous
year due primarily to an increase in catfish feed usage.
Feed sales increased by approximately 30,000 tons over the 
previous year.  Gross margin increased approximately 6.4% due
to favorable price positions for ingredients purchased.

Animal Health sales increased approximately 3% due to 
aggressive sales programs by manufacturer's and the Company's
sales force.  Gross margins increased due to meeting
manufacturer's rebate goals resulting in lower product cost.

TBA sales increased approximately 24% because of the DPF
merger and an increase in market share due to advanced
forecasting programs.  Gross margins increased approximately
26% due to achieving higher rebate levels with most suppliers.

Petroleum sales increased approximately 3% due to the DPF
merger and a strong sales program which helped the Company
gain market share.  Total petroleum sales increased
approximately 764,000 gallons.  Gross margin increased due to 
higher volume rebate programs from refinery suppliers.

<PAGE>
Fertilizer sales increased 34% due to the DPF merger and 
increased sales to non-member accounts.  Fertilizer sales
increased approximately 183,000 tons over the previous year.
Gross margin decreased due to the loss of MCC patronage
rebates and losses on fertilizer sales due to unfavorable
market prices following an anticipated shortage of nitrogen
products.

Chemical sales increased approximately 36% due to the DPF
merger and gaining additional business with established
accounts.  Gross margins increased due to higher dealer
commissions received based on higher volume.

Seed sales increased approximately 8% due mainly to the 
DPF merger.  Gross margin as a percent of sales decreased
because of fewer acres planted in corn, a higher gross
margin product compared to cotton, rice, and soybeans.

Processed catfish sales increased approximately 24% due to 
a higher demand for processed catfish combined with a higher
price per pound.  Gross margin decreased due to the higher
cost of live fish.

Operating expenses increased approximately 22% over the
previous year.  This increase was due to the following
factors:  (1) additional costs associated with the DPF
merger ($2,500,000), (2) increased expenses of the retail
group due to increased business activity ($677,000), (3)
higher expenses at the catfish processing facilities due
to higher production levels ($156,000), and (4) a combination
of miscellaneous other costs necessary to service the rapid
growth in sales ($2,150,000).

Interest expense increased 50.4% over the previous year.
Increases in sales, inventories, accounts receivable, and
capital expenditures resulted in the need for higher
seasonal borrowing on the Company's loan with CoBank, ACB
("CoBank").

<PAGE>
Liquidity and Capital Resources

Cash used in operating activities was approximately $27.1 
million in 1996 compared to approximately $22.4 million
used in the previous year.  This increase was due primarily
to lower operating profits and increased inventories, primarily
fertilizer.  Cash provided by investing activities was 
approximately $23 million in 1996 compared to approximately 
$7.7 million in the prior year.  This increase was due 
to the sale of the investment in MCC, partially offset 
by the purchase of additional property and equipment.  
Cash provided by financing activities was approximately 
$6.6 million in 1996 compared to approximately $14.2 
million in the previous year.  This decrease was due to a 
lower increase in debt than was required in the previous year.

During 1996, the Company sold 1,525,720 shares of MCC stock 
resulting in a gain of $17,863,024 on proceeds of 
$34,027,573.  Proceeds from the stock sales were used to 
pay down the seasonal and term debt.

On January 31, 1996 the Company purchased substantially all 
of the assets of Farmers Service (AAL), Sumner, Mississippi, 
a member cooperative, for approximately $1.3 million.  During 
1995, Farmers Service had purchases of approximately $3.6 
million from the Company.

The allowance for doubtful accounts increased to $950,000 
from $294,814.  Analysis of the current accounts and a 
review of collection history does not indicate that losses 
would be expected to exceed the current reserve balance.

During 1996, the Company invested approximately $10.4 million
in additional fixed assets, including $4.4 million at the
Greenville, Mississippi and Memphis, Tennessee fertilizer
terminals, and $2.7 million for a new computer system and
operating software.  In 1997, the Company expects to invest
an additional $2.1 million in the fertilizer terminals,
and an additional $1.2 million for the computer system.  
Approximately $2.5 million of capital expenditures for the
replacement of depreciated assets are expected to be made 
in the 1997 fiscal year.

<PAGE>
The Company has recorded a deferred tax asset of $1,980,582
at the 1996 fiscal year end.  The deferred tax asset is 
recognized for the tax effects of differences between the
financial statement and tax basis of assets and liabilities
related to non-patronage income.  The deferred tax asset 
includes a $693,000 valuation allowance.  A valuation 
allowance is established to reduce the deferred tax asset
if it is more likely than not that a deferred tax asset will
be realized.  In setting the valuation allowance for 
realization of deferred tax assets, management uses a tax
planning strategy that recognizes the benefits of
impairment losses deductible in the future based on 
available refunds of previously paid tax.

Historically, most of SF Services, Inc.'s financing has been 
with CoBank.  CoBank has provided the Company with an $80 
million seasonal line of credit , of which approximately $65.6
million was used at October 31, 1996.  The Company also 
has $22,677,750 in term loans with CoBank with annual payments 
of $2,557,250.  During 1996, the Company obtained a formal 
waiver from CoBank with respect to covenant violations 
concerning the current ratio.  The Company is currently 
negotiating with CoBank to provide an additional $9.4 million 
in term loans to finance the acquisition of Matthews of 
Monette, Inc. and the Company's other capital projects.  With
the addition of the Matthews of Monette, Inc. acquisition, 
the Company has completed its expansion plans and will concentrate
on the profitability of existing operations.  Management believes
that the current line of credit will provide sufficient liquidity
for current and future operating levels.

<PAGE>
Trends and Operating Outlook

Management recognizes that operating margins have been low in
four areas:  Feed and Animal Health, Fertilizer, Retail 
Operations, and Catfish Processing and Marketing.  Management
is focusing attention toward reversing the recent trends in
these areas.

FEED AND ANIMAL HEALTH.  Feed manufacturing personnel are
being reduced to bring labor cost per ton in line with 
acceptable industry standards.  Studies are being conducted on
utility consumption and demand charges in order to better 
control energy costs.  Transportation efficiencies have been 
gained through increased use of contractual relationships with
independent carriers.  The Company expects substantial savings to
be generated by the changes in the transportation procedures.

FERTILIZER.  Two new fertilizer port facilities are being 
constructed in order to allow for better storage and distribution
and increase margins which were lost when MCC ceased operating
as a cooperative.  In addition to improving storage and
distribution for the Company's membership, the Company will be
able to handle and store product for non-member customers,
which should add to profitability in the future.  Those 
significant projects have had a negative impact on operating
profits during the 1996 fiscal year.  Since these projects
are not expected to be completed until the second quarter
of the 1997 fiscal year, the Company will not be able to 
realize the full benefit of these projects until the 1998 
fiscal year.

RETAIL OPERATIONS.  The Company is currently evaluating the
operating performance of the retail locations.  Up to nine 
retail locations which have not been meeting performance goals
may be closed during the 1997 fiscal year.  The cost to close
the retail facilities and any impairment is not expected to
be significant.

CATFISH PROCESSING AND MARKETING.  The Company's catfish
processing and marketing segment has had a negative impact on
overall profitability since entering this business segment.
During the second half of the 1996 fiscal year, the Company
closed the Wisner, Louisiana processing plant (a leased
facility).  This allowed the processing level to be raised
at the Eudora, Arkansas plant, which has increased processing
efficiency.  Although this segment has not yet reached 
profitability, significant improvements are being made in 
operating performance.

<PAGE>
ITEM  8:   FINANCIAL STATEMENTS

Independent Accountants' Report

Board of Directors
SF Services, Inc.
North Little Rock, Arkansas

We have audited the accompanying consolidated balance sheets 
of SF SERVICES, INC. as of October 31, 1996 and 1995, and the 
related consolidated statements of income, changes in members' 
equity and cash flows for each of the three years in the 
period ended October 31, 1996 and the financial statement 
schedule included in Item 14(a)(2).  These financial statements
and schedule are the responsibility of the Cooperative's 
management.  Our responsibility is to express an opinion on 
these financial statements and schedule based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about 
whether the financial statements are free of material 
misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the 
financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by 
management, as well as evaluating the overall financial 
statement presentation.  We believe 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 SF SERVICES, INC. as of October 31,
1996 and 1995, and the results of its operations and its cash
flows for each of the three years in the period ended October 
31, 1996, in conformity with generally accepted accounting 
principles.  Also, In our opinion, the financial statement 
schedule referred to above, when considered in relation to 
the basic financial statements taken as a whole, present 
fairly, in all material respects, the information required 
to be included therein.

As discussed in Note 19 to the consolidated financial 
statements, in 1996 the Cooperative adopted the provisions 
of Statement of Financial Accounting Standards No. 121, 
"Accounting for the Impairment of Long-lived Assets and for 
Long-lived Assets to be Disposed Of ".  The Cooperative, in
1994, adopted the provision of Statement of Financial 
Accounting Standards No. 115 in accounting for its 
marketable securities.

/s/ Baird, Kurtz, & Dobson

Little Rock, Arkansas
December 20, 1996, except for Note 23 as to
which the date is February 5, 1997
<PAGE>

                     CONSOLIDATED BALANCE SHEETS

                      OCTOBER 31, 1996 AND 1995


ASSETS

                                         1996            1995
                                    ------------    ------------
CURRENT ASSETS
 Cash                               $  3,214,419    $    645,379
 Marketable securities                                34,176,546
 Accounts receivable, less 
  allowance for doubtful 
  accounts; October 31, 1996 -
  $950,000, October 31, 1995 - 
  $294,814                            40,268,809      44,183,592
 Accounts receivable - other           6,287,292       2,556,446
 Note receivable - current portion     2,184,287         929,016
 Inventories                          84,215,934      67,277,893
 Patronage distributions receivable      168,147         118,407
 Deferred income taxes - current         834,738
 Other                                 1,253,263         991,159
                                    ------------    ------------
     Total Current Assets            138,426,889     150,878,438
                                    ------------    ------------

INVESTMENTS AND LONG-TERM
  RECEIVABLES
 Notes receivable                      3,154,281       2,977,192
 Investments in other cooperatives    12,974,801      11,662,378
 Deferred income taxes - long term     1,145,844
                                    ------------    ------------
                                      17,274,926      14,639,570
                                    ------------    ------------

PROPERTY AND EQUIPMENT, At Cost
 Land and improvements                 3,594,565       4,179,756
 Buildings                            19,236,628      22,573,718
 Machinery and equipment              20,438,434      24,110,260
 Automobiles and trucks                1,478,513       1,313,104
 Furniture and fixtures                4,636,169       1,307,315
 Construction in progress              8,269,079
                                    ------------    ------------
                                      57,653,388      53,484,153
 Less accumulated depreciation        21,996,709      20,007,598
                                    ------------    ------------
                                      35,656,679      33,476,555
                                    ------------    ------------

OTHER ASSETS                             763,565         667,326
                                    ------------    ------------

                                    $192,122,059    $199,661,889
                                    ============    ============
<PAGE>
LIABILITIES AND MEMBERS' EQUITY

                                        1996            1995
                                   ------------    ------------
CURRENT LIABILITIES
 Note payable                      $ 65,582,931    $ 65,432,437
 Interest payable                       222,015         110,235
 Debentures                           1,342,009       1,383,209
 Current maturities of 
  long-term debt                      3,013,819       2,820,453
 Accounts payable                    29,094,690      23,261,092
 Patronage distributions and 
  capital stock retirements 
  to be paid in cash                                  4,000,000
 Deferred income taxes                                8,368,554
 Patrons' deposits                   14,175,462       9,701,825
 Accrued expenses                     4,287,813       2,851,057
 Income taxes payable                   739,683         781,958
                                   ------------    ------------
 Total Current Liabilities          118,458,422     118,710,820
                                   ------------    ------------

LONG-TERM DEBT                       22,309,220      19,842,812
                                   ------------    ------------

OTHER LIABILITIES                       168,200         229,406
                                   ------------    ------------


MEMBERS' EQUITY
 Capital stock
  Class "A" preferred                 2,079,600       2,139,400
  Class "B" convertible preferred       676,400         676,400
  Common stock                          125,000         127,000
  Capital certificates                  157,399         157,399
 Unrealized gain on securities 
  reported at fair value, net 
  of tax of $6,956,151 in 1995                       11,055,632
 Retained earnings (deficit)            309,478      (1,631,647)
 Allocated equities                  47,838,340      48,354,667
                                   ------------    ------------
                                     51,186,217      60,878,851
                                   ------------    ------------
                                   $192,122,059    $199,661,889
                                   ============    ============

See Notes to Consolidated Financial Statements


<PAGE>
                        SF SERVICES, INC.

                 CONSOLIDATED STATEMENTS OF INCOME

             YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994


                                 1996          1995          1994     
                            ------------   ------------   ------------
NET SALES                   $590,480,357   $530,820,976   $439,171,314

COST OF GOODS SOLD           556,030,450    500,731,715    410,099,611
                            ------------   ------------   ------------
GROSS PROFIT                  34,449,907     30,089,261     29,071,703

OTHER OPERATING REVENUE        1,957,519        542,926        432,671
                            ------------   ------------   ------------
GROSS MARGIN AND OTHER 
 OPERATING  REVENUE           36,407,426     30,632,187     29,504,374

OPERATING EXPENSES            44,958,673     30,131,789     24,648,408
                            ------------   ------------   ------------
INCOME (LOSS) FROM
 OPERATIONS                   (8,551,247)       500,398      4,855,966
                            ------------   ------------   ------------
OTHER INCOME (EXPENSE)
 Interest income               1,592,666      1,526,514      1,054,460
 Interest expense             (5,939,801)    (6,396,350)    (4,252,638)
 Dividend income                 123,154        530,037
 Miscellaneous                   662,240        146,070        257,603
 Gain on sale of MCC stock    17,863,024      8,590,955      2,038,728
                            ------------   ------------   ------------
                              14,301,283      4,397,226       (901,847)
                            ------------   ------------   ------------

SAVINGS BEFORE INCOME TAXES    5,750,036      4,897,624      3,954,119

PROVISION FOR INCOME TAXES     3,677,875      2,194,361
                            ------------   ------------   ------------
NET SAVINGS                 $  2,072,161   $  2,703,263   $  3,954,119
                            ============   ============   ============

NET SAVINGS APPLIED TO:
 Allocated equities
  Capital equity credits    $              $              $  4,215,923
  Cash                                        1,699,111      1,870,253
                            ------------   ------------   ------------
                                              1,699,111      6,086,176
 Retained earnings             2,072,161      1,004,152     (2,132,057)
                            ------------   ------------   -------------
                            $  2,072,161   $  2,703,263   $  3,954,119
                            ============   ============   ============

See Notes to Consolidated Financial Statements
<PAGE>

                           SF SERVICES, INC.

         CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS' EQUITY

                YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994


                                 Convertible
                      Preferred   Preferred    Preferred    Preferred
                        Stock       Stock        Stock        Stock
                      Class "A"    Class "B"     Class "C"    Class "D"
                    ----------    ----------  -----------   -----------
BALANCE, 
 OCTOBER 31, 1993   $ 2,189,300   $ 676,400   $ 1,780,861   $ 1,736,200

ISSUANCE OF STOCK

NET SAVINGS

CAPITAL EQUITY 
 CREDITS ISSUED 
 AS PATRONAGE 
 DISTRIBUTIONS

CAPITAL EQUITY 
 CREDITS PAID

RETIREMENT OF
 COMMON STOCK

PREFERRED STOCK
 DIVIDENDS

RETIREMENT OF
 PREFERRED STOCK                               (1,780,861)     (173,620)

OFFSET AGAINST
 ACCOUNTS
 RECEIVABLE

CHANGE IN
 UNREALIZED
 GAIN OR LOSSES
                    -----------   ----------  ------------  -----------
BALANCE,
 OCTOBER 31, 1994     2,189,300     676,400            -0-    1,562,580
                    -----------   ----------   -----------  -----------
ISSUANCE OF STOCK

NET SAVINGS

<PAGE>

CAPITAL EQUITY
 CREDITS ISSUED
 AS PATRONAGE
 DISTRIBUTIONS

MERGER WITH 
 DELTA 
 PURCHASING
 FEDERATION (AAL)

CAPITAL EQUITY
 CREDITS PAID

RETIREMENT OF
 COMMON STOCK

PREFERRED STOCK
 DIVIDENDS

RETIREMENT OF
 PREFERRED STOCK        (49,900)                             (1,562,580)

RETIREMENT OF
 ALLOCATED
 EQUITIES

CHANGE IN
 UNREALIZED
 GAIN OR LOSSES
                    -----------   -----------  ----------   ----------
BALANCE,
 OCTOBER 31, 1995   $ 2,139,400   $   676,400  $      -0-   $      -0-
                    -----------   -----------  ----------   ----------
ISSUANCE OF STOCK

NET SAVINGS

RETIREMENT OF
 COMMON STOCK

PREFERRED STOCK
 DIVIDENDS

RETIREMENT OF
 PREFERRED STOCK        (59,800)

RETIREMENT OF
 ALLOCATED
 EQUITIES

OFFSET AGAINST
 ACCOUNTS
 RECEIVABLE

<PAGE>

CHANGE IN 
 UNREALIZED
 GAIN OR LOSSES

BALANCE,            -----------   ----------  ------------   ----------
 OCTOBER 31, 1996   $ 2,079,600   $  676,400  $        -0-   $      -0-
                    ===========   ==========  ============   ==========

See Notes to Consolidated Financial Statements


                         SF SERVICES, INC.

   CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS' EQUITY (Continued)

             YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994

                                                         RETAINED
                          CAPITAL        COMMON          EARNINGS
                         CERTIFICATES     STOCK         (DEFICIT)
                         ------------   ------------   ------------
BALANCE,
 OCTOBER 31, 1993        $    157,399   $    127,000   $   (233,200)

ISSUANCE OF STOCK                              2,000

NET SAVINGS                                               3,954,119

CAPITAL EQUITY
 CREDITS ISSUED
 AS PATRONAGE
 DISTRIBUTIONS                                           (6,086,176)

CAPITAL EQUITY
 CREDITS PAID    

RETIREMENT OF
 COMMON STOCK                                 (6,000)

PREFERRED STOCK
 DIVIDENDS                                                 (136,521)

RETIREMENT OF
 PREFERRED STOCK

OFFSET AGAINST
 ACCOUNTS
 RECEIVABLE

CHANGE IN 
 UNREALIZED
GAIN OR LOSSES
                         ------------   ------------   ------------
<PAGE>

BALANCE,
 OCTOBER 31, 1994        $    157,399   $    123,000   $ (2,501,778)
                         ------------   ------------   ------------
ISSUANCE OF STOCK                              7,000

NET SAVINGS                                               2,703,263

CAPITAL EQUITY
 CREDITS ISSUED
 AS PATRONAGE
 DISTRIBUTIONS                                           (1,699,111)

MERGER WITH
 DELTA
 PURCHASING
 FEDERATION (AAL)

CAPITAL EQUITY
 CREDITS PAID

RETIREMENT OF
 COMMON STOCK                                 (3,000)

PREFERRED STOCK
 DIVIDENDS                                                 (134,021)

RETIREMENT OF
 PREFERRED STOCK

RETIREMENT OF
 ALLOCATED
 EQUITIES

CHANGE IN
 UNREALIZED
 GAIN OR LOSSES

                         ------------   ------------   ------------
BALANCE,
 OCTOBER 31, 1995        $    157,399   $    127,000   $ (1,631,647)
                         ------------   ------------   ------------
ISSUANCE OF STOCK                              2,000

NET SAVINGS                                               2,072,161

RETIREMENT OF
 COMMON STOCK                                 (4,000)

PREFERRED STOCK
 DIVIDENDS                                                 (131,036)

RETIREMENT OF
 PREFERRED STOCK

<PAGE>

RETIREMENT OF
 ALLOCATED
 EQUITIES

OFFSET AGAINST
 ACCOUNTS
 RECEIVABLE

CHANGE IN
 UNREALIZED
 GAIN OR LOSSES
                         ------------   ------------   ------------
BALANCE,
 OCTOBER 31, 1996        $    157,399   $    125,000   $    309,478
                         ============   ============   ============

See Notes to Consolidated Financial Statements


                       SF SERVICES, INC.

   CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS' EQUITY (Continued)

             YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994


                                         UNREALIZED
                                          GAIN ON
                                         SECURITIES
                          ALLOCATED      REPORTED AT   
                          EQUITIES       FAIR VALUE       TOTAL
                         ------------   ------------   ------------
BALANCE,
 OCTOBER 31, 1993        $ 41,277,575   $        -0-   $ 47,711,535

ISSUANCE OF STOCK                                             2,000

NET SAVINGS                                               3,954,119

CAPITAL EQUITY
 CREDITS ISSUED
 AS PATRONAGE
 DISTRIBUTIONS              6,086,176

CAPITAL EQUITY
 CREDITS PAID              (1,870,253)                   (1,870,253)

RETIREMENT OF
 COMMON STOCK                                                (6,000)

PREFERRED STOCK
 DIVIDENDS                                                 (136,521)

<PAGE>

RETIREMENT OF
 PREFERRED STOCK                                         (1,954,481)

OFFSET AGAINST
 ACCOUNTS
 RECEIVABLE                  (447,286)                     (447,286)

CHANGE IN
 UNREALIZED
 GAIN OR LOSSES                            8,936,166      8,936,166

BALANCE,                 ------------   ------------   ------------
 OCTOBER 31, 1994        $ 45,046,212   $  8,936,166   $ 56,189,279
                         ------------   ------------   ------------
ISSUANCE OF STOCK                                             7,000

NET SAVINGS                                               2,703,263

CAPITAL EQUITY
 CREDITS ISSUED
 AS PATRONAGE
 DISTRIBUTIONS              1,699,111

MERGER WITH
 DELTA
 PURCHASING
 FEDERATION (AAL)           4,498,888                     4,498,888

CAPITAL EQUITY
 CREDITS PAID              (1,699,111)                   (1,699,111)

RETIREMENT OF
 COMMON STOCK                                                (3,000)

PREFERRED STOCK
 DIVIDENDS                                                 (134,021)

RETIREMENT OF
 PREFERRED STOCK            1,110,456                      (502,024)

RETIREMENT OF
 ALLOCATED
 EQUITIES                  (2,300,889)                   (2,300,889)

CHANGE IN
 UNREALIZED
 GAIN OR LOSSES                            2,119,466      2,119,466
                         ------------   ------------   ------------
BALANCE,
 OCTOBER 31, 1995        $ 48,354,667   $ 11,055,632   $ 60,878,851
                         ------------   ------------   ------------
ISSUANCE OF STOCK                                             2,000

NET SAVINGS                                               2,072,161

<PAGE>

RETIREMENT OF
 COMMON STOCK                                                (4,000)

PREFERRED STOCK
 DIVIDENDS                                                 (131,036)

RETIREMENT OF
 PREFERRED STOCK                                            (59,800)

RETIREMENT OF
 ALLOCATED
 EQUITIES                    (418,836)                     (418,836)

OFFSET AGAINST
 ACCOUNTS
 RECEIVABLE                   (97,491)                      (97,491)

CHANGE IN 
 UNREALIZED
 GAIN OR LOSSES                          (11,055,632)   (11,055,632)
                         ------------   ------------   ------------
BALANCE,
 OCTOBER 31, 1996        $ 47,838,340   $        -0-   $ 51,186,217
                         ============   ============   ============

See Notes to Consolidated Financial Statements


                             SF SERVICES, INC.

                  CONSOLIDATED STATEMENTS OF CASH FLOWS

                YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994


                               1996           1995         1994
                           ------------   ------------   ------------
CASH FLOWS FROM
 OPERATING ACTIVITIES
  Net savings              $  2,072,161   $  2,703,263   $  3,954,119
  Items not requiring 
  (providing) cash:
   Depreciation and
    amortization              2,239,498      2,951,534      2,514,779
   Non-cash portion of 
    patronage dividends
    received from
    cooperatives             (1,614,598)    (1,284,542)    (1,981,154)
   (Gain) loss on sale 
    of fixed assets             (67,348)      (202,182)        36,291
   Gain on sale of
    investment              (17,863,024)    (8,590,955)    (2,038,728)
   Deferred income taxes     (3,392,985)     1,412,403

<PAGE>
   Writedown of fixed
    assets for impairment     5,497,348
  Changes in operating 
   assets and liabilities,
   net of effects from
   acquisition of Delta
   Purchasing Federation
   (AAL) assets:
    Accounts payable          1,833,597     (2,580,816)    5,819,531
    Accrued expenses          1,548,535        104,653    (1,085,774)
    Accounts receivable       3,817,292     (6,979,362)   (3,471,946) 
    Inventories             (16,938,041)   (11,918,494)   (7,307,029)
    Other current assets        570,208      1,329,734       124,780
    Accounts receivable
     - other                 (3,730,846)      (903,365)      536,183
    Due from broker                            131,868       (57,028)
    Patronage distributions
     receivable                 (49,740)       (11,349)      (39,478)
    Income taxes payable        (42,275)       749,636
    Other assets               (928,551)       828,656        339,542
    Other liabilities           (61,206)      (144,804)       397,159
                           ------------   ------------   ------------
     Net cash used in
      operating activities  (27,109,975)   (22,404,122)    (2,258,753)
                           ------------   ------------   ------------

CASH FLOWS FROM 
 INVESTING ACTIVITIES
  Purchase of stock in
   other cooperatives                                      (1,200,050)
  Purchase of property
   and equipment            (10,449,820)   (13,465,151)    (2,533,957)
  Proceeds from sale 
   of property and 
   equipment                    600,198      2,578,737      2,602,251
  Net cash received in
   the acquisition of
   Delta Purchasing 
   Federation (AAL)
   assets                                      977,428
  Proceeds from investment
   redemption and sale       34,329,962     18,455,358     10,208,374
  Advances on notes
   receivable                (2,502,060)    (1,371,933)      (799,553)
  Collections on notes
   receivable                 1,069,700        510,904        689,844
                           ------------   ------------   ------------
   Net cash provided by
    investing activities     23,047,980      7,685,343      8,966,909
                           ------------   ------------   ------------
CASH FLOWS FROM
 FINANCING ACTIVITIES
  Issuance of common stock        2,000          7,000          2,000

<PAGE>
  Preferred stock
   dividends                   (131,036)      (134,021)      (136,521)
  Patronage dividends paid
   and retirement of
   preferred stock              (59,800)    (4,428,170)      (691,401)
  Repurchase of common
   stock                         (4,000)        (3,000)        (6,000)
  Retirement of allocated
   equities                    (418,836)
  Proceeds from
   borrowings               191,317,056    197,981,565    135,244,378
  Repayment of 
   borrowings              (188,547,986)  (176,528,060)  (140,478,845)
  Net change in
   deposits                   4,473,637     (2,714,022)        (1,322)
                           ------------   ------------   ------------
 Net cash provided 
   by (used in) financing
   activities                 6,631,035     14,181,292     (6,067,711)
                           ------------   ------------   ------------
NET INCREASE (DECREASE)
 IN CASH AND 
 CASH EQUIVALENTS             2,569,040       (537,487)       640,445

CASH AND CASH 
 EQUIVALENTS, BEGINNING
 OF YEAR                        645,379      1,182,866        542,421
                           ------------   ------------   ------------
CASH AND CASH 
 EQUIVALENTS,
 END OF YEAR               $  3,214,419   $    645,379   $  1,182,866
                           ============   ============   ============

See Notes to Consolidated Financial Statements



NOTE 1:  NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT 
         ACCOUNTING POLICIES

Nature of Business

SF Services, Inc. and subsidiaries sell seed, feed, fertilizer,
chemicals, petroleum, lubricants, tires, batteries, 
accessories, and farm supplies and provide related services
to members and patrons of the Cooperative and its subsidiaries.
One subsidiary processes and markets catfish purchased from
area producers.

The Cooperative and its subsidiaries sell to members, patrons
and wholesale entities in Alabama, Arkansas, Louisiana, 
Kansas, Mississippi, Texas, Oklahoma and Missouri on an 
unsecured credit basis.

<PAGE>

Principles of Consolidation

The consolidated financial statements include the accounts 
of the Cooperative and its wholly-owned subsidiaries, AgGrow
Finance, Inc., SFA, Inc., SF Technical Services, Inc. and 
Southern Farm Fish Processors, Inc.  Included with SFA, Inc.,
are its wholly-owned subsidiaries SFA of Louisiana, Inc., and
SFA of Mississippi, Inc., which were formed on April 22, 1995
for retail operations in the respective states.  All 
significant intercompany accounts and transactions have been
eliminated in consolidation.

Inventories

Grains, seed and petroleum inventories are stated at the 
lower of cost or market, weighted average method.  
Realized and unrealized gains and losses on futures 
contracts used to hedge these inventories are deferred until
the related inventories are sold, but are considered in the 
lower of cost or market calculations.  The Cooperative hedges
these particular inventories to the extent considered 
practical for minimizing risk from market price fluctuations.

The remaining inventories are stated at the lower of cost or
market, weighted average method.

A summary of inventories follows:

                                       1996            1995
                                   ------------     ------------
Purchased items held for resale    $ 78,816,793     $ 60,443,652

Manufactured feed and 
 feed ingredients                     3,174,337        2,859,315

Processed catfish                     2,224,804        3,974,926
                                   ------------     ------------
                                   $ 84,215,934     $ 67,277,893
                                   ============     ============


Property and Equipment

Depreciation is provided for primarily by the straight-line 
method using the following estimated useful lives:

                                         Useful Lives 
                                         ------------
Buildings and improvements               5 - 33 years
Machinery and equipment                  2 - 20 years
Automobiles and trucks                   3 -  5 years
Furniture and fixtures                   5 - 15 years

<PAGE>

Patrons' Equities

In accordance with its bylaws, the Cooperative allocates
net savings to its patrons, based on income determined for
financial reporting purposes, in cash, and certificates of 
equity in proportions determined by its Board of Directors.

New members are issued one share of common stock.  At any 
time a member ceases to be active, such shares are redeemed 
at par value.

The Cooperative capitalizes interest costs as a component of
construction in progress, based on the weighted average rates
paid for long-term borrowings.  Total interest incurred (net
of patronage refunds) each year was:


                                1996          1995          1994
                            -----------   ------------   -----------
Interest costs capitalized  $   479,943   $              $
Interest costs charged
  to expense                  5,939,801     6,396,350      4,252,638
                            -----------   ------------   -----------
Total interest incurred     $ 6,419,744   $ 6,396,350    $ 4,252,638
                            ===========   ===========    ===========

Income Taxes

The Cooperative, as a non-exempt cooperative, is taxed on 
non-patronage margins and any patronage margins not paid or 
allocated to patrons.  Consistent with industry practice, 
deferred income taxes are not provided for temporary tax 
differences associated with patronage earnings.  The 
Cooperative's subsidiaries are not required to pay or 
allocate margins to patrons and, therefore, are taxed on 
applicable margins and are able to retain all tax benefits 
related to losses to the extent such benefits are recoverable
from prior taxes paid.

Deferred tax liabilities and assets are recognized for the 
tax effects of differences between the financial statement and
tax basis of assets and liabilities related to non-patronage 
margins and unrealized gain on marketable securities.  A 
valuation allowance is established to reduce deferred tax 
assets if it is more likely than not that a deferred tax 
asset will not be realized.

Temporary tax differences relate principally to non-qualified
patronage distributions received from other cooperatives, 
inventories, depreciation on property and equipment, valuation
of property and equipment, accrued expenses, and market value
over tax basis of marketable securities. 

<PAGE>

Use of Estimates

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 and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the 
reporting period.  Actual results could differ from those 
estimates.

NOTE 2:  ACCOUNTS RECEIVABLE - OTHER

Accounts receivable - other consisted of the following:

                                     1996              1995
                                 ------------      ------------
Vendor rebates                    $ 2,322,396       $ 2,556,446
Other                               1,855,896
Proceeds from new leases            2,109,000
                                 ------------      ------------
                                  $ 6,287,292       $ 2,556,446
                                  ===========       ===========

NOTE 3:  MARKETABLE SECURITIES

On August 22, 1994, Mississippi Chemical Corporation (MCC), 
formerly a Cooperative, became a public entity and the 
Cooperative's investment in common stock, and allocated 
equities of MCC were converted to common stock in the new 
entity (Note 13).  The Cooperative sold its converted common
stock during the years ended October 31, 1996, 1995 and 1994 
as follows:

                          1996           1995           1994    
                      ------------   ------------   ------------
Shares sold              1,525,720        875,000        598,000
                      ============   ============   ============

Proceeds              $ 34,027,573   $ 17,812,493   $  8,340,990
                      ============   ============   ============

Gain on sale          $ 17,863,024   $  8,590,955   $  2,038,728
                      ============   ============   ============

The average cost method was used to determine cost basis on 
these sales.

The Company utilized the provisions of Statement of Financial
Accounting Standards No. 115 "Accounting for Certain 
Investments in Debt and Equity Securities" in accounting 
for its investment in MCC stock.  These securities were 
classified as available-for-sale and carried at estimated 
market value at October 31, 1995.  The unrealized gain, net
of tax, was reported as a separate component of members' 
equity.  The Cooperative's cost basis and estimated market 
value of MCC stock at October 31, 1995 was as follows:

<PAGE>

                                                   1995
                                               ------------
Estimated market value                         $ 34,176,548
Cost basis                                       16,164,765
                                               ------------
Unrealized gain                                $ 18,011,783
                                               ============

NOTE 4:  ACCRUED EXPENSES

Accrued expenses consisted of the following at the 
respective dates:


                                 1996              1995
                             ------------      ------------
Accrued taxes payable,
 other than income taxes     $  1,368,468     $  1,494,978
Accrued leave                   1,365,115        1,089,809
Accrued payroll                   757,222          177,693
Miscellaneous accruals            797,008           88,577
                             ------------     ------------
                             $  4,287,813     $  2,851,057
                             ============     ============

NOTE 5:  INVESTMENTS IN OTHER COOPERATIVES 

The Cooperative invests in other cooperatives with which 
it does business.  Investments in those other cooperatives,
as of the respective dates, were as follows:

                                  1996            1995    
                             ------------     ------------
CoBank                       $  7,705,494     $  7,541,647
Farmland Industries, Inc.       2,491,005        1,516,005
Universal Cooperatives, Inc.    2,023,627        1,965,931
AG Processing                     491,805          444,219
Other                             262,870          194,576
                             ------------     ------------
                             $ 12,974,801     $ 11,662,378
                             ============     ============

These investments consist of common stock, at cost, and the
Cooperative's share of allocated equities.  Allocated 
equities are valued at face amount as determined by the 
issuing entity and are redeemable by the entity at its 
discretion at an amount determined annually.  Patronage 
refunds, which consist of cash and non-cash equity 
allocations, are credited to cost of goods sold, with the
exception of patronage refunds from CoBank, which are 
credited to interest expense.

<PAGE>

Patronage distributions from Mississippi Chemical Corporation,
which was a cooperative prior to August 22, 1994, for the year
ended October 31, 1994, was $2,919,051.  SF Services, Inc., 
will not receive patronage dividends on business with MCC in 
future periods.

The amount of allocated equities previously allocated to SF 
Services, Inc., to be retired during 1995 and 1996 has been 
included in patronage distributions receivable at October 31,
1996 and 1995.

Patronage distributions received for the years ending October
31, 1996, 1995, and 1994 were as follows:

                     1996              1995           1994
Amount Credited
to Cost of Goods
Sold              $1,482,570       $  341,061      $3,090,995

Amount Credited
to Interest
Expense              677,675          707,538         703,607
                  ----------       ----------      ----------
                  $2,160,245       $1,048,599      $3,794,602
                  ==========       ==========      ==========

<PAGE>
NOTE  6:  NOTE PAYABLE

                              1996            1995           1994 
                          ------------   ------------   ------------
Note payable CoBank       $ 65,582,931   $ 65,432,437   $ 26,538,962
 Interest rate                    7.19%          7.64%          6.92%

Average during 
 the period*              $ 57,366,013   $ 48,570,883   $ 31,975,156

Average interest rate
 during the period*              6.87%           7.96%          6.26%

Maximum amount of
 notes payable at
 any month-end
 during the period        $ 71,169,873   $ 65,432,347   $ 46,085,291

*Weighted average interest rate is computed by dividing the 
average monthly face amount of notes payable into the 
aggregate related interest expense.

The Cooperative had a committed line-of-credit with CoBank 
totaling $80,000,000 for the years ended October 31, 1996 
and 1995.  The line-of-credit is secured by substantially all
assets of the Cooperative.  This line-of-credit bears interest
at a fluctuating rate based on the cost of money to CoBank.


NOTE 7:  LONG-TERM DEBT

                                            1996           1995
                                        ------------   ------------
Notes payable - CoBank (A)              $ 22,182,750   $ 19,650,000
Notes payable - CoBank (B)                   495,000        585,000
Notes payable - Municipal (C)                500,000        500,000
Notes payable - Finance Corporation (D)      100,000        100,000
Notes payable - Industrial Revenue
  Bonds (E)                                1,375,000      1,555,000
Notes payable - certificates of
  indebtedness (F)                           210,414        221,314

<PAGE>

Notes payable - Farmers Supply (G)           449,805
Notes payable - other                         10,070         51,951
                                        ------------   ------------
                                          25,323,039     22,663,265
Less current maturities                    3,013,819      2,820,453
                                        ------------   ------------
                                        $ 22,309,220   $ 19,842,812
                                        ============   ============

Aggregate annual maturities of long-term debt at October 31, 1996
are:

      1997                                3,013,819
      1998                                2,817,527
      1999                                2,822,230
      2000                                2,837,230
      2001                                2,852,230
      Thereafter                         10,980,003
                                       ------------  
                                       $ 25,323,039
                                       ============

(A)  Due 1997 through 2004, with annual installments of 
     $2,467,250 plus interest at fluctuating rates based on 
     the cost of money to CoBank (average rate of 8.04% at 
     October 31, 1996); secured by substantially all assets 
     of the Cooperative.  The agreement requires maintenance 
     of $20,000,000 working capital, a maximum ratio of CoBank
     term debt to the value of Mississippi Chemical Stock 
     owned, plus the net book value of assets owned of not 
     more than 60%, a current ratio of 1.2% and requires 
     CoBank approval if distributions to members exceed 50% 
     of patronage based income or the Cooperative retires 
     greater than $60,000 of preferred stock in any fiscal 
     year.  A formal waiver of the working capital and the
     current ratio was obtained for 1996 and a formal waiver
     was obtained during 1995 on payment of patronage 
     distributions, retirement of allocated equities and 
     retirement of preferred stock.  The agreement requires
     the Cooperative to invest in stock of CoBank in 
     amounts determined by the bank.

(B)  Due 1996 through 2002 at $7,500 monthly plus interest at 
     8.25% at October 31, 1996, and 8.75% at October 31, 1995;
     cross-collateralized with (A) above.

(C)  Due at various times through 2002; interest at 7%; 
     maturities of principal are based on Southern Farm Fish 
     Processors, Inc., obtaining various equity and working 
     capital levels; secured by property and equipment.

(D)  Due at various times through 2002; interest at 6%; 
     maturities of principal are based on Southern Farm 
     Processors, Inc., obtaining various equity and working 
     capital levels; secured by property and equipment.

<PAGE>

(E)  Due 1997 through 2002 with annual installments of 
     principal plus interest at rates of 6% to 6.5%; secured 
     by property and equipment.

(F)  Due 1996 with annual installments of principal plus 
     interest at interest rates of 8% and 10%; unsecured.

(G)  Due in annual installments of $44,980 including interest,
     uncollateralized.

The Cooperative paid interest, net of patronage refunds and 
interest capitalized, of $6,307,994 for the year ended October 
31, 1996, $6,629,921 for the year ended October 31, 1995, and 
$3,829,186 for the year ended October 31, 1994.

NOTE 8:  DEBENTURES

The outstanding debentures have maturities ranging from 1996 
through 1998.  Interest rates vary from 7% to 12%.

                                        1996           1995     
                                     ------------   ------------
Debentures                           $  1,348,409   $  1,395,409
Less current maturities                 1,342,009      1,383,209
                                     ------------   ------------
Included in other liabilities        $      6,400   $     12,200
                                     ============   ============

Aggregate annual maturities of debentures at October 31, 1996
are:

     1998                              $      6,400
                                       ============

NOTE 9:  INCOME TAXES

The provision for income taxes includes these components:

                                 1996           1995           1994    
                             ------------   ------------   ------------
Taxes currently payable      $  7,070,860   $    781,958   $        -0-
Deferred income taxes          (3,392,985)     1,412,403            -0-
                             ------------   ------------   ------------
                             $  3,677,875   $  2,194,361   $        -0-
                             ============   ============   ============

<PAGE>

   The tax effects of temporary differences related to deferred taxes
   shown on the balance sheet at October 31, 1996 and 1995 were:

                                                1996          1995
                                            ------------   ------------
Deferred tax assets:
  Allowance for doubtful accounts           $    403,515   $     26,477
  Inventory capitalization                       372,178        284,300
  Accrued expenses not deductible until paid     295,722        201,231
  Alternative minimum tax credit                                425,330
  Net operating loss carryforward                                 8,306
  Writedown of fixed assets                    1,971,917
                                            ------------   ------------
                                               3,043,332        945,644
Deferred tax liabilities:
  Estimated market value over tax 
   basis of marketable securities                             9,260,235
  Accumulated depreciation                       370,150         53,963
                                            ------------   ------------
                                                 370,150      9,314,198
                                            ------------   ------------
Net deferred tax asset (liability)
 before valuation allowance                 $  2,673,182     (8,368,554)
                                            ============   ============
Valuation allowance:
(Increase) during the year                      (692,600)
                                            ------------   ------------

Ending balance                                  (692,600)           -0-
                                            ------------   ------------
Net deferred tax asset (liability)          $  1,980,582   $ (8,368,554)
                                            ============   ============


The above net deferred tax asset (liability) is presented on 
the balance sheets as follows:

                                                1996           1995
                                            ------------   ------------
Deferred tax asset - current                $    834,738
Deferred tax asset - long term                 1,145,844
Deferred tax liability - current                           $ (8,368,554)
                                            ------------   ------------
                                            $  1,980,582   $ (8,368,554)
                                            ============   ============

<PAGE>

A reconciliation of income tax expense at the statutory rate 
to income tax expense at the Company's effective rate is shown 
below:

                                1996           1995           1994  
                            ------------   ------------   ------------
Expected provision (34%)    $  1,955,012   $  1,665,192   $  1,344,400
Tax effect of net 
  savings (loss) applied 
  to allocated equities          355,086       (577,698)    (2,069,300)
Excess of benefits of 
  allocated equity over
  taxable income                                446,535         724,900
State income taxes               675,177        660,332
Change in deferred tax
 asset valuation allowance       692,600
                            ------------   ------------   ------------
                            $  3,677,875   $  2,194,361   $        -0-
                            ============   ============   ============

The Cooperative paid income taxes of $7,431,000 and $32,322 
for the years ended October 31, 1996 and 1995, respectively.
For the year ended October 31, 1994, the Cooperative received 
an income tax refund of $365,942.

As of October 31, 1996, the Cooperative had approximately 
$200,000 of alternative minimum tax credits available to 
offset future patronage based federal income taxes.  The 
Cooperative also has unused patronage operating loss 
carryforwards of approximately $1,090,000 which will 
expire 2011.

Deferred income taxes related to change in realized 
appreciation or available-for-sale securities, shown in 
members' equity, was $9,260,535 for 1995.

In setting the valuation allowance for realization of 
deferred tax assets, management uses a tax planning 
strategy that recognizes the benefits of impairment losses 
deductible in the future based on available refunds of 
previously paid tax.


NOTE 10:  BENEFIT PLANS

The Cooperative adopted a combination salary deferral/profit-
sharing defined contribution plan effective August 1, 1989.  
The plan covers substantially all full-time employees aged 
twenty-one or older with at least one year of service.  
Participants must contribute a minimum of 2% of their 
compensation and may contribute up to the maximum 
permitted by applicable regulations.  The Cooperative will 
match employee contributions up to a maximum of 4% of the 

<PAGE>

participants' compensation.  The matching percentage and 
additional profit-sharing contributions are determined on a
discretionary basis by the Board of Directors.  Participant 
interests in matching contributions are vested over a five-year
period.  The Cooperative contributed $484,282, $ 683,158, and
$524,684 to the plan during the years ended October 31, 1996,
1995 and 1994, respectively.

The Cooperative and its member cooperatives adopted a 
non-qualified defined contribution plan for managers of the 
member cooperatives.  The amount of annual contribution to the 
plan for each participant is based on member cooperatives' 
purchases and the profitability of SF Services, Inc.  The 
participants begin vesting after 14 years of service to the 
member cooperative and are 100% vested after 19 years.  The 
Cooperative incurred expenses of $241,898 and $120,382 related
to this plan for the years ended October 31, 1996 and 1995,
respectively.


NOTE 11:  RELATED PARTY TRANSACTIONS

The Cooperative owned 7% and 10% of the outstanding stock of 
Mississippi Chemical Corporation (MCC) at October 31, 1995 and
1994 and the President of the Cooperative during those years 
was a director of MCC.  Following are the material transactions
with MCC for the respective periods:


                                    1995           1994
                                ------------   ------------
Fertilizer purchases            $ 32,587,243   $ 34,713,124
                                ============   ============

Patronage distributions         $        -0-   $  2,919,051
                                ============   ============

Distribution fee income         $        -0-   $    781,228
                                ============   ============

MCC paid the Cooperative dividends of $123,154 in 1996 and
$530,037 during 1995.  Accounts payable to MCC for fertilizer 
purchases were $1,495,936 at October 31, 1995.

During 1994, the Cooperative bought and sold 24,001 shares 
of MCC Potash stock.  No gain or loss was recognized on these
transactions.

On November 7, 1994, the Cooperative purchased a fertilizer 
storage facility from MCC for $340,000.


<PAGE>

NOTE 12:  LEASES

Noncancellable operating leases for feed mill buildings and 
equipment, other machinery and equipment and trucks expire 
in various years through 2002.  These leases generally 
contain renewal options for periods ranging from one to five 
years and require the Cooperative to pay all executory costs 
(property taxes, maintenance and insurance).

Future minimum lease payments at October 31, 1996, were:

     1997                           $  3,642,169
     1998                              3,296,173
     1999                              2,505,420
     2000                              1,070,126
     2001                                409,108
     Later years                         131,434
                                    ============
Future minimum lease payments       $ 11,054,430


Rental expense for all operating leases amounted to 
the following:

                              1996          1995           1994
                          ------------   ------------   ------------
                          $  4,574,356   $  4,208,848   $  4,120,475
                          ============   ============   ============

NOTE 13:  ACQUISITION 

On December 1, 1994, the Cooperative acquired all the assets 
of and assumed all liabilities of Delta Purchasing Federation 
(AAL) ("DPF") as follows.


  Current assets                  $ 14,421,424
  Other assets                       3,490,231
                                  ------------
                                    17,911,655
                                  ============

  Current liabilities               11,814,255
  Other liabilities                  1,598,512
                                  ------------
                                    13,412,767
                                  ------------

Equities allocated                $  4,498,888
                                  ============

<PAGE>

The total consideration delivered to DPF shareholders was 
equity interest of $4,489,789, or $500,000 in addition to the
net assets received as carried by DPF before the transaction.
The acquisition has been accounted for as a purchase by 
recording the assets and liabilities of DPF at estimated fair
value at the acquisition date.  The consolidated operations 
of the Cooperative include the operations of DPF from the 
acquisition date.  Unaudited proforma consolidated operations
assuming the purchase was made November 1, 1993 are shown below
for the year ended October 31, 1994.

  Net Sales                       $484,600,030
                                  ============

  Net Savings                     $  5,113,126
                                  ============

NOTE 14:  CAPITAL STOCK

                                            Liquidation
                                               and            Shares  
                  Authorized                Redemption       Issued and
 Class of Stock     Shares     Par Value    Preference      Outstanding
 --------------   ----------   ---------    ------------    -----------
Class "A"
  preferred (1)    150,000      $    1       $  100              10,796

Class "B"
  convertible 
  preferred (2)     15,000      $    1       $  100               6,764

Common                 500      $1,000                              125


(1)  Non-voting; non-cumulative dividends not to exceed 8 1/2% of
     liquidation and redemption preference if earned and when 
     declared by the Board of Directors with preference over 
     any other dividend or distributions declared in any year.

(2)  Non-voting; non-cumulative dividends not to exceed 4% of
     liquidation and redemption preference if earned and when 
     declared by the Board of Directors with preference over 
     any other dividend, except Class A preferred stock, or
     distributions declared in any year.  At the discretion of
     the Board of Directors, the Class B preferred stock shall
     become convertible, at the option of the holder, at its 
     liquidation and redemption preference value into equity
     certificates.

<PAGE>

Capital certificates may be surrendered upon termination of 
membership or expiration of ten years from the date of the 
certificate, whichever event shall be last to occur, for 
Class A Preferred Stock with a liquidation and redemption 
preference equal to the stated amount of the capital 
certificate.  The certificates are subordinate to all debt 
and have no voting rights.


NOTE 15:  NOTES RECEIVABLE

The Cooperative has provided long-term financing to certain 
members by transferring amounts owed by the members for 
purchases to long-term notes receivable pursuant to agreements
with CoBank wherein CoBank provides seasonal financing directly
to such members.


NOTE 16:  BUSINESS SEGMENTS

The Cooperative operates in two industries (1) distribution 
of seed, feed, fertilizer, chemicals, petroleum, lubricants, 
tires, batteries, accessories, farm supplies and related 
services and (2) catfish processing and sales.  Sales between
segments are not material.  Net sales, operating income, 
identifiable assets, capital expenditures, and depreciation 
are as follows:

                         Distribution      Catfish     
October 31, 1996         Activities      Processing        Total
----------------         ------------   ------------   ------------
Net sales                $553,856,134   $ 36,624,223   $590,480,357

Operating (loss)         $ (2,768,125)  $ (5,783,122)  $ (8,551,247)

Identifiable assets      $182,953,280   $  9,168,779   $192,122,059

Capital expenditures     $ 10,139,662   $    310,158   $ 10,449,820

Depreciation             $  1,866,517   $    372,981   $  2,239,498

<PAGE>

                         Distribution       Catfish     
October 31, 1995         Activities       Processing       Total
----------------         ------------   -------------   ------------
Net sales                $492,989,054   $ 37,831,922   $530,820,976

Operating income (loss)  $  3,116,147   $ (2,615,749)  $    500,398

Identifiable assets      $188,582,330   $ 11,079,559   $199,661,889

Capital expenditures     $ 11,772,778   $  1,692,373   $ 13,465,151

Depreciation             $  2,544,970   $    406,564   $  2,951,534


                         Distribution       Catfish     
October 31, 1994         Activities       Processing       Total
----------------         ------------   ------------   ------------
Net sales                $408,599,234   $ 30,572,080   $439,171,314

Operating income (loss)  $  7,426,400   $ (2,570,434)  $  4,855,966

Identifiable assets      $148,461,613   $ 11,065,418   $159,527,031

Capital expenditures     $  1,297,958   $  1,235,999   $  2,533,957

Depreciation             $  2,314,779   $    200,000   $  2,514,779


For purposes of business segment disclosure, all activities 
related to other cooperatives are included solely in 
distribution activities.


NOTE 17:  ADDITIONAL CASH FLOW INFORMATION

                                 1996           1995           1994
                             ------------   ------------   ------------
Interest paid (net of
  patronage dividends and
  interest capitalization)   $  6,307,994   $  6,629,921   $  3,829,186

Income taxes paid (received) $  7,431,000   $     32,322   $  (365,942)


<PAGE>
Noncash investing transactions:

                 1995
---------------------------------------
Acquisition of Delta Purchasing 
  Federation (AAL)
    Fair value of assets received                   $ 16,938,948
    Liabilities assumed                              (13,412,767)
    Equities allocated                                (4,503,609)
                                                    ------------
   Cash received                                    $   (977,428)
                                                    ============

Accrued interest paid with advance
 on seasonal line of credit                         $  1,475,000

Class "D" stock redeemed with allocated
 equities                                           $  1,109,456


Trade receivable transferred to
 note receivable                                    $    200,000


                 1994 
---------------------------------------
Disposition of Cross County Farmers Association
 Asset sold                                         $    960,622
                                                    ============

 Liabilities assumed by buyer                       $    960,622
                                                    ============

NOTE 18:  COMMITMENTS

Purchase Agreements

At October 31, 1996, SF Services, Inc. had commitments (open 
contracts) to purchase 90,985 tons of feed ingredients for 
$13,046,771 and to sell 100,600 tons of feed for $20,192,908.

The Company presells feed from March through October on an 
annual basis.  During this period, the Company attempts to 
obtain commitments for as much as 100% ingredients for 
presells.  The Company does not overcommit on purchases of 
ingredients.  At October 31, 1996, the Company had commitments
to sell the cattle feed of 76,615 tons for $14,029,838 and 
catfish feed of 23,985 tons for $6,163,070.  The Cooperative 
also had commitments to purchase cattle feed ingredients of 
67,412 tons at a cost of $8,759,994 and catfish feed 
ingredients of 23,573 tons at a cost of $4,286,777.

<PAGE>

Loan Guarantees

The Cooperative has guaranteed $371,667 in loans to CoBank 
for member cooperatives.  The Cooperative has a second 
mortgage related to these guarantees.

NOTE 19:  IMPAIRMENT OF LONG-LIVED ASSETS

During 1996, the Cooperative adopted the provisions of 
Statements of Financial Accounting Standards No. 121, 
"Accounting for the Impairment of Long-lived Assets and for 
Long-lived Assets to be Disposed of." The Cooperative, as a 
result of adopting the new standard, recognized expenses of 
$4,981,398 to reduce the carrying value of the Southern Farm 
Fish Processors, Inc. plant and the Greenville feed mill, the
values of which have been impaired due to continued losses 
resulting from excessive operating costs.  Also, during the 
fourth quarter of fiscal 1996, the Cooperative recognized 
expenses of $515,950 to reduce the carrying value of various
abandoned properties.  The amount of the impairments were 
estimated based on appraisals performed during the year and
expected future cash flows.  These estimates could change 
materially in the future.  The amount of recognized expense 
is included in operating expenses in the consolidated 
statement of income.

NOTE 20:  DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

Investments in Associated Enterprises

Investments in other cooperative's equities are carried at 
cost, plus the Cooperative's share of allocated equities, less
patronage refunds and cash allocations.  There is no market for
these investments since the securities are redeemable only 
by the issuing cooperative at an established contract value.
Because of the lack of marketability, the Cooperative believes
it is not practicable to estimate the fair value of investments
in associated enterprises.

Long-Term Debt

Fair value is estimated based on the CoBank National Variable
Rate at October 31, 1996.

                                           October 31, 1996
                                     ---------------------------
                                          Carrying      Fair
                                           Amount       Value    
                                     ------------   ------------
CoBank - term                          22,677,750     25,782,000
CoBank - seasonal                      65,582,931     78,120,000
Other                                   2,645,289      4,230,000
                                     ------------   ------------
                                     $ 90,905,970   $108,132,000
                                     ============   ============
<PAGE>

NOTE 21:  SIGNIFICANT ESTIMATES AND CONCENTRATIONS

Generally accepted accounting principles require disclosure
of certain significant estimates and current vulnerabilities
due to certain concentrations.  Those matters include the 
following:

Major Lender

The Cooperative borrows most of its monies from CoBank.  


Income Tax Assessment

During 1996, the Internal Revenue Service (IRS) completed 
its examination of the Cooperative's federal income tax returns
for the years ended October 31, 1991, 1992 and 1993, and 
has proposed certain adjustments which relate principally 
to the Cooperative's method of computing patronage allocations
during those years.  As a result, the IRS has proposed 
additional taxes of $589,823 for 1991 and $447,961 for 
1992, plus interest to date of payment.  This issue 
involves an Industry Coordinated Issue which the cooperative
industry, and the Company, are vigorously contesting.  The 
Cooperative has filed its protest with the Appellate Division
of the IRS.  No accrual has been made for losses, if any, that 
may result, pending the outcome of the Cooperative's appeal.


Contingent Liabilities

In the course of business, the Cooperative has become engaged
in various litigation matters.  In the opinion of management,
based on the currently known facts, the litigation outstanding 
will not materially impact future financial statements, however,
circumstances may change which would require reassessment and
revisions of the estimates of the risk of future litigation losses.

<PAGE>
NOTE 22:  SUBSEQUENT EVENTS

On December 31, 1996, the Cooperative purchased substantially
all of the assets of Matthews of Monette, Inc., a wholesale 
and retail fuel business located in Arkansas, for $9,398,631.
This acquisition is expected to add approximately $45,000,000 in
annual sales.  The new business will operate under the name
"Northeast Arkansas Oil Company, LLC", a newly formed, wholly-owned
subsidiary.  The purchase will be financed as follows: $2,250,000
promissory notes issued by the Cooperative, $2,131,913 in capital
leases and other debt assumed from the seller, and the remainder
in borrowings from CoBank.


NOTE 23:  RESTATEMENT OF 1996 OPERATING EXPENSES

The 1996 operating expenses and net income have been restated for
amounts which should not have been included in intercompany accounts.
The restatement increased operating expenses and decreased net 
income by $500.000.


<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.

                      SF SERVICES, INC.
                     (Registrant)

                     /s/ John A. Gaston            
                      --------------------
                    By:  John A. Gaston, Senior Vice President
                         (Principal Financial Officer)

Date:    August 12, 1997