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 October 31, 1997
 
                              OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

    For the transition period from ----------  to  ----------

    Commission file number    33-38051 
   
                          SF SERVICES, INC. 
    (Exact name of registrant as specified in its Charter)

             Arkansas                           71-0220282
    (State or other jurisdiction of          (I.R.S. Employer
     incorporation or organization)         Identification Number)

     120 Main Street, North Little Rock, Arkansas           72114
    (Address of principal executive offices)             (Zip Code)

   Registrant's telephone number, including area code (501) 945-2371

   Securities registered pursuant to Section 12(b) of the Act
           
                                         Name of each exchange on
       Title of each class                   which registered
             NONE                                   NONE

   Securities registered pursuant to Section 12(g) of the Act
                                   NONE
                            (Title of Class)

 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          
<PAGE>

 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 to Part III
 of this Form 10-K or any amendment to this Form 10-K.  [X]

 The aggregate market value of the voting and non-voting common 
 equity held by nonaffiliates of the registrant was $124,000 at 
 January 27, 1998.

 The number of shares outstanding of the registrant's common stock, 
 $1,000.00 par value per share, was 124 at January 27, 1998.
<PAGE>

                                 FORM 10-K

                                   PART I

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION 
REFORM ACT OF 1995 ("PSLRA")

Certain forward-looking information contained in this report
is being provided in reliance upon the "safe harbor" provisions
of the PSLRA as set forth in Section 27A of the Securities Act 
of 1933, as amended, and Section 21E of the Securities Exchange 
Act of 1934, as amended.  Such information includes, without 
limitation, discussions as to estimates, expectations, beliefs, 
plans, strategies and objectives concerning the Company's future 
financial and operating performance.  Such forward-looking 
information is subject to assumptions and beliefs based on 
current information known to the Company and factors that could 
yield actual results differing materially from those 
anticipated.  Such factors include, without limitation, costs of
feed ingredients and other products sold by the Company, prices 
received for products sold by the Company, extreme weather 
conditions in the Company's trade area, significant economic
changes within the agriculture industry, and effects of the 
Company's restructuring efforts.
<PAGE>
ITEM  1: BUSINESS

SF Services, Inc. is a farm supply cooperative which was 
organized under the laws of the State of Arkansas in 1945.
As of January 27, 1998 it was made up of 124 local member 
cooperatives in Arkansas, Louisiana, Mississippi, Alabama, 
Oklahoma, and Texas.  The local member cooperatives are owned
and controlled by individual farmers.  SF Services, Inc. is 
a basic manufacturer of agricultural and pet feeds, a 
production contractor and distributor of seeds in the rice, 
cotton, soybean and wheat production areas of the midsouth 
and a basic wholesaler of a wide variety of farm supply, 
tires, batteries and automotive ("TBA"), chemical, petroleum 
and fertilizer products to its members and other customers.

SF Services, Inc. attempts, through pooling of resources 
and sharing risks, to secure farm input products of the best
quality and price, to cooperatively achieve economies in the
manufacturing and procurement of goods and supplies, and to 
render service to its local member cooperatives.  SF Services,
Inc. has 15 operating and service divisions: Farm and Ranch;
Petroleum; TBA; Fertilizer; Chemical; Seed; Feed; Animal 
Health; Catfish Processing and Marketing; Warehouse and 
Transportation; Field Services; Corporate Services; 
Information Services; Credit and Financial Analysis; and 
General Corporate.

SF Services, Inc. also controls eight subsidiaries which are
included in the consolidated financial reports of SF Services,
Inc.  The eight subsidiaries are Cloverleaf Cooperative; SFA,
Inc.; Deep South Farmers Supply, Inc.; Professional 
Technologies, Inc.; AgGrow Finance, Inc.; Southern Farm Fish 
Processors, Inc.; SF Technical Services, Inc.; and Northeast
Arkansas Oil Company, LLC ("NEA Oil Company").  SFA, Inc. 
conducts retail farm supply sales and services.  AgGrow 
Finance, Inc. provides financing to individual farmers of 
member cooperatives for crop production and equipment purchases.
Southern Farm Fish Processors, Inc. operates a catfish 
processing plant.  SF Technical Services, Inc., provides
environmental and regulatory compliance services and crop 
consulting services.  The remaining subsidiary, NEA Oil Company,
is a wholesale and retail fuel business.

<PAGE>
In the first quarter of 1997, the Company purchased substantially
all of 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.  This business operates under the name
"Northeast Arkansas Oil Company, LLC" a newly formed wholly-owned
subsidiary.  The purchase was financed as follows, $2.25 million
in promissory notes issued by the Company, $2.13 million in 
capital leases and other debt assumed from the seller, and the 
remainder in borrowings from CoBank.

In the first quarter of 1995, pursuant to a plan and 
agreement of merger by and between Delta Purchasing 
Federation (AAL) ("DPF") and the Company, DPF was merged 
into the Company in a statutory merger.  In the merger, DPF 
shareholders received an equity interest in the Company with 
value equal to net book value of DPF's assets plus $500,000.
The acquisition has been accounted for as a purchase by 
recording the assets and liabilities of DPF based on their 
respective fair market values at acquisition date under the
plan and agreement of merger.  The Company's sales for 1995 
increased approximately $21 million due to the merger.

In the first quarter of 1993, SF Services, Inc., through a 
newly formed wholly-owned subsidiary, Southern Farm Fish 
Processors, Inc., purchased the assets of Arkansas Prime Fish 
Processors by the assumption of debt in a non-cash transaction.

SF Services, Inc. and its subsidiaries employ approximately 
1,310 persons.
<PAGE>

Division sales, savings (loss) before income taxes and 
identifiable assets for each of the last three fiscal 
periods are presented below:

 
                          Year Ended     Year Ended     Year Ended 
                          October 31,    October 31,    October 31,
                             1997           1996           1995    
                         ------------  ------------    ------------
SALES BY DIVISION
  Feed and animal health $113,240,365  $122,397,413    $101,249,886
  Fertilizer              119,486,518   129,557,273     120,596,538
  Seed                     37,922,154    33,028,271      27,246,492
  Chemicals               111,763,122   121,382,784     136,743,532
  Farm and ranch           30,069,407    35,919,700      39,067,528
  Petroleum               103,605,683    70,216,528      37,750,042
  Tires, batteries and
    automotive             18,970,375    19,659,706      20,322,532
  Subsidiary's retail 
    farm supply sales,
    net of eliminations    14,142,897    21,694,459      10,012,504
  Subsidiary's catfish 
    processing and 
    wholesale sales, net 
    of eliminations        31,752,577    36,624,223      37,831,922
  Subsidiary's technical
    services sales, net
    of eliminations           233,801
  Subsidiary's retail and
    wholesale petroleum
    sales, net of 
    eliminations           41,680,545
                         ------------  ------------    ------------
                         $622,867,444  $590,480,357    $530,820,976
                         ============  ============    ============
<PAGE>
                               Year Ended   Year Ended   Year Ended
                               October 31,  October 31,  October 31,
                                  1997         1996         1995
                              -----------  ----------   -----------
SAVINGS (LOSS) BEFORE
INCOME TAXES BY
DIVISION*
  Feed and animal health     $ (2,844,090) $(3,489,573) $   797,252
  Fertilizer                   (5,065,882)  16,838,293    5,635,474
  Seed                           (931,389)     (19,325)     (93,310)
  Chemicals                    (1,449,878)    (249,797)     992,824
  Farm and ranch               (1,284,712)    (139,819)     183,850
  Petroleum                      (150,923)     388,710       40,506
  Tires, batteries and
    automotive                   (858,243)      (6,050)     238,917
  Subsidiary's retail
    operations, net of
    eliminations               (5,495,660)  (1,341,332)    (561,194)
  Subsidiary's finance
    operations, net of
    eliminations                  (15,497)      85,817       38,244
  Subsidiary's  catfish 
    processing and wholesale
    sales, net of
    eliminations                 (922,584)  (6,316,888)  (2,374,939)
  Subsidiary's retail and
    wholesale petroleum
    operations, net of
    eliminations                 (155,775)
                              -----------  -----------  -----------
                             $(19,174,633) $ 5,750,036  $ 4,897,624
                              ===========  ===========  ===========
*After allocation of general and administrative expenses, interest 
  expense and other income (expense).

<PAGE>
                               October 31,   October 31,   October 31,
                                  1997          1996          1995 
                              -----------    -----------  -----------
PROPERTY AND EQUIPMENT (NET)
  Feed and animal health      $ 8,865,929    $ 9,426,682  $13,100,196
  Fertilizer                   12,865,116     11,278,166    6,294,171
  Seed                            522,703        476,914      530,319
  Chemicals                     1,993,661      2,047,747    1,930,296
  Farm and ranch                      167            199          628
  Tires, batteries 
    and automotive                 83,190         89,402      102,062
  Petroleum                       140,060         95,845       77,914
  Warehouse, transportation
    and general corporate      10,080,580      7,934,825    5,771,259
  Subsidiary's retail
    operations                  1,814,071      1,393,864    1,013,762
  Subsidiary's finance 
    operations                          0            360        1,151
  Subsidiary's catfish 
    processing wholesale
    sales                       2,795,661      2,912,675    4,654,797
  Subsidiary's retail and
    wholesale petroleum
    operations                  7,600,438
                              -----------    -----------  -----------
                              $46,761,576    $35,656,679  $33,476,555
                              ===========    ===========  ===========
<PAGE>
The seasonal nature of SF Services, Inc.'s core business 
requires the maintenance of significant inventory levels.  
The Fertilizer, Chemical and Seed Divisions have peak activity
in the spring planting season and again during the fall 
harvest and winter planting season. The geographical spread 
of trade areas from south to north makes these peaks fairly 
long in duration.  However, the Fertilizer, Chemical, and 
Seed Divisions do experience lower levels of inventory in the
late winter and late summer months.

SF Services, Inc.'s Feed Division is also subject to seasonal 
variance with its slow periods being experienced during the 
late spring and summer months when pasture is generally 
available.  This is mitigated somewhat by the dairy feed 
business which is more year round in nature and by catfish 
feed sales which occur during the late spring through early 
fall period.

These seasonal patterns generally call for higher inventory 
levels because products must be stored during the slow period 
for delivery during the peak season.  The requirements for 
competitive pricing has also made it necessary in a variety of 
products to purchase in truck, rail and barge lots which also 
adds to holding cost.  This is especially true in the Farm and
Ranch and TBA Divisions in the purchase of steel products, 
tires, and lubricants in truckload lots and Fertilizer and 
Seed Divisions in barge and rail quantities.

SF Services, Inc. is not dependent upon any one customer for a 
significant portion of its business.  However, because of the 
cooperative ownership, it is dependent upon its local member 
cooperatives with whom it did 55% of its business in the fiscal
year ending October 31, 1997. SF Services, Inc. is very price 
conscious because of the competitive environment in its trade 
area.  Competitors include other regional cooperatives such as 
MFA, Inc., Farmland Industries, and Gold Kist as well as major 
privately-owned agri-business systems such as Helena Chemical,
Terra International, and Conagra.

OPERATING DIVISIONS

Farm and Ranch

The Farm and Ranch Division makes available to the local 
member stores a wide range of products necessary for the 
timely schedule of crop and livestock production.  Such 
products include garden tools, field sprayers, combine parts,
disc blades, baler twine, fencing material, and a full line of
livestock handling equipment.  SF Services, Inc. attempts to 
maintain a relationship with major manufacturers of these 
products in order to guarantee a consistent supply of quality 
products for its local members.

<PAGE>

Petroleum

This division provides petroleum products, including gasoline 
and diesel fuel, to its member stores.  SF Services, Inc. 
believes that it has a good relationship with suppliers having 
strong domestic crude sources, and that this will help SF 
Services, Inc. maintain a competitive position in the 
agricultural petroleum market.

Tires, Batteries and Automotive

The TBA Division supplies tires, batteries and other 
automotive accessories such as antifreeze and lubricants to
the member stores.  Products supplied by the TBA Division 
are for use in both farm equipment and personal vehicles.  
The division operates truck routes out of North Little Rock,
Arkansas to place and service batteries.  Farm lubricants 
are sold in both small containers as well as bulk containers.

Chemical

The Chemical Division provides to the local member stores 
various herbicides, crop protection chemicals, crop soil 
surfactants and other adjuvants for use in the production of 
such crops as rice, cotton, soybeans, wheat and sugar cane.  
The products are also utilized in the development and 
protection of pasture land.  The products are delivered in a 
full range of packaging including the delivery of bulk 
reusable containers.  This division also markets a 
full line of small package lawn and garden products.

The Chemical Division also disseminates information to the
local member stores concerning proper use of crop protection
products.  This includes information concerning container 
disposal, proper storage and application, contingency planning
as well as compliance with state and federal environmental 
regulations.

Fertilizer

The Fertilizer Division provides a full range of fertilizer 
products, services and marketing programs.  The fertilizer 
products handled by the Fertilizer Division include all 
nitrogen products as well as phosphate, potash and sulfur.  
In addition to fertilizer storage, the division has the 
capability to receive and unload barge loads of fertilizer 
products.  The division also has mixing and blending 
capabilities at its North Little Rock, Arkansas facility.  

<PAGE>

Seed

The Seed Division is responsible for marketing and distributing 
agricultural seed to SF Services, Inc.'s membership.  The 
division operates three seed processing and cleaning plants 
located in Blytheville, North Little Rock and Forrest City,
Arkansas.  Through these plants, the division contracts for 
the production of both public and proprietary brands of seed 
which is cleaned, processed and bagged at the plants following 
harvest.

Feed

The Feed Division is a basic manufacturer of livestock, 
aquaculture, horse and pet feeds.  A wide variety of specialized 
formulas are provided to meet the various needs of the dairy, 
livestock, catfish, horse and pet industries.  The division 
operates six feed mills located in North Little Rock and 
Fayetteville, Arkansas; Shreveport, Louisiana; and Lumberton, 
Greenville and Macon, Mississippi.

Animal Health

The Animal Health Division is responsible for the marketing and 
distribution of a full line of livestock pharmaceuticals and 
related products for the care of livestock.  This division 
compliments the Feed Division by providing health related 
products to the same customers using livestock, aquaculture, 
horse and pet feeds.

Warehouse and Transportation

The Warehouse and Transportation Division operates the 
primary product distribution center located in North Little 
Rock, Arkansas.  This division is responsible for the 
warehousing and delivery of SF Services, Inc.'s products 
sold to its customers.  The division maintains a fleet of 
truck tractors and trailers for its delivery function.

Field Services

The Field Services Division includes the departments of
Field Sales and Communications.  The Field Sales department
promotes SF Services, Inc.'s programs and product lines
at the local store level.  This department emphasizes
expansion of the SF Services, Inc.'s market area and
prepares and presents information to educate local 
cooperatives in a variety of areas including products
and practices, cooperative development and member services. 
<PAGE>

The Communications department includes the functions of 
member and public relations, advertising coordination and 
program development.  The advertising coordination function
provides direct support to the member cooperatives when
requested.  This support includes ad slicks, mail stuffers,
and other advertising material.  The member and public 
relations function is responsible for the planning and 
coordination of all SF Services, Inc.'s meetings held for
the local cooperatives.  This includes the SF Services, 
Inc.'s annual meeting, the summer cooperative managers' 
meeting and the annual product shows.  This division also 
represents SF Services, Inc. and the local member 
cooperatives in the development, promotion and coordination
of state and regional cooperative activities.

Corporate Services; Information Services; Credit and 
Financial Analysis; and General Corporate

These divisions encompass a variety of functions which are 
primarily administrative in nature.  The functions include 
finance, accounting, credit, strategic planning, facility and 
property management, risk management, employee benefits 
administration, and management support.

The Corporate Services Division also administers the
SF Services, Inc.'s health plan and 401(k) retirement 
plan.  These are multi-employer plans in which many of the 
local member cooperatives participate.  The division's risk 
management group is responsible for placing and servicing 
liability and casualty insurance for SF Services, Inc. and 
for many of the local member cooperatives.

Technical Services

Technical Services is responsible for research.  
Research may be either exploratory or for the scientific 
procurement of information.  This department is responsible
for the development and administration of the Technical 
Assistance Joint Venture Program and Tech Service program.  
These programs encompass agronomic and economic recommendations
to be used by local cooperatives and membership and 
coordination of marketing planning for both regional and local
cooperative management.  In addition, the department 
administers and disseminates information regarding government
regulatory agencies relating to environmental matters, 
OSHA and the Department of Transportation as may be applied 
to the operations of SF Services, Inc. and member cooperatives.
Assistance is given to testing and remediation of 
environmental problems when required.

<PAGE>
Catfish Processing and Marketing

Catfish processing and marketing is located in Eudora, 
Arkansas.  Live catfish for processing are purchased 
from local farmer producers located in Arkansas, 
Mississippi and Louisiana.  Approximately 32.7 million 
pounds of live fish are purchased annually at a conversion
rate of about 45.3% yield resulting in approximately 14.9 
million pounds of finished product.  Sales consist of frozen
and fresh ice pack whole and fillet product with about 60% 
frozen and 40% fresh.  Primarily sales are made through 
brokers to restaurant and grocery concerns.

NEA Oil Company

NEA Oil Company is a wholesale and retail fuel operation which
was acquired during the first quarter of 1997.  This wholly-
owned subsidiary operates approximately 18 convenience stores 
and sells wholesale fuel to non-member customers, primarily in 
northeastern Arkansas.

ITEM  2:  PROPERTIES

The principal offices of SF Services, Inc. are located in 
North Little Rock, Arkansas.  SF Services, Inc.'s other 
facilities can be divided into two categories - distribution 
and processing.  The major distribution warehouse in North 
Little Rock, Arkansas is on a concrete tilt-up slab 
construction (280,000 square feet).  This centralized 
distribution warehouse serves SF Services Inc.'s Chemical; 
Farm Supply; TBA; Feed; Animal Health; and Seed divisions.  
The North Little Rock warehouse is supported by in-season 
product storage warehouses at Blytheville, Arkansas; Forrest 
City, Arkansas; Bunkie, Louisiana (a leased facility);
Evergreen, Louisiana; and Greenwood, Mississippi.
These metal warehouses are placed for quick product movement 
and could handle up to 50% more product in season.

The Fertilizer Division distributes dry fertilizer products 
from two warehouses in North Little Rock and one warehouse 
in Jonesboro, Arkansas, which have combined storage capacities 
of approximately 80,000 tons.  These wood and treated metal 
warehouses provide off-season and in-season storage.  In 
addition, approximately 50,000 tons of liquid fertilizer 
is distributed through equipment owned by the Company at six 
locations throughout Arkansas, Mississippi, and Louisiana, 
and approximately 55,000 tons through eleven leased facilities 
located in Arkansas, Louisiana, Mississippi, and Texas.  The 
fertilizer bagging facility in the North Little Rock, Arkansas 
warehouse can increase its production to supply additional 
demand.  All distribution warehouses are kept in good operating 
condition with an ongoing repair and maintenance program.

<PAGE>

During 1997 the Company completed construction on two 
fertilizer river terminals located in Memphis, Tennessee 
and Greenville, Mississippi.  The Memphis terminal has a 
storage capacity 60,000 tons and the Greenville terminal
has a storage capacity 43,000 tons.

SF Services, Inc. operates six feed processing plants located 
in North Little Rock, Arkansas (80,000 tons at 89% capacity); 
Fayetteville, Arkansas (70,000 tons at 32% capacity); 
Shreveport, Louisiana (70,000 tons at 43% capacity); Macon, 
Mississippi (110,000 tons at 96% capacity); Lumberton, 
Mississippi (100,000 tons at 100% capacity) and Greenville, 
Mississippi (90,000 tons at 84% capacity).  The facilities 
at Fayetteville, Arkansas; Shreveport, Louisiana; Lumberton, 
Mississippi; and Greenville, Mississippi are concrete mills, 
and the ones at North Little Rock, Arkansas; and Macon, 
Mississippi are of steel construction.  All mills are in good 
operating condition and are capable of running 100% of 
capacity without materially changing or adding additional 
equipment.

During the year ended October 31, 1997, the Seed Division 
operated three seed plants located in Blytheville (600,000
bushel capacity), North Little Rock (160,000 bushel capacity)
and Forrest City (800,000 bushel capacity), Arkansas. Each 
plant has up-to-date cleaning equipment with adequate bulk
and flat storage.  The seed plant at North Little Rock, 
Arkansas operated on an as needed basis with nominal 
production for the fiscal year ended October 31, 1997.  The 
production of the Blytheville and Forrest City plants ran at
approximately 60% of capacity.

SF Services, Inc. acquired a manually operated catfish 
processing plant in December, 1992 located in Eudora, 
Arkansas.  The facility is constructed of concrete foundation 
and flooring with a metal building having offices, processing 
area, ice pack cooler storage and freezer storage.  Following 
the acquisition, the plant was upgraded to an automated 
operation through the addition of automated processing 
equipment and the installation of an ammonia freezing system 
and expanded freezer storage. The operating capacity of the 
Eudora Facility is 40 million live weight pounds annually using 
the current freezing and storage facility. 

SF Services, Inc. has numerous other miscellaneous properties 
which are leased to member cooperatives, subsidiaries, and 
unrelated third parties, as well as several tracts of 
undeveloped land. Some of the properties are used in subsidiary 
operations, some are used by member cooperatives, and others 
were acquired through foreclosures.

<PAGE>
A listing of the locations of such properties by state and 
town follows:

Louisiana              Mississippi                 Arkansas
------------      --------------------------       ----------
Evergreen         Belden        New Albany         Wynne 
Eunice            Natchez       Raymond            Stuttgart
Winnsboro         Inverness     Collins            Augusta
Minden            Sumner        Vicksburg          El Dorado
Iowa              Wiggins            
Mer Rouge         
Moreauville       
Farmerville

All of the facilities and properties listed in the above table 
are held in fee by SF Services, Inc.

SF Services, Inc. believes that its facilities and properties 
are adequate for its current needs and for any anticipated 
future needs.

ITEM  3:   LEGAL PROCEEDINGS

None


ITEM  4:   SUBMISSION OF MATTERS TO A VOTE AND SECURITY 
           HOLDERS

No matters were submitted to a vote of security holders 
during the fourth quarter of the fiscal year covered by this 
report.

                            PART II

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

No market exists for trading of shares of SF Services, 
Inc.'s common stock.  SF Services, Inc.'s common stock 
cannot be transferred by the holders thereof without prior 
approval of the Board of Directors and then only to persons 
meeting the requirements to be a shareholder as specified in 
the bylaws.  No dividends may be paid on SF Services, Inc.'s 
common stock.

The number of shareholders of record for SF Services, Inc.'s 
common stock as of January 27, 1998 was 124.

<PAGE>
ITEM  6:   SELECTED FINANCIAL DATA

The following is a summary of selected historical financial 
data of SF Services, Inc. as of and for the years ended October 
31, 1997, 1996, 1995, 1994 and 1993.  The financial data has 
been derived from the "Consolidated Financial Statements of 
SF Services, Inc.," which have been audited by Baird, Kurtz & 
Dobson, independent certified public accountants.
The financial data should be read in conjunction with the 
"Consolidated Financial Statements and Footnotes" included 
elsewhere herein.  Particular attention is directed to 
Footnote "Acquisitions."

          Year Ended  Year Ended  Year Ended  Year Ended  Year Ended 
           October 31, October 31, October 31, October 31, October 31,
              1997        1996        1995        1994        1993 
           ----------  ----------  ----------  ----------  ----------
                            (Thousand Dollars)

NET SALES    $622,867    $590,480    $530,821    $439,171    $382,545

SAVINGS
 (LOSS)
 BEFORE
 EXTRA-
 ORDINARY
 ITEM        $(17,740)   $  2,072    $  2,703    $  3,954    $  2,263

AT PERIOD END:

TOTAL 
 ASSETS      $188,795    $192,122    $199,662    $159,527    $143,777

LONG-TERM
 NOTES
 PAYABLE,
 NET OF
 CURRENT
 MATURITIES  $ 33,031    $ 22,309    $ 19,843    $ 27,805    $ 30,986

TOTAL
 LONG-TERM
 OBLIGATIONS $ 33,200    $ 22,477    $ 20,072    $ 29,437    $ 32,221

<PAGE>
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 
124 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 
<PAGE>

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 1997 sales increased approximately 5.5% over the
previous year.  Increased sales were realized in Animal
Health, Seed, and Petroleum, while decreases in sales
were realized in Feed, Farm and Ranch, Fertilizer, 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 93.6% of sales in 1997 compared to 94.2%
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,
1997 increased approximately $5.1 million (15%).  Further
analysis of gross profit is included under the comparative
analysis between fiscal years which follows.

Net savings decreased $19.8 million.  This decrease was
due primarily to increased operating expenses and increased
interest costs.  Also, there was $17.9 million gain on sales
of stock in the prior year.

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.
<PAGE>

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.

Subsequent Events

During the first quarter of 1998, the Company sold seven 
convenience store locations through a sale/leaseback 
transaction.  No gain or loss resulted from this transaction.
Proceeds of $2.68 million were used to pay down term debt 
with CoBank.

Comparative Analysis of the Fiscal Year Ended October 31, 1997
to the Fiscal Year Ended October 31, 1996

Net sales for the fiscal year ended October 31, 1997
increased approximately 5.5% over the prior year.  This
increase was attributable to the following factors:

Farm and Ranch sales decreased approximately 16% due 
primarily to a $3 million decline in sales of steel products 
and a $2 million decline in sales of agronomy equipment.  Gross
margin declined to 7.6% of sales compared to 9.1% in the prior
year.  This decrease was primarily the result of the continuing
shift to more direct sales, which carry a lower gross profit 
percent.

Feed sales decreased approximately 10% due to a 30,000 ton
decline in beef feeds and a 20,000 ton decline in dairy feeds.
These declines were due to lower livestock numbers in the trade
area and a mild winter season.  Gross profit decreased $1.3 
million due to the decline in sales , unfavorable ingredient 
prices early in the year which were not passed on the 
customers, and higher per ton manufacturing costs.

Animal Health sales increased approximately 2% due to improved
market conditions and the producers focus on herd health.
Gross profit as a percent of sales decreased from approximately
10% in 1996 to 7% in 1997.  This decrease was due to 
competitive situations in the market.

TBA sales decreased 3.5% due to some loss of market share and
the compressed spring season caused by wet weather conditions.
Gross profit as a percent of sales decreased from 13.9% in 1996
to 12.5% in 1997.  This decrease was due to increased tire 
adjustment costs and lower commissions from vendors.

Petroleum sales increased approximately 48% due to increased
brokered sales to non-member customers.  Gross profit as a
percent of sales decreased to 1.5% from 2% in the previous
year.  This decrease in gross profit as a percent of sales
was due to the increase in non-member brokered sales, which
carry a lower percent gross profit.
<PAGE>

Fertilizer sales decreased approximately 8% due to lower per
unit sales prices.  Total tons sold increased approximately
11,000 tons (1%).  Gross profit as a percent of sales decreased
to approximately 4% from 5% in the previous year.  This 
decrease was due primarily to the decline in nitrogen 
fertilizer prices during the year.

Chemical sales decreased 8% due to the use of more transgenic
crops, which displace a portion of the agricultural chemical
sales.  Also, there were increased sales of generic products, 
which sell at lower per unit prices.  Gross profit as a percent
of sales increased to approximately 7% from 6% in the previous
year due to higher commission income.

Seed sales increased 15% due to increased sales of Roundup Ready
soybeans.  Gross profit as a percent of sales decreased 0.50%
due to the poor wheat crop as a result of unfavorable weather
conditions in the trade area.  

Processed catfish sales decreased approximately 13% due to
fewer sales of processed fish purchases from other processors
for resale ("outside fish").  Total units processed remained at
approximately the same level as experienced during the prior
year period.  Gross margin improved approximately $3.6 million
due to lower prices paid for live fish and improved processing
efficiency.

NEA Oil Company sales were approximately $41.7 million in 1997
compared to zero in the prior year.  Gross profit as a percent 
of sales was approximately 9.6% in 1997.

Operating expenses increased approximately 24% over the 
previous year.  This increase was due to the following
factors.

*    $1.4 million in increased expenses associated with the
     full year of operating costs at the Greenville and
     Memphis fertilizer terminals, including $400,000 of
     additional payroll and related expenses, $258,000 of
     additional depreciation, and $387,000 of additional 
     maintenance and repair costs.

*    $1 million in increased expenses associated with the
     new computer system, including $98,000 in additional
     telecommunication costs, $381,000 in costs for
     outsource services, $237,000 of additional lease cost,
     and $157,000 of additional depreciation.
<PAGE>

*    $719,000 in increased expenses associated with increased
     operations at the Blytheville and Forrest City seed
     plants, including $335,000 of additional payroll
     and related costs, $34,000 of additional maintenance and
     repairs, and $14,000 of additional utilities, and $63,000
     of additional storage costs.

*    $672,000 for additional severance pay and related 
     expenses associated with the closing of 10 company
     owned retail stores and work force reductions in other
     areas of the Company.

*    $877,000 for an asset value adjustment associated
     with the write-off of a computerized product guide.

*    $2.2 million in provision for bad debts, including
     approximately $870,000 associated with the closing
     of 10 company owned retail stores.


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 livestock 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.
<PAGE>

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.

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 a higher margin.

Chemical sales decreased approximately 11% due to changes in
cropping patterns in the trade area.  More corn acres were
planted, replacing cotton acreage, 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 additional retail 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.


Liquidity and Capital Resources

Cash provided by operating activities was approximately $5.8 
million in 1997 compared to approximately $28.5 million
used in the previous year.  This increase in cash provided
by operating activities is due to the reduction of 
inventory, primarily fertilizer.  Cash used in investing 
activities was approximately $10.2 million in 1997 compared 
to approximately $24.5 million provided by investing activities
in the prior year.  This increase in cash used by investing
activities was due to increased investment in fixed assets,
and there were $34 million of MCC stock sales in the prior
year.  Cash provided by financing activities was 
approximately $6 million in 1997 compared to approximately 
$6.6 million in the previous year.  This decrease was due to an
increase in bank debt offset by a reduction in patrons' deposits.

The allowance for doubtful accounts increased to $3,241,948 
from $950,000.  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.

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 $76.5
million was used at October 31, 1997.  The Company also 
has $29.5 million in term loans with CoBank with annual payments 
of $2.98 million.  During 1997, the Company obtained a formal 
waiver from CoBank with respect to covenant violations 
concerning capitalized leases, working capital, and 
capitalization ratios (see Note 7 to the Financial Statements).
The Company is currently making plans to improve operations 
and return to profitability.  These plans include closing or
selling unprofitable operations, creating joint ventures 
and distribution alliances with other supply companies, and 
increasing direct shipment sales, which will reduce warehouse 
inventory levels.  Management believes that as these plans are 
realized, the current line of credit will provide sufficient 
liquidity for current and future operating levels.

<PAGE>

Year 2000 Issue

During 1997 the Company completed the implementation of a new
computer system.  The software used by this new system 
can be upgraded to be year 2000 compliant, therefore, the 
Company does not expect any material expenses relating to its
primary operating software.  In addition, the Company is in 
the process of forming a task force to examine other areas in
and outside the Company which may be required to be updated 
to be year 2000 compliant, or which may otherwise affect the
Company.


Reorganization and Operating Outlook

Management recognizes that operating margins have been low 
across all business segments of the Company and operating
costs have been increasing significantly.  A new president and
CEO was employed by the board of directors in October 1996 and
plans for restructuring the Company operations have been 
developed for implementation beginning in January 1998.

The Company is restructuring the field sales force from one 
that was product specific to one that covers all products in
a geographic area.  This reduced number of field sales staff
will be supported by a centralized group of technical and 
product specialists.  The total number of sales and technical
personnel will be significantly reduced.

Accounting personnel which were assigned to operating divisions
have been centralized into a single corporate accounting function.
This change was made possible following implementation of the new
integrated computer system, and will result in a significant
reduction in clerical accounting positions.

Product specific operating divisions have been consolidated into
three major areas; livestock production, crop production, and 
general farm supplies, to more efficiently support the operating
business units.

The number of employees in the Technical Services division was 
reduced by closing unprofitable sites.

Transportation and warehouse functions were consolidated across 
the Company.  One-half of the truck fleet has been sold, 
maintenance shops are being closed, and the North Little Rock
warehouse will cease being used as a major distribution point
during March, 1998.  The Company has switched to third party
contract and brokered hauling at a substantially lower cost.
Additionally, three Arkansas chemical warehouses are being
consolidated into one location.
<PAGE>

While exiting the warehouse and distribution service, the 
Company is replacing the purchasing and storing of inventory
by making alliances with major suppliers of products in
Animal Health, Farm and Ranch, TBA, and small package seed
and chemical products.  The alliances with major suppliers 
provide for the products to be delivered directly from the
supplier's warehouse to our customer.  The Company takes the
order and invoices the customer, and then places the orders
with the supplier.  The Company is entering into a joint venture
arrangement with a major agricultural chemical distributor
to handle all of the agricultural chemical business.  The joint
venture would provide the Company an ownership interest that
would increase the earning potential for this business 
segment while relieving the Company of carrying inventory
and accounts receivable relating to agricultural chemicals.

In January 1998, the company closed ten (10) unprofitable retail
stores located in Mississippi, Arkansas, and Louisiana.  The 
stores had a history of losses and were requiring working 
capital and management attention needed in other areas of the 
Company.  Fourteen (14) retail locations remain following these
closings.

The results of these plans will eliminate more than 150 employees,
reduce annual operating expenses approximately $15 million, 
and reduce inventory and accounts receivable by approximately
$44 million.

<PAGE>
ITEM  8:   FINANCIAL STATEMENTS


                       SF Services, Inc.

                      Accountants' Report
                    and Financial Statements

                    October 31, 1997 and 1996
<PAGE>
                 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, 1997 and 1996,
and the related consolidated statements of operations, changes 
in members' equity and cash flows for each of the three years 
in the period ended October 31, 1997 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, 1997 and 1996, and 
the results of its operations and its cash flows for each of the 
three years in the period ended October 31, 1997, 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, 
presents 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 Statement of Financial 
Accounting Standards No. 121, "Accounting for the Impairment of 
Long-Lived Assets and for Long-Lived Assets to be Disposed Of." 

Baird, Kurtz, & Dobson


Little Rock, Arkansas
January 16, 1998
<PAGE>

                          SF SERVICES, INC.

                     CONSOLIDATED BALANCE SHEETS

                      OCTOBER 31, 1997 AND 1996

                                 ASSETS


                                       1997               1996        
CURRENT ASSETS
 Cash                             $  4,809,079        $  3,214,419
 Accounts receivable,
  less allowance for 
  doubtful accounts; 
  1997 - $3,241,948,
  1996 - $950,000                   43,456,434          40,268,809
 Accounts receivable - other         6,299,366           6,287,292
 Income taxes receivable             3,128,485
 Note receivable -
  current portion                    2,707,173           2,184,287
 Inventories                        62,903,882          84,215,934
 Patronage distributions 
  receivable                           197,319             168,147
 Deferred income taxes -
  current                                                  834,738
 Other                               1,329,435           1,253,263
                                   -----------         -----------
  Total Current Assets             124,831,173         138,426,889
                                   -----------         -----------

INVESTMENTS AND 
 LONG-TERM RECEIVABLES
 Notes receivable                    2,921,728           3,154,281
 Investments in other 
  cooperatives                      13,549,277          12,974,801
  Deferred income taxes -
   long term                                             1,145,844
                                   -----------         -----------
                                    16,471,005          17,274,926
                                   -----------         -----------
PROPERTY AND EQUIPMENT, At Cost
 Land and improvements               6,187,878           3,594,565
 Buildings                          26,208,590          19,236,628
 Machinery and equipment            27,109,855          20,438,434
 Automobiles and trucks              1,714,562           1,478,513
 Furniture and fixtures              5,182,286           4,636,169
 Leasehold interests                 2,106,038
 Construction in progress            3,161,855           8,269,079
                                   -----------         -----------
                                    71,671,064          57,653,388
 Less accumulated depreciation      24,909,488          21,996,709
                                   -----------         -----------
                                    46,761,576          35,656,679
                                   -----------         -----------
<PAGE>
OTHER ASSETS                           731,662             763,565
                                   -----------         -----------

                                  $188,795,416        $192,122,059
                                   ===========         ===========

                    LIABILITIES AND MEMBERS' EQUITY

                                       1997               1996
CURRENT LIABILITIES
 Note payable                    $ 76,518,530         $ 65,582,931
 Interest payable                   1,315,553              222,015
 Debentures                         1,223,000            1,342,009
 Current maturities of 
  long-term debt                    4,801,464            3,013,819
 Accounts payable                  28,130,453           29,094,690
 Patrons' deposits                  4,010,610           14,175,462
 Accrued expenses                   6,236,470            4,287,813
 Income taxes payable                                      739,683
                                  -----------          -----------
  Total Current Liabilities       122,236,080          118,458,422
                                  -----------          -----------

LONG-TERM DEBT                     33,031,344           22,309,220
                                  -----------          -----------

OTHER LIABILITIES                     168,934              168,200
                                  -----------          -----------

MEMBERS' EQUITY
 Capital stock
 Class "A" preferred                2,047,100            2,079,600
 Class "B" convertible preferred      676,400              676,400
 Common stock                         125,000              125,000
 Capital certificates                 102,709              157,399
 Retained earnings (deficit)       (5,674,214)             309,478
 Allocated equities                36,082,063           47,838,340
                                  -----------          -----------
                                   33,359,058           51,186,217
                                  -----------          -----------
                                 $188,795,416         $192,122,059
                                  ===========          ===========
<PAGE>
                          SF SERVICES, INC.

                  CONSOLIDATED STATEMENTS OF OPERATIONS

               YEARS ENDED OCTOBER 31, 1997, 1996 AND 1995


                                  1997            1996          1995   

NET SALES                     $622,867,444   $590,480,357   $530,820,976

COST OF GOODS SOLD             583,275,706    556,030,450    500,731,715
                               -----------    -----------    -----------
GROSS PROFIT                    39,591,738     34,449,907     30,089,261

OTHER OPERATING REVENUE          1,420,305      1,957,519        542,926
                               -----------    -----------    -----------
GROSS MARGIN AND OTHER
 OPERATING REVENUE              41,012,043     36,407,426     30,632,187
                             
OPERATING EXPENSES              54,655,649     44,958,673     30,131,789


                               -----------    -----------    -----------
INCOME (LOSS) FROM 
 OPERATIONS                    (13,643,606)    (8,551,247)       500,398
                               -----------    -----------    -----------
OTHER INCOME (EXPENSE)
 Interest income                 2,147,412      1,592,666      1,526,514
 Interest expense               (8,617,116)    (5,939,801)    (6,396,350)
 Dividend income                                  123,154        530,037
 Miscellaneous                     938,677        662,240        146,070
 Gain on sale of MCC stock                     17,863,024      8,590,955
                               -----------    -----------    -----------
                                (5,531,027)    14,301,283      4,397,226
                               -----------    -----------    -----------

SAVINGS (LOSS) BEFORE 
 INCOME TAXES                  (19,174,633)     5,750,036      4,897,624

PROVISION (CREDIT)
 FOR INCOME TAXES               (1,434,664)     3,677,875      2,194,361
                               -----------    -----------    -----------
NET SAVINGS (LOSS)            $(17,739,969)  $  2,072,161   $  2,703,263
                               ===========    ===========    ===========
NET SAVINGS (LOSS)
 APPLIED TO:
  Allocated equities
  Capital equity credits      $(11,756,277)  $              $ 
  Cash                                                         1,699,111
                               -----------    -----------    -----------
                               (11,756,277)                    1,699,111
  Retained earnings             (5,983,692)     2,072,161      1,004,152
                               -----------    -----------    -----------
                              $(17,739,969)  $  2,072,161   $  2,703,263
                               ===========    ===========    ===========
<PAGE>
                          SF SERVICES, INC.

       CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS' EQUITY

               YEARS ENDED OCTOBER 31, 1997, 1996 AND 1995


                                        Convertible
                          Preferred      Preferred        Preferred
                            Stock          Stock            Stock
                          Class "A"       Class "B"       Class "D"
                        -----------     -----------     -----------
BALANCE,
 OCTOBER 31, 1994      $  2,189,300    $    676,400    $  1,562,580

ISSUANCE OF STOCK

NET SAVINGS

CAPITAL EQUITY 
 CREDITS ISSUED AS 
 PATRONAGE
 DISTRIBUTIONS

MERGER WITH DELTA
 PURCHASING
 FEDERATION (AAL)

CAPITAL EQUITY
 CREDITS PAID



RETIREMENT OF
 COMMON STOCK

DIVIDENDS ON
 PREFERRED STOCK

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-
                        ===========     ===========     ===========
<PAGE>
ISSUANCE OF STOCK

NET SAVINGS

RETIREMENT OF
 COMMON STOCK

DIVIDENDS ON
 PREFERRED STOCK

RETIREMENT OF
 PREFERRED STOCK            (59,800)

RETIREMENT OF
 ALLOCATED EQUITIES

OFFSET AGAINST
 ACCOUNTS RECEIVABLE

CHANGE IN UNREALIZED
 GAIN ON SECURITIES
                        -----------     -----------     -----------
BALANCE,
 OCTOBER 31, 1996      $  2,079,600    $    676,400    $        -0-
                        ===========     ===========     ===========
NET SAVINGS(LOSS)

CAPITAL EQUITY
 CREDITS PAID

RETIREMENT OF
 PREFERRED STOCK            (32,500)
                        -----------     -----------     -----------
BALANCE,
 OCTOBER 31, 1997      $  2,047,100    $    676,400    $        -0-
                        ===========     ===========     ===========


<PAGE>
                                                          Retained
                           Common        Capital          Earnings
                            Stock      Certificates       (Deficit)
                        -----------     -----------     -----------
BALANCE,
 OCTOBER 31, 1994      $    123,000    $    157,399    $ (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)

DIVIDENDS ON
 PREFERRED STOCK                                          (134,021)

RETIREMENT OF
 PREFERRED STOCK 

RETIREMENT OF
 ALLOCATED EQUITIES

CHANGE IN UNREALIZED
 GAIN OR LOSSES
                        -----------     -----------     -----------
BALANCE,
 OCTOBER 31, 1995      $    127,000    $    157,399    $ (1,631,647)
                        ===========     ===========     ===========
ISSUANCE OF STOCK             2,000

NET SAVINGS                                               2,072,161

RETIREMENT OF
 COMMON STOCK                (4,000)

DIVIDENDS ON
 PREFERRED STOCK                                           (131,036)

RETIREMENT OF
 PREFERRED STOCK 
<PAGE>

RETIREMENT OF
 ALLOCATED EQUITIES

OFFSET AGAINST
 ACCOUNTS RECEIVABLE

CHANGE IN UNREALIZED
 GAIN ON SECURITIES
                        -----------     -----------     -----------
BALANCE,
 OCTOBER 31, 1996      $    125,000    $    157,399    $    309,478
                        ===========     ===========     ===========
NET SAVINGS(LOSS)                                        (5,983,692)

CAPITAL EQUITY
 CREDITS PAID                               (54,690)

RETIREMENT OF
 PREFERRED STOCK
                        -----------     -----------     -----------
BALANCE,
 OCTOBER 31, 1997      $    125,000    $    102,709    $ (5,674,214)
                        ===========     ===========     ===========

<PAGE>
                                        Unrealized
                                         Gain on
                                        Securities
                        Allocated       Reported at
                        Equities        Fair Value         Total
                        -----------     -----------     -----------

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)

DIVIDENDS ON
 PREFERRED STOCK                                           (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

RETIREMENT OF
 COMMON STOCK                                                (4,000)

DIVIDENDS ON
 PREFERRED STOCK                                           (131,036)
<PAGE>

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 ON SECURITIES                     (11,055,632)    (11,055,632)
                        -----------     -----------     -----------
BALANCE,
 OCTOBER 31, 1996      $ 47,838,340    $        -0-    $ 51,186,217
                        ===========     ===========     ===========
NET SAVINGS(LOSS)       (11,756,277)                    (17,739,969)

CAPITAL EQUITY
 CREDITS PAID                                               (54,690)

RETIREMENT OF
 PREFERRED STOCK                                            (32,500)
                        -----------     -----------     -----------
BALANCE,
 OCTOBER 31, 1997      $ 36,082,063    $        -0-    $ 33,359,058
                        ===========     ===========     ===========
<PAGE>
                               SF SERVICES, INC.

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                   YEARS ENDED OCTOBER 31, 1997, 1996 AND 1995



                                  1997            1996          1995

CASH FLOWS FROM 
 OPERATING ACTIVITIES
  Net savings (loss)       $ (17,739,969)  $  2,072,161    $  2,703,263
  Items not requiring
   (providing) cash:
   Depreciation and
    amortization               3,571,355      2,239,498       2,951,534
   Non-cash portion of
    patronage dividends
    received from 
    cooperatives                (801,549)    (1,614,598)     (1,284,542)
   (Gain) loss on sale 
    of fixed assets             (251,413)       (67,348)       (202,182)
   Gain on sale of 
    investment                              (17,863,024)     (8,590,955)
   Deferred income taxes       1,980,582     (3,392,985)      1,412,403
   Writedown of fixed assets
    for impairment               877,040      5,497,348

  Changes in operating 
   assets and liabilities, 
   net of effects from 
   acquisition of Delta 
   Purchasing Federation
   (AAL) assets:
    Accounts payable             916,188      1,833,597      (2,580,816)
    Accrued expenses           1,948,657      1,548,535         104,653
    Accounts and notes
     receivable from
     customers                (2,459,947)     2,384,932      (7,840,391)
    Income taxes receivable   (3,128,485)

    Inventories               21,972,529    (16,938,041)    (11,918,494)
    Other current assets         409,798        570,208       1,329,734
    Accounts receivable -
     other                      (798,961)    (3,730,846)       (903,365)
    Due from broker                                             131,868
    Patronage distributions
     receivable                  (29,172)        (49,740)        (11,349)
    Income taxes payable        (739,683)        (42,275)        749,636
    Other assets                  31,903        (928,551)        828,656
    Other liabilities                734         (61,206)       (144,804)
                             -----------     -----------     -----------
     Net cash provided by 
     (used in) operating 
     activities                5,759,607     (28,542,335)    (23,265,151)
                             -----------     -----------     -----------
<PAGE>
CASH FLOWS FROM
 INVESTING ACTIVITIES
  Purchase of property
   and equipment             (11,242,951)    (10,449,820)    (13,465,151)
  Proceeds from sale of
   property and equipment        805,955         600,198       2,578,737
  Net cash received in 
   the acquisition of
   Delta Purchasing 
   Federation (AAL) assets                                       977,428
  Net cash received in
   the acquisition 
   of Matthews of 
   Monette, Inc. assets           13,055
  Proceeds from investment 
   redemption and sale           227,073      34,329,962      18,455,358
                             -----------     -----------     -----------
  Net cash provided by

   (used in) investing
   activities                (10,196,868)     24,480,340       8,546,372
                             -----------     -----------     -----------
CASH FLOWS FROM
 FINANCING ACTIVITIES
  Issuance of common stock  $                $     2,000    $      7,000
  Dividends on 
   preferred stock                              (131,036)       (134,021)
  Patronage dividends 
   paid and retirement
   of preferred stock            (32,500)        (59,800)     (4,428,170)
  Retirement of capital
   certificates                  (54,690)
  Repurchase of common
   stock                                          (4,000)         (3,000)
  Retirement of 
   allocated equities                           (418,836)
  Proceeds from borrowings   183,886,118     191,317,056     197,981,565
  Repayment of borrowings   (167,602,155)   (188,547,986)   (176,528,060)
  Net change in deposits     (10,164,852)      4,473,637      (2,714,022)
                             -----------     -----------     -----------
   Net cash provided by
    financing activities       6,031,921       6,631,035      14,181,292
                             -----------     -----------     -----------
NET INCREASE (DECREASE) IN
 CASH AND CASH 
 EQUIVALENTS                   1,594,660      2,569,040        (537,487)

CASH AND CASH EQUIVALENTS,
 BEGINNING OF YEAR             3,214,419        645,379       1,182,866
                             -----------    -----------     -----------
CASH AND CASH EQUIVALENTS,
 END OF YEAR                $  4,809,079   $  3,214,419    $    645,379
                             ===========    ===========     ===========
<PAGE>

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 and another subsidiary operates convenience 
stores and sells petroleum on a wholesale basis.

      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.



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., Southern 
Farm Fish Processors, Inc. and Northeast Arkansas Oil Co., LLC.  
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 market or cost, weighted average method.  To reduce 
price risk caused by market fluctuations, the Cooperative
follows a policy of hedging a portion of its production 
requirements and sales commitments using readily marketable
exchange traded futures contracts and forward contracts (see 
Note 18).  The changes in market value of such contracts have
a high correlation to the price changes of the hedged 
commodity.  Losses, if any, on unhedged sales commitments are
recognized based on current market prices of ingredients.  
Gains or losses arising from open and closed hedging 
transactions are included in inventories as a cost of 
the commodities and reflected in the statements of earnings 
when the product is sold.

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

<PAGE>
A summary of inventories follows:

                                       1997            1996

Purchased items held for resale    $ 57,222,122    $ 78,816,793
Manufactured feed and
 feed ingredients                     3,554,592       3,174,337
Processed catfish                     2,127,168       2,224,804
                                    -----------     -----------
                                   $ 62,903,882    $ 84,215,934
                                    ===========     ===========


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


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) was:


                                    1997        1996        1995

Interest costs capitalized     $   217,329   $   479,943   $
Interest costs charged 
 to expense                      8,617,116     5,939,801     6,396,350
                               -----------   -----------   -----------
Total interest incurred        $ 8,834,445   $ 6,419,744   $ 6,396,350
                               ===========   ===========   ===========
<PAGE>
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. 


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

Provision for doubtful accounts:

                                    1997                1996        1995

                               $  3,653,000      $  1,362,000    $   127,397
<PAGE>
Accounts receivable - other:

                                     1997               1996

Vendor rebates                  $  5,068,599     $  2,322,396
Other                              1,230,767        1,855,896
Proceeds from new leases                            2,109,000
                                 -----------      -----------
                                $  6,299,366     $  6,287,292
                                 ===========      ===========
<PAGE>

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.  The Cooperative sold its converted common stock during 
the years ended October 31 as follows:

                                    1996              1995

Shares sold                       1,525,720           875,000
                                ===========       ===========

Proceeds                       $ 34,027,573      $ 17,812,493
                                ===========       ===========

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

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


NOTE 4:  ACCRUED EXPENSES

      Accrued expenses consisted of the following:


                                    1997               1996

Accrued taxes payable, 
 other than income taxes       $  1,598,427      $  1,368,468
Accrued leave                     1,507,369         1,365,115
Accrued payroll                   1,996,299           757,222
Miscellaneous accruals            1,134,375           797,008
                                -----------       -----------
                               $  6,236,470      $  4,287,813
                                ===========       ===========
<PAGE>
NOTE 5:  INVESTMENTS IN OTHER COOPERATIVES 

      The Cooperative invests in other cooperatives with 
which it does business.  Investments in those other cooperatives 
were as follows:

                                    1997               1996

CoBank                        $  7,890,414      $  7,705,494

Farmland Industries, Inc.        2,933,225         2,491,005
Universal Cooperatives, Inc.     2,030,883         2,023,627
AG Processing                      552,111           491,805
Other                              142,644           262,870
                               -----------       -----------
                              $ 13,549,277      $ 12,974,801
                               ===========       ===========

      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.


      The amount of allocated equities previously allocated 
to SF Services, Inc., to be retired during 1997 and 1996 has 
been included in patronage distributions receivable at October 31,
1997 and 1996.

      Patronage distributions received for the years ending 
October 31, 1997, 1996 and 1995 were as follows:

                             1997           1996            1995
Amount credited to
 cost of goods sold      $  1,566,432   $  1,482,570   $    341,061
Amount credited to
 interest expense             740,077        677,675        707,538
                          -----------    -----------    -----------
                         $  2,306,509   $  2,160,245   $  1,048,599
                          ===========    ===========    ===========
<PAGE>
NOTE  6:  NOTE PAYABLE


                             1997           1996            1995
Note payable
 CoBank                 $ 76,518,530   $ 65,582,931   $ 65,432,437
                         ===========    ===========    ===========
Average interest
 rate during the
 period*                        7.95%          7.19%          7.64%
                         ===========    ===========    ===========
Average during
  the period            $ 72,016,720   $ 57,366,013   $ 48,570,883
                         ===========    ===========    ===========
Average interest
 rate during the
 period*                        7.06%          6.87%          7.96%
                         ===========    ===========    ===========

Maximum amount of
 notes - payable at
 any month-end
 during the period      $ 83,322,971   $ 71,169,873   $ 65,432,347
                         ===========    ===========    ===========

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

      The Cooperative had a committed line-of-credit with 
CoBank totalling $80,000,000 for the years ended October 31, 
1997 and 1996.  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 and expires May 1, 1998.


<PAGE>
NOTE 7:  LONG-TERM DEBT

                                          1997             1996

Notes payable - CoBank (A)            $ 25,715,500    $ 22,182,750
Notes payable - CoBank (B)                 405,000         495,000
Notes payable - CoBank (C)               3,387,867 
Notes payable - Municipal (D)              500,000         500,000
Notes payable - Finance
 Corporation (E)                           100,000         100,000
Notes payable - 
 Industrial Revenue Bonds (F)            1,180,000       1,375,000
Notes payable - 
 certificates of  indebtedness (G)         210,314         210,414
Notes payable - Farmers Supply (H)         404,805         449,805
Notes payable - Individual (I)           2,250,000
Capital lease obligations (J)            3,405,643
Notes payable - other                      273,679          10,070
                                       -----------     -----------
                                        37,832,808      25,323,039
Less current maturities                  4,801,464       3,013,819
                                       -----------     -----------
                                      $ 33,031,344    $ 22,309,220
                                       ===========     ===========

      Aggregate annual maturities of long-term debt and payments 
on capital lease obligations at October 31, 1997 are:

                                       Long-term
                                          Debt         Capital Lease
                                    (excl. Leases)      Obligations 

     1998                            $  4,462,455    $    549,310
     1999                               3,655,655         578,363
     2000                               3,671,852         600,973
     2001                               3,688,110         593,441
     2002                               3,659,435         416,829
     Thereafter                        15,289,658       2,619,193
                                      -----------     -----------
                                     $ 34,427,165       5,358,109
                                      ===========
Less amount representing interest                       1,952,466
                                                      -----------
Present value of future minimum 
 lease payments                                         3,405,643

Less current maturities                                   339,009
                                                      -----------
Noncurrent portion                                   $  3,066,634
                                                      ===========

<PAGE>
(A)  Due 1997 through 2004, with annual installments of $2,572,500
     plus interest at fluctuating rates based on the cost of 
     money to CoBank (average rate of 8.04% at October 31, 1997);
     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 working
     capital, capitalization, and capital lease borrowings 
     was obtained for 1997, and a formal waiver was 
     obtained during 1996 on working capital and the 
     current ratio.  The agreement requires the
     Cooperative to invest in stock of CoBank in amounts
     determined by the bank.

(B)  Due 1997 through 2002 at $7,500 monthly plus interest at 
     8.25%; cross-collateralized with (A) above.

(C)  Due 1997 through 2004; with annual installments varying 
     from $317,362 to $704,734; interest at 8.50%; cross-
     collateralized with (A) above.

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

(E)  Due at various times through 2002; interest at 6%;
     maturities of principal are deferred until Southern
     Farm Processors, Inc., obtains various equity and working
     capital levels; secured by property and equipment.

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

(G)  Due 1997 with annual installments of principal plus 
     interest at interest rates of 8% and 10%; unsecured.

(H)  Due in annual installments of $44,980 including interest,
     uncollateralized.
 
(I)  Due 2001; interest at 7.5%; secured by property.

(J)  Capital leases include leases covering various equipment
     and buildings for 3 to 12 years expiring from 2000 
     through 2009.
<PAGE>

Property and equipment include the following property under 
capital leases:

                                                        1997

Land and buildings                                 $  2,056,025
Equipment                                             1,601,745
                                                    -----------
                                                      3,657,770
Less accumulated depreciation                      $    135,482
                                                    -----------
                                                   $  3,522,288
                                                    ===========

NOTE 8:  DEBENTURES

      The outstanding debentures mature in 1998.  Interest rates 
vary from 7% to 12%.

                                  1997                   1996  

Debentures                    $  1,223,000         $  1,348,409
Less current maturities          1,223,000            1,342,009
                               -----------          -----------
Included in other liabilities $        -0-         $      6,400
                               -----------          -----------

NOTE 9:  INCOME TAXES

      The provision for income taxes includes these components:

                                  1997            1996            1995

Taxes currently
 payable (receivable)        $ (3,128,485)   $  7,070,860   $    781,958
Deferred income taxes           1,693,821      (3,392,985)     1,412,403
                              -----------     -----------    -----------
                             $ (1,434,664)   $  3,677,875   $  2,194,361
<PAGE>
      The tax effects of temporary differences related to deferred
taxes shown on the balance sheets were:

                                          1997             1996

Deferred tax assets:
  Allowance for doubtful accounts     $    616,551     $    403,515
  Inventory capitalization                 547,869          372,178
  Accrued expenses not 
   deductible until paid                   286,044          295,722
  Writedown of fixed assets              1,991,026        1,971,917
  Other                                     36,504   
                                       -----------      -----------
                                         3,477,994        3,043,332
                                       -----------      -----------
Deferred tax liabilities
  Accumulated depreciation                 735,127          370,150
                                       -----------      -----------

Net deferred tax asset (liability)
 before valuation allowance              2,742,867        2,673,182
                                       -----------      -----------
Valuation allowance:
Beginning balance                         (692,600)
(Increase) during the year              (2,050,267)        (692,600)
                                       -----------      -----------
Ending balance                          (2,742,867)        (692,600)
                                       -----------      -----------
Net deferred tax asset                $        -0-     $  1,980,582
                                       ===========      ===========
<PAGE>


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

                                           1997            1996

Deferred tax asset - current          $                $    834,738
Deferred tax asset - long term                            1,145,844
                                       -----------      -----------
                                      $        -0-     $  1,980,582
                                       ===========      ===========
<PAGE>
      A reconciliation of income tax expense at the statutory 
rate to income tax expense at the Cooperative's effective 
rate is shown below:

                                   1997            1996          1995

Expected provision (34%)     $ (6,539,903)   $  1,955,012   $  1,665,192
Tax effect of net 
 savings (loss) applied 
 to allocated equities          3,304,594         355,086       (577,698)
Excess of benefits of
 allocated equity over 
 taxable income                                                  446,535
State income taxes               (249,622)        675,177        660,332
Change in deferred tax
 asset valuation allowance      2,050,267         692,600
                              -----------     -----------    -----------
                             $ (1,434,664)   $  3,677,875   $  2,194,361
                              ===========     ===========    ===========

      As of October 31, 1997, the Cooperative had approximately 
$200,000 of alternative minimum tax credits available to offset 
future patronage based federal income taxes.

      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 has a combination salary deferral/profit-
sharing defined contribution plan.  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 
participants' compensation.  The matching percentage and additional 
profit-sharing contributions are determined on a discretionary basis 
by the Board of Directors.  Participant interests in discretionary 
contributions are vested over a five-year period.  The Cooperative 
contributed $484,282, and $683,158 to the plan during the years 
ended October 31, 1997 and 1996, respectively.
<PAGE>

      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, 1997 and 1996, respectively.


NOTE 11:  RELATED PARTY TRANSACTIONS

      The Cooperative owned 7% of the outstanding stock of 
Mississippi Chemical Corporation (MCC) at October 31, 1995 and 
the President of the Cooperative during that year was a director 
of MCC.  Following are the material transactions with MCC during 
the year ended October 31, 1995:


                                              1995

Fertilizer purchases                     $ 32,587,243


      MCC paid the Cooperative dividends of $123,154 in 1996 
and $530,037 during 1995.  


NOTE 12:  LEASES

      Noncancellable operating leases for feed mill buildings 
and equipment, other machinery and equipment and trucks expire in 
various years through 2013.  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, 1997, were:

           1998                                  $  4,292,019
           1999                                     3,643,866
           2000                                     2,326,373
           2001                                     1,078,065
           2002                                       523,804
       Later years                                  3,890,692
                                                  -----------
       Future minimum lease payments             $ 15,754,819
                                                  ===========
<PAGE>
      Rental expense for all operating leases amounted to 
the following:

                              1997           1996            1995

                         $  4,437,471    $  4,574,356    $  4,208,848
                          ===========     ===========     ===========

NOTE 13:  ACQUISITION 

      On December 31, 1996, the Cooperative acquired, through a 
newly-formed wholly-owned subsidiary, Northeast Arkansas Oil 
Co., LLC, substantially all the assets of Matthews of Monette, Inc.,
a company which operated convenience stores and sold wholesale 
petroleum.  The acquisition was financed by assuming liabilities 
of the acquiree.  The acquisition has been accounted for as a 
purchase by recording the assets and liabilities acquired at
their estimated fair values at the acquisition date.  The operation
of the Cooperative includes the operations of the acquiree from
the acquisition date.  Unaudited pro-forma operations, assuming 
the purchase was made at the beginning of each year, are as 
follows:

                          1997             1996           1995

Net Sales           $629,630,927     $634,596,337     $564,693,283
Net Savings(Loss)    (17,845,172)       1,556,926        3,490,354


A summary of the assets acquired is presented below.  


Land                                  $    372,508
Buildings and Improvements               4,346,678

Equipment                                1,086,670
Leasehold Interests                      1,901,231
Inventory                                  660,477
Accounts Receivable                      1,018,011
Cash on hand                                13,055
                                       -----------
                                      $  9,398,630
                                       ===========

<PAGE>
      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
                                       ===========

      The total consideration delivered to DPF shareholders was 
equity interest of $4,998,888, 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. 


NOTE 14:  CAPITAL STOCK

                                        Liquidation
                   Shares                   and
                 Authorized              Redemption    Issued and
Class of Stock     Shares    Par Value  Preference    Outstanding
--------------   ----------  ---------  -----------   -----------
Class "A"
 preferred (1)     150,000   $       1  $       100        20,471

Class "B" 
 convertible 
 preferred (2)      15,000              $       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.
<PAGE>

(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 capital 
certificates.

      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 three industries (1) 
distribution of seed, feed, fertilizer, chemicals, petroleum, 
lubricants, tires, batteries, accessories, farm supplies and 
related services; (2) catfish processing and sales and (3) 
convenience store operations and wholesale petroleum sales.  
Sales between segments are not material.  Net sales, operating 
income, identifiable assets, capital expenditures, and 
depreciation are as follows:

<PAGE>
                                                   Convenience
                                                   Stores and
                       Distribution  Catfish       Wholesale
October 31, 1997       Activities    Processing    Petroleum       Total
----------------       ------------  ----------    -----------   -----------
Net sales             $549,434,322  $ 31,752,577  $ 41,680,545  $622,867,444

Operating income
 (loss)               $(13,335,190) $   (561,992) $    253,576  $(13,643,606)

Identifiable assets   $167,357,182  $  8,955,373  $ 12,482,861  $188,795,416

Capital expenditures  $ 10,725,269  $    281,045  $    236,637  $ 11,242,951

Depreciation          $  2,783,054  $    345,953  $    442,348  $  3,571,355


                       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

                       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


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

<PAGE>
NOTE 17:  ADDITIONAL CASH FLOW INFORMATION

                                  1997           1996           1995

Interest paid (net of 
 patronage dividends and
 interest capitalized)       $  8,025,028   $  6,307,994   $  6,629,921

Income taxes paid
 (received)                  $   (131,219)  $  7,431,000   $     32,322


Noncash investing transactions:

                                                                1997    
Purchase of Assets of Matthews of Monette, Inc.
  Fair value of assets                                     $  9,385,575
  Liabilities assumed                                        (9,398,630)
                                                            -----------
Cash received                                              $    (13,055)
                                                            ===========
Capital leases entered into                                $  3,657,770

Fixed assets transferred to assets held for sale           $    485,970


                                                               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


NOTE 18:  COMMITMENTS

Purchase Agreements

      At October 31, 1997, SF Services, Inc. had commitments 
(open contracts) to purchase 127,760 tons of feed ingredients 
for $20,046,637 and to sell 148,444 tons of feed for $33,077,514.

<PAGE>
      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, 1997, the Company had commitments to sell cattle feed 
of 38,625 tons for $6,131,083 and catfish feed of 109,519 tons for 
$26,946,431.  The Cooperative also had commitments to purchase cattle 
feed ingredients of 34,025 tons at a cost of $3,255,347 and catfish 
feed ingredients of 93,735 tons at a cost of $16,791,290.


Loan Guarantees

      The Cooperative has guaranteed $335,000 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 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, as a result of adopting the new standard, 
recognized expenses of $4,981,000 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 $516,000, to reduce the 
carrying value of various abandoned properties.  During the 
fourth quarter of fiscal 1997, management recognized $877,000 
of expense related to the abandonment of a computerized product 
guide.  The amount of the impairments were estimated based on 
appraisals performed during the year and expected future cash 
flows.  The amount of recognized expense is included in operating 
expenses in the consolidated statements of operations.


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 cash patronage refunds and 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.

Notes Receivable

      Carrying amount is a reasonable estimate of fair value.
<PAGE>
Long-Term Debt

      Fair value is estimated based on the CoBank National 
Variable Rate at October 31, 1997.

                                    October 31, 1997

                                Carrying        Fair
                                Amount          Value
                                
CoBank - term                  $ 29,508,367   $ 29,510,000
CoBank - seasonal                76,518,530     76,503,500
Other                             8,324,441      8,304,367
                                -----------    -----------
                               $114,351,338   $114,317,867
                                ===========    ===========

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 obtains most of its financing from CoBank.
The Cooperative's line of credit of $80,000,000, which expires
May 1, 1998, has not yet been renewed.


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 Cooperative, 
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 position 
and results of operations; however, circumstances may change 
which would require reassessment and revisions of the estimates 
of the risk of future litigation losses. 
<PAGE>

NOTE 22:  PATRONS' DEPOSITS

      Patrons' deposits are monies on deposit from member 
cooperatives.  The cooperative pays interest on these deposits 
at CoBank's seasonal rate.


NOTE 23:  MANAGEMENT PLANS

      
Management's plan to improve operations and return to profitability
include:  1)selling or closing unprofitable subsidiary operations
(see note 24); 2)creating joint ventures with other farm supply
companies; 3)increasing direct shipment sales, thereby reducing
inventory handling costs and 4)reducing administrative costs (see
note 24 ) including a reduction in workforce.  


NOTE 24:  UNUSUAL ITEMS 

      The Cooperative decided during the year ended October 31,
1997, to close ten of its retail operations during the year 
ended October 31, 1998.  The Cooperative estimates that it will 
incur costs of $1,900,000 to close these stores including bad 
debts and reduced inventory realization.  Additionally, 
management intends to reduce the workforce.  Severance pay and 
related expenses are estimated to be approximately $672,000, 
associated with this work force reduction.  These estimated 
expenses are included in operating expenses in the 1997 statement 
of operations and were recorded in the fourth quarter.  In
addition, during the fourth quarter the Cooperative recorded
approximately $1,500,000 of expense to reduce inventories to
net realizable value.  It is reasonable possible that the
actual costs of implementing these plans could exceed the
estimates reflected in these financial statements.

NOTE 25:  SUBSEQUENT EVENT

      On November 6, 1997, the Cooperative sold seven convenience 
store locations through a sale/leaseback transaction.  No gain 
or loss resulted from this transaction.  

<PAGE>
                           PART III


ITEM 10:  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors

The following table sets forth certain information concerning the 
current directors of SF Services, Inc.:

        Name         Age    Principal Occupation    Director Since

 Johnny H. Wilson     62           Farming                1974
 Doyle Yarbrough      66           Farming                1976
 Daniel Viator        53   Farming, Agriculture           1987
                          Consultant, Real Estate
                                  Developer
 Robert Little        46        Co-op Manager             1995
 Gene Bruick          67        Co-op Manager             1992
 Jerry Conerly        64         Dairy Farmer             1992
 John M. Evans        55           Farming                1992
 Jim Gipson           62           Farming                1992
 Steven Henderson     41           Farming                1992
 John C. Jay, Jr.     59     Farming, City Mayor          1992
 W. B. Madden, Jr.    65        Co-op Manager             1992
 Thomas H. Gist, Jr.  63           Farming                1994
 W. S. Patrick        57           Farming                1992
 Michael Simon        55           Farming                1992
 Charlie Starks, Jr.  64           Farming                1992
 Joe Wilder           56           Farming                1992
 Frederick Branch     50           Farming                1995
 Mike Sturdivant      46           Farming                1995
 Floyd Trammel        43        Co-op Manager             1996
 Travis Burchfield    30           Farming                1997

All persons have been engaged in the occupation identified 
in the foregoing table for at least five years.


Executive Officers

<PAGE>

The following table sets forth certain information concerning 
the current executive officers of SF Services, Inc.:

                                  Principal              Office 
     Name              Age        Occupation           Held Since

Michael P. Sadler (1)   47          President            10/96
John A. Gaston          59       Vice-President           3/91
Lehi German (2)         45       Vice-President           4/97
Larry M. Fortner        43       Vice-President           1/87
Joe LaCour (3)          54       Vice-President          10/97
Joe May    (4)          47       Vice-President          10/97
Wayne McDaniel (5)      50       Vice-President          10/97
William C. Mosley       44       Vice-President           3/92


(1) Mr. Sadler previously served as vice president for
    Farmland Industries for seven years.

(2) Mr. German previously served as Director of Petroleum 
    Operations and Planning for Farmland Industries for ten years.

(3) Mr. LaCour joined the Company in 1973, serving in various
    capacities.  Most recently Mr. LaCour served as a Marketing
    Specialist for various product lines.

(4) Mr. May joined the Company in 1993 serving as Regional Sales
    Manager.

(5) Mr. McDaniel joined the Company in 1987 serving as Regional 
    Sales Manager.

ITEM 11:   EXECUTIVE COMPENSATION

Summary of Cash and Other Compensation

The following table sets forth, for the fiscal years 
indicated, the compensation provided by SF Services, Inc. to 
the Chief Executive Officer and each of the executive officers 
of SF Services, Inc. whose compensation exceeded $100,000 for 
the most recent fiscal year.
<PAGE>
                     SUMMARY COMPENSATION TABLE     


                                      Annual Compensation  
                             -------------------------------------
  (a)            (b)            (c)            (d)          (e)
                                                           Other
  Name                                                     Annual
  and                                                      Compen-
 Principal                                                 sation
 Position        Year         Salary ($)      Bonus ($)       ($)

Michael P.       1997        $419,880         $175,000      $ ---
 Sadler          1996        $ 12,531         $    ---      $ ---
 (CEO)

John             1997        $116,408         $    ---      $ ---
 Gaston          1996        $110,281         $    ---      $ ---
 (Vice-          1995        $106,358         $    ---      $ ---
 President)

Lehi             1997        $111,538          $15,395      $ ---
 German          
 (Vice-
 President)



                         Long-Term Compensation
                      ---------------------------------
                              Awards           Payouts
                      ---------------------    --------
    (a)        (b)      (f)         (g)          (h)         (i)
                                       
  Name                Restricted  Securities               All Other
  and                    Stock    Underlying    LTIP       Compen-
Principal               Awards    Options/      Payouts    sation
Position       Year       ($)     SARs(#)        ($)          ($)

Michael P.     1997     $ ---     $ ---         $ ---      $ 85,994  (1)
 Sadler        1996     $ ---     $ ---         $ ---      $    ---
 (CEO)

John           1997     $ ---     $ ---         $ ---      $  4,568  (2)
 Gaston        1996     $ ---     $ ---         $ ---      $  4,411
 (Vice-        1995     $ ---     $ ---         $ ---      $  5,070
 President)

Lehi           1997    $ ---    $ ---           $ ---      $126,360  (3)
 German
 (Vice-
 President)

<PAGE>
(1)Amount represents contribution to SF Services, Inc.'s 401(k)
   and deferred compensation plan of $5,012 on behalf of the 
   named individual, 47,260 for relocation expenses, and
   $33,722 premium paid on a life insurance policy of named 
   individual.

(2)Amount represents contributions to SF Services, Inc's 
   401(k) and deferred compensation plan on behalf of 
   named individual.

(3)Amount represents $125,000 for the equity in the employee's
   home which was purchased by the Company as per the employee's
   employment agreement, and $1,360 premium paid on a life
   insurance policy of named individual.


Director Compensation

The members of the Board receive per diem compensation of $250 
for each meeting for their services as members of the Board, 
and reimbursement to cover expenses while engaged in the 
business of SF Services, Inc.  The Chairman receives one (1) 
additional per diem compensation of $250 for each meeting for 
his services as Chairman.  Except for the additional 
compensation paid the Chairman, no director has any contract, 
arrangement, or agreement not accorded other directors on 
equal terms.  The amount of the per diem compensation is fixed 
by the Board.


Employment Contracts and Termination of Employment and 
Change-in-Control Arrangements

The Company has entered into an agreement effective September
26, 1996, with Michael P. Sadler to serve as President and
Chief Executive Officer.  In addition to normal compensation,
the agreement provides for a guaranteed bonus of $175,000
the first year, and annual bonuses of up to $300,000 per year
thereafter.  The agreement also provides for an employer 
furnished automobile, reimbursed business related expenses, 
and life insurance benefits payable to Mr. Sadler's 
designated beneficiary.  This agreement continues through
October 31, 2001; however, the Company may, under certain
circumstances, terminate Mr. Sadler's employment for cause,
as defined in the agreement.

<PAGE>
The Company has entered into an agreement effective April
7, 1997, with Lehi German to serve as Vice President.  In
addition to normal compensation, the agreement provides for
a guaranteed annual bonus of $30,000 the first year, and 
$15,000 the second year.  The agreement also provides for 
life insurance payable to the employee's designated 
beneficiary, and the purchase of the employee's home in
Kansas City, Missouri, for $550,000.  This agreement 
continues through March 14, 2000; however, the Company may,
under certain circumstances, terminate Mr. German's employment
for cause, as defined in the agreement.

Compensation Committee Interlocks and Insider Participation

Decisions on compensation of SF Services, Inc.'s executives 
are made by the Executive Committee of the Board of 
Directors.  The members of the Executive Committee are Johnny 
Wilson, Doyle Yarbrough, and John Evans.  No interlocks exist 
with respect to the Executive Committee of the Board of 
Directors.


ITEM 12:   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS 
           AND MANAGEMENT

No individual or "group" (as that term is used in Section 
13(d)(3) of the Securities Exchange Act of 1934, as amended) 
owns more than five percent (5%) of the voting stock of SF 
Services, Inc.

No director or officer of SF Services, Inc. beneficially 
owns any "equity security" (as that term is defined in Rule 
13d-1(d) of the Rules promulgated under the Securities and 
Exchange Act of 1934, as amended) of SF Services, Inc.


ITEM 13:   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None

<PAGE>
PART IV

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

(a)   (1)  The following financial statements are included in
           Part II, Item 8:

           Independent Accountants' Report

           Financial Statements:

           Consolidated Balance Sheets, October 31, 1997 and 1996

           Consolidated Statements of Operations, Years Ended October
           31, 1997, 1996 and 1995

           Consolidated Statements of Changes in Members' Equity,
           Years Ended October 31, 1997, 1996 and 1995

           Consolidated Statements of Cash Flows, Years Ended 
           October 31, 1997, 1996 and 1995


           Notes to Consolidated Financial Statements

      (2)  The following financial schedules are submitted 
           herewith:

           Schedule II - Valuation and Qualifying Accounts

           All other schedules are omitted because they are 
           not applicable or the required information is 
           shown in the financial statements or notes 
           thereto.

      (3)  The following exhibits indicated by an asterisk 
           are filed herewith.  The balance of the exhibits 
           have heretofore been filed with the Commission and 
           are incorporated herein by reference as indicated:

           3(i)-  Amended and Restated Articles of Incorporation,
                  as amended
             (Exhibit 3(a) to Form 10-K for the fiscal year 
              ended October 31, 1991 in 33-38051)

    *       3(ii)-  By-Laws
             
           10(i)  - Employment Contract of Michael P. Sadler
             (Exhibit 10(a) to Form 10-K for the fiscal year
             ended October 31, 1996 in 33-38051)
<PAGE>
    *      10(ii)  - Employment Contract of Lehi German

           11     - Statement Re: Computation of earnings per
                    share (Comparative per share data for SF 
                    Services, Inc. is not presented because the
                    nature of cooperative associations is such 
                    that earnings per share information is of 
                    little or no significance.  Net savings of 
                    a cooperative are not distributed to its
                    shareholders based on their respective 
                    percentages of share ownership, but rather 
                    on the basis of each shareholder's patronage
                    to the entity.)

    *      21     - Subsidiaries of the Registrant

    *      27     - Financial Data Schedule

                    Listed below are the only management 
                    contracts required to be identified
                    pursuant to Item 14 (a)(3).

                    Employment contract of Michael P. Sadler
                    Employment contract of Lehi German
                    

                    

(b)   Reports on Form 8-K

      None
<PAGE>
                          SF SERVICES, INC.

                            SCHEDULE II

                  VALUATION AND QUALIFYING ACCOUNTS

                           (Thousand Dollars)

                           
                                        
               Balance at    Charged to                  Balance at
               beginning     costs and     Deductions-      end of 
Description    of period     expenses      describe (a)     period
-----------    ----------    ----------    -----------   ------------

                              OCTOBER 31, 1997

ALLOWANCE 
 FOR 
 DOUBTFUL
 ACCOUNTS     $      950    $   3,653     $      1,361  $     3,242

DEFERRED TAX
 ASSET
 VALUATION
 ALLOWANCE    $      693    $   2,050     $       -0-   $     2,743


                              OCTOBER 31, 1996

ALLOWANCE
 FOR
 DOUBTFUL
 ACCOUNTS     $      295    $   1,362     $       707   $        950

DEFERRED TAX
 ASSET
 VALUATION
 ALLOWANCE    $      -0-    $     693     $       -0-   $        693


                              OCTOBER 31, 1995


ALLOWANCE
 FOR
 DOUBTFUL
 ACCOUNTS     $      532    $     127     $       364   $        295

(a) Accounts receivable charge-offs net of recoveries.

<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/ Michael P. Sadler            
                                 --------------------
                               By:  Michael P. Sadler, President
                               (Principal Executive Officer)

Date:        February 11, 1998           

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 dates indicated.

  /s/ Johnny W. Wilson       Chairman & Director    February 11, 1998
      -------------------
      Johnny W. Wilson

  /s/ Doyle Yarbrough     Vice-Chairman & Director  February 11, 1998
      -------------------
      Doyle Yarbrough

  /s/ John M. Evans       Secretary & Director      February 11, 1998
      -------------------
      John M. Evans

  /s/ Frederick Branch         Director             February 11, 1998
      -------------------
      Frederick Branch

  /s/ Gene Bruick              Director             February 11, 1998
      -------------------
      Gene Bruick

  /s/ Jerry Conerly            Director             February 11, 1998
      -------------------
      Jerry Conerly

  /s/ John A. Gaston     Senior Vice-President      February 11, 1998
      ------------------- (Principal Financial and
      John A. Gaston       Accounting Officer)     

  /s/ Jim Gipson               Director             February 11, 1998
      -------------------
      Jim Gipson
<PAGE>
  /s/ Thomas H. Gist, Jr.      Director             February 11, 1998
      -------------------
      Thomas H. Gist, Jr.

  /s/ Steven Henderson         Director             February 11, 1998
      -------------------
      Steven Henderson

  /s/ John C. Jay, Jr.         Director             February 11, 1998
      -------------------
      John C. Jay, Jr.

  /s/ Robert Little            Director             February 11, 1998
      -------------------
      Robert Little

  /s/ W. B. Madden, Jr.        Director             February 11, 1998
      -------------------
      W. B. Madden, Jr.

  /s/ W. S. Patrick            Director             February 11, 1998
      -------------------
      W. S. Patrick

  /s/ Travis Burchfield        Director             February 11, 1998
      -------------------
      Travis Burchfield

  /s/ Charlie Starks, Jr.      Director             February 11, 1998
      -------------------
      Charlie Starks, Jr.

  /s/                          Director             
      -------------------
      Mike Sturdivant

  /s/ Floyd Trammel            Director             February 11, 1998
      -------------------
      Floyd Trammel

  /s/                          Director             
     --------------------
      Daniel Viator

  /s/ Joe Wilder               Director             February 11, 1998
      -------------------
      Joe Wilder

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT
TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED
SECURITIES PURSUANT TO SECTION 12 OF THE ACT.

<PAGE>
Registrant, subsequent to the filing of this Annual Report on Form 
10-K, intends to furnish its shareholders with an Annual Report 
covering the fiscal year ended October 31, 1997.  Registrant shall 
furnish four copies of such Annual Report to the Commission 
when it is sent to shareholders.

Registrant has not provided and will not provide proxy soliciting 
material to its shareholders.



EXHIBIT INDEX


The following exhibits indicated by an asterisk are filed 
herewith.  The balance of the exhibits have heretofore been
filed with the Commission and are incorporated herein by 
reference as indicated:

  Number in            
 Exhibit Table      Exhibit
--------------      -------
    3(i)            Amended and Restated Articles of 
                    Incorporation, as amended (Exhibit 3(a)
                    to Form 10-K for the fiscal year ended 
                    October 31, 1991 in 33-38051)

  * 3(ii)            By-Laws
                    
    10(i)           Employment Contract of Michael P. Sadler
                    (Exhibit 10(a) to Form 10-K for the fiscal year
                    ended October 31, 1997 in 33-38051)

  * 10(ii)           Employment Contract of Lehi German


    11              Statement Re: Computation of earnings per
                    share (Comparative per share data for SF 
                    Services, Inc. is not presented because 
                    the nature of cooperative associations is
                    such that earnings per share information
                    is of little or no significance.  Net 
                    savings of a cooperative are not 
                    distributed to its shareholders based on
                    their respective percentages of share 
                    ownership, but rather on the basis of 
                    each shareholder's patronage to the
                    entity.)

  * 21              Subsidiaries of the Registrant

  * 27              Financial Data Schedule

<PAGE>
                              EXHIBIT 21



                        LIST OF SUBSIDIARIES:

       NAME                               STATE OF INCORPORATION
------------------------                  ----------------------

  Cloverleaf Cooperative                      Mississippi
  SFA, Inc.                                   Arkansas
  Deep South Farmers Supply, Inc.             Louisiana
  Professional Technologies, Inc.             Arkansas
  AgGrow Finance, Inc.                        Arkansas
  Southern Farm Fish Processors, Inc.         Arkansas
  SF Technical Services, Inc.                 Arkansas
  Northeast Arkansas Oil Company, LLC         Arkansas