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


                                    FORM 10Q


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

                  For the Quarterly Period Ended March 31, 1998
                           Commission File No. 1-11941


                           FARM FAMILY HOLDINGS, INC.
                    A Delaware Corporation IRS No. 14-1789227

                   344 Route 9W, Glenmont, New York 12077-2910
                  Registrant's telephone number: (518) 431-5000







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  / /

The number of shares outstanding of the issuer's common stock as of May 13, 1998
is 5,253,813.


<PAGE>


                           FARM FAMILY HOLDINGS, INC.

                                      INDEX



   Part I.   Financial Information

         Item 1.  Financial Statements of Farm Family Holdings, Inc. (unaudited)
                  Consolidated Balance Sheets
                  March 31, 1998 and December 31, 1997

                  Consolidated Statements of Income and Comprehensive Income
                  Three months ended March 31, 1998 and 1997

                  Consolidated  Statements  of Cash Flow Three  months ended
                  March 31, 1998 and 1997

                  Notes to Consolidated Financial Statements

         Item 2.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations


  Part II.   Other Information

         Item 6.  Exhibits and Reports on Form 8-K





<PAGE>


<TABLE>



                  FARM FAMILY HOLDINGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                ($ in thousands)
<CAPTION>

                                                                                (Unaudited)
                                                                              March 31, 1998  December 31, 1997
---------------------------------------------------------------------------------------------------------------
Assets
Investments:
     Fixed Maturities
<S>                                                                                 <C>               <C>  
     Available for sale, at fair value
        (Amortized cost: $250,002 in 1998 and $248,984 in 1997 )                    $259,956          $259,199
     Held to maturity, at amortized cost
        (Fair value: $8,949 in 1998 and $9,194 in 1997)                                8,602             8,855
   Equity securities
     Available for sale, at fair value
            (Cost: $3,363 in 1998 and 1997)                                            4,730             4,521
   Mortgage loans                                                                        745             1,660
   Other invested assets                                                                 544               553
   Short-term investments                                                             11,609             5,643
---------------------------------------------------------------------------------------------------------------
             Total investments                                                       286,186           280,431
---------------------------------------------------------------------------------------------------------------
Cash                                                                                   5,327             5,841
Insurance receivables:
   Reinsurance receivables                                                            15,630            12,343
   Premiums receivable, net                                                           31,912            28,141
Deferred acquisition costs                                                            13,401            12,613
Accrued investment income                                                              4,820             5,408
Deferred income tax asset, net                                                         1,435             1,469
Prepaid reinsurance premiums                                                             643             2,044
Receivable from affiliates, net                                                       18,191            17,786
Other assets                                                                           3,194             2,202
---------------------------------------------------------------------------------------------------------------
             Total Assets                                                           $380,739          $368,278
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
LIABILITIES aND STOCKHOLDERS' EQUITY
Liabilities:
   Reserves for losses and loss adjustment expenses                                 $163,498          $156,622
   Unearned premium reserve                                                           69,119            66,069
   Reinsurance premiums payable                                                        1,640             2,564
   Accrued expenses and other liabilities                                             12,116            11,828
   Debt                                                                                1,264             1,268
---------------------------------------------------------------------------------------------------------------
             Total liabilities                                                       247,637           238,351
---------------------------------------------------------------------------------------------------------------

Commitments and contingencies
Stockholders' equity:
    Preferred stock $.01 par value 1,000,000 shares authorized
         and no shares issued and outstanding                                              -                 -
    Common stock $.01 par value 10,000,000 shares authorized
         and 5,253,813 shares issued and outstanding                                      53                53
    Additional Paid in Capital                                                        98,140            98,140
    Retained earnings                                                                 27,550            24,342
    Accumulated other comprehensive income                                             7,359             7,392
---------------------------------------------------------------------------------------------------------------
             Total stockholders' equity                                              133,102           129,927
---------------------------------------------------------------------------------------------------------------
             Total Liabilities and Stockholders' Equity                             $380,739          $368,278
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
 See accompanying notes to Consolidated Financial Statements.

</TABLE>
<PAGE>
<TABLE>


                  FARM FAMILY HOLDINGS, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                     ($ in thousands, except per share data)
<CAPTION>


                                                                                                (Unaudited)
                                                                                                Three Months
                                                                                               Ended March 31,
                                                                                             1998           1997
-----------------------------------------------------------------------------------------------------------------

Revenues:
<S>                                                                                       <C>            <C>    
     Premiums                                                                             $42,815        $34,973
     Net investment income                                                                  4,767          4,416
     Realized investment gains  (losses), net                                                 126           (90)
     Other income                                                                             219            220
-----------------------------------------------------------------------------------------------------------------
                   Total revenues                                                          47,927         39,519
-----------------------------------------------------------------------------------------------------------------
Losses and Expenses:
     Losses and loss adjustment expenses                                                   32,139         24,697
     Underwriting expenses                                                                 11,213         10,090
     Interest expense                                                                          25             26
     Dividends to policyholders                                                                50             38
-----------------------------------------------------------------------------------------------------------------
             Total losses and expenses                                                     43,427         34,851
-----------------------------------------------------------------------------------------------------------------
Income before federal income tax expense                                                    4,500          4,668
Federal income tax expense                                                                  1,292          1,612
-----------------------------------------------------------------------------------------------------------------
             Net income                                                                     3,208          3,056
-----------------------------------------------------------------------------------------------------------------

Other comprehensive income, net of tax:

Unrealized holding gain (loss) arising during the period
 (net of deferred tax of ($53) and $1,632, respectively)                                      100        (3,031)
Reclassification adjustment for gains (losses) included in net income
 (net of tax expense (benefit) of $72 and ($19), respectively)                              (133)             36
-----------------------------------------------------------------------------------------------------------------

             Other comprehensive income                                                      (33)        (2,995)
-----------------------------------------------------------------------------------------------------------------

             Comprehensive income                                                          $3,175            $61
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------

Per Common Share:
       Basic earnings per common share                                                      $0.61          $0.58
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
       Diluted earnings per common share                                                    $0.61          $0.58
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
       Basic weighted average shares outstanding                                        5,253,813      5,253,813
-----------------------------------------------------------------------------------------------------------------
       Diluted weighted average shares outstanding                                      5,301,498      5,253,813
-----------------------------------------------------------------------------------------------------------------
See accompanying notes to Consolidated Financial Statements.
</TABLE>
<PAGE>

<TABLE>


                  FARM FAMILY HOLDINGS, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                ($ in thousands)
<CAPTION>
                                                                                                        (Unaudited)
                                                                                                    For the Three Months
                                                                                                       Ended March 31,
                                                                                                     1998           1997
-------------------------------------------------------------------------------------------------------------------------
Cash Flows From Operating Activities:
<S>                                                                                                <C>            <C>   
Net income                                                                                         $3,208         $3,056
-------------------------------------------------------------------------------------------------------------------------

Adjustments to reconcile net income
     to net cash provided by operating activities:
    Realized investment (gains) losses                                                              (126)             90
    Amortization of bond discount                                                                      76             48
    Deferred income taxes                                                                              52          (160)
    Changes in:
         Reinsurance receivables                                                                  (3,287)            342
         Premiums receivable                                                                      (3,771)        (2,891)
         Deferred acquisition costs                                                                 (788)           (39)
         Accrued investment income                                                                    588            388
         Prepaid reinsurance premiums                                                               1,401          (447)
         Receivable from affiliates                                                                 (405)             54
         Other assets                                                                               (991)             57
         Reserves for losses and loss adjustment expenses                                           6,876          1,985
         Unearned premium reserve                                                                   3,050          2,198
         Reinsurance premiums payable                                                               (924)          1,418
         Accrued expenses and other liabilities                                                       288          1,700
-------------------------------------------------------------------------------------------------------------------------
            Total adjustments                                                                       2,039          4,743
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
            Net cash provided by operating activities                                               5,247          7,799
-------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTiNG ACTIVITIES:
Proceeds from sales:
    Fixed maturities available for sale                                                                 -          3,514
Investment collections:
    Fixed maturities available for sale                                                            14,553          3,303
    Fixed maturities held to maturity                                                                 239            207
    Mortgage loans                                                                                    915             20
Investment purchases:
    Fixed maturities available for sale                                                          (15,507)       (15,528)
    Fixed maturities held to maturity                                                                   -          (131)
    Equity securities                                                                                   -           (56)
Change in short-term investments, net                                                             (5,966)            784
Change in other invested assets                                                                         9          (125)
-------------------------------------------------------------------------------------------------------------------------
            Net cash used in investing activities                                                 (5,757)        (8,012)
-------------------------------------------------------------------------------------------------------------------------

Cash Flows From Financing Activities
Principal payments on debt                                                                            (4)           (11)
-------------------------------------------------------------------------------------------------------------------------
            Net cash used in financing activities                                                     (4)           (11)
-------------------------------------------------------------------------------------------------------------------------
            Net decrease in cash                                                                    (514)          (224)
Cash, beginning of period                                                                           5,841          4,110
-------------------------------------------------------------------------------------------------------------------------
Cash, end of period                                                                                $5,327         $3,886
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
See accompanying notes to Consolidated Financial Statements.


</TABLE>
<PAGE>


Notes to Consolidated Financial Statements

     1.   Summary of Significant Accounting Policies

     The accompanying  consolidated financial statements include the accounts of
     Farm Family  Holdings,  Inc. ("Farm Family  Holdings") and its wholly owned
     subsidiaries  (collectively  referred  to as the  "Company").  The  primary
     subsidiary  of Farm  Family  Holdings  is Farm  Family  Casualty  Insurance
     Company ("Farm Family Casualty"). The operations of the Company are closely
     related with those of its  affiliates,  Farm Family Life Insurance  Company
     ("Farm  Family  Life"),  and Farm Family  Life's  wholly owned  subsidiary,
     United Farm Family Insurance Company ("United Farm Family").

     The  accompanying  unaudited  consolidated  financial  statements have been
     prepared in accordance  with the  instructions to Form 10-Q. In the opinion
     of management,  these statements  contain all adjustments  including normal
     recurring  accruals,  which are  necessary for a fair  presentation  of the
     consolidated  financial  position at March 31, 1998,  and the  consolidated
     results of  operations  for the three months ended March 31, 1998 and 1997.
     The results of the  Company's  operations  for any  interim  period are not
     necessarily  indicative  of the results of the Company's  operations  for a
     full fiscal year.  The year end balance sheet data was derived from audited
     financial  statements,  but does not  include all  disclosures  required by
     generally accepted accounting principles.

     Effective  January 1, 1998,  the Company  adopted  Statement  of  Financial
     Accounting  Standards No. 130  "Comprehensive  Income",  which  established
     standards for the reporting and disclosure of comprehensive  income and its
     components,  and restated prior period  financial  statements to conform to
     this reporting standard.

     2.  Earnings Per Share

     The  following  table  presents  a  reconciliation  of the  numerators  and
     denominators of the basic and diluted earnings per share computations.
<TABLE>
<CAPTION>

                                                                                           Three months ended March 31,
                                                                                                  1998             1997
                                                                                     -----------------------------------
<S>                                                                                         <C>              <C>       
         Net income available to common stockholders                                        $3,208,000       $3,056,000
                                                                                     -----------------------------------
         Weighted average number of  shares in basic earnings per share                      5,253,813        5,253,813
         Effect of stock options                                                                47,685              ---
                                                                                     -----------------------------------
         Weighted average number of shares in diluted earnings per share                     5,301,498        5,253,813
                                                                                     -----------------------------------
         Basic net income per share                                                              $0.61            $0.58
                                                                                     -----------------------------------
         Diluted net income per share                                                            $0.61            $0.58
                                                                                     -----------------------------------
</TABLE>

     3.  Future Application of Accounting Standards

     In  February of 1998,  the  Financial  Accounting  Standards  Board  issued
     Statement  of  Financial   Accounting  Statement  (SFAS)  132,  "Employers'
     Disclosures about Pensions and Other  Postretirement  Benefits,"  effective
     for  years  beginning  after  December  15,  1997.  SFAS  132  revises  the
     disclosure  requirements but does not change the measurement or recognition
     of pensions and other post  retirement  benefits.  The adoption of SFAS 132
     will result in revised and additional  disclosures  but will have no effect
     on the  financial  position,  results of  operations,  or  liquidity of the
     Company.



<PAGE>


     4.   Contingencies

     The Company is party to numerous legal actions arising in the normal course
     of business.  Management  believes  that  resolution of these legal actions
     will not have a  material  adverse  effect  on its  consolidated  financial
     condition.

     Catastrophes  are an inherent  risk in the property and casualty  insurance
     industry  and  could  produce  significant  adverse   fluctuations  in  the
     Company's  results of operations  and financial  condition.  The Company is
     subject to a concentration of risk within the  Northeastern  United States.
     For the three months ended March 31, 1998 and 1997,  approximately  62% and
     60%,  respectively,  of the Company's  direct  premiums were written in the
     states of New York and New Jersey.  As a result of the concentration of the
     Company's  business  in the  states  of New York and New  Jersey,  and more
     generally,  in the  Northeastern  United States,  the Company's  results of
     operations   may  be   significantly   affected   by  weather   conditions,
     catastrophic events and regulatory  developments in these two states and in
     the Northeastern United States,  despite the Company's  reinsurance program
     designed to mitigate the impact of these factors.

     As a condition of its license to do business in various states, the Company
     is  required  to  participate  in a variety of  mandatory  residual  market
     mechanisms  (including  mandatory  pools) which provide  certain  insurance
     (most notably  automobile  insurance) to consumers who are otherwise unable
     to obtain such coverages from private insurers. The amount of future losses
     or assessments  from residual  market  mechanisms can not be predicted with
     certainty and could have a material  adverse effect on the Company's future
     results of operations.

     Pursuant  to  agreements  between  the  Company  and its  agents and agency
     managers,  subject to certain  conditions  including  length of service and
     profitability,  certain agents and agency  managers are eligible to receive
     monthly  extended  earnings  payments  for a period  of up to  eight  years
     subsequent  to the  termination  of their  association  with  the  Company.
     Historically, such payments have been funded from commissions earned on the
     agent's or agency manager's book of business  subsequent to the termination
     of the  agent's  association  with  the  Company  in  accordance  with  the
     Company's  agreement with the successor agents and agency managers.  In the
     event that such commissions are insufficient to fund the extended  earnings
     payments, the Company would be responsible for such payments. The aggregate
     outstanding  amount of the extended  earnings  payments which former agents
     and agency  managers  are  entitled  to receive for a period of up to eight
     years subsequent to March 31, 1998 is $4,708,626.

     Many of the  Company's  existing  computer  programs use only two digits to
     identify  a year in the  date  field.  These  programs  were  designed  and
     developed  without  considering  the impact of the  upcoming  change in the
     century. If not corrected,  many of these computer  applications could fail
     or create  erroneous  results by or at the Year  2000.  The Year 2000 issue
     affects virtually all companies and organizations . Therefore,  the Company
     must also  coordinate with other entities with which it interacts to ensure
     these entities are also addressing the Year 2000 issue. If not successfully
     addressed,  the Year 2000 issue could have material adverse consequences on
     the  Company.  The  Company  has an  on-going,  enterprise-wide  project to
     address  its Year  2000  issue.  During  1998,  the  Company  will  perform
     system-wide  testing to support  its plan of having  policy  administration
     systems  Year  2000  compliant  by  December  31,  1998.  Year 2000 work on
     remaining systems will continue through 1999. In addition,  the Company has
     contacted  other  entities  on which it relies to process  and  support its
     business.  The  Company  will  react to their  plans to  achieve  Year 2000
     compliance and will adjust operations as required.  The Company believes it
     will  successfully  address its Year 2000 issue  without  material  adverse
     consequences to the Company.  However, there can be no assurance that other
     entities with which the Company interacts will achieve Year 2000 compliance
     or that the failure by such entities to achieve Year 2000 compliance  would
     not have a material adverse effect on the Company.



<PAGE>


     5.   Acquisition of Farm Family Life

     Farm Family  Holdings  entered into an Option  Purchase  Agreement with the
     shareholders  of Farm  Family Life  pursuant to which Farm Family  Holdings
     has,  for a two-year  period  commencing  on July 26,  1996,  the option to
     acquire  Farm Family Life  subject to certain  conditions.  On February 26,
     1998, the Board of Directors of Farm Family Holdings  approved the exercise
     of the option to acquire Farm Family Life and its wholly  owned  subsidiary
     United Farm Family. Under the terms of the Option Purchase Agreement,  Farm
     Family Holdings will pay an exercise price of $37.5 million to acquire Farm
     Family  Life,  consisting  of $31.5  million of common stock of Farm Family
     Holdings,  and $6 million stated value of 6-1/8% voting  preferred stock of
     Farm Family Holdings,  less certain expenses to be paid by Farm Family Life
     in the  acquisition on behalf of the  shareholders of Farm Family Life. The
     proposed  acquisition of Farm Family Life is subject to the approval of the
     shareholders   of  Farm  Family   Holdings  and  receipt  of  all  required
     governmental  approvals.  Management  expects that the  acquisition of Farm
     Family Life will be brought to the shareholders of Farm Family Holdings for
     their approval in 1998.

     The  following  unaudited  pro  forma  consolidated  financial  information
     reflects  the  acquisition  by the  Company of Farm  Family  Life under the
     purchase  method of accounting.  The pro forma  consolidated  balance sheet
     combines balance sheets of the Company and Farm Family Life as of March 31,
     1998,  as if the  acquisition  had occurred as of March 31,  1998.  The pro
     forma  consolidated  statements  of income  combines the  operations of the
     Company and Farm Family Life for the year ended  December  31, 1997 and the
     three  months  ended March 31, 1998 as if the  acquisition  had occurred on
     January 1, 1997

     The pro forma  adjustment and pro forma  combined  amounts are provided for
     informational  purposes  only  and are not  necessarily  indicative  of the
     actual  financial  position or results of  operations  that would have been
     achieved had the acquisition  been consummated at the dates indicated or of
     future  results.  The pro  forma  financial  statements  should  be read in
     conjunction  with the  historical  financial  statements of the Company and
     Farm Family Life.

     The pro forma financial statements are based upon available information and
     certain  assumptions  that  the  Company  believes  are  reasonable  in the
     circumstances.  The Company's preliminary  allocation of purchase price was
     based upon the  estimated  fair value of assets  acquired  and  liabilities
     assumed.  The actual  allocation  will be based upon  valuations  as of the
     closing date of the acquisition  and,  accordingly,  the final  allocations
     will be different from the amounts herein.


<PAGE>
<TABLE>


                           Farm Family Holdings, Inc.
                 Unaudited Pro Forma Consolidated Balance Sheet
                                 March 31, 1998
                                ($ in thousands)
<CAPTION>
                                                                                                     Pro Forma
                                                             Farm Family        Farm Family         Adjustments
                                                               Holdings             Life           Dr.        Cr.     Pro Forma
                                                               --------             ----           ---        ---     ---------
ASSETS
Investments
   Fixed maturities
<S>                                                             <C>               <C>      <C> <C>     <C> <C>          <C>
     Available for sale                                         $259,956          $698,929     $           $            $958,885
     Held to maturity, at amortized cost                           8,602                                                   8,602
   Equity securities                                               4,730            40,393                                45,123
   Mortgage loans                                                    745            13,361                                14,106
   Policy loans                                                                     29,386                                29,386
   Other invested assets                                             544               724                                 1,268
   Short-term investments                                         11,609             6,582                                18,191
                                                        -------------------------------------------------------------------------
        Total investments                                        286,186           789,375                             1,075,561
                                                        -------------------------------------------------------------------------

Cash                                                               5,327             1,378                                 6,705
Insurance receivables:
   Reinsurance receivables                                        15,630             1,960                                17,590
   Premiums receivable                                            31,912                               (D)     107        31,805
Deferred acquisition costs                                        13,401            30,661             (B)  30,661        13,401
Present value of future profits                                                            (B)  20,941                    20,941
Accrued investment income                                          4,820            12,765                                17,585
Property and equipment, net                                                         12,416 (B)   4,235                    16,651
Deferred income tax asset, net                                     1,435                                                   1,435
Prepaid reinsurance premiums                                         643                                                     643
Receivable from affiliates, net                                   18,191                               (D)  18,191             0
Other assets                                                       3,194             1,827             (A)     824         4,197
                                                        -------------------------------------------------------------------------
        Total Assets                                            $380,739          $850,382     $25,176     $49,783    $1,206,514
                                                        -------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
   Reserves for losses and loss adjustment expenses             $163,498         $             $           $            $163,498
   Future policy and contract benefits                                             216,619                               216,619
   Funds on deposit from policyholders                                             423,112 (B)   2,251                   420,861
   Unearned premium reserve                                       69,119                                                  69,119
   Accrued dividends to policyholders                                                5,023                                 5,023
   Reinsurance premiums payable                                    1,640                                                   1,640
   Deferred income tax liability                                                    33,780 (B)   1,133                    32,647
   Payable to affiliate                                                             18,298 (D)  18,298                         0
   Accrued expenses and other liabilities                         12,116             4,800             (B)     100        17,016
   Debt                                                            1,264                                                   1,264
   Participating policyholders' interest                                           109,125                               109,125
                                                        -------------------------------------------------------------------------
        Total liabilities                                        247,637           810,757      21,682         100     1,036,812
                                                        -------------------------------------------------------------------------

Commitments and contingencies

Mandatory redeemable preferred stock                                                                   (A)   5,856         5,856

Stockholders' equity:
   Common stock                                                       53             3,001 (C)   3,001 (A)       8            61
   Additional Paid in Capital                                     98,140                               (A)  30,736       128,876
   Retained earnings                                              27,550            34,931 (C)  34,931                    27,550
   Accumulated other comprehensive income                          7,359             1,693 (C)   1,693                     7,359
                                                        -------------------------------------------------------------------------
        Total stockholder's equity                               133,102            39,625      39,625      30,744       163,846
                                                        -------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity                      $380,739          $850,382     $61,307     $36,700    $1,206,514
                                                        -------------------------------------------------------------------------

                                   See accompanying notes to unaudited pro forma consolidated balance sheet
</TABLE>
<PAGE>


                           Farm Family Holdings, Inc.
            Notes to Unaudited Pro Forma Consolidated Balance Sheet
                                 March 31, 1998
                                ($ in thousands)

(A)  The following pro forma adjustments  reflect the funding of the acquisition
     and consideration  given ($37,500 less certain expenses currently estimated
     to be equal to  approximately  $900 to be paid by Farm  Family  Life in the
     acquisition on behalf of the selling stockholders)

     Series A Preferred stock                                           ($5,856)

     Unregistered   common  stock  issued   (824,650  shares
     issued, $.01 par value) in the acquisition  assuming an
     average  closing  price of $37 9/32 if the  closing had
     occurred on April 6, 1998. The actual  average  closing
     price and the actual  number of shares of Common  Stock
     that  will be issued to the  selling  stockholders  may
     vary significantly from these amounts.                                  (8)

     Paid in capital                                                    (30,736)

     Expenses relating to acquisition                                       824

(B)  The  following  pro forma  adjustments  result from the  allocation  of the
     purchase  price  for  the  acquisition  based  on  the  fair  value  of the
     underlying net assets acquired.

     Assets
     ------

     Adjustment of carrying amount of properties occupied by
     Farm  Family  Life based on the  estimated  fair market
     value                                                               $4,235

     Elimination of historical  deferred  acquisition  costs            (30,661)

     Adjustment to record present value of future profits                20,941

     Liabilities
     -----------

     Adjustment  to reflect the net  deferred tax benefit of
     purchase accounting  adjustments using a statutory rate
     of 34%                                                               1,133

     Adjustment to record liability for Guaranty Funds                     (100)

     Adjustment of carrying  amount of funds on deposit from
     Policyholders based on fair market value                             2,251

(C)  Adjustment to eliminate Farm Family Life's stockholder's equity

(D)  Adjustment to eliminate intercompany balances



<PAGE>
<TABLE>


                           Farm Family Holdings, Inc.
              Unaudited Pro Forma Consolidated Statement of Income
                    For the three months ended March 31, 1998
                     ($ in thousands, except per share data)
<CAPTION>

                                                                                                   Pro Forma
                                                          Farm Family        Farm Family           Adjustments
                                                            Holdings             Life           Dr.          Cr.      Pro Forma
                                                            --------             ----           ---          ---      ---------
Revenues:
<S>                                                           <C>                 <C>    <C> <C>         <C>            <C>
    Premiums from property/casualty operations                $42,815                 $0     $           $              $42,815
    Premiums from life and health operations                                       8,818                                  8,818
    Net investment income                                       4,767             13,889                                 18,656
    Realized investment gains (losses), net                       126                663                                    789
    Policy and contract charges                                                    1,167                                  1,167
    Other income                                                  219                264 (c)    217                         266
                                                        ------------------------------------------------------------------------
        Total revenues                                         47,927             24,801        217                      72,511
                                                        ------------------------------------------------------------------------
Losses, Benefits and Expenses:
    Losses and loss adjustment expenses                        32,139                469                                 32,608
    Benefits to policyholders                                                      9,228                                  9,228
    Underwriting & operating expenses                          11,213              1,994 (a)     37  (c)      217        13,027
    Non-recurring charges                                                             92                                     92
    Interest credited to policyholders                                             5,394                                  5,394
    Amortization of policy acquisition costs                                       1,782             (a)    1,782             0
    Amortization of present value of future profits                                      (a)    516                         516
    Interest expense                                               25                                                        25
    Dividends to policyholders                                     50                                                        50
                                                        ------------------------------------------------------------------------
        Total losses and expenses                              43,427             18,959        553         1,999        60,940
                                                        ------------------------------------------------------------------------
Income before federal income tax expense                        4,500              5,842        770         1,999        11,571
Federal income tax expense                                      1,292              1,957 (b)    417                       3,666
                                                        ------------------------------------------------------------------------
Income before participating policyholders' interest             3,208              3,885      1,187         1,999         7,905
Participating policyholders' interest                                              2,981 (a)  1,042  (a)      293         3,730
                                                        ------------------------------------------------------------------------
        Income before preferred stock dividends                 3,208                904      2,229         2,292         4,175
        Preferred stock dividends                                                        (a)     90                          90
                                                        ------------------------------------------------------------------------
        Income applicable to common shareholders               $3,208               $904     $2,319        $2,292         4,085
                                                        ------------------------------------------------------------------------
        Net Income per Common Share - Basic                     $0.61                                                     $0.67
                                                        --------------                                            --------------
        Net Income per Common Share - Diluted                   $0.61                                                     $0.67
                                                        --------------                                            --------------
        Weighted average shares - Basic                     5,253,813                                (d)  824,650     6,078,463
                                                        --------------                                            --------------
        Weighted average shares - Diluted                   5,301,498                                (d)  824,650     6,126,148
                                                        --------------                                            --------------

                               See accompanying notes to unaudited pro forma consolidated statements of income

</TABLE>


<PAGE>


                           Farm Family Holdings, Inc.
         Notes to Unaudited Pro Forma Consolidated Statements of Income
                    For the three months ended March 31, 1998
                    ($ in thousands, except per share data)

(a)  Adjustment  resulting  from the  allocation  of the purchase  price for the
     acquisition  based on the estimated fair value of the underlying net assets
     are as follows:

     Additional  depreciation  expense incurred due to write
     up of  building  and a change in the useful life of the
     building to 20 years as of 1/1/97                                     $37

     Adjustment   to  reverse   amortization   of   deferred
     acquisition costs                                                   (1,782)

     Participating  policyholders'  share of amortization of
     deferred acquisition costs, net of taxes at a statutory
     rate of 34%                                                          1,042

     Adjustment to record  amortization  of present value of
     future profits                                                         516

     Participating  policyholders'  share of amortization of
     present  value  of  future  profits  net of  taxes at a
     statutory rate of 34%                                                 (293)

     Series A Preferred  stock  dividends on estimated  fair
     value of $5,856 of preferred  stock at a rate of 6 1/8%
     per annum                                                               90


(b)  Adjustment to reflect the federal  income tax effect of
     item (a) above using statutory rate of 34%                             417

(c)  Adjustment to eliminate intercompany balances                          217

(d)  Adjustment to reflect  estimated  additional  shares of
     common  stock  issued in the  acquisition  assuming  an
     average  closing  price of $37 9/32 if the  closing had
     occurred on April 6, 1998. The actual  average  closing
     price and the actual  number of shares of common  stock
     that  will be issued to the  selling  stockholders  may
     vary significantly from these amounts.                             824,650



<PAGE>
<TABLE>


                 Farm Family Holdings, Inc.
    Unaudited Pro Forma Consolidated Statement of Income
            For the year ended December 31, 1997
           ($ in thousands, except per share data)

<CAPTION>
                                                                                                    Pro Forma
                                                              Farm Family       Farm Family        Adjustments
                                                                Holdings           Life           Dr.         Cr.    Pro Forma
                                                                --------           ----           ---         ---    ---------
Revenues:
<S>                                                              <C>                <C>    <C> <C>     <C> <C>         <C>
     Premiums from property/casualty operations                  $149,220           $9,020     $           $           $158,240
     Premiums from life and health operations                                       33,356                               33,356
     Net investment income                                         18,077           54,964                               73,041
     Realized investment gains (losses), net                        5,406            2,914                                8,320
     Policy and contract charges                                                     5,041                                5,041
     Other income                                                   1,020            1,153 (c)     808                    1,365
                                                           ---------------------------------------------------------------------
         Total revenues                                           173,723          106,448         808                  279,363
                                                           ---------------------------------------------------------------------

Losses, Benefits and Expenses:
     Losses and loss adjustment expenses                          103,301            9,975                              113,276
     Benefits to policyholders                                                      31,568                               31,568
     Underwriting & operating expenses                             41,787            7,747 (a)     158 (c)      808      48,884
     Non-recurring charges                                                             707                                  707
     Interest credited to policyholders                                             24,282                               24,282
     Amortization of policy acquisition costs                                        6,852             (a)    6,852           0
     Amortization of present value of future profits                                       (a)   2,233                    2,233
     Interest expense                                                 102                                                   102
     Dividends to policyholders                                       282                                                   282
                                                           ---------------------------------------------------------------------
         Total losses and expenses                                145,472           81,131       2,391        7,660     221,334
                                                           ---------------------------------------------------------------------
Income before federal income tax expense                           28,251           25,317       3,199        7,660      58,029
Federal income tax expense                                          9,747            8,548 (b)   1,517                   19,812
                                                           ---------------------------------------------------------------------
Income before participating policyholders' interest                18,504           16,769       4,716        7,660      38,217
Participating policyholders' interest                                               13,429 (a)   3,956 (a)    1,273      16,112
                                                           ---------------------------------------------------------------------
         Income before preferred stock dividends                   18,504            3,340       8,672        8,933      22,105
         Series A Preferred stock dividends                                                (a)     359                      359
                                                           ---------------------------------------------------------------------
         Income applicable to common shareholders                 $18,504           $3,340      $9,031       $8,933      21,746
                                                           ---------------------------------------------------------------------
         Net Income per Common Share - Basic                        $3.52                                                 $3.58
                                                           ---------------                                          ------------
         Net Income per Common Share - Diluted                      $3.51                                                 $3.57
                                                           ---------------                                          ------------
         Weighted average shares - Basic                        5,253,813                              (d)  824,650   6,078,463
                                                           ---------------                                          ------------
         Weighted average shares - Diluted                      5,270,947                              (d)  824,650   6,095,597
                                                           ---------------                                          ------------


                               See accompanying notes to unaudited pro forma consolidated statements of income
</TABLE>


<PAGE>


                 Farm Family Holdings, Inc.
 Notes to Unaudited Pro Forma Consolidated Statements of Income
            For the year ended December 31, 1997
           ($ in thousands, except per share data)

(a)  Adjustment  resulting  from the  allocation  of the purchase  price for the
     Acquisition  based on the estimated fair value of the underlying net assets
     are as follows:

     Additional  depreciation  expense incurred due to write
     up of  building  and a change in the useful life of the
     building to 20 years as of 1/1/97                                     $158

     Adjustment   to  reverse   amortization   of   deferred
     acquisition costs                                                   (6,852)

     Participating  policyholders'  share of amortization of
     deferred acquisition costs, net of taxes at a statutory
     rate of 34%                                                          3,956

     Adjustment to record  amortization  of present value of
     future profits                                                       2,233

     Participating  policyholders'  share of amortization of
     present  value  of  future  profits  net of  taxes at a
     statutory rate of 34%                                               (1,273)

     Series A Preferred  stock  dividends on estimated  fair
     value of $5,856 of preferred  stock at a rate of 6 1/8%
     per annum                                                              359

(b)  Adjustment to reflect the federal  income tax effect of
     item (a) above using statutory rate of 34%                           1,517

(c)  Adjustment to eliminate intercompany balances                          808

(d)  Adjustment to reflect  estimated  additional  shares of
     Common  Stock  issued in the  acquisition  assuming  an
     average  closing  price of $37 9/32 if the  closing had
     occurred on April 6, 1998. The actual  average  closing
     price and the actual  number of shares of common  Stock
     that  will be issued to the  selling  stockholders  may
     vary significantly from these amounts.                             824,650



<PAGE>


Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations.

General

The following  discussion includes the operations of Farm Family Holdings,  Inc.
("Farm  Family  Holdings")  and  its  wholly  owned  subsidiaries  (collectively
referred to as the "Company"). The primary subsidiary of Farm Family Holdings is
Farm Family Casualty Insurance Company ("Farm Family Casualty").  The operations
of the Company are closely  related  with those of its  affiliates,  Farm Family
Life Insurance Company ("Farm Family Life"), and Farm Family Life's wholly owned
subsidiary, United Farm Family Insurance Company ("United Farm Family").

Farm Family  Casualty is a specialized  property and casualty  insurer of farms,
other  generally  related   businesses  and  residents  of  rural  and  suburban
communities  primarily in the Northeastern  United States.  Farm Family Casualty
provides property and casualty insurance  coverages to members of the state Farm
Bureau(R) organizations in New York, New Jersey, Delaware, West Virginia and all
of the New England states.  Membership in a state Farm Bureau  organization is a
prerequisite  for  voluntary  insurance  coverage  (except for  employees of the
Company and its affiliates).

The Company's  operating  results are subject to significant  fluctuations  from
period to period depending upon, among other factors, the frequency and severity
of losses from  weather  related and other  catastrophic  events,  the effect of
competition  and  regulation  on the  pricing of  products,  changes in interest
rates, general economic conditions, tax laws and the regulatory environment.  As
a condition  of its license to do  business  in various  states,  the Company is
required to participate  in a variety of mandatory  residual  market  mechanisms
(including  mandatory  pools) which  provide  certain  insurance  (most  notably
automobile  insurance)  to  consumers  who are  otherwise  unable to obtain such
coverages from private  insurers.  In all such states,  residual  market premium
rates are subject to the  approval of the state  insurance  department  and have
generally  been  inadequate.  The amount of future  losses or  assessments  from
residual market  mechanisms  cannot be predicted with certainty and could have a
material adverse effect on the Company's results of operations.

For the three month  periods  ended  March 31,  1998 and 1997,  33.2% and 36.3%,
respectively,  of the  Company's  direct  written  premiums  were  derived  from
policies  written  in New York  and,  for the same  periods,  28.4%  and  23.8%,
respectively,  were derived from policies written in New Jersey.  For these same
periods,  no other state  accounted for more than 10.0% of the Company's  direct
written  premiums.  As a result,  the  Company's  results of  operations  may be
significantly affected by weather conditions, catastrophic events and regulatory
developments  in  these  two  states  and  in  the  Northeastern  United  States
generally.


<PAGE>


Safe Harbor  Statement  under The Private  Securities  Litigation  Reform Act of
1995:
--------------------------------------------------------------------------------
With exception of historical information,  the matters discussed or incorporated
by reference  in this Report on Form 10-Q  contains  forward-looking  statements
within the meaning of the Private Securities  Litigation Reform Act of 1995 that
are based on management's current knowledge,  expectations,  estimates,  beliefs
and assumptions.  The forward-looking  statements in this Form 10-Q include, but
are  not  limited  to,  statements  with  respect  to  the  Company's  potential
acquisition of Farm Family Life, the impact of the potential acquisition of Farm
Family Life on the earnings and shareholder value of the Company, projections of
revenue,  earnings,  capital structure and other financial items,  statements of
the plans and  objectives of the Company or its  management,  and  statements of
future economic performance and assumptions  underlying statements regarding the
Company or its business.  Readers are hereby  cautioned  that certain  events or
circumstances  could  cause  actual  results  to differ  materially  from  those
estimated,  projected, or predicted. The forward-looking statements in this Form
10-Q are not  guarantees  of future  performance  and are subject to a number of
important  risks and  uncertainties,  many of which are  outside  the  Company's
control,  that could cause actual results to differ materially.  These risks and
uncertainties  include, but are not limited to, the results of operations of the
Company and Farm Family Life,  fluctuations in the market value of shares of the
Company's common stock, the satisfaction of the closing  conditions set forth in
the Amended and Restated Option Purchase  Agreement (which  conditions  include,
but are not limited to, the approval of the Company's  shareholders  and receipt
of all required government approvals), exposure to catastrophic loss, geographic
concentration  of loss  exposure,  general  economic  conditions  and conditions
specific to the property and casualty insurance industry, including its cyclical
nature, regulatory changes and conditions, rating agency policies and practices,
competitive factors,  claims development and the impact thereof on loss reserves
and the Company's  reserving policy,  the adequacy of the Company's  reinsurance
programs,  developments in the securities  markets and the impact thereof on the
Company's  investment  portfolio,  factors relating to the Company's  ability to
successfully  address its Year 2000  issues and other risks  listed from time to
time in the Company's Securities and Exchange Commission filings,  including the
Form 10-K filed for the fiscal year ended  December 31, 1997 and the  Prospectus
dated July 22, 1996. Accordingly,  there can be no assurance that actual results
will conform to the forward-looking statements in this Form 10-Q.


Results of Operations
---------------------
The Three Months  Ended March 31, 1998  Compared to the Three Months Ended March
31, 1997

Premiums 
-------- 
Premium revenue  increased $7.8 million or 22.4%,  during the three months ended
March 31, 1998 to $42.8 million from $35.0  million for the same period in 1997.
The  increase  in  premium  revenue in 1998  resulted from an  increase of  $5.9
million in  earned  premiums on  additional  business  directly  written by  the
Company,  and  an increase of $0.1  million  in  earned  premiums  from  assumed
business and a decrease of $1.8  million in earned premiums  ceded to reinsurers
and not retained by the Company.  The $5.9 million increase in  earned premiums 
on   additional  business  directly   written  by  the  Company  was   primarily
attributable  to an increase of $4.8 million,  or 15.6%, in earned premiums from
the Company's  primary  products  (personal and commercial  automobile  products
other  than  assigned  risk  automobile  business,  the  Special  Farm  Package,
businessowners products, homeowners products, and Special Home Package), as well
as an increase of $0.7 million in earned  premiums from the  Company's  workers'
compensation  business.  The Company has approximately 158,600 total policies in
force. The number of policies in force related to the Company's primary products
increased  by  11.7%  to  approximately  130,600  as  of  March  31,  1998  from
approximately  116,900 as of March 31, 1997 and the average  premium  earned for
each such policy  increased by 3.4% during the three months ended March 31, 1998
compared to the same period in 1997.  Net written  premiums  increased  28.9% to
$47.4  million  for the three  months  ended  March 31,  1998  compared to $36.7
million for the same  period in 1997.  The  increase in net written  premiums is
primarily attributable to the growth in direct writings to customers, a decrease
in written premium ceded to reinsurers  and, to a lesser extent,  an increase in
the  Company's  voluntary  assumed  reinsurance  business.  Geographically,  the
increase  in the  Company's  direct  writings  came from New  Jersey,  New York,
Massachusetts,  Connecticut,  Delaware,  West  Virginia,  and Rhode  Island.  In
addition,  direct writings of all the Company's primary  products,  particularly
personal automobile, increased during the first quarter of 1998.

Net Investment Income
---------------------
Net  investment  income  increased  $0.4 million or 7.9% to $4.8 million for the
three months ended March 31, 1998 from $4.4 million for the same period in 1997.
The increase in net investment income was primarily the result of an increase in
average cash and invested  assets (at  amortized  cost) of  approximately  $44.3
million,  or 18.8% from March 31, 1998  compared to March 31,  1997.  The return
realized on the  Company's  cash and  investments  was 6.9% for the three months
ended March 31, 1998 and 7.5% for the same period in 1997.  The reduction in the
return  realized  on  the  Company's  cash  and  invested  assets  is  primarily
attributable to an increase in investment in tax-exempt  bonds which provide for
a larger after tax return.

Losses and Loss Adjustment Expenses
-----------------------------------
Losses and loss adjustment  expenses increased $7.4 million,  or 30.1%, to $32.1
million for the three  months  ended  March 31, 1998 from $24.7  million for the
same period in 1997.  Loss and loss  adjustment  expenses  were 75.1% of premium
revenue for the three months  ended March 31, 1998  compared to 70.6% of premium
revenue for the same period in 1997.  The  increase in loss and loss  adjustment
expenses  as a percent of premium  revenue  was  primarily  attributable  to the
increase in weather related losses during the first three months of 1998. Losses
believed to be weather related aggregated $4.1 million in the three months ended
March 31,  1998  compared  to $2.1  million  for the same  period  in 1997.  The
increase in weather  related  losses was  primarily  attributable  to severe ice
storms which  impacted the upstate New York and Maine  territories  in which the
Company writes business.

Underwriting Expenses
---------------------
Underwriting expenses increased $1.1 million, or 11.1%, to $11.2 million for the
three  months  ended  March 31,  1998 from $10.1  million for the same period in
1997.  For the three  months ended March 31, 1998,  underwriting  expenses  were
26.2% of premium  revenue  compared  to 28.9% for the same  period in 1997.  The
decrease in underwriting  expenses as a percent of premium revenue was primarily
attributable  to a greater  relative  increase in the Company's  premium revenue
than in the  level  of  overhead  expenses,  as well  as the  continuation  of a
company-wide expense management program.

Federal Income Tax Expense
--------------------------
Federal  income tax expense  decreased $0.3 million to $1.3 million in 1998 from
$1.6  million in 1997.  Federal  income tax expense  was 28.7% of income  before
federal income tax expense for the three months ended March 31, 1998 compared to
34.5% for the same period in 1997.

Net Income
----------
Net income  increased  $0.1  million to $3.2  million for the three months ended
March 31,  1998 from $3.1  million for the same  period in 1997  primarily  as a
result of the foregoing factors.




<PAGE>


Liquidity and Capital Resources
-------------------------------
Net cash  provided by  operating  activities  was $5.2  million and $7.8 million
during the three month periods ended March 31, 1998 and 1997, respectively.  The
decrease in net cash  provided by operating  activities  during the three months
ended March 31, 1998 was primarily  attributable  to an increase of $2.6 million
of loss and loss  adjustment  expenses  paid to $25.3 million from $22.7 million
for the three months ended March 31, 1998 and 1997, respectively.

Net cash used in investing  activities  was $5.8 million during the three months
ending  March 31,  1998  compared  to $8.0  million  for the same period in 1997
primarily  as a result of an  increase  in  investment  collections  from  fixed
maturities,  which was partially offset by an increase in short-term investments
by the Company.

The Company has in place unsecured lines of credit with two banks under which it
may borrow up to $12.0 million.  At March 31, 1998, no amounts were  outstanding
on either of the lines of credit.  In addition,  at March 31, 1998,  Farm Family
Casualty had $1.3 million  principal  amount of surplus notes  outstanding.  The
surplus  notes bear  interest at the rate of eight percent per annum and have no
maturity date. Farm Family  Casualty  redeemed all of the surplus notes on April
1, 1998.

Future Application of Accounting Standards
------------------------------------------
In February of 1998, the Financial  Accounting  Standards Board issued Statement
of Financial  Accounting  Statement (SFAS) 132,  "Employers'  Disclosures  about
Pensions and Other Postretirement Benefits," effective for years beginning after
December 31, 1997.  SFAS 132 revises the  disclosure  requirements  but does not
change the  measurement  or  recognition  of pensions and other post  retirement
benefits.  The  adoption  of SFAS 132 will  result  in  revised  and  additional
disclosures  but will have no  effect  on the  financial  position,  results  of
operations, or liquidity of the Company.



Item 6:        Exhibits and Reports on Form 8-K

                                  EXHIBIT INDEX

                      FARM FAMILY HOLDINGS, INC. FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 1998


Exhibit Number       Document Description

*2.1                 Plan of  Reorganization  and Conversion  dated February 14,
                     1996 as amended by Amendment No. 1, dated April 23, 1996

*3.1                 Certificate of Incorporation of Farm Family Holdings, Inc.

*3.2                 Bylaws of Farm Family Holdings, Inc.


*Incorporated by reference to Registration Statement No. 333-4446



<PAGE>


Reports on Form 8-K

        A report on Form 8-K was filed on January  28,  1998  reporting  a press
release issued  announcing that a committee of its  independent  directors and a
committee  representing  the  shareholders  of Farm  Family  Life  negotiated  a
revision  of the form of  consideration  to be paid,  under the Option  Purchase
Agreement  pursuant to which Farm Family  Holdings has an option of acquire Farm
Family Life.

         A report on Form 8-K was filed on February  27, 1998  reporting a press
release issued announcing the Company's  operating results for the quarter ended
and the year ended December 31, 1997.

No financial statements were filed with either Form 8-K.


<PAGE>


Pursuant  to the  requirements  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.


                           FARM FAMILY HOLDINGS, INC.
                                  (Registrant)




May 14, 1998    By: /s/ Philip P. Weber
------------    ----------------------------------------------------------------
   (Date)       Philip P. Weber, President & Chief Executive Officer
                             (Principal Executive Officer)




May 14, 1998    By: /s/ Timothy A. Walsh
------------    ----------------------------------------------------------------
   (Date)       Timothy A. Walsh, Executive Vice President - Finance & Treasurer
                        (Principal Financial & Accounting Officer)