UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549


                                  FORM 10-QSB


                   QUARTERLY REPORT UNDER SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934



For Quarter Ended                                      Commission File
November 30, 1996                                    Number 0000927536




                     ALLIANCE FARMS COOPERATIVE ASSOCIATION
             (Exact name of registrant as specified in its charter)



Colorado                                                   84-1270685
(State or other jurisdiction of  (I.R.S. Employer Identification No.)
Incorporation or Organization)



                   302 Idlewild Street, Yuma, Colorado  80759
                    (Address of principal executive offices)

                                  970-848-3231
                           (Issuers telephone number)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [  ]

At January 14, 1997, there were 102 shares of the issuers common stock
outstanding.

Transitional Small Business Disclosure Format (check one):  Yes [  ]   No [X]


                  ALLIANCE FARMS COOPERATIVE ASSOCIATION
                         CONDENSED BALANCE SHEETS
                                   UNAUDITED
<TABLE>
<CAPTION>

                                                     November 30, 1996             August 31, 1996

<S>                                                       <C>                       <C>
ASSETS
Current Assets:
   Receivables                                                39,716                    72,448
   Inventory  (Note 4)                                     2,732,388                 2,435,477
   Other current assets                                       59,212                    48,273

       Total current assets                                2,831,316                 2,556,198

   Property, plant and equipment, at cost                 17,470,553                16,491,601
   Less accumulated depreciation                           1,533,862                 1,333,291

                                                          15,936,691                15,158,310


   Breeding stock                                          3,771,354                 3,928,215
   Less accumulated depreciation                           1,193,026                 1,013,872

                                                           2,578,327                 2,914,343
   Other assets, net of $59,035 and $51,568
     accumulated amortization                                209,295                   216,762

                                                         $21,555,629               $20,845,613



LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
   Bank Overdraft                                            416,431                   575,749
   Current maturities of long-term debt (Note 5)             926,100                   870,000
   Accounts payable (Note 3)                                 795,316                   526,193
   Accrued Rebates (Note 2)                                  670,167                   670,167
   Accrued expenses                                          246,364                   171,791

     Total current liabilities                             3,054,378                 2,813,900

Long-term debt (Note 5)                                   13,779,824                13,425,424

Shareholders' equity
   Common stock of $.01 par value;  authorized
     10,000 shares, issued and outstanding 102 shares              1                         1
   Additional paid-in capital                              7,487,653                 7,487,653
   Accumulated deficit                                    (2,766,227)               (2,881,365)

      Total shareholders' equity                           4,721,427                 4,606,289

     Commitments (Note 6)                                 
                                                            
                                                         $21,555,629               $20,845,613

<FN>
          See accompanying notes to condensed financial statements
</TABLE>



                ALLIANCE FARMS COOPERATIVE ASSOCIATION
                  CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                        UNAUDITED


                                                          Three Month Periods Ended
                                                                November 30
                                                   1996                          1995

<S>                                            <C>                           <C>
Net sales  (Note 2)                            $3,203,015                    $1,427,713
Cost of goods sold                              2,579,463                     1,577,752


     Gross income (loss)                          623,552                      (150,039)

Expenses related to start-up
  of new production facilities                     75,668                           ---
Administrative expenses                            92,969                        73,667
Loss on sale of breeding stock                     59,658                        74,391


Operating income (loss)                          $395,258                     ($298,097)

Other income (expense):
   Interest expense                              (322,652)                     (216,576)
   Other (Note 3)                                  42,532                         2,165

                                                 (280,120)                     (214,411)

Net income (loss)                                $115,138                     ($512,508)

<FN>
          See accompanying notes to condensed financial statements
</TABLE>



                 ALLIANCE FARMS COOPERATIVE ASSOCIATION
                        STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                          UNAUDITED
                                                                                Three Month Periods Ended
                                                                                       November 30
                                                                                  1996                       1995

<S>                                                                            <C>                       <C>
Cash flow from operating activities:
   Net income (loss)                                                            115,138                    (512,508)
   Adjustment to reconcile net loss to net cash
     used in operating activities:
        Provision for depreciation and amortization                             529,554                     379,329
        Loss on sale of breeding stock                                           59,658                      74,391
   Changes in assets and liabilities:
        Receivables                                                              32,732                     (19,042)
        Inventory                                                              (296,911)                      8,510
        Other current assets                                                    (10,939)                        316
        Other assets                                                                ---                      22,842
        Accounts payable                                                        269,123                     (25,044)
        Accrued expenses                                                         74,573                      28,340

            Net cash provided by (used in)                                      772,927                     (42,866)

               operating activities

Cash flows from investing activities:
   Capital expenditures                                                      (1,156,805)                 (2,042,332)
   Proceeds from sale of breeding stock                                         132,695                      85,277

          Net cash used in investing activities                              (1,024,110)                 (1,957,055)


Cash flows from financing activities
   Increase (decrease) in revolving term credit                                 448,000                    (865,000)
   Payment on long term debt                                                   (217,500)                         ---
   Increase in note payable to Farmland                                         180,000                     347,621
   Issuance of common shares, net of offering cost                                  ---                   1,324,461
   Loan origination fees                                                            ---                     (36,000)
   Decrease in bank overdraft                                                  (159,317)                         ---

            Net cash provided by financing activities:                          251,183                     771,082

            Decrease in cash and cash equivalents                                   ---                  (1,228,839)

Cash and cash equivalents at beginning of period                                    ---                   1,477,213
Cash and cash equivalents at end of period                                          ---                     248,373


<FN>
      See accompanying notes to condensed financial statements
</TABLE>

                    Alliance Farms Cooperative Association
                   Notes to Condensed Financial Statements

                                 (Unaudited)

1.   Interim Financial Statements

     The accompanying condensed unaudited financial statements reflect all
     adjustments (consisting of only normal recurring accruals) which in the
     opinion of management, are necessary for a fair presentation of the
     financial position, results of operations and cash flows for the interim
     periods presented.  Income taxes have not been provided because Alliance
     Farms Cooperative Association (Alliance) expects to derive 100% of its net
     income principally from the sale of feeder pigs to its members which will
     be apportioned and distributed to members of Alliance on a patronage basis
     in accordance with its by-laws.

     Certain information and footnote disclosures normally included in financial
     statements presented in accordance with generally accepted accounting
     principles have been condensed or omitted.  The accompanying unaudited
     condensed financial statements should be read in conjunction with the
     financial statements and notes in Alliance's August 31, 1996 Annual Report
     on Form 10-KSB.

2.   Sales

     Alliance has sold 100% of its feeder pigs to its members for the three
     month periods ended November 30, 1996 and 1995 at a contractual price which
     is based on Alliance's operating costs (which are based on a twelve month
     rolling average), debt service and an additional $4.50 per pig sold.

     Alliance's sales for the three months ended November 30, 1995 were reduced
     by the accrual of a rebate of $4.50 per head shipped that is intended to be
     paid to its members during fiscal 1997.  Alliance has not accrued this
     rebate for the three months ended November 30, 1996 as it does not intend
     to pay a rebate to its members on fiscal 1997 sales.

     Because the contractual price for the sale of a feeder pig is determined
     based upon, among other things, a twelve month historical rolling average
     for operating costs and to the extent that current operating costs per pig
     exceed the historical average operating costs, Alliance may incur a
     negative gross margin on the sale of its feeder pigs during periods of
     rising costs.

     Alliance's average net sales price and the average industry market price
     were as follows:

                                           Three Months Ended
                                               November 30
                                        1996              1995

      Average Net Sales Price          58.18             42.05
      Average Industry Market*         51.77             37.86

     *As published by Spark's Companies, Inc. (from the USDA's Market News
     Service)


3.   Transactions with Farmland and Yuma


     Alliance purchased feed from Yuma Farmers' Milling and Mercantile
     Cooperative (Yuma), and animal health supplies and breeding stock from
     Farmland Industries, Inc. (Farmland) based on market prices. Yuma and
     Farmland are members of Alliance.  Alliance also sold feeder pigs to
     Farmland and Yuma.  Such purchases and sales were as follows:

                                          Three Months Ended
                                             November 30
                                         1996               1995

     Feed Purchases                 $  1,112,412       $  586,437
     Animal Health Purchases             211,549           60,200
     Breeding Stock                      143,694          131,513
     Feeder Pig Sales                  2,004,378          973,742

     Farmland also pays Alliance a royalty for any pigs raised by Alliance and
     sold to a Farmland finisher that are then selected as breeding stock for
     Farmland's contract herds pursuant to the swine production services
     agreement.  The royalty, which is $10 per head selected, paid to Alliance
     under such agreement was as follows:

                           Three Months Ended
                              November 30
                             1996      1995
  
       Royalty Income     $ 32,600   $     0

     Farmland also performs administrative, advisory and consulting services on
     behalf of Alliance pursuant to a contractual agreement.  The agreement
     provides that Farmland will be compensated for such services in an amount
     equal to one dollar per pig shipped adjusted annually for inflation for a
     term of ten years commencing July 13, 1994.  Amounts paid by Alliance to
     Farmland under such agreement were as follows:

                           Three Months Ended
                              November 30
                              1996      1995

     Management Fee        $ 57,616   $35,840

     Alliance owed $98,959 and $143,712 at November 30, 1996 and $36,850 and
     $137,722 at August 31, 1996 to Farmland and Yuma respectively, for goods
     and services.


4.   Major components of inventories as of November 30, 1996 and August 31, 1996
     are as follows:

                             November 30        August 31
                                 1996              1996

      Feeder Pigs............$  2,555,319      $  2,265,056
      Other..................     177,069           170,421

                             $  2,732,388      $  2,435,477




5.   Long-Term Debt


     On May 19, 1995, Alliance entered into a $23,600,000 secured credit
     facility with CoBank.  This agreement provides for $18,850,000 of term
     loans and $4,750,000 of revolving term credit.  Proceeds from the term
     loans are used for construction of feeder pig production facilities and are
     advanced by CoBank as Alliance incurs construction costs.  Proceeds from
     revolving term credit may be used for working capital and other purposes.
     The unused commitments expire February 28, 1997 for the term loans and June
     20, 2006 for the revolving term credit.  Interest accrues on the
     outstanding principle balance of the loan at a rate equal to CoBank's
     national variable rate, plus 1.25% (9.5% at November 30, 1996).

     Long term debt at November 30, 1996 and August 31, 1996 consisted of the
     following:

                             November 30        August 31
                                 1996              1996


  CoBank Term Loan ..........$ 11,300,500      $ 11,518,000
  CoBank Revolving
  Term Credit ...............$  2,589,000      $  2,141,000
  Note Payable, Farmland ....$    816,424           636,424

                             $ 14,705,924      $ 14,295,424

  Less Current Maturities ...$    926,100      $    870,000

                             $ 13,779,824      $ 13,425,424



     At November 30, 1996, no additional term loans were immediately available,
     an additional $211,000 of term loans became available on December 16, 1996,
     another $211,000 of term loans will be available upon acceptance by CoBank
     of a feeder pig production facility and $331,000 of revolving term credit
     was immediately available.

     Additional amounts of term  loans of $6,330,000 and revolving term credit
     of $1,830,000 are restricted and available only as additional shares of
     common stock are sold ($2,110,000 of term loans and $610,000 of revolving
     term credit for every $1,360,000 of common stock sold).

     Alliance is required to comply with various covenants, including, but not
     limited to (i) maintaining at least $3,350,000 of shareholder's equity,
     (ii) maintaining modified working capital (calculated as current assets
     plus the available revolving term credit minus current liabilities
     excluding the current portion of term debt payments) of at least $406,000,
     (iii) restrictions on the occurrence of additional indebtedness, (iv)
     restrictions on the declaration and payment of the cash portion of
     patronage distributions and other distributions or allocations of earnings,
     surplus or assets.  As of November 30, 1996 Alliance was in compliance with
     all covenants.  Alliance may be required to make equity investments in
     CoBank in an amount not to exceed 1% of the average five-year principal
     loan balance until Alliance meets CoBank's target level of equity
     investment, which is currently 11.5% of the average five-year principal
     loan balance.  As of November 30, 1996, substantially all assets of
     Alliance were pledged to CoBank.

     At November 30, 1996, $816,424 had been borrowed from Farmland pursuant to
     a $760,000 loan agreement and a $200,000 loan agreement.  The $760,000 loan
     agreement provides for interest at CoBank's prime rate and requires
     repayment in 2005.  The $200,000 loan agreement provides for interest at
     CoBank's prime rate plus 1.25% and requires repayment in November 2006, or
     upon the sale of an additional 17 shares of common stock by Alliance if
     that occurs prior to November 2006.

     Long-term debt as of November 30, 1996 matures during the fiscal years
     ending August 31 in the following amounts:


                        1997........$    870,000
                        1998........   1,262,700
                        1999........   1,318,800
                        2000........   1,318,800
                        2001........   1,318,800
                        Thereafter..   7,690,724

                                    $ 13,779,824



6. Alliance Farms is currently operating six 2,450 sow feeder pig production
  units and has an additional unit under construction in Wayne County,
  Illinois.  As of November 30, 1996, commitments for construction of this
  facility totaled approximately $2,109,900.  Contracts for these commitments
  were entered into on December 16, 1996.




           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE STATEMENTS MADE IN
THIS REPORT ON FORM 10-QSB ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES.  ALLIANCE'S ACTUAL RESULTS, FINANCIAL CONDITION OR BUSINESS COULD
DIFFER MATERIALLY FROM ITS HISTORICAL RESULTS, FINANCIAL CONDITION OR BUSINESS,
OR THE RESULTS OF OPERATIONS, FINANCIAL CONDITION OR BUSINESS CONTEMPLATED BY
SUCH FORWARD-LOOKING STATEMENTS.  FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH
DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN ALLIANCE FARMS'
AUGUST 31, 1996 ANNUAL REPORT ON FORM 10-KSB UNDER THE CAPTION "FACTORS THAT MAY
AFFECT FUTURE RESULTS OF OPERATIONS, FINANCIAL CONDITION OR BUSINESS", AS WELL
AS THOSE DISCUSSED ELSEWHERE IN ALLIANCE'S REPORTS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     Alliance issued 17 shares of common stock in October 1995 for net proceeds
of approximately $1,324,461.  Alliance used these proceeds, in combination with
$3,219,899 of net proceeds from previous sales of common stock and borrowings of
$14,705,924, for the development, population, and start-up of five 2,450-sow
feeder pig production facilities in Yuma County, Colorado and one 2,450-sow
feeder pig production facility in Wayne County, Illinois.

     Alliance has issued 102 shares of common stock and is presently offering an
additional 51 shares to qualified buyers. Alliance has under its credit facility
$331,000 immediately available as of November 30, 1996.  An additional $211,000
of term loans became available on December 16, 1996 and an additional $211,000
is to become available approximately 90 days following completion of
construction of the first sow unit in Illinois (anticipated to occur in February
1997).  In the opinion of management, these arrangements for debt capital are
adequate for Alliance's present operating and capital plans. Another $8,160,000
will be eligible for borrowing upon the completion of the sale of an additional
51 shares of Alliance common stock.  Proceeds from the sale of such additional
shares and additional bank borrowings would be used for future capital expansion
of additional feeder pig production facilities.  However; there is no assurance
that additional shares of common stock will be sold and that the resulting
additional debt would be available.

     As of November 30, 1996, Alliance has borrowed $816,424 from Farmland,
including $200,000 borrowed for the acquisition of certain real property in
Wayne County, Illinois on which the second Illinois facility is under
development.  As of the date of this report, Alliance is engaged in negotiations
with Farmland for the provision of an additional $1,160,000 loan and with CoBank
to obtain a $2,720,000 advance under the CoBank credit facility.  No assurances
can be given that Alliance's negotiations with Farmland and CoBank will be
successful and that Alliance will obtain such additional financing.

     During the three month period ended November 30, 1996, Alliance incurred
capital expenditures of $516,764 for construction of a new 2,450 sow feeder pig
unit in Yuma County, Colorado and a new 2,450 sow feeder pig unit in Wayne
County, Illinois, as well as capital expenditures of $399,650 for land purchased
for future construction.  The remaining capital expenditures were for
replacement breeding stock and building construction for the first four units.


THREE MONTHS ENDED NOVEMBER 30, 1996 AND 1995

     Shipments of feeder pigs were higher for the three months ended November
30, 1996 than in the prior year's period.  Alliance shipped 55,054 feeder pigs
for the quarter ended November 30, 1996 compared to 33,951 feeder pigs shipped
for the quarter ended November 30, 1995 for an increase of 62%.  Net sales for
the quarter ended November 30, 1996 increased to $3,203,015 from $1,427,713 for
the prior year period, an increase of $1,775,302, or 124%.  The selling price
per pig is determined pursuant to the formula established under Alliance's
Feeder Pig Purchase Agreement with its members.  The selling price is based on
Alliance's operating costs (which are based on a twelve month rolling average),
debt service and an additional $4.50 per pig.  The above increase in volume and
sales dollars is primarily due to six units operating at full capacity for the
quarter ended November 30, 1996 as compared to four units operating at full
capacity for the quarter ended November 30, 1995.  The sales price per pig
pursuant to the Feeder Pig Purchase Agreement also was higher due to an increase
in the twelve month rolling average of operating costs.  Additionally, a sales
rebate of $152,780 was accrued during the quarter ended November 30, 1995 which
reduced net sales.  During the three months ended November 30, 1996, Alliance
did not accrue the sales rebate of $4.50 per pig shipped due to Alliance's
decision to no longer pay a sales rebate.  Average net sales price was $58.18
and $42.05 during the quarter ended November 30, 1996 and 1995, respectively.

     Alliance incurred a positive gross margin of $623,552 and a negative gross
margin of $150,039 for the three month periods ended November 30, 1996 and 1995,
respectively.  This improvement in gross margin is primarily due to the nature
of the contractual pricing arrangements applicable to Alliance's sale of feeder
pigs to its members.  As previously described, the selling price is based on,
among other things, Alliance's operating costs on a twelve month historical
rolling average.  For the three months ended November 30, 1996, Alliance's then
current operating costs (at the time pigs were shipped) were lower than the
twelve month historical rolling average operating costs by $1.69 per pig sold.
For the three months ended November 30, 1995, the then current operating costs
exceeded the historical rolling average of operating costs by $4.40 per pig
sold.

     Sales to Farmland for the three month period ended November 30, 1996 and
1995 were $2,004,378 and $973,742, respectively.   The average net sales price
per head was $58.18 and $42.05 and the average industry market price per head
was $51.77 and $37.86 during 1996 and 1995, respectively.

     Alliance recorded $75,668 of start-up costs relating to the operation of
the newest production facility, which is located in Wayne County, IL, during the
three months ended November 30, 1996.  All costs for the three month period
ended November 30, 1996 were comprised of utilities, feed, labor and other
general expenses prior to the operation of the newest 2,450-sow feeder pig
production facility.

     Loss on sale of breeding stock was $59,658 for the three months ended
November 30, 1996 as compared to $74,391 for the prior year period.  This
decrease is attributable to the existence of more newly developed facilities
culling animals during the first quarter of fiscal 1996 as compared to more
mature facilities culling animals during the first quarter of fiscal 1997.

     Administrative expenses were $92,969 for the three months ended November
30, 1996 compared to $73,667 for the prior year period.  This increase reflects
the increased operations and includes higher administrative, payroll and
professional fees.

     Interest expense of $322,652 for the three months ended November 30, 1996
as compared to $216,576 for the prior year period, was incurred in financing the
development of four existing and two new 2,450-sow feeder pig facilities.  This
increase is primarily due to the increase in the outstanding loan balance.  As
of November 30, 1996, Alliance had borrowed $13,889,500 from CoBank for
construction and start up costs and $816,424 from Farmland for the purchase of
land which is intended to be used for future expansion.

     Alliance incurred net income of $115,138 for the three months ended
November 30, 1996 compared to net loss of $512,508 for the prior year period.
The net income for the first quarter of fiscal 1997 was attributable to the
rolling average cost that per pig sales prices are based on exceeding then
current costs, caused in part by increasing productivity as well as decreasing
corn prices.  The net loss for the first quarter of fiscal 1996 was attributable
primarily to then current costs exceeding the rolling average cost that per pig
sales prices are based on, caused in part by high death loss due to herd health
issues, as well as rising corn prices.  In addition to operating risks and
uncertainties associated with any business, Alliance's ability to generate net
income is limited by any start-up expenses that are incurred with respect to
facilities development and by the selling price formula for feeder pigs that
contains a $4.50 production margin.


PLAN OF OPERATION

     Alliance currently is expanding its operations and, until such time as its
units are operating at full capacity, losses continue to be a possibility.

     During the year ending August 31, 1997, Alliance intends to continue the
operation of its five 2,450-sow production facilities located in Yuma County,
Colorado as well as its one 2,450-sow production facility in Wayne County,
Illinois and to complete construction and population of a second 2,450 sow
production facility under development in Wayne County, Illinois.  Alliance
anticipates that construction of the new facility will be completed by late
October 1997.  Further, in the event that completion of construction and
population of this facility is accomplished in a timely manner, Alliance expects
to be in a position to produce feeder pigs from the new facility by October 22,
1997 and to be operating at full capacity by November 1997.  It is anticipated
that the number of Alliance's employees will increase by approximately thirteen
persons by August 1997, as the operation of each production unit, together with
attendant nursery facilities, is expected to require thirteen persons.

     Funding of the ongoing operation of Alliance's existing 2,450-sow feeder
pig production facilities is anticipated to be obtained from revenues from the
sale of feeder pigs to members based on Alliance's Feeder Pig Purchase Agreement
and its existing credit facility.

     Alliance has implemented an artificial insemination program (AI) in the
Colorado operation and plans on continuing AI as Alliance expands into other
geographical areas. Alliance believes that AI will allow more rapid improvements
in carcass quality and assist in maintaining higher health status of the herds.

     Alliance has begun planning operations to depopulate the five 2450-sow
feeder pig production facilities located in Yuma County, Colorado in order to
repopulate these units with Pig Improvement Company (P.I.C.) females.  Sourcing
for this repopulation will be Alliance's P.I.C. multiplier unit in Illinois.
Management believes this change will improve both productivity and health of the
sow units and may possibly result in improved production results in both nursery
and finishing pig performance.  Repopulation is expected to begin in August 1997
with P.I.C. feeder pigs available in October 1997.  Completion of the
repopulation project is anticipated to be completed by June 1998.



                          PART II.  OTHER INFORMATION



Item 6.     Exhibits and Report on Form 8-K


(a)  Exhibits

     The exhibit listed below is filed as part of Form 10-QSB for quarter ended
     November 30, 1996.

          27.  Financial Data Schedule

(b)  No reports on Form 8-K were filed during the quarter ended November 30,
     1996.


                                   SIGNATURES



In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.


                            ALLIANCE FARMS COOPERATIVE ASSOCIATION
                                         (Registrant)


                                        /s/ WAYNE SNYDER

                                          Wayne Snyder
                                Chairman of the Board, President
                                          and Director
                              (Principal Executive Officer and Principal
                               Financial and Accounting Officer)

Dated:  January 14, 1997