U.S. 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 Quarterly Period Ended                             Commission File
May 31, 1999                                         Number 0000927536




                     ALLIANCE FARMS COOPERATIVE ASSOCIATION
       (Exact name of small business issuer as specified in its charter)



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



                   503 East 8th Avenue, 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 July 15, 1999, there were 190 shares of the issuer's common stock
outstanding, of which 136 were shares of Class A common stock and 54 were shares
of Class B common stock.

Transitional Small Business Disclosure Format (check one):  Yes [  ]   No [X]
<TABLE>
<CAPTION>


                          ALLIANCE FARMS COOPERATIVE ASSOCIATION
                                      BALANCE SHEETS
                                         UNAUDITED

<S>                                                         <C>                             <C>
                                                                 May 31, 1999                   August 31, 1998

ASSETS
Current Assets:
   Receivables, trade                                                       $12,573                          $4,620
   Receivables, non-trade (Note 3)                                           27,323                         145,832
   Inventory  (Note 4)                                                    4,250,979                       3,591,665
   Other current assets                                                      18,170                          50,160

       Total current assets                                              $4,309,045                      $3,792,277

   Property, plant and equipment, at cost                               $29,209,795                     $25,140,867
   Less accumulated depreciation                                          4,308,872                       3,266,290

                                                                        $24,900,923                     $21,874,577


   Breeding stock                                                        $3,849,670                      $4,515,230
   Less accumulated depreciation                                          1,212,509                       1,027,749

                                                                         $2,637,161                      $3,487,481
   Other assets, net of $136,796 and $109,218
     accumulated amortization                                              $396,023                        $370,220

                                                                        $32,243,152                     $29,524,555



LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
   Bank Overdraft                                                          $783,473                        $279,069
   Current maturities of long-term debt (Note 5)                          1,812,000                       1,812,000
   Accounts payable (Note 3)                                                420,550                         917,338
   Patronage refund payable                                                       0                         433,115
   Accrued property tax                                                     653,019                         332,587
   Accrued payroll                                                          133,662                         145,118
   Other accrued expenses                                                   961,767                         389,010

     Total current liabilities                                           $4,764,471                      $4,308,237

Long-term debt (Note 5)                                                 $15,796,779                     $15,996,775

Shareholders' equity:
   Class A common stock of $.01 par value;  authorized
     5,000 shares, issued and outstanding 136 shares at May
31,
     1999 and 119 shares at August 31, 1998                                      $1                              $1
   Class B common stock of $.01 par value;  authorized
     2,500 shares, issued and outstanding 54 shares at May
31,
     1999 and 36 shares at August 31, 1998                                        1                               0
   Class C common stock of $.01 par value;
     authorized 2,500 shares, none issued                                         0                               0
   Additional paid-in capital                                            13,182,431                      10,751,324
   Patronage refund for reinvestment                                      1,031,533                       1,031,533
   Accumulated deficit                                                  (2,532,064)                     (2,563,315)

      Total shareholders' equity                                        $11,681,902                      $9,219,543
     Commitments and Contingencies (Note 6)                                  ------                          ------

                                                                        $32,243,152                     $29,524,555


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

<TABLE>
<CAPTION>


                        ALLIANCE FARMS COOPERATIVE ASSOCIATION
                          CONDENSED STATEMENTS OF OPERATIONS
                                       UNAUDITED





                                                Three Month Periods            Nine Month Periods Ended
                                                       Ended
                                                       May 31                           May 31

                                                   1999              1998                  1999              1998

<S>                                               <C>               <C>                  <C>               <C>



Net sales (Notes 2 and 3)                         $5,227,862        $4,375,672           $13,735,549       $13,346,482
Cost of goods sold (Note 3)                        3,913,718         3,460,916            11,192,560         9,692,946


     Gross margin                                  1,314,144           914,756             2,542,989         3,653,536

Expenses related to start-up
  of new production facilities                        46,712           342,814               132,410           791,861
Administrative expenses                              214,979           319,403               711,752           646,062
Loss on sale of breeding stock                       204,002           103,518               741,269           159,057


Operating income                                    $848,451          $149,021              $957,558        $2,056,556

Other income (expense):
   Interest expense                                (364,042)         (412,924)           (1,138,542)       (1,129,039)
   Other                                             107,604           246,194               212,235           298,355

                                                   (256,438)         (166,730)             (926,307)         (830,684)



Net income (loss)                                   $592,013         ($17,709)               $31,251        $1,225,872





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

<TABLE>
<CAPTION>

                        ALLIANCE FARMS COOPERATIVE ASSOCIATION
                               STATEMENTS OF CASH FLOWS
                                      UNAUDITED


                                                                Nine Month Periods Ended
                                                                         May 31
                                                                  1999                    1998

<S>                                                                 <C>                     <C>


Cash flows from operating activities:
   Net income                                                          $31,251               $1,225,872
   Adjustment to reconcile net income to net cash
     provided by operating activities:
        Provision for depreciation and amortization                  2,009,653                1,922,780
        Loss on sale of breeding stock                                 741,269                  159,057
   Changes in assets and liabilities:
        Receivables                                                    110,556                   64,722
        Inventory                                                    (659,314)                (540,799)
        Other current assets                                            31,990                 (68,025)
        Other assets                                                  (53,380)                (104,778)
        Accounts payable                                             (496,788)                  512,286
        Accrued expenses                                               881,733                  148,694

            Net cash provided by operating activities               $2,596,970               $3,319,809

Cash flows from investing activities:
   Capital expenditures                                           ($5,348,698)             ($7,305,367)
   Proceeds from sale of breeding stock                                449,328                1,385,582

          Net cash used in investing activities                   ($4,899,370)             ($5,919,785)


Cash flows from financing activities:
   Proceeds from issuance of long term debt                         $2,523,116               $2,658,785
   Net decrease in revolving term credit                             (730,712)                (309,782)
   Payment on long term debt                                       (1,359,000)                (970,400)
   Decrease in note payable to Farmland                              (633,400)                (116,666)
   Loan origination fees                                                     0                   12,000
   Payment of patronage refund                                       (433,115)                        0
   Issuance of common shares, net of offering cost                   2,431,107                2,032,087
   Increase (decrease) in bank overdraft                               504,404                (706,048)
            Net cash provided by

                    financing activities:                           $2,302,400               $2,599,976


            Change in cash                                                  $0                       $0

Cash at beginning of period                                                  0                        0

Cash at end of period                                                       $0                       $0



<FN>
                    See accompanying notes to 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 adjustments) 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 nearly 100% of
     its net income from the sale of feeder and weaned 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 August 31, 1998 balance
     sheet presented in the accompanying condensed financial statements was
     derived from the financial statements in Alliance's August 31, 1998 Annual
     Report on Form 10-KSB.  The accompanying unaudited condensed financial
     statements should be read in conjunction with the financial statements and
     notes in Alliance's August 31, 1998 Annual Report on Form 10-KSB.

2.   Sales

     Alliance sold nearly 100% of its feeder and weaned pigs to its members for
     the three and nine month periods ended May 31, 1999 and 1998 respectively,
     at a contractual price which is based on Alliance's operating costs, debt
     service and an additional amount of $0 to $4.50 per pig sold.  Prior to
     September 1, 1998 the contractual price for feeder pigs was based on a
     twelve month rolling average for operating costs and the additional fixed
     amount of $4.50 per pig.  Effective September 1, 1998 the contractual price
     for feeder pigs is based on a five month rolling average for operating
     costs and an additional amount of $0 to $4.50 as determined periodically by
     the Board of Directors at its discretion.  The contractual price for weaned
     pigs is based on a five month rolling average for operating costs and an
     additional amount of $0 to $4.50 as determined periodically by the Board of
     Directors at its discretion.  For the nine months ended May 31, 1999 $0
     additional amount per pig was charged in addition to the operating costs
     and debt service for feeder and weaned pigs.

     Because the contractual price for the sale of a feeder or weaned pig is
     determined based upon, among other things, a five month historical rolling
     average of operating costs (twelve month historical rolling average prior
     to September 1, 1998) 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 and weaned pigs during
     periods of rising costs.

     Alliance's average net sales price and the average industry market price
     were as follows:
     <TABLE>
     <CAPTION>

                                             Three Months Ended      Nine Months Ended
                                                             May 31             May 31

                                                             1999         1998       1999         1998


         <S>                                               <C>          <C>        <C>          <C>

         Feeder Pig Average Net Sales Price                 53.20        56.05      51.77        58.53
         Feeder Pig Average Industry Market*                46.89        35.14      38.85        39.48
         Weaned Pig Average Net Sales Price                 39.71          N/A      38.32          N/A
         Weaned Pig Average Industry Market*                30.77          N/A      23.67          N/A

         * Provided by the USDA - Iowa Department of Ag Market News
</TABLE>


       3. Transactions with Effingham, Farmland and Yuma


     Alliance purchased feed and propane from Effingham Equity (Effingham), 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. Effingham, Farmland and Yuma are members
     of Alliance.  Alliance also sold feeder pigs to Farmland and Yuma and
     weaned pigs to Farmland.  Such purchases and sales were as follows:
     <TABLE>
     <CAPTION>
                                               Three Months Ended        Nine Months Ended



                                                     May 31                    May 31


                                                       1999             1998            1999             1998


         <S>                                     <C>             <C>             <C>              <C>

         Feed Purchases                          $1,112,298       $1,216,790      $3,478,493       $4,110,877
         Propane Purchases                            9,389           16,224          55,610           67,220
         Animal Health Purchases                    131,679           82,698         344,219          169,736
         Breeding Stock Purchases                   780,981          795,685       1,887,391        2,308,245
         Feeder & Weaned Pig Sales                2,404,664        2,293,777       6,616,386        8,009,564
     </TABLE>

     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 a swine production services
     agreement.  The royalty, which is $10 per head selected, paid to Alliance
     under such agreement was as follows:
     <TABLE>
     <CAPTION>
                                    Three Months Ended         Nine Months Ended

                                          May 31                    May 31


                                          1999              1998           1999                1998

         <S>                             <C>               <C>             <C>                 <C>


         Royalty Income                  $0                $0              $3,540               $21,100
</TABLE>



     Farmland provided Alliance with an administrative office in Yuma, Colorado
     at no cost through July 31, 1998.  Commencing August 1, 1998 Alliance and
     Farmland began to equally share the office rent.  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:
     <TABLE>
     <CAPTION>
                                     Three Months Ended         Nine Months Ended
                                           May 31                     May 31


                                           1999              1998             1999             1998


         <S>                             <C>                <C>             <C>              <C>
         Management Fee                  $119,843           $87,277         $321,004         $254,344
     </TABLE>

     Alliance had $27,323 and $145,832 of non-trade receivables at May 31, 1999
     and August 31, 1998, respectively.  The $27,323 due Alliance at May 31,
     1999 was due in part from Farmland for royalty fees incurred and for items
     received out of Alliance's shop stock inventory, and the remainder from Pig
     Producers I, LP ("Pig Producers"), a limited partnership in which Farmland
     holds a 12.5% interest, for the reimbursement of wages, benefits and other
     costs attributable to Alliance employees that are assigned to perform
     various duties at Pig Producers, as well as for items received out of
     Alliance's shop stock inventory.  The $145,832 due Alliance at August 31,
     1998 was due in part from Farmland for royalty fees incurred and the
     remainder from Pig Producers I, LP for the reimbursement of wages, benefits
     and other costs attributable to Alliance employees that are assigned to
     perform various duties at Pig Producers, as well as for items received out
     of Alliance's shop stock inventory.

     Alliance owed $546,815, $122,060 and $74,121 at May 31, 1999 and $278,650,
     $87,389 and $61,768 at August 31, 1998 to Farmland, Yuma and Effingham,
     respectively, for goods and services. Alliance is also obligated to
     Farmland in the amount of $333,172 at May 31, 1999 for funds used to
     purchase land for future expansion.  See note 5.

4.       Inventories


     Major components of inventories as of May 31, 1999 and August 31, 1998 are
     as follows:

                                 May 31           August 31
                                  1999               1998


      Feeder and Weaned Pigs...$  4,092,941      $ 3,467,308
      Other ...................     158,038          124,357

      .........................$  4,250,979      $ 3,591,665



5.   Long-Term Debt


     Long term debt at May 31, 1999 and August 31, 1998 consisted of the
     following:
<TABLE>
                                                          May 31                August 31

                                                           1999                    1998

         <S>                                               <C>                     <C>
         CoBank Term Loan                                  $10,464,800              $11,823,800
         CoBank Construction Loan                            6,148,223                3,625,107
         CoBank Revolving Term Credit                          662,584                1,393,296
         Note Payable to Farmland                              333,172                  966,572

                                                           $17,608,779              $17,808,775

         Less Current Maturities                             1,812,000                1,812,000

                                                           $15,796,779              $15,996,775



     </TABLE>


     On March 18, 1998, the Company entered into various loan agreements with
     CoBank, ACB ("CoBank") related to a secured credit facility which provides
     for up to $26,846,700 of non-revolving term debt,  $7,660,000 of revolving
     term credit and $18,400,00 of construction financing.  Proceeds from the
     term debt were used for refinancing the then existing non-revolving term
     debt, and will be used to finance the construction or acquisition of
     additional pig production facilities.  Proceeds from the revolving term
     credit were used for refinancing the existing revolving term credit, and
     will be used to provide working capital.  Proceeds from the construction
     loan may be used for the construction or acquisition of pig production
     facilities and are advanced by CoBank as construction costs are incurred by
     Alliance.  The actual advance of funds under this credit facility is
     subject to the satisfaction of certain conditions precedent and may be
     withdrawn or terminated by CoBank under certain circumstances.  The unused
     portion of the credit facility expires August 31, 2001 with the unpaid
     balance on that date due by September 30, 2011 with respect to the
     revolving term credit, December 31, 2001 with respect to the non-revolving
     term debt and September 30, 2001 with respect to the construction
     financing.

     The availability of non-revolving term debt, revolving term credit and
     construction debt under the CoBank credit facility is subject to specified
     equity investment levels in the Company being satisfied.  As of May 31,
     1999, $5,919,193 was immediately available to Alliance under its credit
     facility.  The availability of $16,381,900 of unused term loans and
     $4,130,000 of revolving term credit and $9,200,000 of construction loans
     under the CoBank credit facility is restricted and may be 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 Class A common
     stock sold and $1,675,000 of term loans and $485,000 of revolving term
     credit for every $1,080,000 of Class B or Class C common stock sold).

     The CoBank credit facility provides for the monthly payment of principal
     and interest.  Principal payments pursuant to the existing non-revolving
     term debt are to be made in equal monthly installments of $151,000, with
     the remaining unpaid balance being due and payable on that date which is
     ninety-nine months after the final advance under the non-revolving term
     loan.  Principal payments pursuant to each $2,110,000 of new non-revolving
     term loans are to be made in monthly installments of $21,800 each,
     beginning on the 20th day of the eighteenth month following the date of the
     initial advance of such $2,110,000 loan.  For each $2,720,000 of new
     construction loans, payment of the entire outstanding principal balance is
     to be made on that date that is sixteen (16) months after the date of the
     initial advance for construction of the proposed facility.  The revolving
     loan commitment will be reduced in 40 equal payments commencing on August
     31, 2001, such that after the fortieth reduction, the revolving loan
     commitment will be zero.  To the extent that the outstanding principal
     balance under the revolving loan exceeds the revolving loan commitment, the
     Company will be required to immediately make a principal payment in an
     amount sufficient to reduce the outstanding principal balance under the
     revolving loan to an amount not exceeding the revolving loan commitment.
     Interest accrues on the outstanding principal balance of the loan at a rate
     equal to either (i) a variable rate equal to CoBank's then national
     variable rate plus a base rate margin of 1.25% for non-revolving term loans
     and for revolving loans  or 2.25% for construction loans, or (ii) CoBank's
     then quoted rates for fixed rate loans, as may be elected from time to time
     by the Company, and is payable monthly in arrears by the 20th day of the
     following month.  During the period in which principal under the loan is
     outstanding, portions of such principal may bear interest at such variable
     rate while other portions may bear interest at such fixed rate.  As of May
     31, 1999, interest accrued on the outstanding principal balance on the
     respective loan portions under variable rates at 9.00% per annum for non-
     revolving term loans, 9.00% per annum for revolving term loans and 10.00%
     per annum for construction loans and between 8.01% and 9.14% for those
     portions under fixed rates.  The interest rates applicable to the loan are
     subject to reduction at specified times upon the Company's satisfaction of
     certain conditions relating to the Company's equity level and debt service
     coverage ratio.  The Company is permitted to prepay the loan at any time
     without penalty, except that in the event that fixed rate balances are
     prepaid, the Company is required to pay CoBank a surcharge in an amount
     equal to CoBank's funding losses with respect thereto.  Alliance
     capitalized $55,058 and $0 of interest on construction for the three months
     ended May 31, 1999 and 1998 respectively and $157,910 and $38,606 of
     interest on construction for the nine months ended May 31, 1999 and 1998
     respectively.

     In obtaining the secured credit facility, and for each year in which the
     credit facility is effective, the Company is required to pay a commitment
     fee equal to 0.5% on the outstanding revolving loan commitment and 0.25% on
     the unadvanced amount of the construction loan commitment.  In addition,
     the Company will be required to pay an activation fee equal to 1% on the
     amount withdrawn under the construction loan, along with a $6,000 fee with
     respect to the origination of each $2,110,000 of new non-revolving term
     loans.  During the course of the loan, the Company may be required to make
     additional equity investments at a rate not to exceed 1% of the average
     five-year principal loan balance (which additional equity investments may
     be satisfied out of CoBank's non-cash patronage distributions) until the
     Company meets CoBank's target level of equity investment, which currently
     is 11.5% of the Company's average five-year principal loan balance.  In
     addition, the Company was required to grant a first perfected lien and
     security interest on substantially all of its properties and assets to
     CoBank and to assign to CoBank all of the Company's rights in and to the
     existing and future Pig Purchase Agreements.  The Company is required to
     comply with various affirmative and negative covenants, including but not
     limited to (i) maintenance of at least a 0.25 ratio of total equity to
     total assets for the period ending August 31, 1998 and thereafter a 0.35
     ratio of total equity to total assets, (ii) maintenance of a debt service
     coverage ratio (calculated by dividing average annual cash flow by the
     current debt) of not less than one, (iii) provision of monthly financial
     statements and audited annual financial statements to CoBank, (iv)
     restrictions on the incurrence of additional indebtedness, (v) restrictions
     on certain liens, mergers, sales of assets, investments, guaranties, loans,
     advances and business activities unrelated to existing operations, and (vi)
     restrictions on the declaration and payment of the cash portion of
     patronage distributions and other distributions or allocations of the
     Company's earnings, surplus or assets.  As of May 31, 1999 the Company was
     in compliance with each of these covenants.

     As of May 31, 1999, Alliance has borrowed $333,172 from Farmland to
     purchase land for future expansion. This loan agreement with Farmland is
     evidenced by a promissory note providing for amortization over a ten-year
     period, at a variable rate of interest equal to CoBank's prime rate (7.75%
     at May 31, 1999). The payment schedule for this loan requires the Company
     to make interest-only payments for the life of the loan, with a final
     balloon payment of all principal to be made upon the expiration of the ten-
     year term on September 30, 2005.

     Long-term debt as of May 31, 1999 matures during the fiscal years ending
     August 31 in the following amounts:

                        1999                   $     453,000
                        2000                       2,227,200
                        2001                       2,243,765
                        2002                       2,293,458
                        Thereafter                10,391,356

                                               $ 17,608,779


6.       Commitments and Contingencies


As of May 31, 1999 Alliance Farms was operating five 2,450-sow feeder pig
production facilities in Yuma County, Colorado, two 2,450-sow feeder pig
production facilities in Wayne County, Illinois, one 2,450-sow weaned pig
production facility in Yuma County, Colorado and one 2,450-sow weaned pig
production facility in Wayne County, Illinois.  A 5,000-sow (2,500 feeder and
2,500 weaned pig production facility) unit in Yuma County, Colorado is nearly
completed.  Also, there are construction projects in Yuma County, Colorado for
another nursery facility and an additional farrowing room.  In Wayne County,
Illinois there is construction underway on an additional farrowing room.  At May
31, 1999, commitments for construction of said facilities totaled $677,620.
These commitments will be funded through bank borrowings.

In the November 1998 general election, Colorado voters adopted amendments to the
Colorado Revised Statutes concerning the regulation of housed commercial swine
feeding operations.  Such amendments may have material and adverse consequences
to Alliance Farms and its business.  These amendments mandate certain water and
air quality control measures that must be implemented by commercial swine
feeding operations housing at lease 800,000 pounds of swine or which are deemed
commercial under local law.  Regulations implementing the amendments were
recently promulgated and the amendments almost certainly are applicable to
Alliance's Colorado operations.

Alliance continues to evaluate the impact that the amendments would have.
In this regard, Alliance is implementing an odor management plan that is
designed to satisfy applicable air quality standards.  If Alliance's
implementation of its odor management plan does not result in compliance
with air quality standards, Alliance would be required to take other, more
costly odor management measures including possibly placing covers over the
waste lagoons at Alliance's facilities.  Such measures could have material
and adverse consequences to Alliance Farms and its business.  Alliance
presently is unable to estimate the costs that reasonably could be expected
to be incurred to comply with the amendments and any related regulations.



     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


STATEMENTS MADE IN THIS REPORT THAT ARE NOT HISTORICAL IN NATURE, OR THAT
STATE ALLIANCE'S, OR MANAGEMENT'S INTENTIONS, HOPES, BELIEFS,   EXPECTATIONS, OR
PREDICTIONS OF THE FUTURE, ARE "FORWARD-LOOKING   STATEMENTS" WITHIN THE MEANING
OF SECTION 21E OF THE SECURITIES AND   EXCHANGE ACT OF 1934, AS AMENDED, AND
INVOLVE RISKS AND UNCERTAINTIES.    IT IS IMPORTANT TO NOTE THAT ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM   THOSE EXPRESSED IN SUCH FORWARD-LOOKING
STATEMENTS.  FACTORS THAT COULD   CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES
INCLUDE, BUT ARE NOT LIMITED TO,   THOSE DISCUSSED UNDER THE CAPTION *FACTORS
THAT MAY AFFECT FUTURE RESULTS   OF OPERATIONS, FINANCIAL CONDITION OR BUSINESS*
IN ALLIANCE'S ANNUAL   REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED AUGUST
31, 1998, AS WELL   AS THOSE DISCUSSED ELSEWHERE IN ALLIANCE'S REPORTS FILED
WITH THE   SECURITIES AND EXCHANGE COMMISSION FROM TIME TO TIME.


FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     At May 31, 1999, Alliance reported a working capital deficit of $455,426
and total assets of $32,243,152. Alliance issued 17 shares of Class A common
stock and 18 shares of Class B common stock in February 1999 for net proceeds of
$2,431,107.  Alliance used these funds to repay the balance owed Farmland
pursuant to a $2,160,000 loan agreement, and for the development, population,
and start-up of a 5,000-sow unit in Yuma County, Colorado.

     As of May 31, 1999, Alliance has 136 shares of Class A Common Stock issued
and outstanding, 54 shares of Class B Common Stock issued and outstanding, no
issued and outstanding shares of Class C Common Stock and was offering an
additional 17 shares of Class A Common Stock and 72 shares of Class C Common
Stock to qualified prospective investors.  The offering of Class A Common Stock
and Class C Common Stock expired on July 7, 1999 without additional shares being
issued.  As of May 31, 1999, Alliance had $5,919,193 immediately available under
its credit facility with CoBank, consisting of $3,051,777 of construction loans
and $2,867,416 of revolving term credit. The availability of non-revolving term
debt and revolving term credit under the CoBank credit facility is subject to
specified equity investment levels in the Company being satisfied.

     As of May 31, 1999, Alliance has borrowed $333,172 from Farmland to
purchase land for future expansion.  During the nine month period ended May 31,
1999, Alliance incurred capital expenditures of $386,228 for construction of its
two weaned pig production facilities in located in Yuma County, Colorado and
Wayne County, Illinois, $4,025,838 for construction of the 5,000-sow pig
production facility in Yuma County, Colorado currently under construction, and
$35,505 for construction of the additional nursery facility in Yuma County,
Colorado.  The remaining capital expenditures were for replacement breeding
stock and building construction for the first seven production facilities.

     Major uses of cash during the nine months ended May 31, 1999 include
$5,348,698 for capital expenditures on new and existing facilities, $730,712
decrease in revolving term credit, $1,359,000 of principal payments on long term
debt, $633,400 payment on Farmland note and $433,115 payment of patronage
refunds.  Major sources of cash include  $2,523,116 of proceeds from the
issuance of long term debt, $2,431,107 of net proceeds from issuance of common
stock and $2,596,970 in cash provided by operating activities.  The decrease in
cash provided by operating activities in 1999 is primarily attributable to the
net income of $31,251 compared to net income of $1,225,872 for the prior period.

THREE MONTHS ENDED MAY 31, 1999 AND 1998

     Shipments of feeder pigs were slightly higher for the three months ended
May 31, 1999 than in the prior year.  Alliance began shipping weaned pigs in
August 1998.  Alliance shipped 79,159 feeder pigs and 25,599 weaned pigs for the
quarter ended May 31, 1999 compared to 78,065 feeder pigs and no weaned pigs
shipped for the quarter ended May 31, 1998 for an increase in feeder pigs
shipped of approximately 1%. Net sales for the quarter ended May 31, 1999
increased to $5,227,862 from $4,375,672 for the prior year period.  Net sales
for the quarter ended May 31, 1999 consisted of $4,211,296 feeder pig sales and
$1,016,566 weaned pig sales.  This is a decrease in feeder pig sales of $164,375
or 4%.  Seven feeder pig units  were in operation for the quarters ended May 31,
1999 and 1998.  The two weaned pig units were in  operation for the quarter
ended May 31, 1999.  The sales price per feeder pig pursuant to Alliance's Pig
Purchase Agreements was lower for the quarter ended May 31, 1999 despite the
five month rolling average of operating costs being more than the twelve month
rolling average of operating costs for the quarter ended May 31, 1998.  This is
because during the quarter ended May 31, 1998, an additional $4.50 margin was
charged on every feeder pig sold.  Effective September 1, 1998, the margin was
changed to $0 to $4.50,  as determined periodically by the Board of Directors at
its discretion.  For the quarter ended May 31, 1999 $0 margin per pig was
charged in addition to the operating costs and debt service.   Average net sales
prices for feeder and weaned pigs were $53.20 and $39.71 during the quarter
ended May 31, 1999 and $56.05 and $0 during the quarter ended May 31, 1998,
respectively.

     Alliance earned gross margins of $1,314,144 and $914,756 for the three
month periods ended May 31, 1999 and 1998, respectively.  This increase in gross
margin is due to the addition of two weaned pig units, partially offset by the
$4.50 additional margin per pig no longer being charged.  As previously
described, the selling price for Alliance's feeder and weaned pigs is based on,
among other things, the twelve-month (five-month effective September 1, 1998)
and five-month rolling average of operating costs per pig for feeder and weaned
pigs, respectively.  For the third quarter of fiscal 1999, Alliance's average
net sales price for feeder and weaned pigs exceeded then current production
costs by $12.54 per pig sold.  For the third quarter of fiscal 1998, the net
sales price exceeded then current production costs by $11.72 per pig sold.

     Sales to Farmland and Yuma for the three month periods ended May 31, 1999
and 1998 were $2,404,664 and $2,293,777, respectively.   The average feeder pig
net sales price per head was $53.20 and $56.05 and the average feeder pig
industry market price per head was $46.89 and $35.14 during the quarters ended
May 31, 1999 and 1998, respectively.  The average weaned pig net sales price per
head was $39.71 and the average weaned pig industry market price per head was
$30.77 during the quarter ended May 31, 1999.

     Alliance recorded $46,712 of start-up costs relating to the operation of
the 5,000 sow pig production facility under construction in Yuma County,
Colorado during the three months ended May 31, 1999 and $324,814 of start-up
costs relating to the operation of the weaned pig production facilities in both
Yuma County, Colorado and Wayne County, Illinois under construction during the
three months ended May 31, 1998.  All costs for the three month period ended May
31, 1999 and 1998 were comprised of utilities, feed, labor and other general
expenses prior to the operation of the new pig production facilities.

     Administrative expenses were $214,979 for the three months ended May 31,
1999 compared to $319,403 for the prior year period.  The expenses for the three
months ended May 31, 1998 included additional fees related to obtaining the
secured credit facility with CoBank.

     Loss on sale of breeding stock was $204,002 for the three months ended May
31, 1999 compared to $103,518 for the prior year period.  This increase is
attributable to lower market conditions during the three months ended May 31,
1999 as compared to the prior year period.

     Interest expense of $364,042 for the three months ended May 31, 1999 as
compared to $412,924 for the prior year period, was incurred in financing the
development of nine existing and one new pig production facilities.  This
decrease is primarily due to the capitalization of $55,058 in the third quarter
of fiscal 1999 and zero in the third quarter of fiscal 1998.  As of May 31,
1999, Alliance had borrowed $17,275,607 from CoBank for construction and start
up costs and $333,172 from Farmland for the purchase of land which is intended
to be used for future expansion.

     Alliance earned net income of $592,013 for the three months ended May 31,
1999 compared to a net loss of $17,709 for the prior year period.  The net gain
for the third quarter of fiscal 1999 was attributable to the rolling average
cost that per pig sales are based on exceeding current costs per pig by $5.65
per feeder and weaned pig shipped, caused primarily by the addition of two
weaned pig units.  The net loss for the third quarter of fiscal 1998 was
attributable to costs incurred related to the two pig production facilities
under construction.  These costs were significantly offset by the rolling
average cost that per pig sales prices are based on exceeding then current costs
per pig by $4.16 per pig shipped, caused primarily by an improvement in
productivity.  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 the
Company's selling price formula that contains a production margin.






NINE MONTHS ENDED MAY 31, 1999 AND 1998

     Shipments of feeder pigs were lower for the nine months ended May 31, 1999
than in the prior year.  Alliance began shipping weaned pigs in August 1998.
Alliance shipped 217,665 feeder pigs and 64,361 weaned pigs for the nine months
ended May 31, 1999 compared to 228,040 feeder pigs and no weaned pigs shipped
for the nine months ended May 31, 1998 for a decrease in the number of feeder
pigs shipped of approximately 5%.  Shipments are down due to a decline in
farrowing rates and pigs born alive.   Net sales for the nine months ended May
31, 1999 increased to $13,735,549 from $13,346,482 for the prior year period.
Net sales for the nine months ended May 31, 1999 consisted of $11,269,037 feeder
pig sales and $2,466,512 weaned pig sales.  This is a decrease in feeder pig
sales of $2,077,442 or 16%.  The above decrease in volume and sales dollars
occurred, despite the fact that seven feeder pig units were in operation for
thirty-nine weeks of the nine months ended May 31, 1999, whereas six feeder pig
units were in operation for nineteen weeks and seven feeder pig units were in
operation for twenty weeks of the  nine months ended May 31, 1998.  One weaned
pig unit was in operation for five weeks and two weaned pig units were in
operation for thirty-four weeks of the nine months ended May 31, 1999, whereas
no weaned pig units were in operation for the nine months ended May 31, 1998.
The sales price per feeder pig pursuant to Alliance's Pig Purchase Agreements
was lower due to the five month rolling average of operating costs for the nine
months ended May 31, 1999 being less than the twelve month rolling average of
operating costs for the nine months ended May 31, 1998.  Also, during the nine
months ended May 31, 1998, an additional $4.50 margin was charged on every
feeder pig sold.  Effective September 1, 1998, the margin was changed to $0 to
$4.50,  as determined periodically by the Board of Directors at its discretion.
For the nine months ended May 31, 1999 $0 margin per pig was charged in addition
to the operating costs and debt service.  Average net sales prices for feeder
and weaned pigs were $51.77 and $38.32 during the nine months ended May 31, 1999
and $58.53 and $0 during the nine months ended May 31, 1998, respectively.

     Alliance earned gross margins of $2,542,989 and $3,653,536 for the nine
month periods ended May 31, 1999 and 1998, respectively.  This decline in gross
margin is partially due to the $4.50 additional margin per pig no longer being
charged.  As previously described, the selling price for Alliance's feeder and
weaned pigs is based on, among other things, the twelve-month (five-month
effective September 1, 1998) and five-month rolling average of operating costs
per pig for feeder and weaned pigs, respectively.  For the nine months ended May
31, 1999, Alliance's average net sales price for feeder and weaned pigs exceeded
then current production costs by $9.02 per pig sold.  For the nine months ended
May 31, 1998, Alliance's net sales price exceeded then current production costs
by $16.02 per pig sold.

     Sales to Farmland and Yuma for the nine month periods ended May 31, 1999
and 1998 were $6,616,386 and $8,009,564, respectively.   The average feeder pig
net sales price per head was $51.77 and $58.53 and the average feeder pig
industry market price per head was $38.85 and $39.48 during the nine month
periods ended May 31, 1999 and 1998, respectively.  The average weaned pig net
sales price per head was $38.32 and the average weaned pig industry market price
per head was $23.67 during  the nine month period ended May 31, 1999.

          Alliance recorded $132,410 of start-up costs relating to the operation
of the weaned pig production facility under construction in Yuma County,
Colorado and to the operation of the 5,000 sow pig production facility under
construction in Yuma County, Colorado during the nine months ended May 31, 1999
and $791,861 of start-up costs relating to the operation of the weaned pig
production facilities in both Yuma County, Colorado and Wayne County, Illinois
under construction during the nine months ended May 31, 1998.  All costs for the
nine month periods ended May 31, 1999 and 1998 were comprised of utilities,
feed, labor and other general expenses prior to the operation of the new pig
production facilities.

     Administrative expenses were $711,752 for the nine months ended May 31,
1999 compared to $646,062 for the prior year period.  This increase reflects the
increased operations and includes higher administrative, payroll and
professional fees, related primarily to additional facilities being in
operation.  Also, during the nine months ended May 31, 1999 Alliance incurred
expenses of $100,000 related to the Colorado regulation of housed commercial
swine feeding operations.  During the nine months ended May 31, 1998 Alliance
incurred additional fees related to obtaining  the secured credit facility with
CoBank.
     Loss on sale of breeding stock was $741,269 for the nine months ended May
31, 1999 compared to $159,057 for the prior year period.  This increase is
attributable to lower market conditions during the nine months ended May 31,
1999 as compared to the prior year period.

     Interest expense of $1,138,542 for the nine months ended May 31, 1999 as
compared to $1,129,039 for the prior year period, was incurred in financing the
development of nine existing and one new pig production facilities. This slight
increase is primarily due to the increase in the outstanding loan balance,
partially offset by the capitalization of $157,910 of interest in the nine
months ended May 31, 1999 compared to $38,606 in the prior year period.  As of
May 31, 1999, Alliance had borrowed $17,275,607 from CoBank for construction and
start up costs and $333,172 from Farmland for the purchase of land which is
intended to be used for future expansion.

     Alliance earned net income of $31,251 for the nine months ended May 31,
1999 compared to $1,225,872 for the prior year period.  The net gain for the
nine months ended May 31, 1999 was attributable to the rolling average cost that
per pig sales are based on exceeding current costs per pig by $.11 per feeder
and weaned pig shipped, caused primarily by the addition of two weaned pig
units.  These gains were significantly offset by the elimination of the
additional $4.50 margin charged on every feeder pig sold and approximately
$741,000 of losses incurred on the sale of breeding stock due to market
conditions.  The net income for the nine months ended May 31, 1998 was
attributable to the rolling average cost that per pig sales prices are based on
exceeding then current costs per pig by $8.84 per pig shipped, caused primarily
by an improvement in productivity.  This net income was partially offset due to
costs incurred in the third quarter of fiscal 1998 related to the construction
of the two weaned pig production facilities.  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 the Company's selling price formula that contains a
production margin.

     YEAR 2000.  The Company has completed an assessment of the changes needed
to make its financial system, operational system and equipment year 2000
compliant.  A plan has been developed to implement such changes.  A software
application that will meet the financial and reporting needs of the Company and
that is year 2000 compliant has been purchased and was in use as of May 31,
1999.  The cost of the replacement software was approximately $20,000.
Currently, the Company is reviewing the non-information technology related
systems.  At this time, no equipment that is date sensitive has been identified.
The time frame and cost associated with becoming year 2000 compliant is based on
management's best estimates, although no assurances can be given in this regard.
The Company intends to evaluate its reliance on third parties to determine and
minimize the extent to which its operations may be dependent on such third
parties to remediate year 2000 issues in their systems.  In addition, as systems
are tested the Company intends to develop a contingency backup plan for systems
which exhibit possible year 2000 problems.

                          PART II.  OTHER INFORMATION

Item 6.     Exhibits and Report on Form 8-K


(a)  Exhibits

     The exhibits listed below are filed as part of Form 10-QSB for the quarter
     ended May 31, 1999.

     27   Financial Data Schedule


(b)  No reports on Form 8-K were filed during the quarter ended May 31, 1999.


                                   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:  July 15, 1999