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
February 28, 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 April 14, 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

                                                               February 28, 1999                August 31, 1998

ASSETS
<S>                                                            <C>                             <C>
Current Assets:
Receivables, trade                                                            $0                          $4,620
   Receivables, non-trade (Note 3)                                           45,214                         145,832
   Inventory  (Note 4)                                                    3,969,598                       3,591,665
   Other current assets                                                     313,122                          50,160

       Total current assets                                              $4,327,934                      $3,792,277

   Property, plant and equipment, at cost                               $28,585,356                     $25,140,867
   Less accumulated depreciation                                          3,927,030                       3,266,290

                                                                        $24,658,326                     $21,874,577


   Breeding stock                                                        $4,286,790                      $4,515,230
   Less accumulated depreciation                                          1,148,669                       1,027,749

                                                                         $3,138,121                      $3,487,481
   Other assets, net of $127,603 and $109,218
     accumulated amortization                                              $335,458                        $370,220

                                                                        $32,459,839                     $29,524,555


LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
   Bank Overdraft                                                          $461,378                        $279,069
   Current maturities of long-term debt (Note 5)                          1,812,000                       1,812,000
   Accounts payable (Note 3)                                              1,048,642                         917,338
   Patronage refund payable                                                       0                         433,115
   Accrued property tax                                                     456,907                         332,587
   Accrued payroll                                                          123,687                         145,118
   Other accrued expenses                                                   399,957                         389,010

     Total current liabilities                                           $4,302,571                      $4,308,237

Long-term debt (Note 5)                                                 $17,067,379                     $15,996,775

Shareholders' equity:
   Class A common stock of $.01 par value;  authorized
     5,000 shares, issued and outstanding 136 shares at
February 28,
     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
February 28,
     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                                                  (3,124,077)                     (2,563,315)

      Total shareholders' equity                                        $11,089,889                      $9,219,543
     Commitments and Contingencies (Note 6)                                  ------                          ------

                                                                        $32,459,839                     $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        Six Month Periods
                                      Ended                     Ended
                                    February 28               February 28

                                  1999         1998           1999         1998


<S>                            <C>          <C>            <C>          <C>
Net sales (Notes 2 and 3)      $4,205,780   $4,808,904     $8,507,687   $8,970,810
Cost of goods sold (Note 3)     3,590,028    3,523,858      7,278,842    6,232,030


     Gross  margin                615,752    1,285,046      1,228,845    2,738,780

Expenses related to start-up
  of new production facilities          0       45,438         85,698      449,047
Administrative expenses           231,816      156,921        496,773      326,659
(Gain) Loss on sale of breedin    288,616      (7,562)        537,267       55,539
stock


Operating income                  $95,320   $1,090,249       $109,107   $1,907,535

Other income (expense):
   Interest expense             (374,259)    (334,566)      (774,500)    (716,115)
   Other                           94,643       25,102        104,631       52,161

                                (279,616)    (309,464)      (669,869)    (663,954)



Net income (loss)              ($184,296)     $780,785     ($560,762)   $1,243,581





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


                        ALLIANCE FARMS COOPERATIVE ASSOCIATION
                               STATEMENTS OF CASH FLOWS
                                      UNAUDITED

                                                                Six Month Periods Ended
                                                                       February 28
                                                                  1999                    1998

<S>                                                       <C>                     <C>
Cash flows from operating activities:
   Net income (loss)                                                ($560,762)               $1,243,581
   Adjustment to reconcile net income to net cash
     provided by operating activities:
        Provision for depreciation and amortization                  1,317,326                1,285,421
        Loss on sale of breeding stock                                 537,267                   55,539
   Changes in assets and liabilities:
        Receivables                                                    105,238                  187,856
        Inventory                                                    (377,933)                (512,289)
        Other current assets                                         (262,962)                 (57,949)
        Other assets                                                    16,377                 (23,751)
        Accounts payable                                               131,304                  220,296
        Accrued expenses                                               113,836                  184,180

            Net cash provided by operating activities               $1,019,691               $2,582,884

Cash flows from investing activities:
   Capital expenditures                                           ($4,520,308)             ($5,660,496)
   Proceeds from sale of breeding stock                                249,712                  794,038

          Net cash used in investing activities                   ($4,270,596)             ($4,866,458)


Cash flows from financing activities:
   Proceeds from issuance of long term debt                         $1,531,518                 $443,869
   Net increase in revolving term credit                             1,078,486                  410,631
   Payment on long term debt                                         (906,000)                (603,300)
   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                2,104,638
   Increase in bank overdraft                                          182,309                   32,402
            Net cash provided by

                    financing activities:                           $3,250,905               $2,283,574


            Change in cash                                                  $0                       $0

Cash at beginning of period                                                  0                        0

Cash at end of period                                                       $0                       $0




                    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 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 six month periods ended February 28, 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 six
     months ended February 28, 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      Six Months Ended
                                                           February 28        February 28

                                                             1999         1998       1999         1998

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

         Feeder Pig Average Net Sales Price                 51.76        59.86      50.96        59.82
         Feeder Pig Average Industry Market*                39.91        38.83      34.83        40.26
         Weaned Pig Average Net Sales Price                 37.71          N/A      37.41          N/A
         Weaned Pig Average Industry Market*                23.23          N/A      20.12          N/A

         <FN>
         * 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         Six Months Ended


                                                   February 28              February 28


                                                       1999             1998            1999             1998

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

         Feed Purchases                          $1,233,500       $1,524,908      $2,366,195       $2,894,087
         Propane Purchases                           30,146           33,240          46,221           50,996
         Animal Health Purchases                    115,189           41,490         212,540           87,038
         Breeding Stock Purchases                   709,992          914,821       1,106,410        1,512,560
         Feeder & Weaned Pig Sales                1,987,558        2,962,334       4,211,722        5,715,787
     </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         Six Months Ended


                                        February 28               February 28


                                          1999              1998           1999                1998

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

         Royalty Income                     $0           $14,730          $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           Six Months Ended
                                        February 28                 February 28


                                          1999              1998              1999             1998

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

         Management Fee                $98,810           $89,225          $201,161         $167,067
     </TABLE>

     Alliance had $45,214 and $145,832 of non-trade receivables at February  28,
     1999 and  August 31,  1998,  respectively.   The  $45,214 due  Alliance  at
     February 28, 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  $284,111,  $97,438 and  $31,096  at February  28,  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 February 28, 1999 for funds  used
     to purchase land for future expansion.  See note 5.

4.       Inventories


     Major components of inventories as of February 28, 1999 and August 31, 1998
     are as follows:

                                February 28        August 31
                                    1999              1998    


      Feeder and Weaned Pigs    $  3,863,880      $  3,467,308
      Other                          105,718           124,357

                                $  3,969,598      $  3,591,665



5.   Long-Term Debt


     Long term debt at February 28, 1999 and August 31, 1998 consisted of the
     following:

                                    February 28      August 31
                                        1999            1998

      CoBank Term Loan               $10,917,800      $11,823,800
      CoBank Construction Loan         5,156,625        3,625,107
      CoBank Revolving Term            2,471,782        1,393,296
      Credit
      Note Payable to Farmland           333,172          966,572

                                     $18,879,379      $17,808,775

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

                                     $17,067,379      $15,996,775




     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  February
     28, 1999, $4,541,593 was immediately available to Alliance under its credit
     facility.   The  availability  of $15,928,900  of  unused  term  loans  and
     $4,130,000 of revolving  term credit and  $9,760,000 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
     February 28, 1999, interest accrued on the outstanding principal balance on
     the respective loan portions  under variable rates at  8.75% per annum  for
     non-revolving term  loans, 8.75%  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.  For the quarter ended February 28,  1999,
     the Company's interest  rates charged  on the  non-revolving and  revolving
     term loans had been reduced by 25  basis points.  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  $68,142  and  $33,042  of  interest   on
     construction for  the  three  months  ended  February  28,  1999  and  1998
     respectively and $102,852 and $38,606 of  interest on construction for  the
     six months ended February 28, 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 February 28, 1999 the Company
     was in compliance  with each of  these covenants except  for maintaining  a
     total equity to total assets ratio of  0.35.  CoBank has provided a  waiver
     for this violation.

     As of February 28,  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 February 28,  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 February 28, 1999 matures during the fiscal years
     ending August 31 in the following amounts:

                        1999.............$    906,000
                        2000.............   2,227,200
                        2001.............   2,288,995
                        2002.............   2,474,378
                        Thereafter.......  10,982,806

                         .................$18,879,379


6.       Commitments and Contingencies


     As of February 28, 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 unit is
     under construction at February 28, 1999.  At February 28, 1999, commitments
     for construction of said facility totaled $776,056.  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.

     Although Alliance has begun to evaluate the impact that the amendments
     would have, 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 that may be promulgated.
     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 February 28, 1999, Alliance reported working capital of $25,363 and
total assets of $32,459,839. 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 February 28, 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 is
offering an additional 17 shares of Class A Common Stock and 72 shares of Class
C Common Stock to qualified prospective investors.  As of February 28, 1999,
Alliance had $4,541,593 immediately available under its credit facility with
CoBank, consisting of $3,483,376 of construction loans and $1,058,217 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 February 28, 1999, Alliance has borrowed $333,172 from Farmland to
purchase land for future expansion.  During the six month period ended February
28, 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 and $3,399,123 for construction of the 5,000-sow pig
production facility in Yuma County, Colorado currently under construction.  The
remaining capital expenditures were for replacement breeding stock and building
construction for the first seven production facilities.
     Major uses of cash during the six months ended February 28, 1999 include
$4,520,308 for capital expenditures on new and existing facilities, $906,000 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
$1,531,518 of proceeds from the issuance of long term debt, $1,078,486 increase
in revolving term credit, $2,431,107 of net proceeds from issuance of common
stock and $1,019,691 in cash provided by operating activities.  The decrease in
cash provided by operating activities in 1999 is primarily attributable to the
net loss incurred of $560,762 compared to net income of $1,243,581 for the prior
period.

THREE MONTHS ENDED FEBRUARY 28, 1999 AND 1998

     Shipments of feeder pigs were lower for the three months ended February 28,
1999 than in the prior year.  Alliance began shipping weaned pigs in August
1998.  Alliance shipped 67,506 feeder pigs and 18,866 weaned pigs for the
quarter ended February 28, 1999 compared to 80,331 feeder pigs and no weaned
pigs shipped for the quarter ended February 28, 1998 for a decrease  in the
number of feeder pigs shipped of approximately  16%.  Shipments are down due to
a decline in farrowing rates and born alive.  Net sales for the quarter ended
February 28, 1999 decreased to $4,205,780 from $4,808,904 for the prior year
period, a decrease of $603,124 or 13%.   The above decrease in volume and sales
dollars occurred, despite the fact that seven feeder pig units  were in
operation for the quarter ended February 28, 1999, whereas only six feeder pig
units were in operation for six weeks and seven feeder pig units were in
operation for seven weeks of the quarter ended February 28, 1998.  The first two
weaned pig units began  operation in the quarter ended February 28, 1999.  The
sales price per feeder pig pursuant to Alliance's Pig Purchase Agreements was
lower for the quarter ended February 28, 1999 due to the five month rolling
average of operating costs being less than the twelve month rolling average of
operating costs for the quarter ended February 28, 1998.  Also, during the
quarter ended February 28, 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 February 28, 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 $51.76 and $37.71 during the quarter ended February
28, 1999 and $59.86 and $0 during the quarter ended February 28, 1998,
respectively.  Net sales for the quarter ended February 28, 1999 consisted of
$3,494,339 feeder pig sales and $711,441 weaned pig sales.

     Alliance earned gross margins of $615,752 and $1,285,046 for the three
month periods ended February 28, 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 second quarter of
fiscal 1999, Alliance's average net sales price for feeder and weaned pigs
exceeded then current production costs by $7.13 per pig sold.  For the second
quarter of fiscal 1998, the net sales price exceeded then current production
costs by $16.00 per pig sold.
     Sales to Farmland and Yuma for the three month periods ended February 28,
1999 and 1998 were $1,987,558 and $2,962,334, respectively.   The average feeder
pig net sales price per head was $51.76 and $59.86 and the average feeder pig
industry market price per head was $39.91 and $38.83 during the quarters ended
February 28, 1999 and 1998, respectively.  The average weaned pig net sales
price per head was $37.71 and the average weaned pig industry market price per
head was $23.23 during the quarter ended February 28, 1999.
     No start-up costs were recorded during the three months ended February 28,
1999.  Alliance recorded start-up costs of $45,438 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 February 28,
1998.  All costs for the three month period ended February 28, 1998 were
comprised of utilities, feed, labor and other general expenses prior to the
operation of the new pig production facilities.

     Administrative expenses were $231,816 for the three months ended February
28, 1999 compared to $156,921 for the prior year period.  This increase reflects
the increased operations and includes higher administrative, payroll and
professional fees.   Alliance also incurred expenses of $50,000 related to the
Colorado regulation of housed commercial swine feeding operations.

     Interest expense of $374,259 for the three months ended February 28, 1999
as compared to $334,566 for the prior year period, was incurred in financing the
development of nine existing and one new pig production facilities.  This
increase is primarily due to the increase in the outstanding loan balance.  As
of February 28, 1999, Alliance had borrowed $18,546,207 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 incurred a net loss of $184,296 for the three months ended
February 28, 1999 compared to a net income of $780,785 for the prior year
period.  The net loss for the second quarter of fiscal 1999 was attributable to
the current costs per pig exceeding the rolling average cost that per pig sales
are based on by $2.13 per feeder and weaned pig shipped, caused primarily by the
elimination of the additional $4.50 margin charged on every feeder pig sold as
well as a decline in production and approximately $289,000 of losses incurred on
the sale of breeding stock due to market conditions.  The net income for the
second quarter of fiscal 1998 was attributable to the rolling average cost that
per pig sales prices are based on exceeding then current costs per pig by $9.72
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.






SIX MONTHS ENDED FEBRUARY 28, 1999 AND 1998

     Shipments of feeder pigs were lower for the six months ended February 28,
1999 than in the prior year.  Alliance began shipping weaned pigs in August
1998. Alliance shipped 138,506 feeder pigs and 38,762 weaned pigs for the six
months ended February 28, 1999 compared to 149,975 feeder pigs and no weaned
pigs shipped for the six months ended February 28, 1998 for a decrease in the
number of feeder pigs shipped of approximately 8%.  Shipments are down due to a
decline in farrowing rates and born alive.   Net sales for the six months ended
February 28, 1999 decreased to $8,507,687 from $8,970,810 for the prior year
period, a decrease of $463,123, or 5%. The above decrease in volume and sales
dollars occurred, despite the fact that seven feeder pig units were in operation
for twenty six weeks of the first half of fiscal 1999, whereas six feeder pig
units were in operation for nineteen weeks and seven feeder pig units were in
operation for seven weeks of the first half of fiscal 1998.  One weaned pig unit
was in operation for five weeks and two weaned pig units were in operation for
twenty-one weeks of the first half of fiscal 1999, whereas no weaned pig units
were in operation for the first half of fiscal 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 first half of fiscal 1999 being
less than the twelve month rolling average of operating costs for the first half
of fiscal 1998.  Also, during the first half of fiscal 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 first half of fiscal 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 $50.96 and $37.41 during the
six months ended February 28, 1999 and $59.82 and $0 during the six months ended
February 28, 1998, respectively.  Net sales for the six months ended February
28, 1999 consisted of $7,057,741 feeder pig sales and $1,449,946 weaned pig
sales.

     Alliance earned gross margins of $1,228,845 and $2,738,780 for the six
month periods ended February 28, 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 first half of fiscal
1999, Alliance's average net sales price for feeder and weaned pigs exceeded
then current production costs by $6.93 per pig sold.  For the first half of
fiscal 1998, Alliance's net sales price exceeded then current production costs
by $18.26 per pig sold.

     Sales to Farmland and Yuma for the six month periods ended February 28,
1999 and 1998 were $4,211,722 and $5,715,787, respectively.   The average feeder
pig net sales price per head was $50.96 and $59.82 and the average feeder pig
industry market price per head was $34.83 and $40.26 during the six month
periods ended February 28, 1999 and 1998, respectively.  The average weaned pig
net sales price per head was $37.41 and the average weaned pig industry market
price per head was $20.12 during the six month period ended February 28, 1999.

          Alliance recorded $85,698 of start-up costs relating  primarily to the
operation of the weaned pig production facility under construction in Yuma
County, Colorado during the six months ended February 28, 1999 and $449,047 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 six months ended February 28, 1998.  All costs for the six month
periods ended February 28, 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 $496,773 for the six months ended February 28,
1999 compared to $326,659 for the prior year period.  This increase reflects the
increased operations and includes higher administrative, payroll and
professional fees.   Alliance also incurred expenses of $100,000 related to the
Colorado regulation of housed commercial swine feeding operations.

     Loss on sale of breeding stock was $537,267 for the six months ended
February 28, 1999 compared to $55,539 for the prior year period.  This increase
is attributable to lower market conditions during the first half of fiscal 1999
as compared to the first half of fiscal 1998.

     Interest expense of $774,500 for the six months ended February 28, 1999 as
compared to $716,115 for the prior year period, was incurred in financing the
development of nine existing and one new pig production facilities. This
increase is primarily due to the increase in the outstanding loan balance,
partially offset by the capitalization of $102,852 of interest in the first half
of fiscal 1999 compared to $38,606 in the first half of fiscal 1998.  As of
February 28, 1999, Alliance had borrowed $18,546,207 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 incurred a net loss of $560,762 for the six months ended February
28, 1999 compared to a net income of $1,243,581 for the prior year period.  The
net loss for the first half of fiscal 1999 was attributable to the current costs
per pig exceeding the rolling average cost that per pig sales are based on by
$3.16 per feeder and weaned pig shipped, caused primarily by the elimination of
the additional $4.50 margin charged on every feeder pig sold as well as a
decline in production and approximately $537,000 of losses incurred on the sale
of breeding stock due to market conditions.  The net income for the first half
of fiscal 1998 was attributable to the rolling average cost that per pig sales
prices are based on exceeding then current costs per pig by $8.29 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.

     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.   Installation,  testing  and
training has begun and are anticipated to  be completed in the third quarter  of
fiscal 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 4.  Submission of Matters to a Vote of Security Holders
The Annual Meeting of the Members of Alliance Farms Cooperative Association was
held on December 8, 1998.  The following matters were submitted to a vote of the
members:

     Item 1.  Election of Directors

     Wayne N. Snyder, Doug Brown, Merl Daniel, Loren Keppy and Larry Welsh each
     were elected as directors of Alliance Farms for a term expiring at the 1999
     Annual Meeting of Members and until their respective successors are duly
     elected and qualified or until their earlier resignation or removal.  The
     vote with respect to the election of directors was as follows:

     Nominee        Affirmative Votes        Withheld Authority


     Mr. Snyder           118                       2
     Mr. Brown            116                       4
     Mr. Daniel           120                       0
     Mr. Keppy            120                       0


     Item 2.  Selection of Independent Auditors

     KPMG LLP (formerly (KPMG Peat Marwick LLP) was selected as the
     Association's independent auditors for the fiscal year ending August 31,
     1999.  The vote with respect to the approval of KPMG LLP was as follows:

          Affirmative Votes     120
          Negative Votes          0
          Abstentions             0

 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 February 28, 1999.

     27   Financial Data Schedule


(b)  No reports on Form 8-K were filed during the quarter ended February 28,
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:  April 9, 1999