Exhibit 10.3
                               OPTION CONTRACT



          THIS CONTRACT is made and entered into this 20th day of November,
1996, by and between Bill L. Bailey and Norma Jean Bailey, husband and wife,
hereinafter referred to as "Seller", and Alliance Farms Cooperative Association,
a Colorado cooperative association, hereinafter referred to as "Buyer".

          WITNESSETH:

          1.   Seller hereby grants to Buyer, subject to the terms and
conditions hereinafter set forth, an option to purchase (the "Option") certain
real property (the "Property") in Wayne County, Illinois, legally described on
Exhibit A, attached hereto and incorporated herein by this reference.


          2.   The Option term (the "Term") shall commence upon the execution of
this Agreement, and shall terminate on November 1, 1998.  If all of Buyer's
conditions and contingencies contained herein have been satisfied on or prior to
the expiration of the Term, and Buyer shall fail to exercise the Option, or any
part thereof, prior to the expiration of the Term, and Seller shall have
satisfied all of their conditions to this Contract, then this Option shall
lapse, expire and become null and void, and Seller shall be entitled to
liquidated damages in an amount equal to One Hundred Fifty Thousand and No/100
Dollars ($150,000.00), and the parties hereby agree that this amount is a fair
and reasonable estimate of the damages sustained by Seller and is not a penalty
or forfeiture (the "Liquidated Damages Payment").  At or prior to the execution
of this agreement, Buyer shall deposit with Seller an original irrevocable
standby letter of credit in the amount of One Hundred Fifty Thousand and No/100
Dollars ($150,000.00) issued by CoBank; ACB and in substantially the form and
substance set forth in Exhibit B attached hereto and incorporated herein by this
reference.  Said letter of credit shall give Seller the right to draw upon the
full amount of said Letter of Credit upon seller's delivery to Co Bank, ACB of
the original Letter of Credit and Seller's written certification as to the
satisfaction of all conditions on the face of the Letter of Credit entitling
Seller to payment.  The letter of credit shall be released by Seller and
delivered to Buyer (or Buyer's assigns) upon closing of the transaction as
provided for herein which results in all remaining unpurchased tracts of
Property being sold as provided herein (other than any tracts that are excluded
form Buyer's obligation to purchase as provided herein).  During the term of
this agreement the original Letter of Credit shall be held by Croegaert, Clark &
Hough, Ltd. in its fireproof safe at 305 East Main Street, Olney, Illinois, and
Seller shall defend, indemnify and hold harmless Buyer from and against any
loss, liability or expense suffered as a result of the loss, theft, improper
drawing upon, or improper failure to release said Letter of Credit.

          3.   Concurrently with the execution hereof, Buyer shall pay to Seller
the sum of One Hundred Dollars ($100.00) (the "Initial Term Deposit") in
consideration of Seller's grant of the Option.

     4.   A.   Buyer must exercise the Option granted herein to purchase
     the following-described property (the "90.5 Acre Tract") by written
     notice to Seller within fourteen (14) days of the execution of this
     Contract:

     A tract of land located in Section 1, Township 1 North,
     Range 8 East of the Third Principal Meridian located in
     Wayne County, Illinois and legally described as follows:

     Commencing at the Southeast Corner of the Northeast Quarter
     of said Section 1, thence in a northerly direction along the
     east section line of Section 1 a distance of 1,970 feet to a
     point, thence westerly parallel with the south line of said
     Section 1 a distance of 2,000 feet to a point, thence
     southerly parallel with the east line of said Section 1 a
     distance of 1,970 feet to the south line of the Northeast
     Quarter of said Section 1, thence easterly along said
     quarter section line a distance of 2,000 feet to the point
     of beginning, containing 90.5 acres, more or less.

     Upon Buyer's giving of written notice of exercise, this Contract shall
immediately operate as a real estate sale contract for the purchase of the
90.5 Acre Tract on the terms herein set forth.  Buyer may elect to divide
this 90.5 Acre Tract into two separate tracts for the purpose of allowing
separate closings.  The total purchase price for this tract shall be Three
Hundred Ninety-Nine Thousand Six Hundred Forty-Nine and 84/100 Dollars
($399,649.84).  Should Buyer elect to divide the 90.5 Acre Tract into two
separate tracts with separate closings, the purchase price for each tract
shall be the sum of One Hundred Ninety-Nine Thousand Eight Hundred
Twenty-Four and 92/100 Dollars (199,824.92). The date of closing for the
entire 90.5 Acre Tract shall be on or before thirty (30) days after
Seller's receipt of Buyer's notice of exercise of the option granted in
this paragraph 4.A (except to the extent that the closing is delayed by
Seller).

          B. At any time prior to the expiration of the Term, Buyer may
exercise the Option granted herein to purchase an additional sixty (60)
acres of the Property in accordance with the following provisions for each
tract purchased:

          (1)  Buyer may elect to divide the sixty (60) acres into two
               separate tracts for the purpose of allowing separate
               closings.

          (2)  Buyer shall deliver written notice to Seller ("Buyer's
               Notice") of Buyer's election to purchase one or more
               identified tracts of Property (the "Purchase Parcel"), the
               legal description of said Purchase Parcel to be determined
               by a survey conducted by a licensed surveyor of the State of
               Illinois, with the costs of said survey to be borne by
               Buyer.  Upon delivery of any such Buyer's Notice, this
               Contract shall immediately operate as a real estate sale
               contract for the purchase of each such Purchase Parcel on
               the terms hereinafter set forth.  The date of closing for
               any identified tract shall be on or before thirty (30) days
               after Seller's receipt of Buyer's notice of exercise of the
               option granted in this paragraph 4.B (except to the extent
               that the closing is delayed by Seller).

          (3)  The purchase price for each such Purchase Parcel shall be
               equal to the sum of One Thousand Eight Hundred Fifty and
               No/100 Dollars ($1,850.00) per acre, plus the cost of any
               grading, terracing, excavating and other earthmoving
               improvements made to the real estate by Seller at the
               written request of Buyer.  Seller shall have the exclusive
               right to perform all labor and to provide all equipment
               required for the grading, terracing, excavating and other
               earthmoving improvements requested by Buyer.  The cost of
               any such improvements shall be calculated and determined as
               follows:

               Seller shall provide the following equipment and operator at
               rates determined under the following schedule:

                                        Per Hour Rates

      Tractor and disk -                             $70.00
      Road Grader -                                  $65.00
      Compactor -                                    $60.00
      Single Pull 613 -                              $80.00
      Single Pull with Laser -                      $100.00
      Single Pull 615 -                             $125.00
      Double Pull 29 yd. -                          $140.00
      Double Pull 28 yd. with Laser                 $160.00
      Trackhoe -                                     $85.00
      Bulldozer (D-8, D-9, 21-C) -                   $90.00
      Land Leveler -                                 $65.00
      Land Leveler with Laser -                      $85.00
      Disk Roller -                                  $65.00


               C.   Notwithstanding the foregoing, the Buyer shall not be
     entitled to exercise the Option granted herein as to the balance of the
     Property until October 15, 1998 and must exercise said Option by
     written notice on or before November 1, 1998.  The total purchase price
     for the balance of the Property shall be One Thousand Eight Hundred
     Fifty and No/100 Dollars ($1,850.00) per acre plus the cost of a dam
     and lake previously constructed by Seller in the amount of $38,056.67.
     The date of closing for the balance of the Property shall be on or
     before November 15, 1998 or such other date as Buyer and Seller shall
     mutually agree (except to the extent that the closing is delayed by
     Seller).

               D.   Seller shall convey to Buyer merchantable fee simple
     title to the property, subject only to Permitted Exceptions (as
     hereinafter defined).  Possession of such tract shall be delivered to
     Buyer at closing.

          E.   (1)  Seller excepts and reserves all oil, gas, coal or other
               minerals for a period of twenty-five (25) years from the date
               of closing on any portion of the Property and as long
               thereafter as oil, gas, coal or other minerals are produced
               from the Property.  Any conveyance shall be subject to
               mineral reservations, exceptions and conveyances of record.
               Notwithstanding the foregoing, under no circumstances shall
               Seller's exercise and enjoyment of the rights reserved in
               this paragraph be permitted to create a nuisance or otherwise
               disturb Buyer's business and operations on the Property, and
               Seller shall defend, indemnify and hold harmless Buyer from
               and against any loss, liability or expense suffered as a
               result of Seller's exercise and enjoyment of the rights
               reserved in this paragraph.

               (2)  Seller reserves exclusive hunting and fishing rights on
               the property during the term of his natural life.  Buyer
               hereby grants an irrevocable license to Seller for such
               purposes.

               F.   In connection with any tax-free exchange pursuant to
     Section 1031 of the Internal Revenue Code of 1986, as amended, and the
     regulations promulgated thereunder, involving the Property and other
     property owned or to be acquired by Seller, Seller may, without the
     consent of Buyer, assign this Agreement and their rights hereunder to
     any qualified intermediary (an "Intermediary") participating with
     Seller in such exchange as contemplated by Treasury Regulation Section
     1.1031(k)-1(g)(4) and related regulations.  In the event of any such
     assignment to an Intermediary: (i) Seller shall give written notice of
     such assignment and the identity of the Intermediary to the Buyer at
     least ten (10) days prior to the date of closing; (ii) except to the
     extent of any liabilities expressly assumed by the Intermediary in
     writing in connection with such assignment, the Intermediary shall have
     no personal liability to the Buyer or any other person or entity under
     this Agreement, or under any other document or instrument at any time
     executed by Seller or the Intermediary in connection herewith or
     pursuant hereto (each such document or instrument being referred to
     herein as "Related Document@), and neither the Buyer nor any other
     person or entity shall have any recourse against the Intermediary or
     any of its assets on account of any breach or default hereunder or
     under any Related Document; (iii) the Intermediary shall have all of
     the rights and remedies of Seller provided for herein or in any Related
     Documents; (iv) there shall be no diminution of the Buyer's rights or
     remedies, and no increase of the Buyer's liabilities or obligations,
     hereunder or under any Related Documents on account of such assignment;
     (v) notwithstanding anything to the contrary contained herein, Seller
     shall continue to be liable for all obligations imposed upon Seller
     under this Agreement and under any Related Document executed by Seller.

               G.   Seller shall pay all taxes and assessments, general and
     special, which are a lien upon each tract of Property purchased by
     Buyer and can be paid at the Closing and Buyer shall assume all taxes
     and assessments, general and special, which become a lien after the
     Closing except that (a) as to any assessments payable in installments,
     Seller shall be liable only for those instruments payable with respect
     to the years prior to the year in which the Closing occurs, and (b) all
     taxes and assessments, general and special, and all installments of any
     assessments, which are due and payable for the year in which the
     Closing occurs shall be prorated as of the Closing.  In the event that
     the amount of any such tax or assessment for the year in which the
     Closing occurs cannot be determined, then such proration shall be based
     upon the amount of such tax or assessment for the preceding year.

               H.   For each tract of Property purchased by Buyer, Seller
     shall furnish to Buyer, at Seller's cost, an Owner's Title Insurance
     Policy, ALTA Form B-1970 (amended 10-17-70 and 10-17-84) (the "Policy@)
     in the amount of the Purchase Price, from a company reasonably
     acceptable to Buyer authorized to insure titles in the State of
     Illinois (the "Title Company") insuring a merchantable fee simple title
     in such Purchase Parcel in Buyer as of the date and time of the
     recording of the Deed.  Permitted Exceptions to title shall include
     only:

          (1)  The lien of general taxes not yet payable;

          (2)  Zoning laws and building ordinances;

          (3)  Easements of record for utilities, drainage and public roads,
               highways and improvements;

          (4)  Covenants and restrictions of record that do not interfere
               with Buyer's current and contemplated business; and,

          (5)  Reservation of mineral title as set forth above.

               Seller shall, within fifteen (15) days from the date of
          delivery of each Buyer's Notice, deliver to Buyer a commitment for
          the Policy (the "Commitment").  Within fifteen (15) days of
          receipt of each Commitment,  Buyer shall notify Seller of any
          defect or exception to title to which Buyer objects ("Buyer's
          Objections").  If Buyer fails to notify Seller within said fifteen
          (15) day period of any such exception or defect, Buyer shall be
          deemed to have accepted the exceptions noted on the Commitment,
          and such exceptions shall constitute the "Permitted Exceptions",
          as said term is used herein.  Seller shall use their best efforts
          to eliminate or modify Buyer's Objections to the satisfaction of
          Buyer.  If Seller is unable to eliminate or modify Buyer's
          Objections to the satisfaction of Buyer, Buyer (a) may terminate
          and cancel Buyer's obligation to purchase the affected tract of
          Property by notice in writing to Seller by the earlier to occur of
          (i) the Closing Date, or (ii) five (5) business days following
          notice from Seller that it is unable to so eliminate or modify
          Buyer's Objections, and thereupon Buyer's failure to purchase said
          tract of Property shall not entitle Seller to the Liquidated
          Damages Payment or (b) shall accept such title to such Purchase
          Parcel as Seller can deliver with a reasonable reduction in the
          Purchase Price, with said reduction determined by a qualified real
          estate appraiser, appointed by Buyer, with a minimum of ten (10)
          years of experience in appraising rural property.  The title
          commitment shall be conclusive of title as therein shown as to all
          matters insured by the policy, subject to exceptions as therein
          stated.

          I.   (1)  Buyer has already taken possession of the 90.5 Acre
               Tract of real estate described in paragraph 4.A. above on or
               about May 1, 1996 and has been conducting a hog confinement
               operation on the tract since said date.  As a results of such
               uses and activities, physical and other changes may have
               occurred on the tract.  Prior to taking possession, Buyer had
               full right of access to the 90.5 Acre Tract to enable it to
               conduct any independent environmental audits and tests for
               the existence of environmental conditions in violation of
               environmental laws, as a result of which Buyer determined
               that there existed prior to its possession of the tract no
               adverse physical or environmental condition on the tract.
               Accordingly, Buyer waives, releases, covenants not to sue and
               forever discharges Sellers, their agents and employees and
               other persons acting on behalf of Seller, of and from any and
               all claims, actions, causes of actions, demands, rights,
               damages, costs, expenses or compensation whatsoever, direct
               or indirect, known or unknown, foreseen or unforeseen, which
               Buyer now has or which may arise in the future on account of
               or growing out of or in connection with any physical
               characteristics or existing condition, including without
               limitation, subsurface conditions, solid and hazardous waste,
               and hazardous materials on, under, or related to the 90.5
               acres, or any applicable law or regulation.  Buyer
               acknowledges that this clause is a negotiated part of this
               Agreement and serves as an essential component of
               consideration for the property.  The release contained under
               this clause includes, but is not limited to, the release of
               Seller from all claims pursuant to the Illinois Responsible
               Property Transfer Act S.H.A., 765 ILCS 90/1 et seq. and the
               Comprehensive Environmental Response, Compensation and
               Liability Act of 1980, as amended.

               (2)  As additional consideration in determining the purchase
               price of the tract, Buyer assumes and covenants to undertake
               and discharge all liabilities of Seller or Buyer arising
               from:

               (i)  Any condition which now exists or may be found to exist
                    in, on, under or about the 90.5 Acre Tract,

               (ii) A determination that the 90.5 Acre Tract or any portion
                    violates any applicable environmental or health or
                    safety law, ordinance, regulation or ruling, and

               (iii)     The presence, use, generation, storage, release,
                    threatened release, or containment, treatment or
                    disposal of any hazardous materials on the 90.5 Acre
                    Tract.  Such liabilities include without limitation any
                    losses, damages or expenses, including attorney fees and
                    related expenses arising from any matters relating to
                    the existence of hazardous substances or hazardous
                    wastes as defined in the Comprehensive Environmental
                    Response, Compensation and Liability Act, as amended,
                    482 U.S.C. 9601, et seq. or the Resource, Conservation
                    and Liability Act, 42 U.S.C. 6901, et seq., or similar
                    state environmental laws or subsequent federal or state
                    legislation of a similar nature which may be enacted
                    from time to time.

               (3)  Buyer shall defend, indemnify and hold Seller harmless
               from and against any and all damage, costs, loss, liability
               and expense, which may be incurred by Seller by reason of,
               resulting from, or in connection with or arising in any
               manner whatsoever from any breach of the covenant of Buyer
               contained in this paragraph.  The covenants and agreements of
               Buyer in this paragraph shall survive the closing and
               consummation of the transactions contemplated in this
               Contract.

               (4)  Buyer shall have the right to have access to the
               remainder of the Property (approximately 410 acres) to enable
               an independent environmental consultant chosen by Buyer and
               approved in advance by Seller, which approval shall not be
               unreasonably withheld or delayed, to inspect, audit and test
               the Property for the existence of environmental conditions
               and violations of environmental laws ("environmental
               assessment").  The scope, sequence and timing of the
               environmental assessment shall be at the sole discretion of
               the Buyer but shall be conducted in a manner which will
               minimize disruption to the farming operations to be conducted
               on the Property.

                    Buyer may terminate this agreement no later than five
               (5) business days after receipt of any environmental
               assessment by so notifying the Seller if the environmental
               assessment reveals the existence of any violation of
               environmental law which Buyer is unwilling to accept.  The
               notification to Seller shall include a copy of the
               environmental assessment.  Seller shall have the option to
               elect to remove or remediate any condition which has caused
               any violation of an environmental law in which event Buyer
               shall have no right to terminate this agreement.  If Buyer
               elects to remove or remediate any environmental concerns, he
               shall so notify Seller within five (5) days of receipt of the
               Buyer's notification and a copy of the environmental
               assessment.  Seller shall have ninety (90) days from receipt
               of notification from Buyer of said violation within which to
               remove or remediate the condition which resulted in the
               violation of environmental law at the Seller's sole cost and
               expense.  Seller shall not be obligated to remove or
               remediate non-compliance with any environmental law and shall
               not be liable to Buyer for their failure or refusal to do so,
               it being understood that Buyer's sole remedy will be the
               option to terminate this agreement, in which event it shall
               be entitled to the prompt return of the earnest money and the
               Letter of Credit as its full remedy, or Buyer may close this
               transaction without abatement of the purchase price in which
               case Seller shall not be obligated to remove or remediate any
               non-compliance with any environmental laws.

          J.   Subject to the other terms and provisions of this Contract,
     the closing hereunder shall take place as follows:  Seller shall
     deliver to Buyer, at the office of the Title Company, a General
     Warranty Deed (the "Deed"), properly executed and conveying each tract
     of Property purchased free and clear of all liens and encumbrances
     whatsoever, except as herein provided, and reserving for Seller any and
     all mineral rights on the tract of Property purchased; Buyer shall then
     and there pay the balance of the Purchase Price for said tract of
     Property purchased.  It is agreed that Seller and Buyer shall each
     deliver the Deed, the original Letter of Credit (at the final closing,
     if applicable), the money and other instruments to be delivered by them
     to the Title Company to be held by the Title Company under instructions
     that the same not be delivered unless and until the requirements of
     this Contract have been satisfied.

          K.   Subject to the rights of termination otherwise contained
     herein, if Seller has complied with all the terms and conditions
     contained herein and Buyer thereafter fails to perform by failing to
     deliver the balance of the Purchase Price on any tract on or before the
     Closing Date or Buyer fails to perform any other agreement contained
     herein and such default continues for five (5) days after notice in
     writing to Buyer, then Seller shall be entitled to declare this
     Contract null and void and forfeit and retain the Liquidated Damages
     Payment and enforce collection of such damages by presentment of the
     irrevocable letter of credit as their sole and exclusive remedy.  If
     Buyer has complied with all the terms and conditions contained herein,
     and thereafter Seller fails to perform any of the covenants or
     conditions contained herein prior to the Closing Date and such default
     continues for five (5) days after notice in writing to Seller, Buyer,
     may at its option, terminate this Contract and obtain the prompt return
     of the original Letter of Credit and this contract shall be considered
     canceled, null and void, or Buyer may seek specific performance of this
     Contract.  If this Contract is terminated prior to closing, Buyer shall
     not be entitled to damages of any type, direct or consequential, it
     being expressly understood and agreed that the remedies specifically
     described herein shall constitute Buyer's sole remedies hereunder for
     Seller's default prior to closing, and that Buyer hereby waives any and
     all remedies not expressly provided herein.

          L.   The parties hereto shall negotiate in good faith a lease for
     the growing and harvesting of crops by Seller on each tract purchased
     and an additional three hundred fifty (350) acre tract previously
     purchased from Seller, utilizing that certain standard Farm Lease
     entitled "Illinois Crop-Share Cash Farm Lease" prepared by the
     Department of Agricultural Economics, Cooperative Extension Service,
     College of Agriculture, University of Illinois at Champaign, Urbana.

     5.   Seller and Buyer represent to, and agree with, each other that
neither has dealt with any real estate broker or agent or any other party who 
may claim or be entitled to a commission in connection with the sale of the 
Property, or any part thereof.

          6.   All notices and other communications required hereunder shall be
in writing and shall be considered as given when delivered personally or when
deposited in the U.S. mails, registered or certified, return receipt requested,
postage prepaid, addressed (a) if to Seller, at Rural Route 1, Box 89, Xenia,
Illinois 62899, and (b) if to Buyer, at Alliance Farms Cooperative Association,
c/o Farmland Industries, Inc., 3315 North Oak Trafficway, P.O. Box 7305, Kansas
City, Missouri 64116-0005.  Either party may by notice as aforesaid designate a
different address for notices or other communications intended for it.  All
notices given as aforesaid shall be deemed given as of the second day after the
date upon which such notice is placed in the U. S. mail.

          7.   Seller hereby covenants and agrees to defend (with counsel of
Buyer's choice), indemnify and hold Buyer harmless from and against all claims,
suits, orders, judgments and decrees, losses, damages, fines, penalties, liens,
liabilities and expenses (including Buyer's personnel and overhead costs and
attorney's fees and other costs incurred in connection therewith, regardless of
whether they or any of them involve litigation) resulting from any actual or
alleged injury (including death) to any person or from any actual or alleged 
loss of or damage to any property alleged to be attributable to Seller or 
Seller's operation or occupation (including through its agents, employees, 
guests, invitees and independent contractors) of the Property, or any part 
thereof, or alleged to be or have been caused by or resulting from any act or 
omission of Seller or any agent, employee or independent contractor thereof, or
any licensee, guest or invitee or independent contractor of any such entity in
or about the Property, or any part thereof.

          8.   Buyer hereby covenants and agrees to defend (with counsel of
Seller's choice), indemnify and hold Seller harmless from and against all 
claims, suits, orders, judgments and decrees, losses, damages, fines, penalties,
liens, liabilities and expenses (including Seller's personnel and overhead costs
and attorney's fees and other costs incurred in connection therewith, regardless
of whether they or any of them involve litigation) resulting from any actual or
alleged injury (including death) to any person or from any actual or alleged 
loss of or damage to any property, alleged to be attributable to Seller or 
Seller's operation or occupation (including through its agents, employees, 
guests, invitees and independent contractors) of the Property prior to Closing,
or to Seller's breach of any of its obligations under this Contract, alleged to
be or have been caused by or resulting from any act or omission of Seller or any
agent, employee or independent contractor thereof, or any licensee, guest or 
invitee or independent contractor of any such entity in or about the Property, 
or any part thereof.

          9.   Seller and Buyer each warrant and represent to the other that it
has all requisite power and authority to enter into this Contract and to carry
out its obligations hereunder, and that its entering into this Contract and
carrying out its obligations hereunder shall not be violative of any statute,
law, ordinance or regulation or of any agreement to which it is a party.

         10.  Seller and Buyer shall execute, concurrently with the execution of
this Contract, a memorandum (the "Memorandum") of this Contract in form
sufficient for recording.  Buyer shall cause the Memorandum to be recorded at 
its cost and expense.

         11.  This Contract contains the entire agreement between the parties
respecting the matters set forth, and expressly supersedes all previous or
contemporaneous agreements, understandings, representations or statements 
between the parties respecting such matters.

          12.  Any covenants and agreements which this Contract does not require
to be fully performed prior to the Closing of each Purchase Parcel shall survive
said Closing and shall be fully enforceable thereafter in accordance with their
terms.

          13.  This Contract and any of its terms may only be altered, amended,
waived, discharged or terminated by a written instrument signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought.

          14.  If any provision of this Contract, or any instrument to be
delivered by either of the parties at the Closing of each such Purchase Parcel
pursuant to this Contract, is declared invalid or is unenforceable for any
reason, such provision shall be deleted from such document and shall not
invalidate any other provision contained in the document.

          15.  Nothing in this Contract, express or implied, is intended to
confer upon any person, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Contract.

          16.  Headings at the beginning of each section and subsection are
solely for the convenience of the parties and are not a part of and shall not be
used to interpret this Contract.  The singular form shall include plural and the
masculine shall include the feminine and vice versa.  This Contract shall not be
construed as if it had been prepared by one of the parties, but rather as if 
both parties had prepared the same.  Unless otherwise indicated, all references
to sections are to this Contract.

          17.  This Contract shall be binding upon and inure to the benefit of
the parties, and their respective heirs, personal representatives, successors 
and assigns.

          18.  This Contract shall be governed and construed in accordance with
the laws of the State of Illinois.

          19.  Time is of the essence of this Agreement.  If the date for
performance of a condition hereof shall fall on a Saturday, Sunday or a holiday,
it may be performed on the next business day.

          20.  This Agreement supersedes all previous agreements, negotiations,
statements and undertakings which are merged herein and its terms and 
conditions, including all representations, indemnities, covenants and 
warranties, shall remain in full force and effect and shall not merge or 
terminate on the closing.

This Agreement may be signed in counterparts, all of which shall be deemed
originals.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed in two or more counterparts and dated as of the date first above written.

                         SELLER:


                         BILL L. BAILEY


                         NORMA JEAN BAILEY




                         BUYER:

                         Alliance Farms Cooperative Association, a Colorado
                              cooperative association.

                         By
                           Typed Name:
                           Title:
                                   EXHIBIT A


TRACT 1:  The North Half of Section 1, EXCEPT a part of the Northwest Quarter of
Section 1, Township 1 North, Range 8 East of the Third Principal Meridian, more
particularly described as follows:  Commencing at the Northeast corner of said
Section 1; thence North 89 Degrees 45 Minutes 10 Seconds West, 2897.43 feet 
along the north line of Section 1 to the point of beginning; thence North 89 
Degrees 45 Minutes 10 Seconds West, 208.88 feet along the North line of 
Section 1; thence 

South 0 Degrees 43 Minutes 05 Seconds East, 205.93 feet; thence South 88 Degrees
49 Minutes 30 Seconds East, 199.79 feet; thence North 0 Degrees 23 Minutes 30
Seconds West, 209.04 feet to a point on the North line of Section 1 being the
point of beginning, and FURTHER EXCEPT a tract more particularly described as
beginning at a point 8 chains East of the Northwest corner of the Northeast
Quarter of Section 1, Township 1 North, Range 8 East of the Third Principal
Meridian, thence South 4 chains, thence East 2.50 chains, thence North 4 chains,
thence West 2.50 chains to the point of beginning;

and

The North Half of the North Half of the South Half of Section 1;

and

The Northeast Quarter (known as the East Half of Lot 2) of the Northeast Quarter
of Section 2;

and

All in Township 1 North, Range 8 East to Third Principal Meridian.

                                  EXHIBIT B


APPLICANT:
ALLIANCE FARMS COOPERATIVE ASSOCIATION
3315 NORTH OAK TRAFFICWAY
P. O. BOX 7305
KANSAS CITY, MO 64116-0005

BENEFICIARY;
BILL L. BAILEY AND NORMA JEAN BAILEY
R R 1, BOX 89
XENIA, IL 62899

IRREVOCABLE LETTER OF CREDIT NO.

AT THE REQUEST, AND FOR THE ACCOUNT, OF ALLIANCE FARMS COOPERATIVE ASSOCIATION,
WE HEREBY ESTABLISH THIS IRREVOCABLE LETTER OF CREDIT NUMBER
IN THE AMOUNT OF ONE HUNDRED FIFTY THOUSAND U.S. DOLLARS ($150,000.00)
EXPIRATION DATE NOVEMBER 30, 1998 IN DENVER, COLORADO WHICH IS AVAILABLE FOR
PAYMENT UPON PRESENTATION OF YOUR SIGHT DRAFT AND THE FOLLOWING DOCUMENTS:

     THIS ORIGINAL LETTER OF CREDIT.

2.   A WRITTEN CERTIFICATE, SIGNED BY THE BENEFICIARY AND ACKNOWLEDGED BY A
     NOTARY PUBLIC, WHICH CERTIFIES AS FOLLOWS:
     A.   AS OF NOVEMBER 1, 1998, ALL OF THE CONDITIONS AND CONTINGENCIES
          SPECIFIED IN THE OPTION CONTRACT DATED NOVEMBER 20,1996 BETWEEN
          APPLICANT AND BENEFICIARY HAVE BEEN SATISFIED.
     B.   AS OF NOVEMBER 1, 1998, APPLICANT HAS FAILED TO EXERCISE THE OPTION
          GRANTED TO IT UNDER SAID OPTION CONTRACT.
     C.   NOT LESS THAN FIVE NOR MORE THAN 26 BUSINESS DAYS PRIOR TO
          BENEFICIARY'S PRESENTMENT OF THIS ORIGINAL LETTER OF CREDIT AND
          BENEFICIARY'S CERTIFICATE TO COBANK BENEFICIARY HAS NOTIFIED APPLICANT
          OF BENEFICIARY'S INTENTION TO DRAW ON THIS LETTER OF CREDIT.

WE HEREBY ENGAGE WITH THE BENEFICIARY THAT DOCUMENTS DRAWN UNDER AND IN
COMPLIANCE WITH THE TERMS OF THIS CREDIT WILL BE DULY HONORED UPON PRESENTATION
IN OUR OFFICES, AS SPECIFIED.
THIS LETTER OF CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICES FOR
DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE,
PUBLICATION NO. 600 (THE "UCP").



AUTHORIZED SIGNATURE                AUTHORIZED SIGNATURE