UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period endedSeptember 30, 2007

OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition period fromto

Commission File Number000-50736

SALOMON SMITH BARNEY FAIRFIELD FUTURES FUND L.P.

|
|
|
|

(Exact name of registrant as specified in its charter)

New York


04-3621353(State or other jurisdiction of


(I.R.S. Employerincorporation or organization)


Identification No.)


c/o Citigroup Managed Futures LLC
731 Lexington Avenue – 25th Fl.
New York, New York 10022

|
|
|
|

(Address of principal executive offices) (Zip Code)

(212) 559-2011

|
|
|
|

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YesXNo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of ‘‘accelerated filer and large accelerated filer’’ in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filerAccelerated filerNon-accelerated filerX

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YesNoX

As of October 31, 2007, 21,946.4331 Limited Partnership Redeemable Units were outstanding.

---



SALOMON SMITH BARNEY FAIRFIELD FUTURES FUND L.P.

FORM 10-Q

INDEX

Page
NumberPART I - Financial Information:Item 1.


Financial Statements:Statements of Financial Condition
at September 30, 2007 and December 31, 2006
(unaudited)


3Condensed Schedules of Investments
at September 30, 2007 and December 31, 2006
(unaudited)


4 – 5Statements of Income and Expenses
and Partners’ Capital for the three and nine
months ended September 30, 2007 and 2006
(unaudited)


6Statements of Cash Flows for the three and nine
months ended September 30, 2007 and 2006
(unaudited)


7Notes to Financial Statements
(unaudited)


8 – 11Item 2.


Management’s Discussion and
Analysis of Financial Condition
and Results of Operations


12 – 14Item 3.


Quantitative and Qualitative
Disclosures about Market Risk


15Item 4.


Controls and Procedures


16PART II - Other Information


17


2

---



PART I

Item 1.    Financial Statements

Salomon Smith Barney Fairfield Futures Fund L.P.
Statements of Financial Condition
(Unaudited)

September 30,
2007


December 31,
2006Assets:Equity in commodity futures trading account:Cash (Restricted $3,176,120 and $9,059,615 in 2007 and 2006, respectively)



$
35,260,435




$
49,180,095Net unrealized appreciation on open futures positions




245,331





528,088Unrealized appreciation on open forward contracts




2,118,092





1,888,43437,623,858





51,596,617Interest receivable




30,739





31,573$
37,654,597




$
51,628,190Liabilities and Partners’ Capital:Liabilities:Unrealized depreciation on open forwards contracts



$
1,287,948




$
782,357Accrued expenses:Brokerage commissions




136,375





190,672Management fees




60,322





84,358Administrative fees




15,080





21,090Other




37,081





40,172Redemptions payable




155,256





6,193,3851,692,062





7,312,034Partners’ Capital:General Partner, 864.9335 Unit equivalents outstanding in 2007 and 2006




1,356,441





1,235,791Limited Partners, 22,066.5211 and 30,152.0834 Redeemable Units of Limited Partnership Interest outstanding in 2007 and 2006, respectively




34,606,094





43,080,36535,962,535





44,316,156$
37,654,597




$
51,628,190


See accompanying notes to financial statements.

3

---



Salomon Smith Barney Fairfield Futures Fund L.P.
Condensed Schedule of Investments
September 30, 2007
(Unaudited)

Fair Value


% of Partners’
CapitalFutures Contracts PurchasedEnergy



$
154,471





0.43
%Grains




6,055





0.02Indices




9,058





0.03Interest Rates U.S.




(7,944
)




(0.02
)Interest Rates Non-U.S.




(34,410
)




(0.10
)Metals




25,220





0.07Softs




(8,611
)




(0.03
)Total Futures Contracts Purchased




143,839





0.40Futures Contracts SoldEnergy




20,470





0.06Grains




(3,898
)




(0.01
)Indices




100,289





0.28Interest Rates Non-U.S.




(2,632
)




(0.01
)Softs




(12,737
)




(0.04
)Total Futures Contracts Sold




101,492





0.28Unrealized Appreciation on Forward ContractsCurrencies




2,100,704





5.84Metals




17,388





0.05Total Unrealized Appreciation on Forward Contracts




2,118,092





5.89Unrealized Depreciation on Forward ContractsCurrencies




(1,233,398
)




(3.43
)Metals




(54,550
)




(0.15
)Total Unrealized Depreciation on Forward Contracts




(1,287,948
)




(3.58
)Total Fair Value



$
1,075,475





2.99
%


See accompanying notes to financial statements.

4

---



Salomon Smith Barney Fairfield Futures Fund L.P.
Condensed Schedule of Investments
December 31, 2006
(Unaudited)

Fair Value


% of Partners’
CapitalFutures Contracts PurchasedGrains



$
(8,654
)




(0.02
)%Indices




528,542





1.19Interest Rates U.S.




(664,110
)




(1.50
)Interest Rates Non-U.S.




(147,358
)




(0.33
)Metals




(3,790
)




(0.00
)*Softs




49,987





0.11Total Futures Contracts Purchased




(245,383
)




(0.55
)Futures Contracts SoldEnergy




150,348





0.34Indices




(100,190
)




(0.23
)Interest Rates Non-U.S.




786,435





1.78Softs




(63,122
)




(0.14
)Total Futures Contracts Sold




773,471





1.75Unrealized Appreciation on Open Forward ContractsCurrencies




1,883,615





4.25Metals




4,819





0.01Total Unrealized Appreciation on Open Forward Contracts




1,888,434





4.26Unrealized Depreciation on Open Forward ContractsCurrencies




(716,763
)




(1.62
)Metals




(65,594
)




(0.15
)Total Unrealized Depreciation on Open Forward Contracts




(782,357
)




(1.77
)Total Fair Value



$
1,634,165





3.69
%


* Due to rounding

See accompanying notes to financial statements.

5

---



Salomon Smith Barney Fairfield Futures Fund L.P.
Statements of Income and Expenses and Partners’ Capital
(Unaudited)

Three Months Ended
September 30,


Nine Months Ended
September 30,2007


2006


2007


2006Income:Net gains (losses) on trading of commodity interests:Realized gains (losses) on closed positions



$
(1,376,658
)



$
(3,084,720
)



$
4,383,557




$
314,486Change in unrealized gains (losses) on open positions




(58,791
)




200,055





(558,690
)




152,083(1,435,449
)




(2,884,665
)




3,824,867





466,569Interest income




341,844





570,893





1,088,285





1,772,060(1,093,605
)




(2,313,772
)




4,913,152





2,238,629Expenses:Brokerage commissions including clearing fees of $12,062, $18,708, $44,922 and $95,875, respectively




428,037





663,465





1,358,244





2,283,323Management fees




182,715





278,634





574,218





941,419Administrative fees




45,678





69,658





143,554





235,355Other




27,907





28,310





84,881





85,995684,337





1,040,067





2,160,897





3,546,092Net income (loss)




(1,777,942
)




(3,353,839
)




2,752,255





(1,307,463
)Redemptions—Limited Partners




(1,414,612
)




(1,669,642
)




(11,105,876
)




(14,453,456
)Net decrease in Partners’ Capital




(3,192,554
)




(5,023,481
)




(8,353,621
)




(15,760,919
)Partners’ Capital, beginning of period




39,155,089





58,989,116





44,316,156





69,726,554Partners’ Capital, end of period



$
35,962,535




$
53,965,635




$
35,962,535




$
53,965,635Net Asset Value per Redeemable Unit (22,931.4546 and 39,948.3698 Redeemable Units outstanding at September 30, 2007 and 2006, respectively)



$
1,568.26




$
1,350.88




$
1,568.26




$
1,350.88Net income (loss) per Redeemable Unit of Limited Partnership Interest and General Partner Unit equivalent



$
(73.18
)



$
(81.73
)



$
139.49




$
(40.48
)


See accompanying notes to financial statements.

6

---



Salomon Smith Barney Fairfield Futures Fund L.P.
Statements of Cash Flows
(Unaudited)

Three Months Ended
September 30,


Nine Months Ended
September 30,2007


2006


2007


2006Cash flows from operating activities:Net income (loss)



$
(1,777,942
)



$
(3,353,839
)



$
2,752,255




$
(1,307,463
)Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:Changes in operating assets and liabilities:(Increase) decrease in restricted cash




2,364,173





(3,571,110
)




5,883,495





364,616(Increase) decrease in net unrealized appreciation on open futures positions




286,708





(257,064
)




282,757





(725,624
)(Increase) decrease in unrealized appreciation on open forward contracts




863,588





144,202





(229,658
)




1,983,025(Increase) decrease in interest receivable




8,546





4,784





834





(28,332
)Increase (decrease) in net unrealized depreciation on open futures positions




—





—





—





(142,543
)Increase (decrease) in unrealized depreciation on open forward contracts




(1,091,505
)




(87,193
)




505,591





(1,266,941
)Accrued expenses:Increase (decrease) in brokerage commissions




(14,506
)




(21,789
)




(54,297
)




(75,899
)Increase (decrease) in management fees




(6,417
)




(9,650
)




(24,036
)




(33,643
)Increase (decrease) in administrative fees




(1,605
)




(2,413
)




(6,010
)




(8,411
)Increase (decrease) in other




(3,454
)




807





(3,091
)




28,347Net cash provided by (used in) operating activities




627,586





(7,153,265
)




9,107,840





(1,212,868
)Cash flows from financing activities:Payments for redemptions
—Limited Partners




(2,064,328
)




(2,423,733
)




(17,144,005
)




(17,426,139
)Net cash provided by (used in) financing activities




(2,064,328
)




(2,423,733
)




(17,144,005
)




(17,426,139
)Net change in unrestricted cash




(1,436,742
)




(9,576,998
)




(8,036,165
)




(18,639,007
)Unrestricted cash, at beginning of period




33,521,057





57,549,532





40,120,480





66,611,541Unrestricted cash, at end of period



$
32,084,315




$
47,972,534




$
32,084,315




$
47,972,534


See accompanying notes to financial statements.

7

---



Salomon Smith Barney Fairfield Futures Fund L.P.
Notes to Financial Statements
September 30, 2007
(Unaudited)

1.    General:

Salomon Smith Barney Fairfield Futures Fund L.P. (the ‘‘Partnership’’) is a limited partnership that was organized on March 25, 2002 under the partnership laws of the State of New York to engage in the speculative trading of a diversified portfolio of commodity interests including futures contracts, options and forward contracts. The commodity interests that are traded by the Partnership are volatile and involve a high degree of market risk. During the initial offering period (April 15, 2002 through June 4, 2002), the Partnership sold 12,423 Redeemable Units of Limited Partnership Interest (‘‘Redeemable Units’’) and 126 Units of General Partnership Interest. The Partnership commenced trading on June 5, 2002.

Citigroup Managed Futures LLC, a Delaware limited liability company acts as the general partner (the ‘‘General Partner’’) of the Partnership. The Partnership’s commodity broker is Citigroup Global Markets (‘‘CGM’’). CGM is an affiliate of the General Partner. The General Partner is wholly owned by Citigroup Global Markets Holdings Inc. (‘‘CGMHI’’), which is the sole owner of CGM. CGMHI is a wholly owned subsidiary of Citigroup Inc. As of September 30, 2007, all trading decisions for the Partnership are made by Graham Capital Management, L.P. (the ‘‘Advisor’’).

The accompanying financial statements are unaudited but, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Partnership’s financial condition at September 30, 2007 and December 31, 2006 and the results of its operations, changes in Partners’ capital and cash flows for the three and nine months ended September 30, 2007 and 2006. These financial statements present the results of interim periods and do not include all disclosures normally provided in annual financial statements. You should read these financial statements together with the financial statements and notes included in the Partnership’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the ‘‘SEC’’) for the year ended December 31, 2006.

Due to the nature of commodity trading, the results of operations for the interim periods presented should not be considered indicative of the results that may be expected for the entire year.

8

---



Salomon Smith Barney Fairfield Futures Fund L.P.
Notes to Financial Statements
September 30, 2007
(Unaudited)

2.    Financial Highlights:

Changes in Net Asset Value per Redeemable Unit of Limited Partnership Interest for the three and nine months ended September 30, 2007 and 2006 were as follows:

Three Months Ended
September 30,


Nine Months Ended
September 30,2007


2006


2007


2006Net realized and unrealized gains (losses) *



$
(76.79
)



$
(86.49
)



$
128.83




$
(52.14
)Interest income




14.52





13.99





41.44





40.06Expenses **




(10.91
)




(9.23
)




(30.78
)




(28.40
)Increase (decrease) for the period




(73.18
)




(81.73
)




139.49





(40.48
)Net Asset Value per Redeemable Unit, beginning of period




1,641.44





1,432.61





1,428.77





1,391.36Net Asset Value per Redeemable Unit, end of period



$
1,568.26




$
1,350.88




$
1,568.26




$
1,350.88


|* | Includes brokerage commissions.
|- | -------------------------------

|** | Excludes brokerage commissions.
|-- | -------------------------------

Three Months Ended
September 30,


Nine Months Ended
September 30,2007


2006


2007


2006Ratio to average net assets: ***Net investment loss before incentive
fees ****




(3.7
)%




(3.2
)%




(3.8
)%




(3.7
)%Operating expenses




7.4
%




7.4
%




7.6
%




7.6
%Incentive fees




—
%




—
%




—
%




—
%Total expenses




7.4
%




7.4
%




7.6
%




7.6
%Total return:Total return before incentive fees




(4.5
)%




(5.7
)%




9.8
%




(2.9
)%Incentive fees




—
%




—
%




—
%




—
%Total return after incentive fees




(4.5
)%




(5.7
)%




9.8
%




(2.9
)%


|*** | Annualized (other than incentive fees)
|--- | --------------------------------------

|**** | Interest income less total expenses (exclusive of incentive fees)
|---- | -----------------------------------------------------------------

The above ratios may vary for individual investors based on the timing of capital transactions during the period. Additionally, these ratios are calculated for the Limited Partner class using the Limited Partners’ share of income, expenses and average net assets.

9

---



Salomon Smith Barney Fairfield Futures Fund L.P.
Notes to Financial Statements
September 30, 2007
(Unaudited)

3.    Trading Activities:

The Partnership was formed for the purpose of trading contracts in a variety of commodity interests, including derivative financial instruments and derivative commodity instruments. The results of the Partnership’s trading activities are shown in the Statements of Income and Expenses and Partners’ Capital and are discussed in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The Customer Agreement between the Partnership and CGM gives the Partnership the legal right to net unrealized gains and losses on open futures positions.

All of the commodity interests owned by the Partnership are held for trading purposes. The average fair values of these interests during the nine and twelve months ended September 30, 2007 and December 31, 2006, based on a monthly calculation, were $653,662 and $727,875, respectively. The fair values of these commodity interests, including options thereon, if applicable, at September 30, 2007 and December 31, 2006, were $1,075,475 and $1,634,165, respectively. Fair values for exchange traded commodity futures and options are based on quoted market prices for those futures and options. Fair values for all other financial instruments for which market quotations are not readily available are based on other measures of fair value deemed appropriate by the General Partner.

4.    Financial Instrument Risks:

In the normal course of its business, the Partnership is party to financial instruments with off-balance sheet risk, including derivative financial instruments and derivative commodity instruments. These financial instruments may include forwards, futures and options, whose values are based upon an underlying asset, index, or reference rate, and generally represent future commitments to exchange currencies or cash flows, to purchase or sell other financial instruments at specific terms at specified future dates, or, in the case of derivative commodity instruments, to have a reasonable possibility to be settled in cash, through physical delivery or with another financial instrument. These instruments may be traded on an exchange or over-the-counter (‘‘OTC’’). Exchange traded instruments are standardized and include futures and certain option contracts. OTC contracts are negotiated between contracting parties and include forwards and certain options.

Each of these instruments is subject to various risks similar to those related to the underlying financial instruments including market and credit risk. In general, the risks associated with OTC contracts are greater than those associated with exchange traded instruments because of the greater risk of default by the counterparty to an OTC contract.

Market risk is the potential for changes in the value of the financial instruments traded by the Partnership due to market changes, including interest and foreign exchange rate movements and fluctuations in commodity or security prices. Market risk is directly impacted by the volatility and liquidity in the markets in which the related underlying assets are traded.

Credit risk is the possibility that a loss may occur due to the failure of a counterparty to perform according to the terms of a contract. Credit risk with respect to exchange traded instruments is reduced to the extent that an exchange or clearing organization acts as a counterparty to the transactions. The Partnership’s risk of loss in the event of counterparty default is typically limited to the amounts recognized as unrealized appreciation in the statements of financial condition and not represented by the contract or notional amounts of the instruments. The Partnership has credit risk and concentration risk because the sole counterparty or broker with respect to the Partnership’s assets is CGM.

10

---



Salomon Smith Barney Fairfield Futures Fund L.P.
Notes to Financial Statements
September 30, 2007
(Unaudited)

The General Partner monitors and controls the Partnership’s risk exposure on a daily basis through financial, credit and risk management monitoring systems, and accordingly believes that it has effective procedures for evaluating and limiting the credit and market risks to which the Partnership is subject. These monitoring systems allow the General Partner to statistically analyze actual trading results with risk-adjusted performance indicators and correlation statistics. In addition, on-line monitoring systems provide account analysis of futures, forward and option positions by sector, margin requirements, gain and loss transactions and collateral positions.

The majority of these instruments mature within one year of the inception date. However, due to the nature of the Partnership’s business, these instruments may not be held to maturity.

11

---



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

Liquidity and Capital Resources

The Partnership does not engage in the sale of goods or services. Its only assets are its equity in its commodity futures trading account, consisting of cash, net unrealized appreciation on open futures, unrealized appreciation on open forward contracts and interest receivable. Because of the low margin deposits normally required in commodity futures trading, relatively small price movements may result in substantial losses to the Partnership. While substantial losses could lead to a substantial decrease in liquidity, no such losses occurred in the third quarter of 2007.

The Partnership’s capital consists of capital contributions, as increased or decreased by realized and/or unrealized gains or losses on commodity futures trading and expenses, interest income, redemptions of Redeemable Units and distributions of profits, if any.

For the nine months ended September 30, 2007, Partnership capital decreased 18.9% from $44,316,156 to $35,962,535. This decrease was attributable to a redemption of 8,085.5623 Redeemable Units of Limited Partnership Interest totaling $11,105,876, which was partially offset by a net income from operations of $2,752,255. Future redemptions can impact the amount of funds available for investment in commodity contract positions in subsequent periods.

Critical Accounting Policies

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

All commodity interests (including derivative financial instruments and derivative commodity instruments) are used for trading purposes. The commodity interests are recorded on the trade date and open contracts are recorded in the statements of financial condition at fair value on the last business day of the period, which represents market value for those commodity interests for which market quotations are readily available or other measures of fair value deemed appropriate by management of the General Partner for those commodity interests and foreign currencies for which market quotations are not readily available. Investments in commodity interests denominated in foreign currencies are translated into U.S. dollars at the exchange rates prevailing on the last business day of the period. Realized gains (losses) and changes in unrealized values on open positions are recognized in the period in which the contract is closed or the changes occur and are included in net gains (losses) on trading of commodity interests.

Foreign currency contracts are those contracts where the Partnership agrees to receive or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed future date. Foreign currency contracts are valued daily, and the Partnership’s net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in the statements of financial condition. Realized gains (losses) and changes in unrealized values on foreign currency contracts are recognized in the period in which the contract is closed or the changes occur and are included in the statements of income and expenses and partners’ capital.

In July 2006, the Financial Accounting Standards Board (‘‘FASB’’) released FASB Interpretation No. 48 ‘‘Accounting for Uncertainty in Income Taxes’’ (FIN 48).  FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements.  FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Partnership’s tax returns to determine whether the tax positions are ‘‘more-likely-than-not’’ of being sustained by the applicable tax authority.  Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year.  The Partnership adopted FIN 48 as of January 1, 2007 and the application of this standard did not impact the financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards (‘‘SFAS’’) No. 157, ‘‘Fair Value Measurements’’. This accounting standard establishes a single authoritative

12

---



definition of fair value, sets out a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and the interim periods within those fiscal years. As of September 30, 2007, the Partnership is still evaluating the impact the adoption of SFAS No. 157 will have on the financial statement amounts; however, additional disclosures will be required about the inputs used to develop the measurements and the effect of certain measurements on changes in Partners’ Capital for the period.

Results of Operations

During the Partnership’s third quarter of 2007 the Net Asset Value per Redeemable Unit decreased 4.5% from $1,641.44 to $1,568.26 as compared to a decrease of 5.7% in the third quarter of 2006. The Partnership experienced a net trading loss (comprised of net realized gains (losses) on closed positions and change in net unrealized gains (losses) on open positions) before brokerage commissions and related fees in the third quarter of 2007 of $1,435,449. Losses were primarily attributable to the trading of commodity futures in currencies, U.S. and non-U.S. interest rates, metals, softs and indices and were partially offset by gains in energy and grains. The Partnership experienced a net trading loss before brokerage commissions and related fees in the third quarter of 2006 of $2,884,665. Losses were primarily attributable to the trading of commodity futures in currencies, grains, metals, and U.S. and non-U.S. interest rates, and were partially offset by gains in energy, softs and indices.

Third quarter results were impacted by widespread economic concerns related to sub-prime mortgage lending issues resonated throughout the capital and commodity markets. The Partnership registered losses in currencies, fixed-income, metals, stock indices and agricultural softs, while it registered gains in energy and grains.

In the currencies, losses were primarily incurred in Japanese Yen and Swiss Francs trades. High non-directional volatility was seen especially in Japanese Yen due to the brief unwinding of the currency carry trade. In the fixed income sector, losses were caused by reversal of well-established trends due to widespread uncertainty as the markets speculated the future direction of the interest rates. Trading in agricultural softs, such as cotton and coffee also contributed to the losses. In the metals sector, trading in base metals such as copper and aluminum contributed to the losses due to widespread selling on concerns of global growth. Losses were also encountered in the stock indices as concerns of economic weakness dominated the markets and previously established long-term trends were broken.

The Partnership registered gains in the energy sector primarily due to trades in crude oil. Weaker U.S. Dollar and strong demand driven by global growth pushed the crude oil price to its highest exchange-listed value. Gains were also registered in grains, especially in wheat as strong technical trends continued to push the prices to new highs.

During the Partnership’s nine months ended September 30, 2007 the Net Asset Value per Redeemable Unit increased 9.8% from $1,428.77 to $1,568.26 as compared to a decrease of 2.9% for the nine months ended September 30, 2006. The Partnership experienced a net trading gain (comprised of realized gains (losses) on closed positions and change in unrealized gains (losses) on open positions) before brokerage commissions and related fees for the nine months ended September 30, 2007, of $3,824,867. Gains were primarily attributable to the trading of commodity futures in currencies, grains, U.S. and non-U.S. interest rates, and indices and were partially offset by losses in energy, metals and softs. The Partnership experienced a net trading gain before commissions and related fees for the nine months ended September 30, 2006 of $466,569. Gains were primarily attributable to the trading of commodity futures in metals, U.S. and non-U.S. interest rates and indices and were partially offset by losses in currencies, energy, grains and softs.

Commodity futures markets are highly volatile. The potential for broad and rapid price fluctuations increases the risks involved in commodity trading, but also increases the possibility of profit. The profitability of the Partnership depends on the existence of major price trends and the ability of the Advisor to correctly identify those price trends. Price trends are influenced by, among other things, changing supply and demand relationships, weather, governmental, agricultural, commercial and trade programs and policies, national and international political and economic events and changes in interest

13

---



rates. To the extent that market trends exist and the Advisor is able to identify them, the Partnership expects to increase capital through operations.

Interest income on 80% of the Partnership’s daily average equity maintained in cash was earned at a 30-day U.S. Treasury bill rate determined weekly by CGM based on the average non-competitive yield on 3-month U.S. Treasury bills maturing in 30 days. CGM may continue to maintain the Partnership’s assets in cash and/or place all of the Partnership’s assets in 90-day Treasury bills and pay the Partnership 80% of the interest earned on the Treasury bills purchased. CGM will retain 20% of any interest earned on Treasury bills. Interest income for the three and nine months ended September 30, 2007 decreased by $229,049 and $683,775, respectively, as compared to the corresponding periods in 2006. The decrease in interest income is primarily due to lower daily average equity maintained in cash during the three and nine months ended September 30, 2007 as compared to the corresponding periods in 2006.

Brokerage commissions are calculated as a percentage of the Partnership’s adjusted net asset value on the last day of each month and are affected by trading performance, additions and redemptions. Accordingly, they must be analyzed in relation to the fluctuations in the monthly net asset values. Commissions and fees for the three and nine months ended September 30, 2007 decreased by $235,428 and $925,079, respectively as compared to the corresponding periods in 2006. The decrease in brokerage commissions was primarily due to lower average month-end net assets during the three and nine months ended September 30, 2007 as compared to the corresponding periods in 2006.

Management fees are calculated as a percentage of the Partnership’s net asset value as of the end of each month and are affected by trading performance, additions and redemptions. Management fees for the three and nine months ended September 30, 2007 decreased by $95,919 and $367,201, respectively as compared to the corresponding periods in 2006. The decrease in management fees was primarily due to lower average month-end net assets during the three and nine months ended September 30, 2007 as compared to the corresponding periods in 2006.

Administrative fees are paid to the General Partner for administering the business and affairs of the Partnership. These fees are calculated as a percentage of the Partnership’s net asset value as of the end of each month and are affected by trading performance and redemptions. Administrative fees for the three and nine months ended September 30, 2007 decreased by $23,980 and $91,801, respectively as compared to the corresponding periods in 2006. Administrative fees decreased due to lower average month-end net assets during the three and nine months ended September 30, 2007 as compared to the corresponding periods in 2006.

Incentive fees are based on the new trading profits generated by the Advisor at the end of the quarter as defined in the advisory agreements between the Partnership, the General Partner and the Advisor. There were no incentive fees earned for the three and nine months ended September 30, 2007 and 2006.

14

---



Item 3.    Quantitative and Qualitative Disclosures about Market Risk

The Partnership is a speculative commodity pool. The market sensitive instruments held by it are acquired for speculative trading purposes, and all or substantially all of the Partnership’s assets are subject to the risk of trading loss. Unlike an operating company, the risk of market sensitive instruments is integral, not incidental, to the Partnership’s main line of business.

Market movements result in frequent changes in the fair market value of the Partnership’s open positions and, consequently, in its earnings and cash flow. The Partnership’s market risk is influenced by a wide variety of factors, including the level and volatility of interest rates, exchange rates, equity price levels, the market value of financial instruments and contracts, the diversification effects among the Partnership’s open positions and the liquidity of the markets in which it trades.

The Partnership rapidly acquires and liquidates both long and short positions in a wide range of different markets. Consequently, it is not possible to predict how a particular future market scenario will affect performance, and the Partnership’s past performance is not necessarily indicative of its future results.

Value at Risk is a measure of the maximum amount which the Partnership could reasonably be expected to lose in a given market sector. However, the inherent uncertainty of the Partnership’s speculative trading and the recurrence in the markets traded by the Partnership of market movements far exceeding expectations could result in actual trading or non-trading losses far beyond the indicated Value at Risk or the Partnership’s experience to date (i.e., ‘‘risk of ruin’’). In light of the foregoing, as well as the risks and uncertainties intrinsic to all future projections, the inclusion of the quantification in this section should not be considered to constitute any assurance or representation that the Partnership’s losses in any market sector will be limited to Value at Risk or by the Partnership’s attempts to manage its market risk.

Exchange maintenance margin requirements have been used by the Partnership as the measure of its Value at Risk. Maintenance margin requirements are set by exchanges to equal or exceed the maximum losses reasonably expected to be incurred in the fair value of any given contract in 95%-99% of any one-day interval. Maintenance margin has been used rather than the more generally available initial margin, because initial margin includes a credit risk component, which is not relevant to Value at Risk.

The following table indicates the trading Value at Risk associated with the Partnership’s open positions by market category as of September 30, 2007, and the highest, lowest and average values during the three months ended September 30, 2007. All open position trading risk exposures of the Partnership have been included in calculating the figures set forth below. As of September 30, 2007, the Partnership’s total capitalization was $35,962,535. There has been no material change in the trading Value at Risk information previously disclosed in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2006.

September 30, 2007
(Unaudited)

Three months ended September 30, 2007Market Sector


Value at Risk


% of Total
Capitalization


High
Value at Risk


Low
Value at Risk


Average
Value at
Risk*Currencies:– OTC Contracts



$
2,147,686





5.97
%



$
3,026,926




$
632,524




$
1,788,725Energy




292,600





0.81
%




292,600





52,500





209,583Grains




15,900





0.04
%




90,512





14,550





35,858Interest Rates U.S.




69,500





0.19
%




482,650





7,019





62,417Interest Rates Non -U.S.




88,230





0.25
%




497,790





33,081





88,110Metals– Exchange Traded Contracts




25,000





0.07
%




32,500





8,000





8,333– OTC Contracts




85,565





0.24
%




120,770





3,033





63,218Softs




38,964





0.11
%




55,573





13,145





28,603Indices




235,485





0.66
%




1,638,171





69,811





334,739Total



$
2,998,930





8.34
%


|* | Average of month-end Values at Risk
|- | -----------------------------------

15

---



Item 4.    Controls and Procedures

The Partnership’s disclosure controls and procedures are designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) of the General Partner, to allow for timely decisions regarding required disclosure and appropriate SEC filings.

Management is responsible for ensuring that there is an adequate and effective process for establishing, maintaining and evaluating disclosure controls and procedures for the Partnership’s external disclosures.

The General Partner’s CEO and CFO have evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2007 and, based on that evaluation, the CEO and CFO have concluded that at that date the Partnership’s disclosure controls and procedures were effective.

The Partnership’sinternal control over financial reportingis a process under the supervision of the General Partner’s CEO and CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. generally accepted accounting principles. These controls include policies and procedures that:

|  |                                                                                                                                                                  
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Partnership;

|  |                                                                                                                                                                                                                                                                                                                                   
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | provide reasonable assurance that (i) transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and (ii) the Partnership’s receipts are handled and expenditures are made only pursuant to authorizations of the General Partner; and

|  |                                                                                                                                                                                                                 
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Partnership’s assets that could have a material effect on the financial statements.

There were no changes in the Partnership’s internal control over financial reporting during the fiscal quarter ended September 30, 2007 that materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

16

---



PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

The following information supplements and amends our discussion set forth under Part I, Item 3 ‘‘Legal Proceedings’’ in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, as updated by our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2007 and June 30, 2007.

Enron-Related Civil Actions

On August 27, 2007, the District Court for the Southern District of New York inIn Re. Enron Corp.reversed the rulings of the federal bankruptcy court that certain bankruptcy claims held by Citigroup transferees could be equitably subordinated or disallowed solely because of the alleged misconduct of Citigroup, and remanded for further proceedings.

IPO Regulatory Inquiries

On August 14, 2007, plaintiffs filed amended complaints in the six focus cases as well as amended master allegations for all cases in the coordinated proceedings. On September 27, 2007, plaintiffs filed a motion to certify new classes in the six focus cases.

Item 1A.    Risk Factors

There are no material changes from the risk factors set forth under Part I, Item 1A. ‘‘Risk Factors’’ in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and under Part II, Item 1A ‘‘Risk Factors’’ in the Partnership’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 and June 30, 2007.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

The Partnership no longer offers Redeemable Units at the Net Asset Value per Redeemable Unit at the end of each month. The Redeemable Units were issued in reliance upon applicable exemptions from registration under Section 4(2) of the Securities Act of 1933, as amended, and Section 506 of Regulation D promulgated thereunder.

Proceeds from the sale of additional Redeemable Units are used in the trading of commodity interests including futures contracts, options and forwards contracts.

The following chart sets forth the purchases of Redeemable Units by the Partnership.

Period


(a) Total Number
of Shares
(or Units) Purchased*


(b) Average
Price Paid per
Share (or Unit)**


(c) Total Number
of Shares (or Units)
Purchased as Part
of Publicly Announced
Plans or Programs


(d) Maximum Number
(or Approximate
Dollar Value) of Shares
(or Units) that
May Yet Be
Purchased Under the
Plans or ProgramsJuly 1, 2007 –
July 31, 2007


232.0938


$1,576.50


N/A


N/AAugust 1, 2007 –
August 31, 2007


591.5780


$1,510.30


N/A


N/ASeptember 1, 2007 –
September 30, 2007


98.9991


$1,568.26


N/A


N/A922.6709


$1,551.69


|* Generally, Limited Partners are permitted to redeem their Redeemable Units as of the end of each month on 10 days’ notice to the General Partner. Under certain circumstances, the General Partner can compel redemption but to date the General Partner has not exercised this right. Purchases of Redeemable Units by the Partnership reflected in the chart above were made in the ordinary course of the Partnership’s business in connection with effecting redemptions for Limited Partners.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|** Redemptions of Redeemable Units are effected as of the last day of each month at the Net Asset Value per Redeemable Unit as of that day.
|-------------------------------------------------------------------------------------------------------------------------------------------

17

---



Item 3.    Defaults Upon Senior Securities – None.

Item 4.    Submission of Matters to a Vote of Security Holders – None.

Item 5.    Other Information – None.

Item 6.    Exhibits

| |                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The exhibits required to be filed by Item 601 of Regulation S-K are incorporated herein by reference to the exhibit index of the Partnership’s Annual Report on Form 10-K for the period ended December 31, 2006.

| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| | Exhibit – 31.1 – Rule 13a-14(a)/15d-14(a) Certification (Certification of President and Director)

| |                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------
| | Exhibit – 31.2 – Rule 13a-14(a)/15d-14(a) Certification (Certification of Chief Financial Officer and Director)

| |                                                                                       
| | --------------------------------------------------------------------------------------
| | Exhibit – 32.1 – Section 1350 Certification (Certification of President and Director).

| |                                                                                                     
| | ----------------------------------------------------------------------------------------------------
| | Exhibit – 32.2 – Section 1350 Certification (Certification of Chief Financial Officer and Director).

18

---



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SALOMON SMITH BARNEY FAIRFIELD FUTURES FUND L.P.

By:


Citigroup Managed Futures LLC(General Partner)By:


/s/ Jerry PascucciJerry Pascucci,
President and DirectorDate:


November 14, 2007By:


/s/ Jennifer MagroJennifer Magro
Chief Financial Officer and DirectorDate:


November 14, 2007


19

---