SECURITIES AND EXCHANGE COMMISSION
                       Washington, D. C.
                               

                           FORM 10-K

       [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
            OF THE SECURITIES EXCHANGE ACT OF 1934

     For the fiscal year           Commission File
     ended June 27, 1998           No. 2-59958

                        GOLD KIST INC.

    (Exact name of registrant as specified in its charter)
                               
          Georgia                            58-0255560
     (State or other jurisdiction       (I.R.S. Employer
      of incorporation or organization) Identification No.)
                               
              244 Perimeter Center Parkway, N. E.
                    Atlanta, Georgia 30346

      (Address of principal executive offices) (Zip Code)

      Registrant's  telephone  number,  including  area  code:
(770) 393-5000
                               
      Securities registered pursuant to Section 12(b)  of  the
Act:      None
      Securities registered pursuant to Section 12(g)  of  the
Act:      None

                               
           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  l934  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.
YES X .  NO   .
                               
              DOCUMENTS INCORPORATED BY REFERENCE
                        Not Applicable.
                               
                               

                       TABLE OF CONTENTS

     Item                                         Page


 1.  Business (and Properties) . . . .             1

 2.  Properties  . . . . . . . . . . .            11

 3.  Legal Proceedings  . . . . . . . .           11

 4.  Submission of Matters to a
     Vote of Security Holders . . . . . .         11

 5.  Market for Registrant's Common Equity
     and Related Stockholder Matters              11

 6.  Selected Financial Data . . . . .            12

 7.  Management's Discussion and Analysis of
     Financial Condition and Results of
     Operations. .                                13

 7A. Quantitative and Qualitative
     Disclosure about Market Risk .               18

 8.  Financial Statements and Supplementary
     Data . . . . . . . . . .                     19

 9.  Changes in and Disagreements with
     Accountants on Accounting and
     Financial Disclosure .. . . . . .            40

10.  Directors and Executive Officers
     of the Registrant  . . . . . .               40

11.  Executive Compensation  . . . . .            43

12.  Security Ownership of Certain
     Beneficial Owners and Management             46

13.  Certain Relationships and Related
     Transactions. . . . . . . . .                46

14.  Exhibits, Financial Statement Schedules,
     and Reports on Form 8-K  . . . .             47



                             - i -
                        GOLD KIST INC.

     ANNUAL REPORT FOR THE FISCAL YEAR ENDED JUNE 27, 1998

                            PART I

Item 1.  Business (and Properties).

     Gold  Kist Inc. ("Gold Kist" or the "Association")  is  a
diversified  agricultural membership cooperative  association,
headquartered  in  Atlanta,  Georgia.   It  was   incorporated
without  capital  stock in 1936 under the Georgia  Cooperative
Marketing  Act.   The name of the Association was  changed  in
1970  from Cotton Producers Association to Gold Kist Inc.   In
April  1985, the Articles of Incorporation and By-Laws of  the
Association  were  amended to provide for a  class  of  common
stock  and  a  class of preferred stock as authorized  by  the
Georgia Cooperative Marketing Act.  Each member is issued  one
share of common stock only, as evidence of membership and  the
right to one vote as long as the member maintains status as an
active member.  Only members may hold the common stock,  which
is nontransferable and receives no dividends.

     Gold  Kist  serves  approximately  31,000  active  farmer
members  located  principally in  Alabama,  Florida,  Georgia,
Mississippi,  South  Carolina and Texas.  In  addition,  other
cooperative associations are members of Gold Kist.  Any person
engaged in the production of farm commodities and any firm  or
corporation  whose  members  or stockholders  are  persons  so
engaged  and any cooperative association organized  under  the
cooperative marketing laws of any state, which enters  into  a
marketing and/or purchasing agreement with the Association, is
eligible for membership.

      Gold   Kist   offers  both  cooperative  marketing   and
cooperative  purchasing services to its member patrons.   Farm
commodities  are marketed by Gold Kist on behalf  of  members.
Similarly,  Gold Kist manufactures or processes many  products
purchased   for   its   members.   The  standard   Membership,
Marketing,  and/or Purchasing Agreement which is entered  into
between each member and Gold Kist does not require the  member
to  market  his  agricultural products  or  to  purchase  farm
supplies  through Gold Kist.  Under the agreement,  Gold  Kist
undertakes  to  market  for the member  agricultural  products
delivered  which are of a type marketed by Gold  Kist  and  to
purchase  or  manufacture and sell to  the  member  such  farm
supplies  as  the member requires, provided it is advantageous
for  Gold Kist to handle such supplies in the interest of  the
membership.   The  Association also does  business  with  non-
members  and  engages  in non-cooperative  activities  through
subsidiaries and partnerships.  AgraTrade Financing,  Inc.,  a
wholly-owned  subsidiary of Gold Kist, provides  financing  to
members and non-members doing business with Gold Kist and  its
subsidiaries  and  partnerships.  Financing  is  extended  for
poultry  and  pork housing construction and for  certain  farm
commodity crop production.

     Agriculture is generally cyclical in nature.  Commodities
marketed by Gold Kist on behalf of its members are subject  to
fluctuations in price, based on supply of the farm commodities
and  demand  for  the  raw or processed  products.   Commodity
prices  are also sensitive to interest rates, with high  rates
generally  tending to depress market prices, and to  worldwide
economic  and  political factors.  In addition, a  portion  of
Gold Kist's business is dependent on the demand of farmers for
the  purchase of products, which is influenced by the  general
farm economy and the success of particular crops.

      Gold  Kist's  business  is  conducted  in  two  industry
segments.   The  Poultry segment conducts  broiler  production
operations,  providing both marketing and purchasing  services
to   its   cooperative  patrons.   The  Agri-Services  segment
purchases or manufactures feed, seed, fertilizers, pesticides,
animal health products and other farm supply items for sale at
wholesale  and  retail.  Additionally, that  segment  operates
pork  production operations, serves as a contract  procurement
agent  for,  and storer of, farm commodities such as  soybeans
and grain and is engaged in the purchase, sale, processing and
storage  of  cotton.  Gold Kist is also a partner in  a  major
peanut  processing  and  marketing business  and  in  a  pecan
processing and marketing business and participates as a member
of  limited  liability  companies which  are  engaged  in  the
production and sale of hogs and of fertilizer ingredients.

     Gold  Kist  has entered into an Asset Purchase  Agreement
(the  "Agreement"), dated as of July 23, 1998,  with  Southern
States Cooperative, Incorporated ("Southern States"), pursuant
to  which  the Association has agreed to sell and assign,  and
Southern States has agreed to purchase and assume, the  assets
and   certain   of   the  obligations  of  the   Association's
agricultural  inputs  business.  The affected  assets  include
substantially   all   of  the  assets  of  the   Association's
AgriServices  segment (including the retail  stores  division,
the  fertilizer and chemicals division, and the pet  food  and
animal  products  division), as well  as  certain  crop  notes
receivable  of  AgraTrade Financing, Inc.,  the  Association's
wholly-owned  finance subsidiary.  The Association's  poultry,
pork,  aquaculture,  seed marketing and other  operations  and
businesses   are  not  affected  by  this  transaction.    The
consideration  to be paid the Association in  connection  with
the  sale  shall be an amount equal to $41.4 million plus  the
net  current  asset  value as of the  closing  date  less  the
remaining obligations under an industrial development bond and
lease  obligation  as  of the closing date.   Unless  Southern
States  otherwise agrees, the final purchase price  shall  not
exceed $251.4 million.  Subject to the satisfaction of certain
conditions  to  closing, the consummation of  the  transaction
shall  take place on October 13, 1998, or such other  date  as
the  Association  and  Southern States may  agree.   Upon  the
consummation  of  this transaction, the  Association  will  no
longer  engage  in  the  business  operated  by  the  affected
segments.

     In  addition,  in  September 1998, the  Association  sold
certain assets of its cotton marketing business.  As a  result
of  that  transaction, and the conveyance  of  certain  cotton
ginning and storage facilities operated by the Association  to
Southern States pursuant to the Agreement described above, the
Association  will terminate its cotton operations  other  than
the Moultrie, Georgia cotton warehouse activities in the first
quarter of fiscal 1999.

                            POULTRY
Broilers

     Gold Kist conducted its poultry operations in fiscal 1998
through  six Gold Kist cooperative broiler divisions,  through
its   former  75%  majority-owned  public  subsidiary,  Golden
Poultry  Company,  Inc. ("Golden Poultry"),  and  through  its
former   partnership  interest  in  Carolina  Golden  Products
Company ("Carolina Golden").  Gold Kist acquired the remaining
interests  in Golden Poultry and Carolina Golden in  September
1997   and   conducted  the  operations  of  those   companies
subsequently  as cooperative broiler divisions of  Gold  Kist.
See Note 11 of Notes to Consolidated Financial Statements.

     Gold  Kist's  cooperative broiler operation is  organized
into  broiler divisions, each encompassing one of Gold  Kist's
decentralized broiler complexes.  Each Gold Kist decentralized
broiler  complex operates within a separate geographical  area
and  includes  within  that area broiler  flocks,  pullet  and
breeder (hatching egg) flocks, one or more hatcheries, a  feed
mill,  poultry processing plant(s) and management,  sales  and
accounting office(s), and transportation facilities.  The  six
complexes  operated as Gold Kist divisions  throughout  fiscal
1998  are headquartered in Boaz and Cullman, Alabama;  Athens,
Ellijay  and Carrollton, Georgia; and Live Oak, Florida.   The
broiler  growers for each complex are members  of  Gold  Kist.
The facilities and operations of each complex are designed  to
furnish the growers flocks of chicks, feed and medicines,  and
to  provide processing and marketing services for the broilers
grown.

    Effective September 1997, the operations of Golden Poultry
and  Carolina  Golden were included in Gold  Kist  cooperative
poultry  operations.   The  former Golden  Poultry  integrated
poultry  processing  complexes are in  Russellville,  Alabama,
Douglas,  Georgia, and Sanford and Siler City, North Carolina.
Each  of these complexes contracts for poultry production with
broiler growers and includes a hatchery, feed mill, processing
plant  and  management,  sales  and  accounting  office,   and
transportation   facilities.   The  former   Carolina   Golden
integrated  poultry processing complex is located  in  Sumter,
South Carolina, and produces value-added and further processed
poultry   products.   This  complex  contracts   for   poultry
production with broiler growers and includes a hatchery,  feed
mill,  processing plant and management, sales  and  accounting
office, and transportation facilities.

     The  principal products marketed by the broiler divisions
are  whole chickens, cut-up chickens, segregated chicken parts
and  further  processed products packaged  in  various  forms,
including  fresh  bulk ice pack, chill pack and  frozen.   Ice
pack  chicken is packaged in ice or dry ice and sold primarily
to  distributors, grocery stores and fast food chains.   Chill
pack  chicken is packaged for retail sale and kept chilled  by
mechanical refrigeration from the packing plant to  the  store
counter.   Frozen  chicken  is marketed  primarily  to  school
systems,  the military services, fast food chains and  in  the
export  market.   Further  processed products,  which  include
preformed  breaded  chicken nuggets and patties  and  deboned,
skinless  and  marinated products are sold primarily  to  fast
food and grocery store chains.  Chill pack chicken is sold  in
certain  localities under the Gold Kist Farmsr  and  Young  'n
Tenderr labels; however, some is sold under customers' private
labels.  Most of the frozen chicken carries the Gold Kistr  or
Early  Birdr label.  Cornish game hens are marketed in  frozen
form primarily to hotels, restaurants and grocery stores under
the  Gold  Kist Farms, Young 'n Tender and Medallionr  labels.
Medallion,  Big Valuer, Gold Kist Farms, Young 'n  Tender  and
Early Bird are registered trademarks of Gold Kist Inc.

    Broiler products are marketed directly from the processing
plant  in  each broiler complex.  Some packaged  products  are
marketed from the Atlanta headquarters.  The plants at Athens,
Carrollton,  Boaz,  and  Live Oak  have  special  distribution
facilities,   and   there   are  five  separate   distribution
facilities  located in Florida, Tennessee, Ohio and  Kentucky.
The  former  Golden  Poultry operations include  two  separate
distribution  facilities in Siler City,  North  Carolina,  and
Pompano  Beach, Florida.  Cornish game hens are  processed  at
facilities  in  Trussville,  Alabama  and  marketed  from  the
Atlanta headquarters.

     Gold Kist is one of the largest poultry processors in the
United  States.   It competes with other large processors  and
with  smaller  companies.  Competition is  based  upon  price,
quality  and  service.   While Management  believes  that  the
pricing and quality of its products are competitive with other
processors,  it  believes  that Gold  Kist's  service  to  its
customers is a principal factor that has established Gold Kist
as  one of the largest United States poultry processors.  Gold
Kist's  ability to deliver broilers and other poultry products
cut-up  or otherwise produced to order is an important service
to customers.

     The  poultry  industry,  just  as  many  other  commodity
industries,  has  historically  been  cyclical.    Prices   of
perishable  commodities, such as broilers, react  directly  to
changes  in  supply  and  demand.  Furthermore,  broilers  are
typically  a  high volume, low margin product  so  that  small
increases  in costs, such as feed ingredient costs,  or  small
decreases  in price, can produce losses.  As an integral  part
of its feed ingredient purchasing strategy, Gold Kist attempts
to  limit  the  effects  and  risk  of  fluctuations  in  feed
ingredient costs (i.e., corn and soybean meal) through varying
amounts  of commodity trading transactions in the agricultural
commodity  futures  and  options  market.   Commodity  trading
transactions,  which  are  a common  industry  practice,  have
inherent  risk,  such that changes in the commodities  futures
and  options  prices as a result of favorable  or  unfavorable
changes  in the weather, crop conditions or government  policy
may  have an adverse effect on Gold Kist's net feed ingredient
cost  as compared to the cost in cash markets.  Likewise, Gold
Kist could benefit from reduced net feed ingredient cost as  a
result  of  these  changes as compared to  cost  in  the  cash
market.  Results of hedging and commodity options transactions
are  reflected as an adjustment to feed ingredient cost in the
Association's consolidated financial statements.  See  Note  l
(c) of Notes to Consolidated Financial Statements.

     The  poultry industry has also traditionally been subject
to  seasonality in demand and pricing.  Generally,  the  price
and demand for poultry products peaks during the summer months
and  declines  to  lower levels during the  winter  months  of
November,  December, January and February.  Gold Kist  broiler
prices and sales volume follow the general seasonality of  the
industry.

     The  following table shows the amount and  percentage  of
Gold  Kist's net sales volume contributed by sales of  broiler
products for each of the years indicated.
<TABLE>
<CAPTION>

                          Fiscal Year Ended (000's Omitted)

                        June 29,        June 28,       June 27,
                           1996            1997           1998
<S>                     <C>             <C>            <C>
Broiler Products
Volume            $1,380,649      $1,629,705       $1,630,437
Percentage (%)          97.2            98.2           98.7

</TABLE>

                         AGRI-SERVICES

      Gold   Kist   purchases,  manufactures   and   processes
fertilizers,  agricultural chemicals, seed, pet  foods,  feed,
animal  health  products  and  other  farm  supply  items  for
distribution and sale at wholesale and retail.  These products
are  distributed  through approximately 100 Gold  Kist  retail
stores  and  at wholesale to national accounts and independent
dealers.   Gold  Kist serves as a contract  procurement  agent
for,  and  storer  of, farm commodities such as  soybeans  and
grain.

     Gold  Kist  has entered into an Asset Purchase  Agreement
(the  "Agreement"), dated as of July 23, 1998,  with  Southern
States Cooperative, Incorporated ("Southern States"), pursuant
to  which  the Association has agreed to sell and assign,  and
Southern States has agreed to purchase and assume, the  assets
and   certain   of   the  obligations  of  the   Association's
agricultural  inputs  business.  The affected  assets  include
substantially   all   of  the  assets  of  the   Association's
AgriServices  segment (including the retail  stores  division,
the  fertilizer and chemicals division, and the pet  food  and
animal  products  division), as well  as  certain  crop  notes
receivable  of  AgraTrade Financing, Inc.,  the  Association's
wholly-owned  finance subsidiary.  The Association's  poultry,
pork,  aquaculture,  seed marketing and other  operations  and
businesses   are  not  affected  by  this  transaction.    The
consideration  to be paid the Association in  connection  with
the  sale  shall be an amount equal to $41.4 million plus  the
net  current  asset  value as of the  closing  date  less  the
remaining obligations under an industrial development bond and
lease  obligation  as  of the closing date.   Unless  Southern
States  otherwise agrees, the final purchase price  shall  not
exceed $251.4 million.  Subject to the satisfaction of certain
conditions  to  closing, the consummation of  the  transaction
shall  take place on October 13, 1998, or such other  date  as
the  Association  and  Southern States may  agree.   Upon  the
consummation  of  this transaction, the  Association  will  no
longer  engage  in  the  business  operated  by  the  affected
segments.

     In  addition,  in  September 1998, the  Association  sold
certain assets of its cotton marketing business.  As a  result
of  that  transaction, and the conveyance  of  certain  cotton
ginning and storage facilities operated by the Association  to
Southern States pursuant to the Agreement described above, the
Association  will terminate its cotton operations  other  than
the Moultrie, Georgia cotton warehouse activities in the first
quarter of fiscal 1999.

Retail Stores

     The  Gold  Kist  retail store operation is  conducted  in
Alabama,  Arkansas, Florida, Georgia, Louisiana,  Mississippi,
South Carolina and Texas.

     The  typical  Gold Kist store is a complete  farm  supply
center  offering for sale many types of feeds,  animal  health
products,  fertilizers, pesticides, seeds, farm  supplies  and
equipment.  It also offers services such as precision farming,
customized fertilizer spreading, field mapping, soil  testing,
insect  scouting,  and agronomic and animal nutrition  advice.
Gold Kist purchases most of the farm supplies distributed from
various manufacturers.

    The competition for retail sales faced by Gold Kist stores
varies  greatly from locality to locality.  Some compete  with
other   purchasing  cooperatives,  hardware  and  farm  supply
stores,  and  retail  outlets owned or affiliated  with  major
fertilizer, agricultural chemical and feed manufacturers.   In
some  areas  these  competing manufacturers sell  directly  to
farmers.  Price competition is important for many items.   The
Gold Kist stores emphasize service to the customer.

     Luker  Inc.,  a  steel  fabrication  company  located  in
Augusta, Georgia, and a wholly-owned subsidiary of Gold  Kist,
manufactures  steel  equipment  such  as  poultry   processing
equipment, storage bins, elevators and conveyor systems.

     Gold  Kist  operates  a system of receiving  and  storage
facilities for handling unprocessed farm commodities  such  as
soybeans,  corn and other grains.  Approximately 98%  of  Gold
Kist's storage facilities are licensed by the federal or state
government  and  can  issue  negotiable  warehouse   receipts.
Pursuant  to  a  five-year  grain  handling  agreement   which
terminates  in  2000, Gold Kist utilizes these facilities  and
assets exclusively as independent buying points operating on a
commission basis for the Archer Daniels Midland Company.

Fertilizers and Chemicals

      Gold  Kist  distributes  granular,  blended  and  liquid
fertilizers and fertilizer materials.  Each type is  purchased
or   produced  in  varying  compositions  depending  upon  the
ultimate  use of the product as a plant food.  The Association
owns  and operates five fertilizer plants in addition to other
blending   facilities  at  certain  Gold  Kist  stores   where
fertilizer  ingredients  are  physically  mixed  to  a  custom
formula.   Gold  Kist  leases or owns terminal  facilities  at
which  fertilizer materials are warehoused for resale  through
Gold  Kist  stores and private dealers.  Granular  fertilizers
are  purchased  and distributed in bagged and bulk  form.   In
addition  to  traditional agricultural  customers,  Gold  Kist
markets fertilizers and chemicals to, and provides application
services for, forestry, turf and industrial customers.

      Gold  Kist  is  a  member  of  CF  Industries,  Inc.,  a
cooperative owned by regional cooperatives, which produces and
supplies fertilizer materials to its members.  For the  fiscal
year  ended  June 27, 1998, Gold Kist purchased  approximately
38%  of its fertilizer materials and products at market prices
from  CF  Industries.  The remaining fertilizer materials  and
products were purchased from more than 50 other suppliers.

     Gold  Kist competes for fertilizer sales with  the  major
fertilizer    manufacturers,    wholesalers    and    brokers.
Competition  is  largely on the basis of  price  and  service.
Gold   Kist  markets  premium  grade  fertilizers  under   its
trademarks  Growers Prider, Living Lawnr,  and  Garden  Goldr.
Gold  Kist  also markets a premium growing medium composed  of
soil  materials and fertilizer nutrients under  its  trademark
Garden on the Spotr.

      Gold   Kist   distributes  agricultural  and   specialty
chemicals,   including  pesticides,  growth   regulators   and
surfactants which it purchases from approximately 50  chemical
manufacturers.    Competition  for   sales   of   agricultural
chemicals is primarily on the basis of price and service since
most  retailers have access to the same inventory of  products
produced  by the major manufacturers.  Gold Kist also provides
aerial  application of fertilizer for forestry  customers  and
ground  application  of  fertilizer  and  chemicals  for  turf
customers.  The Association is also a participant in a limited
liability  company  which manufactures  and  sells  fertilizer
ingredients.

Pet Food and Animal Products

     Gold Kist operates four major feed mills for its pet food
and  animal  products  operations.  The  mills  produce  feeds
distributed  at wholesale or at retail through the  Gold  Kist
stores  and independent dealers.  All of the mills  are  batch
process mills in which ingredients are weighed.  This type  of
mill  is capable of precision feed mixing, which is especially
important  to the poultry industry.  Feeds are distributed  in
bagged and bulk form.

     In  the fiscal year ended June 27, 1998, Gold Kist's feed
mills produced substantially all of the feed it distributed at
wholesale   or  retail.   Gold  Kist  produces   and   markets
approximately  300 different feeds, including  custom  blended
feeds and feeds containing various medications.  Pro Balancedr
is  a dairy feed sold through a special program which includes
survey  and  analysis  of  feed  ingredients  needed   for   a
particular  herd.  Gold Kist also markets dog food  under  the
Pay  Dayr,  Pro  Balanced  and  Performance  Plusr  trademarks
through  independent  dealers, under the  Gold  Kist  and  Pro
Balanced trademarks through Gold Kist retail stores, and under
the  Gold  Kist  and  Top  Notchr trademarks  through  grocery
wholesalers and retail chain stores.  Pro Balanced cat food is
also  marketed through independent dealers, Gold  Kist  stores
and   grocery  wholesalers  and  retail  chain  stores.    Pro
Balanced, Pay Day, Gold Kist, Top Notch, and Performance  Plus
are  registered  trademarks of Gold  Kist.   Aquaculture  feed
products,   primarily   feed  for  commercial   fish   farming
operations,  also form a significant portion  of  Gold  Kist's
feed business.

     Feed  ingredients are purchased in the  marketplace  from
many   sources,   including  major  grain   companies.    Feed
formulation  is  based  on  the cost  of  various  alternative
ingredients  in a given week.  Feed ingredients  are  normally
purchased for several weeks' production; corn is purchased  in
fifteen-rail car units.

     Approximately forty percent of the feed sold is delivered
in  bulk  form  directly from the feed mill to the  farm;  the
remainder is sold in bag form.  Gold Kist operates a fleet  of
trucks, including feed tankers, for the delivery of feed.

     Competition  for sales of feed is based  on  quality  and
service, as well as price.  Gold Kist competes with major feed
manufacturers   and  local  feed  mills.    The   major   feed
manufacturers distribute through independent retailers,  owned
retail  stores and direct to farmers.  Gold Kist sells through
its  own  retail stores and directly to large farmers, private
dealers,  independent  cooperatives,  wholesale  grocers,  and
retail grocery chains.

Pork

     Gold Kist markets hogs raised by producers in Alabama and
Georgia.  Feeder pigs are furnished to members who raise them,
using  Gold  Kist  feed and medicines,  to  produce  hogs  for
marketing.  Feeder pigs are either raised by Gold Kist members
and  marketed  through Gold Kist to the  market  hog  growers,
raised for Gold Kist by non-member independent contractors  or
purchased  by  Gold Kist in the marketplace.  The  Association
also  has  a  joint venture arrangement with another  regional
cooperative association in the form of a limited liability hog
sales  and production company.  Gold Kist raises and  provides
young pigs for the venture.

     Live  market  hogs  are marketed  by  Gold  Kist  in  the
Southeastern  United States to processors of   pork  products,
primarily on a competitive bid basis in the states of Alabama,
Georgia  and Mississippi.  Management believes that  customers
are  favorably  impressed by the quality of  its  market  hogs
which  is  principally  due  to superior  breeding  stock  and
management  grow-out techniques employed by Gold  Kist.   Gold
Kist  competes with other major national producers and smaller
individual  producers, primarily on a regional  basis  in  the
Southeastern United States.

Cotton

     Cotton  ginning  and storage facilities are  operated  at
Statesboro,  Morven,  Byromville  and  DeSoto,  Georgia,   and
Bishopville,  South Carolina.  A central storage warehouse  is
operated  in  Moultrie,  Georgia.  The  Association   provides
ginning  and  storage services to members and non-members  and
markets  cotton  purchased  from members  and  non-members  to
domestic and foreign textile mills.

      While operations of the Moultrie storage warehouse  will
be  continued  to  service  cotton currently  stored  in  that
facility,  the  other  facilities of the  cotton  ginning  and
storage operations and the cotton marketing operations will be
terminated in the first quarter of 1999.

Seed Marketing

     AgraTech  Seeds, Inc. ("AgraTech Seeds"), a  wholly-owned
subsidiary  of  Gold Kist, owns and operates a seed  business,
which   consists  of  the  development,  contract  production,
processing  and sale primarily of proprietary seed  varieties.
AgraTech  Seeds  distributes  approximately  50  varieties  of
seeds.   Seed  is marketed by AgraTech Seeds at  wholesale  to
seed  retailers,  including Gold Kist stores  and  independent
seed   retail  outlets  in  the  Southeast  and  the  Midwest.
AgraTech Seeds licenses certain seed dealers, including Golden
Peanut  Company, to sell its proprietary peanut varieties  "GK
7",  "GK  7  Hi-Oleic",  "AgraTech 108",  "AgraTech  120"  and
ViruGard"T,   and  receives  a  royalty  on  licensed   sales.
AgraTech  Seeds contracts with farmers for the  production  of
seed.   Careful control is required to maintain the purity  of
varieties.  Quality and name recognition play a large role  in
competition for sales of seed.

     AgraTech  Seeds processes or contracts for the processing
of  approximately  95% of the seeds it distributes.   AgraTech
Seeds   owns  and  operates  seed  processing  facilities   in
McCordsville, Indiana, St. Joseph, Illinois, and  Mason  City,
Illinois.  Proprietary corn, soybean, sorghum and peanut  seed
varieties are marketed under the trademark AgraTechr.

     As  a function of its retail sales operations, Gold  Kist
operates a commodity seed procurement plant at Dublin, Georgia
for  the  cleaning,  grading,  treatment  and  processing   of
commodity seeds.  Seed products from its Dublin operations are
marketed primarily through the Gold Kist retail stores.

Pecans

     Gold  Kist is a partner in Young Pecan Company,  a  pecan
processing  and marketing business headquartered in  Florence,
South  Carolina, in which the Association holds a  25%  equity
interest and a 35% earnings (loss) allocation.  See Note 8  of
Notes to Consolidated Financial Statements.

                     PARTNERSHIP INTEREST

     Gold  Kist,  Archer Daniels Midland Company and  Alimenta
Processing Corporation are partners in Golden Peanut  Company,
a   partnership   formed  to  operate  a   peanut   procuring,
processing, and marketing business.  The partners lease peanut
facilities,  equipment and fixed assets  to  the  partnership.
Gold   Kist,  as  a  general  partner,  participates  in   all
partnership   allocations  in  proportion  to  its   33   1/3%
partnership  interest.  See Note 9(b) of Notes to Consolidated
Financial Statements.

     The  peanut  facilities leased to Golden  Peanut  Company
pursuant   to   the  general  partnership  agreement   include
receiving  stations, shelling plants, cold storage  facilities
and  warehouses  located in the three major  peanut  producing
areas   of   the  United  States  (Southeast,  Southwest   and
Virginia/Carolinas).

     Golden  Peanut  Company procures, processes  and  markets
peanuts  and  peanut by-products in each of the  three  peanut
producing  areas of the United States.  Golden Peanut  Company
is  a  major processor of edible peanuts and is active in both
domestic  and  international markets.   The  principal  peanut
product is shelled edible peanuts.  Shelled edible peanuts are
marketed  domestically  primarily to manufacturers  of  peanut
butter,  candy  and  salted nuts and are sold  in  the  export
market.  Golden Peanut Company also processes peanuts for sale
in the shell or for processing by others into oil and meal.

                         EXPORT SALES

     Gold Kist owns no physical facilities overseas and has no
overseas  employees.   Product sales managers  maintain  sales
networks  overseas  through contacts with independent  dealers
and  customers.  During the fiscal year ended June  27,  1998,
the  approximate  export sales volume of  the  primary  export
product line (poultry) was $61.6 million.  During that period,
export  sales of poultry were mainly to customers  in  Russia,
Eastern Europe, the Far East, South Africa, Central and  South
America and the Caribbean area.

      Export   sales   involve   an  additional   element   of
transportation  and  credit risk to the  shipper  beyond  that
normally encountered in domestic sales.

     Gold  Kist faces competition for export sales  from  both
domestic and foreign suppliers.  In export poultry sales, Gold
Kist   faces  competition  from  other  major  United   States
producers  as  well  as  companies in  France,  Thailand,  and
Brazil.   Tariff  and  non-tariff barriers  to  United  States
poultry  established by the European Economic Community  (EEC)
since  1962 have virtually excluded Gold Kist and other United
States  poultry exporters from the EEC market.   In  addition,
EEC  exporters  are  aided  in price competition  with  United
States  exporters in certain markets by subsidies  from  their
governments.

     Gold Kist and a group of other North American and foreign
farm  cooperatives  and  agribusiness  firms,  acting  through
companies  formed  for  this purpose, own  50%  of  a  trading
company  engaged in international merchandising of grains  and
other  agricultural  commodities.  Gold  Kist  is  a  minority
shareholder  and deals with the trading company  on  an  arm's
length basis.



                          PROPERTIES

     Gold  Kist corporate headquarters building, completed  in
1975  and  containing  approximately 260,000  square  feet  of
office  space,  is located on fifteen acres  of  land  at  244
Perimeter Center Parkway, N. E., Atlanta, Georgia.   The  land
and  building  are  owned by a partnership of  Gold  Kist  and
Cotton  States  Mutual Insurance Company in which  partnership
Gold   Kist  owns  54%  of  the  equity.   Gold  Kist   leases
approximately  120,000 square feet of the  building  from  the
partnership.

     The  Association's  principal  operating  facilities  are
operated by its two industry segments, the Poultry segment and
the Agri-Services segment.

Poultry

     The seven poultry processing plants operated as Gold Kist
facilities in fiscal 1998 are located at Boaz, Trussville  and
Guntersville,   Alabama;  Athens,  Ellijay   and   Carrollton,
Georgia;  and  Live  Oak,  Florida.   These  plants  have   an
aggregate   weekly   processing  capacity   of   approximately
8,830,000 broilers and 415,000 cornish game hens.  The  plants
are   supported   by   hatcheries  located   at   Albertville,
Crossville, Cullman, Curry, Ranburne and Scottsboro,  Alabama;
and  Blaine, Bowdon, Calhoun, Commerce, Carrollton, and Talmo,
Georgia;  and  Live  Oak, Florida.  These hatcheries  have  an
aggregate   weekly   capacity   (assuming   85%   hatch)    of
approximately  1,040,000  chicks.   Additionally,  Gold   Kist
operates  seven feed mills to support its poultry  operations;
the  mills  have an aggregate annual capacity of approximately
3.3  million tons and are located in Guntersville and  Jasper,
Alabama;  Calhoun, Cartersville, Commerce, and Waco,  Georgia;
and Live Oak, Florida.

     The  four former Golden Poultry poultry processing plants
are located in Douglas, Georgia, Sanford and Siler City, North
Carolina, and Russellville, Alabama.  The Douglas plant has  a
weekly processing capacity of approximately 1,300,000 broilers
on two shifts; the Sanford and Russellville plants have weekly
processing  capacities of approximately 1,450,000 broilers  on
two  processing shifts; and the Siler City plant has a  weekly
processing capacity of 630,000 chickens on two shifts.   These
plants  are supported by hatcheries in Siler City and  Staley,
North Carolina (with a hatch capacity of 1,505,000 chicks  per
week),   Douglas,   Georgia  (with   a   hatch   capacity   of
approximately  1,350,000 chicks per week),  and  Russellville,
Alabama    (approximately   1,250,000   chicks   per    week).
Additionally, the former Golden Poultry feed mills at Ambrose,
Georgia,  Bonlee  and  Staley,  North  Carolina,  and   Pride,
Alabama, have an aggregate annual capacity of 1,615,000 tons.

     The  former Carolina Golden processing plant  in  Sumter,
South  Carolina has a weekly processing capacity of  1,400,000
broilers  on  two  processing shifts.   The  Sumter  plant  is
supported by a hatchery in Sumter, South Carolina with a hatch
capacity  of  approximately 1,400,000 chicks  per  week.   The
former Carolina Golden feed mill at Sumter, South Carolina has
an annual capacity of 338,000 tons.

    The Association operated six separate distribution centers
in  fiscal  1998  as Gold Kist facilities  in  its  sales  and
distribution  of  poultry  products:   Tampa  and   Crestview,
Florida;  Chattanooga and Nashville, Tennessee; Mt.  Sterling,
Kentucky;  and  Cincinnati, Ohio.  The former  Golden  Poultry
distribution  facilities are in Pompano  Beach,  Florida,  and
Siler City, North Carolina.


Agri-Services

     In  its retail store operations, Gold Kist operates  Gold
Kist  stores  at  23  locations in Alabama,  one  location  in
Arkansas, 5 locations in Florida, 42 locations in Georgia, one
location   in  Louisiana,  6  locations  in  Mississippi,   14
locations in South Carolina and 6 locations in Texas.

    For its fertilizer and chemicals business, the Association
operates  four fertilizer plants at Clyo and Cordele, Georgia,
Hanceville,  Alabama,  and Greenville, Mississippi,  and  bulk
chemical   storage   facilities  at  Moultrie,   Georgia   and
Bishopville  and  Darlington,  South  Carolina.    Gold   Kist
utilizes  chemical  storage  and  distribution  facilities  at
Alcolu,  South Carolina, Lawrenceville and Sylvester, Georgia;
Hanceville,   Alabama,  Greenville,  Mississippi;  Carrollton,
Lubbock  and  Buda,  Texas; and Pensacola and  Riviera  Beach,
Florida;  and  fertilizer distribution terminal facilities  at
Pine  Bluff,  Arkansas,  Bainbridge  and  Brunswick,  Georgia;
Fayetteville,  Morehead City, and Wilmington, North  Carolina;
Charleston, South Carolina; and Memphis, Tennessee.   Forestry
fertilizer  application facilities are maintained  at  Tifton,
Georgia and Live Oak, Florida.

     For  its  pet food, feed and pork operations,  Gold  Kist
operates four feed mills with an aggregate annual capacity  of
approximately  470,000  tons.   The  mills  are   located   at
Guntersville,  Alabama; Flowery Branch and Valdosta,  Georgia;
and Gaston, South Carolina.

     Gold  Kist operates four pork production centers.   These
production  facilities  include a gilt  production  center  in
Stephens,  Georgia;  two  gilt  and  pork  production  centers
located  at  Kingston, Georgia; and a boar and pork production
center headquartered in Stephens, Georgia.

     Cotton  ginning  and storage facilities are  operated  at
Statesboro,  Morven,  Byromville  and  DeSoto,  Georgia,   and
Bishopville,  South Carolina.  A central storage warehouse  is
operated in Moultrie, Georgia.

     The  Association  operates a  seed  processing  plant  at
Dublin,   Georgia,   which   can  clean,   grade   and   treat
approximately  100,000 bags of seeds annually (when  operating
on one shift).  AgraTech Seeds operates seed processing plants
in  McCordsville,  Indiana, and Mason  City  and  St.  Joseph,
Illinois,  which  can  clean, grade  and  treat  approximately
320,000  bags, 110,000 bags and 80,000 bags, respectively,  of
seeds annually (when operating on one shift).

     For  its  grain procurement and storage operations,  Gold
Kist  operated 25 owned facilities and 3 leased facilities  in
Alabama,  Florida, Georgia and South Carolina in fiscal  1998.
The   facilities  have  an  aggregate  storage   capacity   of
approximately 7 million bushels.

     Gold Kist owns peanut procuring, processing and marketing
facilities which are leased to Golden Peanut Company  pursuant
to  the  general partnership agreement executed by  Gold  Kist
with  ADM  and  Alimenta.  The lease is for  a  20-year  term,
beginning in 1988; however, the lease is subject to the  terms
of  the  partnership  agreement which is  terminable  upon  18
months  prior  written  notice.  These facilities  include  37
peanut  receiving stations located in the three  major  peanut
producing  areas  of the United States (Southeast,  Southwest,
and   Virginia/Carolinas)  and  four  peanut  shelling  plants
located  in  Ashburn, Georgia; Graceville, Florida;  Anadarko,
Oklahoma; and Comyn, Texas.  Gold Kist also owns and leases to
Golden  Peanut Company two cold storage facilities located  at
Anadarko,  Oklahoma and Suffolk, Virginia  with  an  aggregate
storage capacity of 11,000 tons, and 48 warehouses located  at
30  of the leased receiving stations with an aggregate storage
capacity of approximately 133,000 tons.

     The Association holds all of the facilities in fee except
for  the  corporate headquarters building (lease expires  June
30,  2004); poultry distribution facilities at Tampa,  Florida
(lease  expires  May  14, 2000) and Nashville  (lease  expires
December  31, 1998) and Chattanooga (terminable upon  30  days
notice)   Tennessee;  Crossville,  Alabama,  poultry  hatchery
facility (lease expires February 23, 2088); Anadarko, Oklahoma
peanut  cold storage facility (lease expires April  30,  2010;
subleased   to  Golden  Peanut  Company);  and  retail   store
facilities at Dermott, Arkansas (lease expires March 9, 1999);
Byromville  (lease  expires March  15,  1999),  Canton  (lease
expires  October  31, 1998), DeSoto (lease expires  March  15,
1999), and Oglethorpe (lease expires March 15, 1999), Georgia;
Brundidge  (terminable upon 30 days notice),  Danville  (lease
expires  January  31, 2002), Geraldine (lease expires  January
31,   1999),   Jasper  (lease  expires  May  31,  2002),   and
Russellville  (lease  expires  November  30,  1998),  Alabama;
Bennettsville  (lease  expires October  14,  1998),  Lexington
(lease  expires September 30, 1998), Newberry (lease continues
on a month-to-month basis) and Sumter (lease expires March 31,
2002)   South   Carolina.   Forestry  fertilizer   application
headquarters  facilities are leased at Tifton, Georgia  (lease
expires  June  15,  1999).  Chemical storage and  distribution
facilities  are  leased  at  Greenville,  Mississippi   (lease
expires  November 30, 1999); Buda (lease expires  February  1,
1999)  and  Carrollton (lease expires March 31, 1999),  Texas;
and  Pensacola  (lease expires January 5, 1999),  Florida  and
fertilizer storage and distribution space is also leased on  a
continuing  as  needed  basis  at  terminals  in  Pine  Bluff,
Arkansas;  Bainbridge and Brunswick, Georgia; Boone, Carthage,
Fayetteville, Horseshoe, Morehead City, and Wilmington,  North
Carolina; Charleston, South Carolina; Memphis, Tennessee;  and
Houston, Texas.

             ENVIRONMENTAL AND REGULATORY MATTERS

     Processing plants such as those operated by Gold Kist are
potential  sources  of emissions into the atmosphere  and,  in
some  cases,  of effluent emissions into streams  and  rivers.
Presently,  management does not know of any  material  capital
expenditures for environmental control facilities that will be
necessary for the remainder of the current fiscal year and the
next fiscal year in order to comply with current statutes  and
regulations.    On  January  29,  1992,  the   United   States
Environmental  Protection Agency ("EPA") sent  General  Notice
Letters  designating Gold Kist and several other companies  as
potentially   responsible   parties   (PRP's)   for    alleged
environmental  contamination  at  an  Albany,   Georgia   site
previously owned by Gold Kist.  Gold Kist has responded to the
General Notice Letter denying liability for the contamination.
EPA  has  not indicated to Gold Kist how it intends to proceed
with  regard to the site.  Gold Kist is unable to estimate  at
this  time  the cost of compliance, if any, to be required  of
Gold  Kist  for  the location.  Management believes  that  the
potential  cost of compliance for Gold Kist would not  have  a
material effect on Gold Kist's financial condition or  results
of operations.

    The Georgia Environmental Protection Division ("GEPD") has
issued  a request for submittal of a Compliance Status  Report
("CSR") for the former Gold Kist chemical blending facility in
Cordele, Georgia.  Gold Kist sold this facility in 1985.   The
site  of  this facility has been listed on Georgia's Hazardous
Sites   Inventory  list  under  the  State's  Hazardous  Sites
Response  Act  due to the presence of pesticide residue  above
regulatory  standards.  Completion of  the  CSR  will  require
assessment  and  delineation of the extent  of  the  pesticide
residue  conditions, which are present both on  and  off-site.
Remediation  may be required in the future to meet  regulatory
clean-up standards.  Since the extent of the conditions at the
site  have not been defined at this time, Gold Kist is  unable
to estimate cost of the compliance to be required of Gold Kist
for  this  location.  Management believes that  the  potential
cost  of  compliance for Gold Kist would not have  a  material
effect  on  Gold  Kist's  financial condition  or  results  or
operations.

     The  regulatory  powers  of  various  federal  and  state
agencies,  including the federal Food and Drug Administration,
apply  throughout the agricultural industry, and many of  Gold
Kist's  products and facilities are subject to the regulations
of such agencies.

                        HUMAN RESOURCES

     Gold  Kist has approximately 18,000 employees during  the
course  of a year.  Gold Kist's processing facilities  operate
year  round  without  significant  seasonal  fluctuations   in
manpower  requirements.   Gold Kist  has  approximately  3,200
employees who are covered by collective bargaining agreements.
Employee    relations   are   considered   to   be   generally
satisfactory.

                       PATRONAGE REFUNDS

     The  By-Laws  of Gold Kist provide that Gold  Kist  shall
operate  on  a  cooperative basis.  After the  close  of  each
fiscal  year,  the net taxable margins of Gold Kist  for  that
year  from business done with or for member patrons (patronage
margins)  are computed and, after deductions for a  reasonable
reserve  for permanent non-allocated equity and after  certain
adjustments,  these  margins are  distributed  to  members  as
patronage  refunds on the basis of their respective  patronage
(business  done with or through the Association)  during  that
year.   Upon  the determination of the total patronage  refund
for  any  fiscal  year,  this amount is  allocated  among  the
several operations of Gold Kist or one or more groups of  such
operations, as determined by the Board of Directors  in  light
of each operation's or group's contribution for the year.

     Patronage refunds are distributed in the form  of  either
qualified  or  nonqualified written notices of allocation  (as
defined  for purposes of Subchapter T of the Internal  Revenue
Code).   If qualified notices are used, at least 20%  of  each
patronage refund is distributed in cash or by qualified  check
(as  defined in the Internal Revenue Code) with the  remainder
distributed  in  patronage dividend  certificates  or  written
notices  of  allocated reserves, or any combination  of  these
forms.   A  distribution to a patron made in  the  form  of  a
qualified notice must be included in his gross income, at  its
stated  dollar  amount,  for the  taxable  year  in  which  he
receives  the  distribution.   If  nonqualified  notices   are
distributed, less than 20% of the refund can be distributed in
cash  or by qualified check and the patron is not required  to
include in gross income the noncash portion of the allocation.
See  Notes  1(f)  and  6  of Notes to  Consolidated  Financial
Statements.

     The  deduction for unallocated reserves and retention  of
allocated  reserves  provide means  whereby  the  current  and
active  members  of  Gold Kist may finance  the  Association's
continuing  operations.  Each fiscal  year,  the  members  are
notified  by Gold Kist of the amounts, if any, by which  their
equity accounts have been credited to reflect their allocated,
but   undistributed,   portion  of  the   patronage   refunds.
Allocated  reserves may be retired and distributed to  members
only  at the discretion of the Board of Directors in the order
of  retention  by years, although the Board may authorize  the
retirement  of  small  aggregate amounts  (not  in  excess  of
$100.00)  of  reserves  or  the  retirement  of  reserves   in
individual  cases without regard to how long  they  have  been
outstanding.   Allocated reserves bear  no  interest  and  are
subordinate  in the event of insolvency of the Association  to
outstanding  patronage  dividend  certificates  and   to   all
indebtedness of Gold Kist.

                        INCOME TAXATION

    As a cooperative association entitled to the provisions of
Subchapter T of the Internal Revenue Code, Gold Kist does  not
pay   tax   on  net  margins  derived  from  member  patronage
transactions which are distributed to the members by check  or
in  the form of qualified written notices of allocation within
8-l/2  months of the close of each fiscal year.  To the extent
that  Gold  Kist distributes nonqualified written  notices  of
allocation,  has income from transactions with  nonmembers  or
has income from non-patronage sources, it will be taxed at the
corporate  rate.   See  Notes  l  (f)  and  6  of   Notes   to
Consolidated Financial Statements.

    Gold Kist has subsidiaries which are not cooperatives, and
all  the  income of these subsidiaries is subject to corporate
income taxes.

Item 2.  Properties.

      The  principal  facilities  used  in  the  Association's
business  are  described in Item 1. Business (and Properties).
Management  believes  that  the facilities  are  adequate  and
suitable  for  their  respective uses  and  the  Association's
current  intended  operations.  The properties  owned  by  the
Association   are  not  subject  to  any  material   lien   or
encumbrance.

Item 3.  Legal Proceedings.

      The  Association  is  a  party  to  various  legal   and
administrative  proceedings, all of which management  believes
constitute  ordinary  routine  litigation  incident   to   the
business conducted by the Association, or are not material  in
amount.

Item 4.  Submission of Matters to a Vote of Security Holders.

     No  matter was submitted during the fourth quarter of the
fiscal  year  covered by this report to  a  vote  of  security
holders.

                            PART II


Item  5.   Market for Registrant's Common Equity  and  Related
Stockholder Matters.

     There is no market for Gold Kist equity.




Item 6.   Selected Financial Data.


              SELECTED CONSOLIDATED FINANCIAL DATA

     The selected  consolidated  financial data  presented  below
under the captions  "Consolidated Statement  of Operations  Data"
for each of the years in the five-year period ended June 27, 1998
and "Consolidated Balance Sheet Data" as  of June 25, 1994,  July
1, 1995,  June 29,  1996, June  28, 1997  and June  27, 1998  are
derived from the consolidated  financial statements of Gold  Kist
Inc. and subsidiaries.  The consolidated financial statements  as
of June 28, 1997 and June 27, 1998  and for each of the years  in
the three-year period ended June 27, 1998, and the report thereon
of KPMG  Peat Marwick  LLP, which  is  based partially  upon  the
report of other  auditors, are  included elsewhere  herein.   The
information set forth  below should be  read in conjunction  with
Management's Discussion and Analysis  of Consolidated Results  of
Operations  and  Financial   Condition  and  the   aforementioned
consolidated financial  statements,  the related  notes  and  the
audit report.

<TABLE>
<CAPTION>
                                      For Fiscal Years Ended (000's omitted)
                                June 25,   July 1,   June 29,   June 28,   June 27,
Consolidated Statement of        1994       1995       1996       1997       1998
Operations Data:
<S>                           <C>         <C>       <C>        <C>        <C>
Net sales volume              $1,183,729 1,255,087  1,420,281  1,658,191  1,651,115

Margins (loss) from continuing
 operations before cumulative
 effect of accounting change  $   32,725     9,875     33,706     10,870    (57,036)

Cumulative effect of change in
 accounting for income taxes
 (A)                          $    5,339         -          -          -          -

Margins (loss) from continuing
 operations                   $   38,064     9,875     33,706     10,870    (57,036)
</TABLE>
<TABLE>
<CAPTION>
                                              As of (000's omitted)
                                June 25,   July 1,   June 29,   June 28,   June 27,
Consolidated Balance Sheet        1994      1995       1996       1997       1998
Data:
<S>                           <C>          <C>        <C>      <C>        <C>
Total assets                  $  678,922   768,415    914,161  1,051,813  1,080,655

Long-term liabilities         $  144,992   176,259    224,183    301,190    376,553

Patrons' and other equity (B) $  296,662   314,990    326,410    346,075    234,006



NOTE:
A.Effective June  27,  1993,  Gold  Kist adopted  the  provisions  of  Statement  of
  Financial Accounting  Standards No. 109 (SFAS  109), _Accounting for Income  Taxes_
  and reported the cumulative effect of  that change in the method of accounting  for
  income taxes in the 1994 consolidated  statement of operations.  SFAS 109  requires
  an asset  and liability  approach in accounting  for income  taxes and,  therefore,
  required a change  from the deferred method Gold Kist  previously used.  Under  the
  asset and liability method, deferred tax assets and liabilities are recognized  for
  the  future tax  consequences attributable  to  differences between  the  financial
  statement carrying amounts of existing assets and liabilities and their  respective
  tax bases  and operating loss and  tax credit carryforwards.   Deferred tax  assets
  and liabilities are measured using enacted  tax rates expected to apply to  taxable
  income  in the  years in  which  those temporary  differences  are expected  to  be
  recovered  or settled.   Under  SFAS 109,  the effect  on deferred  tax assets  and
  liabilities of  a change in  tax rates is  recognized as income  or expense in  the
  period that includes the enactment date.
B.See Note 9(a) of Notes to Consolidated Financial Statements.

</TABLE>
Item 7.      Management's  Discussion and  Analysis of  Financial
             Condition and Results of Operations.


             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
   CONSOLIDATED RESULTS OF OPERATIONS AND FINANCIAL CONDITION

  The nature  of the  poultry industry  in general  is such  that
supply and demand  market forces  exert a  significant amount  of
influence  over  the  operations   of  firms  engaged  in   these
businesses.  Prices  of commodities react  directly to  worldwide
supply and demand.  Additionally, demand for poultry and costs of
other agricultural  products  utilized  by Gold  Kist  are  often
influenced by supplies and prices of alternative products.

  As with other  perishable commodity businesses, the  integrated
poultry   industry   has    demonstrated   varying   levels    of
profitability, and to a lesser extent, losses over its thirty-six
year history.   Although the industry  has been profitable  since
1983 with the exception  of brief periods  during 1992 and  1996,
net margins have varied from year  to year in response to  market
fundamentals.  The following  addresses the various factors  that
have influenced poultry  industry profitability  during the  past
five years.  Increased market prices in 1994 were the result of a
general economic  recovery in  the  United States  and  increased
demand for poultry products.  During 1995, broiler market  prices
declined due to the large supply of competing meats, such as beef
and pork,  and the  continuation of  broiler industry  expansion.
During 1996, broiler market prices increased approximately 10% as
compared to 1995 as a result of hot, dry weather conditions  that
reduced meat production in the summer  of 1995, as well as  lower
than expected industry expansion and increased exports.   Average
market prices  for broilers  during 1997  remained at  relatively
high levels as compared to historical averages.  However,  during
the May-June  1997  period,  market prices  declined  below  1996
levels as  a  result  of the  increase  in  industry  production.
Export prices for broiler leg-quarters declined substantially  in
1997 as a result of disruptions in the Russian markets.  Although
market prices  for broiler  products strengthened  in the  fourth
quarter  of   1998,  average   market   prices  for   1998   were
approximately 4.0%  lower  than  in  1997.    According  to  USDA
estimates, the supply of  broilers is expected  to increase at  a
2.0% rate in 1998 and a 5.0% rate in 1999 as compared to the 5.3%
average annual increase between 1994 and 1997.

  Generally,  feed  grain  costs  represent  approximately  fifty
percent of  total  broiler  production  costs.    In  1994,  feed
ingredient prices,  primarily corn  and soybean  meal,  increased
substantially as a result  of the reduced  corn harvest in  1993.
As a result of the increase  in planted corn and soybean  acreage
and favorable growing  conditions in the  summer of 1994,  market
prices for  feed  ingredients declined  in  1995.   Average  cash
market prices for corn  and soybean meal  increased 59% and  30%,
respectively, during 1996 as compared to 1995 due to the  weather
reduced 1995  harvest and  strong export  demand.   During  1997,
average cash market prices for corn  declined 14% as a result  of
the favorable 1996 harvest.   However, soybean meal average  cash
market prices increased approximately 26% for 1997 as compared to
1996 as a  result of strong  demand and  lower carryover  stocks.
Average cash market prices for corn and soybean meal declined 18%
and 20%, respectively, during 1998 as  a result of the  favorable
1997 harvest and reduced exports of agricultural commodities.

  Historically, weather  has  had  a significant  impact  on  the
agricultural  economy   and   the  operating   results   of   the
Association. Flooding in the Midwestern United States during  the
summer of 1993 severely impacted  the domestic grain harvest  and
boosted feed  ingredient  prices  to  near  record  levels.    In
addition, favorable  spring  weather  conditions  contributed  to
increased planting activity  in 1994.   The weather reduced  1995
grain harvest  in  the  Midwestern U.S.  boosted  farm  commodity
prices.  Favorable weather conditions  during the summer of  1996
contributed to  plentiful grain  harvests in  the United  States.
Favorable growing conditions in the summer of 1997 contributed to
a slight increase in the  1997 grain harvest as compared to 1996.
Favorable growing conditions in the  summer of 1998 are  expected
to contribute to the  second largest grain  harvest on record  in
the United States.

  Poultry  export sales  for  1996,  1997  and  1998  were  $89.3
million, $81.7 million  and $61.6  million, respectively.  During
1997 and 1998, export sales declined as a result of lower  market
prices for poultry  and the economic  problems in Southeast  Asia
and Russia.  Export sales of poultry products will be  influenced
by  credit  availability  to  foreign  countries,  political  and
economic stability, particularly  in Russia,  Eastern Europe  and
Mexico.

  In May  1998, the Association's  Board of  Directors adopted  a
plan to  discontinue  operations of  the  Agri-Services  segment.
Accordingly, the operating results of the Agri-Services  segment,
including provisions for losses during the phase out period, have
been  segregated   from   continuing  operations   and   reported
separately in the Statements of Operations.   See Notes 1 and  10
of Notes to Consolidated Financial Statements.  The Association's
continuing operations include the Association's poultry and  pork
operations.  The discussion and analysis of results of operations
that follows relates solely to  the continuing operations of  the
Association for each of the years in the three-year period  ended
June 27, 1998.


                      Results of Operations


  Fiscal 1997 Compared to Fiscal 1996

  For 1997, net sales volume of $1.7 billion represented a  16.8%
increase as compared to 1996.  Margins from continuing operations
were $10.9  million for  1997 as  compared to  $33.7 million  for
1996.   The decline  in margins  from continuing  operations  was
primarily the  result of  an increase  in poultry  and pork  feed
ingredient costs. The increase in net  sales volume for 1997  was
due to a  11.5% increase  in pounds of  poultry sold  and a  6.0%
increase in  average  selling  prices. The  increase  in  poultry
products market prices was  due to the reduction  in the rate  of
industry growth  as compared  to prior  years.   The increase  in
pounds sold during 1997  reflected the Association's  acquisition
of its twelfth processing  facility in July  1996 and changes  in
product mix.

  Cost of sales  for 1997 increased  $288.5 million  or 22.2%  as
compared to  1996  as  a  result  of  the  Association's  poultry
expansion program and  significant increases  in feed  ingredient
costs.    The  Association's  feed  ingredient  costs  for   1997
increased 28.0%  as compared  to the  prior fiscal  year.   As  a
result  of  the  Association's  forward  purchasing  and  hedging
strategies, feed  ingredient costs  for  1996 were  below  market
prices for corn  and soybean meal.   In  1997, the  Association's
feed ingredient costs reflected the increase in market prices for
corn and soybean meal.  As a percentage of net sales volume, cost
of sales were 95.7% of net  sales volume for 1997 as compared  to
91.4% for 1996.

  Distribution,  administrative and  general  expenses  for  1997
were $64.9 million, which represented a .85% decline as  compared
to 1996.    The decrease  in  1997  was due  to  lower  incentive
compensation costs.  As  a  percentage   of  net  sales   volume,
distribution, administration and  general expenses  were 3.9%  of
net sale volume for 1997 as compared to 4.6% for 1996.

  The various components  included in  other income  (deductions)
represented an income of $1.4 million  for 1997 as compared to  a
deduction of $354,000 for 1996.  Interest income of $4.8  million
for 1997 increased $1.9 million primarily as a result of interest
income related to a favorable tax litigation decision.   Interest
expense for 1997 was $10.7 million as compared to $6.5 million in
1996.  The increase was due to an increase in average borrowings.
Equity in earnings of partnership represents the Association's 33
1/3% pro rata share of the Golden Peanut Company's 1997 earnings.
See Note  9(b) of  Notes  to Consolidated  Financial  Statements.
Miscellaneous, net for 1997 includes a  $1.2 million loss on  the
purchase of subsidiary common stock.  Miscellaneous, net for 1997
includes a $992,000 loss representing the Association's equity in
the loss  of a  pecan processing  and marketing  enterprise.   In
1996, the Association recognized earnings of $1.0 million related
to this  investment.   Net rental  income of  approximately  $1.9
million  and  $1.6   million,  respectively,   was  included   in
miscellaneous, net for 1997 and 1996.

  In 1997 and 1996, the Association's combined federal and  state
effective income tax rates  for continuing operations were  (48)%
and 33%, respectively.  The effective tax rate for 1997  reflects
a $5.2 million income tax benefit  related to a Circuit Court  of
Appeals decision in the Association's favor.  See Note 6 of Notes
to Consolidated Financial Statements.

  Fiscal 1998 Compared to Fiscal 1997

  The Association's net  sales volume was  $1.7 billion for  1998
and 1997.  The loss from continuing operations for 1998 was $57.0
million as  compared to  margins  from continuing  operations  of
$10.9 million for 1997.  The loss from continuing operations  for
1998 was the result of lower  market prices for poultry and  live
hogs and higher feed ingredient costs.  Net sales volume for 1998
reflected lower  broiler  market  prices,  which  were  partially
offset by  a  3.0% increase  in  broiler pounds  sold.    Average
selling prices for  poultry products  for 1998  declined 3.0%  as
compared to  1997  as a  result  of excess  industry  supply,  an
increase in  pork and  beef supplies  and instability  in  export
markets.  Poultry sales to Russia were affected by disruptions in
the market related to tariffs and custom regulations resulting in
lower than expected net margins.  Poultry sales to the  Southeast
Asia markets  were  affected  by the  financial  crisis  in  that
region.  Pork net sales volume for 1998 declined 39% as  compared
to 1997 due to  head reduction and lower  market prices for  live
hogs.

  Cost of  sales for  1998  increased $76.3  million or  4.8%  as
compared to 1997  primarily due  to higher  field production  and
processing costs.  Although corn  and  soybean meal  cash  market
prices declined  significantly in  1998, the  Association's  feed
ingredient costs for 1998 were comparable to 1997 as a result  of
the  Association's  forward  purchasing  and  commodity   trading
activities.  Feed ingredient  costs reflected losses realized  on
commodities futures and options transactions of $85.2 million for
1998.  As a percent of net sales volume, cost of sales was 100.7%
of net sales volume for 1998 as compared to 95.7% in 1997.

  Distribution,  administrative and  general  expenses  of  $66.7
million for  1998 increased  2.8%  as compared  to  1997.   As  a
percent of  net sales  volume, distribution,  administrative  and
general expenses  were  4.0% of  net  sales volume  for  1998  as
compared to 3.9% for 1997.

  The components included in other income (deductions)  represent
a $14.2 million deduction for 1998 as compared to income of  $1.4
million for  1997.   Interest income  of  $2.0 million  for  1998
declined $2.8 million as compared to  1997.  Interest income  for
1997  reflected  interest  income  related  to  a  favorable  tax
litigation decision.  Interest expense for 1998 was $26.9 million
as compared  to  $10.7  million for  1997,  which  reflected  the
increase in  borrowings  to  support  higher  asset  levels,  the
acquisition of minority interest in  Golden Poultry and the  1998
operating losses.  Also, interest  expense for 1998 reflected  an
increase in  borrowing  costs  related  to  the  decline  in  the
Association's financial condition.  Equity in the earnings of the
partnership represents the Association's  33 1/3% pro rata  share
of the Golden Peanut Company's 1998  earnings.  See Note 9(b)  of
Notes to Consolidated Financial  Statements.  Miscellaneous,  net
for 1998 includes a $192,000 loss representing the  Association's
equity  in  the  loss  of   a  pecan  processing  and   marketing
enterprise.  The  Association recorded  a $992,000  loss on  this
investment in 1997.  Net rental  income of $2.1 million and  $1.9
million, respectively,  was included  in miscellaneous,  net  for
1998 and 1997.  Miscellaneous, net for 1998 includes $2.0 million
of income related to a poultry grower agreement.   Miscellaneous,
net for 1997  reflects a  $1.2 million  loss on  the purchase  of
subsidiary common stock.

  In 1998 and 1997, the Association's combined federal and  state
effective income tax rates  for continuing operations were  (38)%
and (48)%,  respectively.    The  effective  tax  rate  for  1997
reflects a  $5.2  million income  tax  benefit resulting  from  a
Circuit Court  of Appeals  decision in  the Association's  favor.
See Note 6 of Notes to Consolidated Financial Statements.



                       Financial Condition


Liquidity and Capital Resources

 The  Association's  liquidity  is  dependent  upon  funds   from
operations and  external sources  of  financing.   The  principal
sources of external short-term financing are, a secured committed
credit facility  with a  commercial bank  and proceeds  from  the
continuous offering of Subordinated Certificates.   At  June  27,
1998, the Company  had a  $440 million  secured committed  credit
facility with eight  commercial banks.   The facility included  a
three-year $132  million  revolving  credit  commitment,  a  $132
million 364-day  line of  credit commitment  and a  $176  million
three-year term loan.  As of  June 27, 1998, borrowings of  $21.5
million, $132.0 million  and $176.0  million, respectively,  were
outstanding under  the revolving  credit, 364-day  line-of-credit
and term loan commitments.

  In August  1998,  the  Association replaced  the  $440  million
facility with a $500 million  credit agreement with a  commercial
bank that includes a secured $125 million 364-day line of  credit
commitment, a secured  $125 million  three-year revolving  credit
facility and a $250 million three-year unsecured bridge facility.
Upon the consummation of the  anticipated sale of certain  assets
of the Agri-Services  segment, the loan  agreement provides  that
proceeds be applied to the $250 million bridge loan.  See Notes 1
and  10   of   Notes  to   Consolidated   Financial   Statements.
Alternatively, the Association may convert the bridge facility to
a three-year  term loan  secured with  substantially all  of  the
Association's assets.   In 1998, the  Association obtained a  $50
million term loan from  an agricultural credit  bank and a  $69.9
million  rolling  four-month  equity  swap  arrangement  with   a
commercial bank.  At  June 27, 1998,  the Association had  unused
loan commitments  of $110.5  million  and additional  letters  of
credit from banks aggregating $12.5 million.  The primary sources
of external long-term financing are proceeds from the  continuous
offering of Subordinated Capital  Certificates of Interest and  a
revolving credit facility.  See Note  4 of Notes to  Consolidated
Financial Statements.

  Covenants under the terms of  the loan agreements with  lenders
include conditions  that  could limit  short-term  and  long-term
financing available  from various  external sources.   The  terms
require a ratio of current assets  to current liabilities of  not
less than 1.25:1  and the  ratio of  total funded  debt to  total
capitalization not  to  exceed  65%.    At  June  27,  1998,  the
Association's current ratio  and ratio  of total  funded debt  to
capitalization, determined under the loan agreements, were 1.32:1
and 64%,  respectively.   The terms  of the  $500 million  credit
facility requires specific quarterly fixed charge coverage ratios
during fiscal 1999 and  a fixed charge ratio  for fiscal 1999  of
150%.   In addition,  the terms  place  a limitation  on  capital
expenditures, equity  distribution,  cash patronage  refunds  and
commodity hedging contracts that include cash forward  purchases,
as well as futures and options contracts.  At June 27, 1998,  the
Association was in compliance with the agreements.  See Note 4 of
Notes to Consolidated Financial Statements.

  During  1996,  the  uses  of  cash  in  continuing   operations
included capital expenditures of $56.7 million and $28.6  million
for repayments  of  long-term  debt,  as  well  as  increases  in
operating assets.  Increases in inventories reflected the  impact
of higher  feed  ingredient  prices on  raw  materials  and  live
poultry and hog inventories and the increase in poultry prices on
marketable products inventories.  During  1996, net cash used  in
operating and  investing  activities of  discontinued  operations
totaled $66.5  million.   The  funds  for these  activities  were
provided by borrowings of $131.5 million.

  In 1997,  the  uses of  cash  in the  Association's  continuing
operations included $67.5 million for capital expenditures, $55.7
million for  long-term  debt  repayments and  $30.0  million  for
patronage refunds and other equity  payments.  In addition,  cash
uses included the funding of increases in operating assets,  such
as inventories,  receivables  and  commodities  margin  deposits.
During 1997, increases in  inventories and receivables  primarily
reflected the expansion in poultry  operations.  The increase  in
commodities margin deposits  was the result  of corn and  soybean
futures contracts and  the related  unrealized losses  associated
with these positions at June 28, 1997.  See Note 1(c) of Notes to
Consolidated Financial Statements.  During 1997, net cash used in
operating and  investing  activities of  discontinued  operations
totaled $26.8  million.   The  funds  for these  activities  were
provided by borrowings of $182.8 million.

  During 1998, the primary uses of cash in continuing  operations
included $54.4 million in capital expenditures and $53.1  million
for the acquisition of the remaining 3.7 million shares of Golden
Poultry Company, Inc. common stock  that the Association did  not
already own.   See  Note 11  of Notes  to Consolidated  Financial
Statements.    During  1998,  net  cash  used  in  operating  and
investing activities  of  discontinued operations  totaled  $58.8
million.   The  funds  for  these  activities  were  provided  by
borrowings of $173.0 million.  Borrowings and repayments of long-
term debt during 1998 reflected the replacement of Golden Poultry
Company, Inc.'s debt subsequent to the merger and the replacement
of the  Association's  $250 million  unsecured  committed  credit
facility with the $440 million secured committed credit facility.

  The Association  plans  capital expenditures  of  approximately
$45 million  in  1999  that primarily  include  expenditures  for
expansion and technological  advances in  poultry production  and
processing.  In  addition, planned  capital expenditures  include
other asset improvements and necessary replacements.   Management
intends to finance planned 1999 capital expenditures and  related
working capital needs with existing cash balances and net margins
adjusted for non-cash items and additional long-term  borrowings,
as needed.   In  1999, management  expects cash  expenditures  to
approximate $4.0 million for equity distributions.  In connection
with the sale of assets of the Agri-Services segment to  Southern
States Cooperative,  Incorporated  and the  plan  to  discontinue
operations of the Agri-Services segment during fiscal 1999,  Gold
Kist will discontinue the sale of Subordinated Certificates.  The
Association believes cash  on hand and  cash equivalents at  June
27, 1998 and  cash expected to  be provided  from operations,  in
addition  to   borrowings   available   under   existing   credit
arrangements, will be sufficient to maintain cash flows  adequate
for the Association's projected growth and operational objectives
during 1999 and to fund the repayment of outstanding Subordinated
Certificates as  they mature.   Approximately,  $36.9 million  of
Subordinated Certificates and accrued interest will mature during
the last three quarters of fiscal 1999.

Year 2000 Disclosure Statement

  The  year 2000  problem  is  the result  of  computer  programs
written using  two  digits  (rather  than  four)  to  define  the
applicable year.   Any of  the Association's  programs that  have
time-sensitive software may  recognize a date  using _00_ as  the
year 1900  rather  than the  year  2000, which  could  result  in
miscalculations or system failures.

  The   Association   has   completed   its   identification   of
information technology systems that  are not year 2000  compliant
and is in the process of implementing a comprehensive  initiative
to make its information technology systems (_IT_ systems) and its
non-information technology systems (_non-IT_ systems),  including
embedded microprocessors  in  equipment,  refrigeration  systems,
feed mills, and environmental controls, year 2000 compliant.  The
initiative covers the following three phases: (1)  identification
of all  IT  and  non-IT  systems  and  an  assessment  of  repair
requirements, (2) repair of the identified IT and non-IT systems,
and (3)  testing  of  the  IT  and  non-IT  systems  repaired  to
determine correct manipulation  of dates  and date-related  data.
As of July 1,  1998, the Association has  completed phase (1)  of
its initiative  and has  begun phase  (2).   The  Association  is
scheduled to complete phase (2) by the end of the second  quarter
of fiscal 1999 at which time  it will commence its final  testing
phase.  The  Association expects the  final testing  phase to  be
complete by third quarter.  The Association believes that it  has
allocated sufficient resources  to resolve  all significant  year
2000 issues in the above time frame.

  As part of  its year 2000 initiative,  the Association is  also
contacting key suppliers and business partners to evaluate  their
year 2000 compliance plans and  state of readiness and  determine
whether a  year 2000  problem will  impede  the ability  of  such
suppliers and business partners to provide goods and services  as
the year 2000  is approached and  reached.   The Association  has
received responses from  a majority of  its key trading  partners
and is  currently assessing  their state  of  compliance.   As  a
general matter, the Association  is vulnerable to key  suppliers'
inability to remedy their own year  2000 issues and there can  be
no assurance that all date-handling problems in the IT systems of
those  suppliers  will   be  identified  in   advance  of   their
occurrence.

  The Association  estimates that its  cost of  repairing the  IT
systems and non-IT systems will range from $500,000 to  $700,000.
To date, the Association has yet  to fully assess any  additional
costs that may be incurred to  complete the testing phase of  the
year 2000 initiative and  resolve any problems identified  during
that phase.  The Association believes such costs will not have  a
material effect  on  liquidity  or  its  financial  condition  or
results of operations.

  To date, the  Association has not identified  any IT or  non-IT
system that presents a material risk of not being year 2000 ready
or for  which  a  suitable  alternative  cannot  be  implemented.
However, as the initiative  moves into the  testing phase, it  is
possible that  the Association  may identify  potential risks  of
year 2000 disruption.  It is also possible that such a disruption
could have a material adverse  effect on the financial  condition
and results of operations.  In addition, if any third parties who
provide goods or services that are critical to the  Association's
business activities fail to appropriately address their year 2000
issues,  there  could  be  a  material  adverse  effect  on   the
Association's financial condition and results of operations.

  Because the Association has not begun the testing phase of  its
initiative, and, accordingly,  has not fully  assessed its  risks
from potential year  2000 failures, the  Association has not  yet
fully developed  year 2000  specific  contingency plans.    These
plans will be developed as appropriate, if the results of testing
identify a material business function that is substantially at
risk.

Important Considerations Related to Forward-Looking Statements

  It should  be  noted  that this  discussion  contains  forward-
looking statements  which are  subject to  substantial risks  and
uncertainties.  There are many  factors which could cause  actual
results to differ materially from those anticipated by statements
made herein.   Such  factors include,  but  are not  limited  to,
changes in general economic conditions, weather, the growth  rate
of the  market  for  the Company's  products  and  services,  the
availability of raw inputs, global political events, the  ability
of the Association to implement  changes in sales strategies  and
organization  on  a  timely  basis,  the  affect  of  competitive
products and pricing, seasonal revenues,  a delay in closing  the
sale of assets of the Agri-Services segment, as well as a  number
of other risk factors which  could effect the future  performance
of the Association.

Effects of Inflation

  The major factor affecting  the Association's net sales  volume
and cost of sales  is the change in  commodity market prices  for
broilers, hogs and feed grains.  The prices of these  commodities
are affected  by  world market  conditions  and are  volatile  in
response to supply and demand, as well as political and  economic
events.   The  price fluctuations  of  these commodities  do  not
necessarily correlate with the general inflation rate.  Inflation
has, however, affected operating costs such as labor, energy  and
material costs.

Future Accounting Requirements

  In June 1997,  the Financial Accounting Standards Board  (FASB)
issued Statement  of Financial  Accounting Standards  (SFAS)  No.
130,  "Reporting  Comprehensive  Income,"   and  SFAS  No.   131,
"Disclosures  About  Segments  of   an  Enterprise  and   Related
Information."  These  new standards become  effective for  fiscal
years beginning after  December 15, 1997.   The Association  will
begin reporting comprehensive income in compliance with SFAS  No.
130 beginning with the quarter  ending September 26, 1998,  while
reporting under SFAS No. 131 initially  will be presented in  the
consolidated financial  statements for  fiscal 1999.   While  the
Association is evaluating the  criteria of SFAS  No. 131 as  they
apply to  its operations,  the  Association does  not  anticipate
significant changes  to  its  reportable segments.  Both  of  the
statements require additional reporting and expanded disclosures,
but  will  have  no  effect  on  the  Association's  results   of
operations, financial position, capital resources or liquidity.

  In February  1998, the FASB  issued SFAS  No. 132,  "Employers'
Disclosure about Pension and Other Postretirement Benefits"  that
revised   disclosure   requirements   for   pension   and   other
postretirement benefits.  It does  not affect the measurement  of
the expense of the Association's pension and other postretirement
benefits.  The  disclosure requirements of  the standard will  be
reflected  in  the  Association's  1999  consolidated   financial
statements.

  In June 1998, the  Financial Accounting Standards Board  issued
Statement No.  133  "Accounting for  Derivative  Instruments  and
Hedging Activities."  The  Statement requires the recognition  of
all derivatives  on  the  balance  sheet  at  fair  value.    The
Company's derivatives, which include agricultural related futures
and options, are specifically designated  as hedges.  Changes  in
the fair value of these derivatives will either be offset against
the change  in fair  value of  the corresponding  hedged  assets,
liabilities, or firm commitments through earnings or reflected as
other comprehensive income until the hedged item is recognized in
earnings.  The  disclosure requirements of  the Standard will  be
reflected  in  the  Association's  2000  consolidated   financial
statements.  If the Association were  to adopt the new  Statement
as of July 1, 1998, the effect of adoption would be immaterial to
the financial statements.

Item 7A.    Quantitative And Qualitative Disclosure About  Market
            Risks.

Market Risk

  The  principal  market  risks  affecting  the  Association  are
exposure to changes  in commodity  prices and  interest rates  on
borrowings.   Although the  Company has  international net  sales
volume and related accounts receivable for foreign customers,  it
considers the foreign currency exchange risk in such activities
to be immaterial.

Interest Rate Risk

  The Association  uses  interest rate  swaps to  hedge  interest
rate changes on a portion of  its borrowings.  At June 27,  1998,
the Association had $150 million notional value of interest  rate
swaps outstanding.   The  swaps  effectively change  the  average
interest rates on $150 million of long-term debt to a 5.97% fixed
rate from LIBOR.  See Note  4 of Notes to Consolidated  Financial
Statements.   Assuming year-end  fiscal 1998  variable rates  and
borrowings at June 27, 1998, a one-hundred-basis-point change  in
interest  rates  would  impact  the  Association's  net  interest
expense by approximately $2.6 million, net  of the effect of  the
swaps.

Commodities Risk

  The  Association  is   a  purchaser  of  certain   agricultural
commodities used  for  the manufacture  of  poultry feeds.    The
Association  uses  commodity  futures  and  options  for  hedging
purposes to reduce the effect of  changing commodity prices on  a
portion of  its commodity  inventories and  related purchase  and
sale contracts.   Feed ingredients  futures contracts,  primarily
corn and  soybean meal,  are recognized  when closed  and  option
contracts are accounted for at market.   Gains and losses on  the
transactions are recorded as a component of product cost.   Terms
of the Association's committed secured credit facility limit  the
use of cash forward contracts and commodities futures and options
to hedge no more than thirteen weeks of the Association's soybean
meal and corn requirements.  At June 27, 1998, the fair value  of
the  Association's  outstanding  commodity  futures  and  options
positions was not material.



Item 8.    Financial Statements and Supplementary Data.


                              INDEX


                                                           Page
GOLD KIST INC.
CONSOLIDATED FINANCIAL STATEMENTS:
Independent Auditors' Reports..........................     21
Consolidated Balance Sheets as of June 28, 1997 and
 June 27, 1998 ........................................     23
Consolidated Statements of Operations for the years
 ended June 29, 1996, June 28, 1997 and June 27, 1998 .     24
Consolidated Statements of Patrons' and Other Equity
 for the years ended June 29, 1996, June 28, 1997
 and June 27, 1998 ....................................     25
Consolidated Statements of Cash Flows for the years
 ended June 29, 1996, June 28, 1997
 and June 27, 1998 ....................................     26
Notes to Consolidated Financial Statements.............     27

FINANCIAL STATEMENT SCHEDULES
(Included in Part IV of this Report):

Valuation Reserves for the years ended June 29, 1996,
 June 28, 1997 and June 27, 1998 ......................     48



                  INDEPENDENT AUDITORS' REPORT

 

The Board of Directors
Gold Kist Inc.:

   We have audited  the accompanying consolidated balance  sheets
of Gold Kist Inc. and subsidiaries  as of June 28, 1997 and  June
27, 1998, and the related consolidated statements of  operations,
patrons' and other equity, and cash  flows for each of the  years
in the three-year  period ended June  27, 1998 as  listed in  the
accompanying  index.  In  connection  with  our  audits  of   the
consolidated financial  statements,  we  also  have  audited  the
financial statement schedule as listed in the accompanying index.
These consolidated financial  statements and financial  statement
schedule are the responsibility of the Company's management.  Our
responsibility is  to express  an opinion  on these  consolidated
financial statements and  financial statement  schedule based  on
our  audits.    We  did  not  audit  the  consolidated  financial
statements  of  Golden   Peanut  Company   and  Subsidiaries,   a
partnership investment accounted for  using the equity method  of
accounting,  as  described  in  Note  9(b)  to  the  consolidated
financial statements.  The  consolidated financial statements  of
Golden Peanut  Company and  Subsidiaries  were audited  by  other
auditors whose report has been furnished to us, and our  opinion,
insofar as it relates to the  amounts included for Golden  Peanut
Company and Subsidiaries, is  based solely on  the report of  the
other auditors.

   We conducted our audits in accordance with generally  accepted
auditing standards.   Those standards  require that  we plan  and
perform the audit  to obtain reasonable  assurance about  whether
the financial statements are free  of material misstatement.   An
audit includes examining,  on a test  basis, evidence  supporting
the amounts  and disclosures  in the  financial statements.    An
audit also includes assessing the accounting principles used  and
significant estimates made by  management, as well as  evaluating
the overall financial  statement presentation.   We believe  that
our audits  and  the  report of  the  other  auditors  provide  a
reasonable basis for our opinion.

   In our  opinion, based  on our audits  and the  report of  the
other auditors, the consolidated financial statements referred to
above present  fairly, in  all material  respects, the  financial
position of Gold Kist Inc. and  subsidiaries as of June 28,  1997
and June 27, 1998, and the results of their operations and  their
cash flows for each of the  years in the three-year period  ended
June 27, 1998, in  conformity with generally accepted  accounting
principles.  Also in our opinion, the related financial statement
schedule, when considered in  relation to the basic  consolidated
financial statements taken  as a whole,  presents fairly, in  all
material respects, the information set forth therein.




                              KPMG Peat Marwick LLP


Atlanta, Georgia
September 10, 1998


                    REPORT OF INDEPENDENT AUDITORS



Partnership Committee
Golden Peanut Company

   We have  audited  the consolidated  balance sheets  of  Golden
Peanut Company and  Subsidiaries (the "Partnership")  as of  June
30, 1997 and  1998, and  the related  consolidated statements  of
operations, partners'  equity, and  cash flows  for each  of  the
three years  in the  period ended  June 30,  1998 (not  presented
separately  herein).     These  financial   statements  are   the
responsibility   of   the   Partnership's   management.       Our
responsibility is  to  express  an  opinion  on  these  financial
statements based on our audits.

   We conducted our audits in accordance with generally  accepted
auditing standards.   Those standards  require that  we plan  and
perform the audit  to obtain reasonable  assurance about  whether
the financial statements are free  of material misstatement.   An
audit includes examining,  on a test  basis, evidence  supporting
the amounts  and disclosures  in the  financial statements.    An
audit also includes assessing the accounting principles used  and
significant estimates made by  management, as well as  evaluating
the overall financial  statement presentation.   We believe  that
our audits provide a reasonable basis for our opinion.

   In our  opinion, the  financial statements  referred to  above
present  fairly,  in  all  material  respects,  the  consolidated
financial position of Golden  Peanut Company and Subsidiaries  at
June 30, 1997  and 1998, and  the consolidated  results of  their
operations and their cash  flows for each of  the three years  in
the period  ended June  30, 1998,  in conformity  with  generally
accepted accounting principles.


                                        Ernst & Young LLP


Atlanta, Georgia
August 28, 1998

<TABLE>
                                   GOLD KIST INC.

                             CONSOLIDATED BALANCE SHEETS

                               (Amounts in Thousands)



<CAPTION>
                                                 June 28, 1997   June 27, 1998

                             ASSETS
<S>                                               <C>                <C>
Current assets:
 Cash and cash equivalents..............          $    17,921          11,789
 Receivables, principally trade, less
  allowance for doubtful accounts of
  $1,426 in 1997 and $3,113 in 1998 ....              101,419         107,957
 Inventories (note 2)...................              179,489         174,204
 Commodities margin deposits............               53,348               -
 Deferred income taxes (note 6).........               13,541          45,431
 Other current assets...................                7,862          32,673
 Net assets of discontinued operations
  (note 10) ............................              261,445         247,621
  Total current assets .................              635,025         619,675
Investments (note 9)....................              132,373         125,623
Property, plant and equipment, net
  (note 3) .............................              239,242         255,791
Other assets............................               45,173          79,566
                                                   $1,051,813       1,080,655


                     LIABILITIES AND EQUITY
Current liabilities:
 Notes payable and current maturities of
 long-term debt (note 4):
  Short-term borrowings ................           $  178,900         201,939
  Subordinated loan certificates .......               36,466          35,005
  Current maturities of long-term debt .               14,956          93,248
                                                      230,322         330,192
 Accounts payable.......................               92,635          85,188
 Accrued compensation and related
  expenses .............................               28,545          32,466
 Interest left on deposit (note 4)......               11,396          11,451
 Other current liabilities..............               13,192          10,799
  Total current liabilities ............              376,090         470,096
Long-term debt, excluding current
 maturities (note 4)....................              247,176         320,600
Accrued postretirement benefit costs
 (note 7(b))............................               43,683          48,678
Other liabilities.......................               10,331           7,275
  Total liabilities ....................              677,280         846,649
Minority interest (note 11).............               28,458               -
Patrons' and other equity (note 5):
 Common stock, $1.00 par value -
  Authorized 500 shares; issued and
  outstanding 32 in 1997 and 33 in 1998                    32              33
 Patronage reserves.....................              203,988         198,517
 Unrealized gain on marketable equity
  security (note 9(a)) .................               32,749          27,099
 Retained earnings......................              109,306           8,357
  Total patrons' and other equity ......              346,075         234,006
Commitments and contingent liabilities
 (notes 4, 7, 8 and 9(b))
                                                   $1,051,813       1,080,655


         See accompanying notes to consolidated financial statements.
</TABLE>


<TABLE>

                                   GOLD KIST INC.

                        CONSOLIDATED STATEMENTS OF OPERATIONS

                               (Amounts in Thousands)


<CAPTION>
                                                       Years Ended
                                     June 29, 1996    June 28, 1997   June 27, 1998
<S>                                    <C>               <C>             <C>
Net sales volume.....................  $1,420,281        1,658,191       1,651,115
Cost of sales........................   1,297,602        1,586,110       1,662,376
  Gross margins (loss) ..............     122,679           72,081         (11,261)
Distribution, administrative and
 general expenses ...................      65,440           64,885          66,695
  Net operating margins (loss) .....       57,239            7,196         (77,956)
Other income (deductions):
  Interest income ...................       2,930            4,804           1,955
  Interest expense ..................      (6,477)         (10,666)        (26,910)
  Equity in earnings (loss) of
     partnership (note 9(b)) ........      (1,181)           5,807           4,369
  Miscellaneous, net (note 9(a)) ....       4,374            1,464           6,383
     Total other income
       (deductions) .................        (354)           1,409         (14,203)
  Margins (loss) from continuing
     operations before income taxes
     and minority interest ..........      56,885            8,605         (92,159)
Income tax expense (benefit)-(note 6)      18,848           (4,108)        (35,123)
  Margins (loss) from continuing
     operations before minority
     interest .......................      38,037           12,713         (57,036)
Minority interest....................      (4,331)          (1,843)              -
  Margins (loss) from continuing
     operations .....................      33,706           10,870         (57,036)
Discontinued operations (notes 6 and 10):

  Margins (loss) from operations of
     discontinued  ....Agri-Services
     segment (less applicable income
     taxes of $1.9 million for 1996,
     $.7 million for 1997 and $(8.6)
     million for 1998) ..............       3,326            1,020         (15,130)
  Loss on disposal of Agri-Services
     segment including provision
     of $20.4 million for operating
     losses during phase out  period
     (less applicable income taxes of
     $(16.5) million). ..............           -                -         (30,622)
  Net margins (loss) ................ $    37,032           11,890        (102,788)



           See accompanying notes to consolidated financial statements.
</TABLE>


<TABLE>

                                   GOLD KIST INC.

                CONSOLIDATED STATEMENTS OF PATRONS' AND OTHER EQUITY

         For the Years Ended June 29, 1996, June 28, 1997 and June 27, 1998

                               (Amounts in Thousands)

<CAPTION>



                                                               Unrealized
                                                             gain (loss) on
                                                                marketable 
                                          Common    Patronage     equity    Retained
                                 Total     stock    reserves     security   earnings
<S>                            <C>          <C>      <C>          <C>      <C>
July 1, 1995                   $ 314,990     62      216,854     18,531      79,543
  Net margins for 1996            37,032      -       21,700          -      15,332
  Nonqualified patronage
   refund ............ ........
   and other equity payable
   in cash ........... ........ (24,212)      -      (24,212)         -           -
  Redemptions and other
   changes ........... ........  (3,847)    (26)      (5,202)         -       1,381
  Change in value of
   marketable  .equity
   security, net of tax
   (note 9(a)) ....... ........    2,447       -           -      2,447           -
June 29, 1996......... ........  326,410      36     209,140     20,978      96,256
  Net margins for 1997            11,890      -            -          -      11,890
  Redemptions and other
   changes ........... ........  (3,996)     (4)      (5,152)         -       1,160
  Change in value of
   marketable  .equity
   security, net of tax
   (note 9(a)) ....... ........   11,771       -           -     11,771           -
June 28, 1997......... ........  346,075     32      203,988     32,749     109,306
  Net loss for 1998 .. ........ (102,788)      -           -          -    (102,788)
  Redemptions and other
   changes ........... ........  (3,631)      1       (5,471)         -       1,839
  Change in value of
   marketable equity security,
   net of tax (note 9(a))        (5,650)       -           -     (5,650)         -
June 27, 1998......... ........$ 234,006     33      198,517     27,099       8,357



             See accompanying notes to consolidated financial statements.
</TABLE>

<TABLE>

                                   GOLD KIST INC.

                        CONSOLIDATED STATEMENTS OF CASH FLOWS

                               (Amounts in Thousands)

<CAPTION>
                                                       Years Ended                  

                                      June 29, 1996   June 28, 1997  June 27, 1998

<S>                                       <C>             <C>            <C>
Cash flows from operating activities:
 Margins (loss) from continuing
  operations.......................       $ 33,706         10,870         (57,036)
 Non-cash items included in margins
  (loss) from continuing operations:
  Depreciation and amortization....         33,719         32,801          37,547
  Equity in (earnings) loss of
    partnership....................          1,181         (5,807)         (4,369)
  Deferred income tax benefit......         (2,095)        (1,718)        (14,486)
  Other............................          3,697          2,265           8,549
 Changes in operating assets and
 liabilities:......................
  Receivables......................        (8,387)         (5,278)         (8,225)
  Inventories......................       (32,985)         (6,853)          5,285
  Commodities margin deposits......       (18,590)        (31,951)         53,348
  Other current assets.............           585         (10,619)        (24,809)
  Accounts payable and accrued
    expenses.......................         16,540         11,513          (5,919)
  Interest left on deposit.........          1,626           (723)             56
Net cash provided by (used in)
 operating activities of
 continuing operations.............         28,997         (5,500)        (10,059)
Net cash used in operating
 activities of discontinued
 operations........................        (49,013)       (17,400)        (52,400)
Net cash used in operating activities      (20,016)       (22,900)        (62,459)
Cash flows from investing activities:
 Acquisitions of property, plant and
   equipment.......................        (56,727)       (67,547)        (54,360)
 Acquisition of subsidiary minority
   interest (note 11)..............              -              -         (53,104)
 Other.............................          8,302           (405)            513
Net cash used in investing
 activities of continuing
 operations........................        (48,425)       (67,952)       (106,951)
Net cash used in investing
 activities of discontinued
 operations - acquisitions of
 property, plant and equipment.....        (17,535)        (9,375)         (6,385)
Net cash used in investing activities      (65,960)       (77,327)       (113,336)
Cash flows from financing activities:
 Short-term borrowings, net........         45,211         71,992          21,578
 Proceeds from long-term debt......         86,296        110,846         272,116
 Principal payments of long-term
  debt.............................        (28,557)       (55,656)       (120,400)
 Patronage refunds and other equity
  paid in cash.....................        (13,009)       (29,596)         (3,631)
Net cash provided by financing
 activities........................         89,941         97,586         169,663
Net change in cash and cash
 equivalents.......................          3,965         (2,641)         (6,132)
Cash and cash equivalents at
 beginning of year.................         16,597         20,562          17,921
Cash and cash equivalents at end of
 year..............................       $ 20,562         17,921          11,789
Supplemental disclosure of cash
 flow data:
 Cash paid during the years for:
  Interest (net of amounts
    capitalized)...................       $ 18,327         25,761          45,577
  Income taxes.....................       $ 20,676         11,173               -



            See accompanying notes to consolidated financial statements.
 </TABLE>



                         GOLD KIST INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

          June 29, 1996, June 28, 1997 and June 27, 1998

                  (Dollar Amounts in Thousands)



(1)  Summary of Significant Accounting Policies

  Gold  Kist  Inc.  is  an  agricultural  membership  cooperative
association, headquartered in Atlanta,  Georgia.  Gold Kist  Inc.
has approximately  31,000 farmer  members and  other  cooperative
associations  located  principally  in  the  southeastern  United
States.    Gold  Kist  Inc.  operates  fully  integrated  broiler
production, processing and marketing operations, as well as  pork
production facilities.   These operations  provide marketing  and
purchasing services to approximately  2,400 breeder, broiler  and
pork producers.

  Gold Kist  Inc. and Southern  States Cooperative,  Incorporated
("Southern States") have entered into an Asset Purchase Agreement
(the "Agreement"), dated as of July  23, 1998, pursuant to  which
Gold Kist Inc. has agreed to sell and assign, and Southern States
has agreed to purchase and assume, the assets and certain of  the
liabilities of  Gold Kist  Inc.'s agricultural  inputs  business.
The affected assets  include substantially all  of the assets  of
the  Agri-Services  segment,  as  well  as  certain  crop   notes
receivable of AgraTrade Financing,  Inc., a wholly-owned  finance
subsidiary (see note 10).

  The accounting  and reporting policies  of Gold  Kist Inc.  and
subsidiaries conform to generally accepted accounting  principles
and to general  practices among agricultural  cooperatives.   The
following is a summary of the significant accounting policies.

  (a)  Basis of Presentation

       The   accompanying   consolidated   financial   statements
     include the accounts  of Gold Kist Inc.  and its wholly  and
     majority owned  subsidiaries  (collectively "Gold  Kist"  or
     "Company").    All  significant  intercompany  balances  and
     transactions have been eliminated in consolidation.

  (b)  Cash and Cash Equivalents

       Gold  Kist's  policy  is  to  invest  cash  in  excess  of
     operating requirements  in  highly liquid  interest  bearing
     debt  instruments,  which   include  commercial  paper   and
     reverse  repurchase  agreements.    These  investments   are
     stated at cost which approximates  market.  For purposes  of
     the  consolidated  statements  of  cash  flows,  Gold   Kist
     considers all highly liquid debt instruments purchased  with
     original maturities  of  three months  or  less to  be  cash
     equivalents.

  (c)  Inventories

       Live poultry and hogs consist of broilers, breeding  stock
     and market hogs.   The broilers and  market hogs are  stated
     at the lower of average cost or market.  The breeding  stock
     is stated at average cost, less accumulated amortization.

       Raw materials and  supplies consist  of feed  ingredients,
     hatching eggs, packaging  materials and operating  supplies.
     These inventories  are stated,  generally, on  the basis  of
     the  lower of  cost  (first-in,  first-out  or  average)  or
     market.  Gold Kist engages in commodity futures and  options
     transactions  to   manage   the  risk   of   adverse   price
     fluctuations with regard  to its feed ingredient  purchases.
     Futures contracts  are  recognized when  closed  and  option
     contracts are accounted for at  market.  Gains or losses  on
     futures and options transactions are  included as a part  of
     product cost.

                         GOLD KIST INC.

      Notes to Consolidated Financial Statements, Continued

                  (Dollar Amounts in Thousands)



          At June 28,  1997, Gold Kist  had unrealized  commodity
     futures losses of $36.8 million related to its hedging of  a
     portion of its  1998 poultry feed ingredients  requirements.
     These futures positions were  closed in July 1997  resulting
     in realized losses of approximately $48.6 million which  are
     reflected in the  1998 consolidated financial statements  as
     an adjustment  to product  cost.   At June  27, 1998,  there
     were no significant unrealized commodity futures positions.

          Marketable products  consist primarily  of dressed  and
     further processed  poultry.  These  inventories are  stated,
     principally, on the basis of selling prices, less  estimated
     brokerage, freight  and certain  other selling  costs  where
     applicable (estimated net realizable value).

  (d)  Property, Plant and Equipment

       Property,  plant  and  equipment  is  recorded  at   cost.
     Depreciation of  plant and  equipment is  calculated by  the
     straight-line method over the estimated useful lives of  the
     respective assets.

  (e)  Investments

       Investments in  other cooperatives  are recorded  at  cost
     and include the amount of patronage refund certificates  and
     patrons' equities  allocated, less  distributions  received.
     These investments  are  not readily  marketable  and  quoted
     market prices  are not available.   Accordingly,  it is  not
     practical to determine these  investments' fair value.   The
     equity method  of  accounting  is used  for  investments  in
     other companies in which Gold  Kist's voting interest is  20
     to 50 percent.   Investments in less  than 20 percent  owned
     companies which  are not  readily marketable  are stated  at
     cost.

       Gold  Kist  applies   the  provisions   of  Statement   of
     Financial  Accounting   Standards   No.  115   (SFAS   115),
     "Accounting  for Certain  Investments  in  Debt  and  Equity
     Securities."   Pursuant to  the provisions of SFAS 115,  the
     Association has  classified its  marketable equity  security
     and   collateralized    loans    as    "available-for-sale."
     "Available-for-sale"  securities  are   those  the   Company
     intends to hold  for a period of  time and are not  acquired
     with  the  intent  of  selling   them  in  the  near   term.
     Unrealized   gains  and   losses   on   "available-for-sale"
     securities are included as a separate component of  patrons'
     and other equity  in the accompanying financial  statements,
     net of  deferred  income  taxes.   Management  believes  the
     carrying  value  of  the  collateralized  loans  approximate
     market  value  and,  accordingly,  no  adjustment  has  been
     recognized in the accompanying financial statements.

       Gold  Kist's  investment  in  the  Golden  Peanut  Company
     partnership is accounted  for using the  equity method  (see
     note 9(b)).    Other  investments accounted  for  under  the
     equity method are not significant.

  (f)  Income Taxes

       Gold Kist  operates  as an  agricultural  cooperative  not
     exempt from  Federal income  taxes.   Aggregate margins  not
     refunded in  cash to  members or  allocated in  the form  of
     qualified written notices are subject to income taxes.

       The  bylaws of  Gold  Kist  provide for  the  issuance  of
     either  qualified  or  nonqualified  patronage  refunds  (as
     defined  for  purposes  of  Subchapter  T  of  the  Internal
     Revenue Code).   Gold Kist  utilized nonqualified  patronage
     refunds  in  1996  which  are  deductible  for  income   tax
     purposes only to the extent paid or redeemed in cash.


                         GOLD KIST INC.

      Notes to Consolidated Financial Statements, Continued

                  (Dollar Amounts in Thousands)



       Income  taxes  are  accounted  for  under  the  asset  and
     liability method.  Deferred  tax assets and liabilities  are
     recognized for the  future tax consequences attributable  to
     differences  between   the  financial   statement   carrying
     amounts  of  existing  assets  and  liabilities  and   their
     respective tax  bases  and  operating loss  and  tax  credit
     carryforwards.   Deferred  tax assets  and  liabilities  are
     measured  using enacted  tax  rates  expected  to  apply  to
     taxable  income  in  the  years  in  which  those  temporary
     differences are expected  to be recovered  or settled.   The
     effect on deferred  tax assets and  liabilities of a  change
     in tax  rates is  recognized  as income  or expense  in  the
     period that includes the enactment date.

  (g)  Fair Value of Financial Instruments

       Gold Kist's financial  instruments include  cash and  cash
     equivalents,   commodities    margin   deposits,    accounts
     receivables  and payables  and  accrued  expenses,  interest
     left on deposit, notes receivable and debt.  Because of  the
     short  maturity of  cash  equivalents,  notes  and  accounts
     receivable and payables and accrued expenses, interest  left
     on deposit, certain  short-term debt which  matures in  less
     than one year, long-term  debt with variable interest  rates
     and  interest  rate  swap  agreements,  the  carrying  value
     approximates fair  value.   All  financial  instruments  are
     considered  to   have   an  estimated   fair   value   which
     approximates carrying value  at June 28,  1997 and June  27,
     1998 unless otherwise specified (see notes 1(e) and 4).

  (h)  Impairment of Long-Lived  Assets and Long-Lived Assets  to
     Be Disposed Of

       Gold  Kist  adopted  the  provisions  of  SFAS  No.   121,
     _Accounting for the Impairment of Long-Lived Assets and  for
     Long-Lived Assets  to Be Disposed  Of_ (SFAS  121), on  June
     30, 1996.   SFAS  121 requires  that long-lived  assets  and
     certain identifiable intangibles be reviewed for  impairment
     whenever events or  changes in  circumstances indicate  that
     the carrying  amount of  an asset  may not  be  recoverable.
     Recoverability of assets to be held and used is measured  by
     a comparison of  the carrying amount of  an asset to  future
     net cash flows  expected to be generated  by the asset.   If
     such assets are  considered to be  impaired, the  impairment
     to be  recognized is  measured by  the amount  by which  the
     carrying amount of the assets  exceed the fair value of  the
     assets.  Assets to be disposed of are reported at the  lower
     of the carrying  amount or fair  value less  costs to  sell.
     Adoption of SFAS 121 did not have a material impact on  Gold
     Kist's  financial   position,  results   of  operations   or
     liquidity.

  (i)  Fiscal Year

       Gold  Kist  employs  a  52/53  week  fiscal  year.     The
     consolidated financial statements  for 1996,  1997 and  1998
     reflect 52 weeks.  Fiscal 1999 will be a 52 week year.

  (j)  Use of Estimates

       Management of  Gold Kist has  made a  number of  estimates
     and assumptions  relating  to the  reporting of  assets  and
     liabilities and  the  disclosure of  contingent  assets  and
     liabilities  to  prepare   these  financial  statements   in
     conformity with  generally accepted  accounting  principles.
     Actual results could differ from these estimates.
     


                         GOLD KIST INC.

      Notes to Consolidated Financial Statements, Continued

                  (Dollar Amounts in Thousands)



 (2) Inventories

  Inventories are summarized as follows:

<TABLE>
<CAPTION>
                                        1997      1998   

          <S>                         <C>       <C>
          Live poultry and hogs...... $101,062   94,005
          Marketable products........   36,331   45,081
          Raw materials and supplies.   42,096   35,118
                                      $179,489  174,204
</TABLE>

(3)  Property, Plant and Equipment

  Property, plant and equipment is summarized as follows:
<TABLE>
<CAPTION>
                                        1997      1998   

          <S>                        <C>       <C>
          Land and land improvements.$ 28,233    33,412
          Buildings.................. 168,863   182,735
          Machinery and equipment.... 328,432   369,441
          Construction in progress...  28,134     8,569
                                      553,662   594,157
          Less accumulated
             depreciation............ 314,420   338,366
                                     $239,242   255,791
</TABLE>


(4)  Notes Payable and Long-Term Debt

  Short-term borrowings  at June 27,  1998 include $69.9  million
under a rolling  four-month secured agreement  with a  commercial
bank entered  into in  April 1998.    The commercial  bank  holds
marketable equity  securities owned  by Gold  Kist as  collateral
(see note 9(a)).  The Company is required to maintain funds  with
the bank to  account for volatility  in the market  price of  the
securities held as collateral.  Interest on the borrowings are at
one-month LIBOR plus .75% per annum.  The Company earns  interest
on the collateral  funds at  rates that  approximate the  federal
funds rate.

  In February  1997, an insurance  company purchased $30  million
of 7.6% Series A Senior Notes  and $25 million of 7.94% Series  B
Senior Notes.  As a result of changes in the Company's  financial
structure, the interest rates on the senior promissory notes,  as
well as the previously issued $20.0 million 9.35% interest  note,
will be  adjusted  quarterly  in accordance  with  the  Company's
overall financial condition.  Effective August 1, 1998,  interest
rates on the 9.35% interest notes, the 7.6% Series A Senior Notes
and the 7.94%  Series B  Senior Notes  will be  11.1%, 9.35%  and
9.69%, respectively.

  At  June 27,  1998,  the Company  had  a $440  million  secured
committed credit  facility  with  eight commercial  banks.    The
facility included  a  three-year $132  million  revolving  credit
commitment, a $132 million 364-day line of credit commitment  and
a $176  million three-year  term  loan.   As  of June  27,  1998,
borrowings of $21.5 million,  $132.0 million and $176.0  million,
respectively, were outstanding under  the revolving credit,  364-
day line-of-credit and term loan commitments.

  In  August  1998,  the  Company  refinanced  its  $440  million
secured committed  credit facility  with  a $500  million  credit
agreement with  a  commercial  bank.   The  new  credit  facility
includes  a  secured   $125  million  364-day   line  of   credit
commitment, a secured  $125 million  three-year revolving  credit
facility and a $250 million three-year unsecured bridge facility.
The 364-day  line  of  credit  and  three-year  revolving  credit
facility are  secured by  all inventory  and receivables  of  the
Company.  Upon  the consummation of  the Agreement with  Southern
States, the loan provisions  require  that  proceeds  be  applied
to   the   $250    million   bridge    facility   (see  note  1).
Alternatively, the


                         GOLD KIST INC.

      Notes to Consolidated Financial Statements, Continued

                  (Dollar Amounts in Thousands)



Company may convert the bridge facility to a three-year term loan
secured with  substantially all  of the  Company's assets.    The
credit agreement  contains  provisions that  require  accelerated
payments in  accordance  with    certain  terms  and  conditions,
including the sale of facilities and excess cash flow as defined.
The 364-day  line of  credit provides  short-term financing  that
will expire  in August  3,  1999 and  may  be extended  with  the
consent of the bank.  The 364-day line of credit is subject to  a
 .30% per annum  facility fee.   The  three-year revolving  credit
agreement expires on August  3, 2001, but may  be extended for  a
one-year period  with the  consent of  the bank.   The  revolving
credit facility  fee  will be  computed  quarterly based  on  the
Association's ratio of funded debt to total capital and will  not
exceed .35% per annum. The term loan commitment matures on August
3, 2001.  Borrowings  under the $500  million facility will  bear
variable interest rates below prime.

  Subordinated loan  certificates of  $36.5 million  at June  28,
1997 bore interest at  rates of 5.75% to  6.4% with terms of  one
year and were  unsecured.  At  June 27,  1998, subordinated  loan
certificates outstanding were $35.0  million bearing interest  at
rates of 6.3% and 6.4%.

  Interest  left  on  deposit  represents  amounts  of   interest
payable, which at the option of the holders of various classes of
certificates, is  left on  deposit with  Gold Kist.    Additional
interest on  these  amounts accrues  at  the same  rates  as  the
related certificates.

  Long-term debt is summarized as follows:

<TABLE>
<CAPTION>
                                                                  1997        1998

  <S>                                                           <C>        <C>
  Senior notes payable:
    9.90% interest notes, due in semi-annual installments
     of $1,539 with interest payable semiannually ..............$  6,152     3,077
    9.35% interest note, due in a single installment in
     June 2001 with interest payable quarterly .................  20,000    20,000
    7.60% series A senior notes, due in annual installments
     of $2,727 beginning in February 2002 with interest
     payable quarterly .........................................  30,000    30,000
    7.94% series B senior notes, due in annual installments
     of $2,272 beginning in May 2002 with interest payable
     quarterly .................................................  25,000    25,000
  Other long term debt:
    Subordinated capital certificates of interest with
     fixed maturities ranging from two to fifteen years,
     unsecured (weighted average interest rate of 7.7%
     at June 28, 1997 and 7.6% at June 27, 1998) ...............  63,714    73,407
    Term loan agreement with commercial banks (interest
     rate of 8.2% at June 27, 1998) ............................       -   176,000
    Term loan agreement with agricultural credit bank,
     due in semi-annual installments of $1,785 beginning
     in June 1999 with interest payable quarterly (weighted
     average interest rate of 8.7% at June 27, 1998) ...........       -    50,000
    Revolving credit agreements with commercial banks
     (weighted average rate of 6.0% at June 28, 1997 and
     8.1% at June 27, 1998) .................................... 101,350    21,500
    Tax exempt industrial revenue bonds with varying interest
     rates, due in quarterly and annual installments
     through 2016, secured by property, plant and equipment ....  11,350    10,900
    Pro rata share of mortgage loan, at 8.47% interest, due
     in monthly installments to June 30, 2004, secured by a
      building .................................................   2,100     1,873
    Other.......................................................   2,466     2,091

                                                                 262,132   413,848
  Less current maturities ......................................  14,956    93,248
                                                                $247,176   320,600
</TABLE>


                         GOLD KIST INC.

      Notes to Consolidated Financial Statements, Continued

                  (Dollar Amounts in Thousands)



    Based upon discounted cash flows of future payments, assuming
interest rates available to Gold Kist  for issuance of debt  with
similar terms and remaining maturities, the estimated fair  value
of the senior notes  payable at June  28, 1997 was  approximately
$83.1 million.

    In  June 1997, Gold  Kist entered into  two notional  amount
$25 million  interest rate  swap  agreements with  a  commercial
bank.  Under a  five-year interest rate  swap, the Company  pays
interest at a fixed rate of  6.48% and receives interest at  the
three-month London Interbank  Offered Rate (LIBOR).   Under  the
ten year interest rate  swap, the Company  paid interest at  the
three-month LIBOR  and  received interest  at  a fixed  rate  of
7.44%.  In June 1998, the  commercial bank exercised its  option
to terminate the ten-year interest rate swap.  In      September
1997, Gold Kist  entered into  a notional  amount five-year  $25
million interest  rate swap  agreement with  a commercial  bank.
Under the agreement, the Company pays  interest at a fixed  rate
of 5.90% and  receives interest at  the three-month  LIBOR.   In
September 1999, the commercial bank has an option to convert the
fixed rate payment to  LIBOR less .23%.   In October 1997,  Gold
Kist entered into  three notional amount  five-year $25  million
interest rate swap agreements with two commercial banks.   Under
the agreements, the Company pays interest at a weighted  average
fixed rate of  5.98% and  receives interest  at the  three-month
LIBOR.  In  October 2000, one  of the commercial  banks has  the
option to  cancel two  of the  $25  million interest  rate  swap
agreements.  In January 1998, the  Company entered into a  five-
year $25 million interest rate swap agreement with a  commercial
bank.  Under  the agreement,  the Company   pays  interest at  a
fixed rate of  5.51% and  receives interest  at the  three-month
LIBOR.  In January 2001, the  bank has an option to convert  the
fixed rate payment to LIBOR less .10%.

    The terms of debt agreements specify minimum working capital,
consolidated tangible net worth,  current ratio and fixed  charge
coverage ratio  requirements,  as well  as  a limitation  on  the
funded debt to total capital ratio.  The debt agreements place  a
limitation on  capital expenditures,  equity distributions,  cash
patronage refunds,  commodity  hedging contracts  and  additional
loans, advances or investments.

    Annual required principal  repayments on  long-term debt  for
the five years subsequent to June 27, 1998 are as follows:

<TABLE>
       <S>                                              <C>
       Year:
       1999 ........................................    $  93,248
       2000 ........................................       27,230
       2001 ........................................      123,389
       2002 ........................................       43,554
       2003 ........................................       16,913


(5) Patrons' and Other Equity

  Gold Kist's  Articles of Incorporation provide  for a class  of
common stock  and a  class of  preferred  stock pursuant  to  the
provisions of the Georgia Cooperative Marketing Act.  Each member
is allocated one  share of common  stock, $1.00 par  value.   The
common shares are not marketable or transferable and no dividends
will be  declared  on  these  common  shares.    No  issuance  of
preferred stock has been authorized by Gold Kist.

  Patronage  reserves represent  allocated  undistributed  member
margins less  taxes  paid  on  nonqualified  equity.    Patronage
reserves do  not  bear  interest  and  are  subordinated  to  all
certificates  outstanding   and   indebtedness  of   Gold   Kist.
Patronage reserves may be revolved and paid at the discretion  of
the Board of Directors.

  Retained earnings include  the cumulative net margins  (losses)
resulting from nonmember and nonpatronage transactions, including
noncooperative subsidiaries.  Retained earnings at June 27,  1998
reflected the  net loss  for 1998.    Also included  are  amounts
related to the early redemption of notified equity,  representing
the difference between the face value and the redemption amounts.


                         GOLD KIST INC.

      Notes to Consolidated Financial Statements, Continued

                  (Dollar Amounts in Thousands)



(6) Income Taxes

  Total income tax expense (benefit) was allocated as follows:


</TABLE>
<TABLE>
<CAPTION>
                                                       1996       1997      1998
  <S>                                               <C>>        <C>     <C>
  Margins (loss) from continuing operations .......  $18,848    (4,108) (35,123)
  Discontinued operations .........................    1,909       662   (8,571)
  Loss on disposal of Agri-Services segment,
    including operating losses during phase out
    period.........................................        -         -  (16,489)
  Patrons' and other equity - unrealized gain on
    marketable equity security.....................    1,530     4,518   (3,043)
                                                     $22,287     1,072  (63,226)
</TABLE>


  The provisions  for income tax  expense (benefit),  principally
Federal, related  to margins  (loss) from  continuing  operations
consist of the following:


                                              1996      1997      1998
  Current expense (benefit) .............  $20,943    (2,391)  (20,637)
  Deferred benefit ......................   (2,095)   (1,717)  (14,486)
                                          $ 18,848    (4,108)  (35,123)

    Gold Kist's  combined federal  and state  effective tax  rate
from operations for 1996, 1997 and 1998 was 33%, (48)% and (38)%,
respectively.  A reconciliation  of income tax expense  (benefit)
from continuing  operations  computed  by  applying  the  Federal
corporate income  tax rate  of  35% in  1996,  1997 and  1998  to
margins from continuing before income taxes and minority interest
for the applicable year follows:
<TABLE>
<CAPTION>
                                                      1996        1997        1998


  <S>                                               <C>          <C>       <C>
  Computed expected income tax expense (benefit) .  $19,910       3,012    (32,256)
  Increase (decrease) in income tax expense
    resulting from:
    Income tax litigation.........................        -      (5,207)         -
    Cash portion of nonqualified patronage refund.     (986)          -          -
    Effect of state income taxes, net of Federal
     benefit .....................................       970       (531)    (2,199)
    Nonqualified equity redemptions...............     (886)       (831)    (1,203)
    Target jobs credits...........................      (11)       (344)       (80)
    Other, net....................................     (149)       (207)        615
                                                     $18,848     (4,108)    (35,123)
</TABLE>


                                   GOLD KIST INC.

                Notes to Consolidated Financial Statements, Continued

                            (Dollar Amounts in Thousands)


  The tax effects of temporary differences that give rise to significant 
portions of the deferred tax assets and deferred  tax liabilities at June  28, 
1997 and June  27, 1998 are as follows:
<TABLE>
<CAPTION>
                                                        1997           1998

  <S>                                                 <C>            <C>
  Deferred tax assets:
    Postretirement benefits....................       $ 16,920       18,826
    Insurance accruals.........................          7,487        7,440
    Federal net operating loss carryforward....              -       12,286
    Bad debt reserves..........................            895        1,531
    State tax operating loss carryforwards.....          1,850        3,950
    Other......................................          1,164        2,100
    Discontinued operations....................          2,547       21,188
     Total gross deferred tax assets ..........         30,863       67,321
    Less valuation allowance...................         (1,078)      (1,136)
     Total net deferred tax assets ............         29,785       66,185

  Deferred tax liabilities:
    Unrealized gain on marketable equity security      (17,634)      14,592)
    Accelerated depreciation...................            350       (2,831)
    Deferred compensation......................         (3,604)      (3,622)
     Total deferred tax liabilities ...........        (20,888)     (21,045)
     Net deferred tax assets ..................      $   8,897       45,140
</TABLE>

  The net change in  the total valuation allowance for the  years
ended 1996, 1997  and 1998 was  a decrease of  $578, $328 and  an
increase of  $58,  respectively.   The  Association's  management
believes  the  existing  net  deductible  temporary   differences
comprising the total net deferred tax assets will reverse  during
periods in which the Association generates net taxable income.  

  At  June   27,  1998,  Gold   Kist  has   net  operating   loss
carryforwards for federal income  tax purposes of $34.9  million,
which are  available  to  offset future  federal  taxable  income
through 2013.

(7) Employee Benefits

  (a) .Pension Plans

       Gold  Kist has  noncontributory  defined  benefit  pension
     plans  covering  substantially  all  of  its  employees  and
     directors and an affiliate's employees (participants).   The
     plan covering  the  salaried participants  provides  pension
     benefits  that are  based  on  the  employees'  compensation
     during the years before  retirement or other termination  of
     employment.   The  plan  covering  the  hourly  participants
     provides  pension  benefits  that  are  based  on  years  of
     service.   Gold  Kist's  funding  policy  is  to  contribute
     within the  guidelines  prescribed by  Federal  regulations.
     Plan assets consist  principally of  corporate equities  and
     bonds, and United States Government and Agency obligations.

     Net  periodic  pension  expense  for  1996,  1997  and  1998
included the following components:

<TABLE>
<CAPTION>
                                                        1996      1997      1998


     <S>                                             <C>        <C>      <C>
     Service cost - benefits earned during the year  $  4,092     4,226    4,484
     Interest cost on projected benefit obligations     7,426     8,006    8,677
     Actual return on plan assets ......              (27,724)  (19,118) (47,530)
     Net amortization and deferral .....               16,799     7,127   34,564
       Net periodic pension expense ....           $      593       241      195
</TABLE>



                         GOLD KIST INC.

      Notes to Consolidated Financial Statements, Continued

                  (Dollar Amounts in Thousands)



       The following table sets  forth the plans' funded  status,
     amounts recognized  in the  consolidated balance  sheets  at
     June 28, 1997 and June 27, 1998 and economic assumptions:

<TABLE>
<CAPTION>
                                                              1997          1998

       <S>                                                  <C>         <C>
       Actuarial present value of benefit obligations:
          Vested participants..................             $ 90,256     108,620
          Nonvested............................                7,410      10,822
            Total accumulated benefit
               obligations ....................               97,666     119,442

       Projected benefit obligations for
          services rendered to date............             $116,670     140,983

       Plan assets for benefits:
          Plan assets at fair value............             $156,673     198,521
          Prepaid pension cost included in
            other assets in consolidated balance
            sheets ............................             (19,721)     (22,740)
            Net plan assets ...................             $136,952     175,781

       Plan assets in excess of projected
         benefit obligations...................             $ 20,282      34,798

       Consisting of:
          Unrecognized net asset existing at the
             date of adoption                               $  7,116       5,970
          Unrecognized net gain/(loss) from past
             experience different ....from that
             assumed and effects of changes in
             assumptions.......................               18,889      34,743
          Prior service cost not yet recognized
             in net periodic pension cost......              (5,723)      (5,915)
                                                            $ 20,282      34,798

       Actuarial assumptions:
          Weighted-average discount rate.......                8.25%       7.25%
          Weighted-average expected long-term
             rate of return on
           plan assets.........................                9.50%       9.50%
          Weighted-average rate of compensation
             increase..........................                5.50%       5.50%
</TABLE>

       The  unrecognized  net  asset  existing  at  the  date  of
     adoption of Statement of Financial Accounting Standards  No.
     87 is being  amortized over the  remaining service lives  of
     the participants.



                         GOLD KIST INC.

      Notes to Consolidated Financial Statements, Continued

                  (Dollar Amounts in Thousands)



  (b)  Other Postretirement Benefits

       Gold Kist  provides  health  care and  death  benefits  to
     substantially all retired employees, covered dependents  and
     their  beneficiaries.     Generally,   employees  who   have
     attained  age 55  and  who  have 10  years  of  service  are
     eligible for these  benefits.  In  addition, employees  with
     less than 10  years of service  who retired  before July  1,
     1992 are eligible for these  benefits.  The health care  and
     death benefit plans are contributory and coverages  increase
     with increased years of service.

       Postretirement health and death benefit expense for  1996,
     1997 and 1998 included the following components:

<TABLE>
<CAPTION>
                                            1996    1997   1998
       <S> .............................  <C>     <C>     <C>
       Service cost - benefits earned
          during the year................. $2,029  2,452  2,917
       Interest cost .....................  2,998  3,508  4,290
       Net amortization and deferral .....     80     80    155
         Net postretirement health and
          death benefit expense........... $5,107  6,040  7,362
</TABLE>

         Gold Kist's postretirement benefit plans are not funded.
     The status of the plans at  June 28, 1997 and June 27,  1998
     was as follows:
<TABLE>
<CAPTION>
                                                   1997     1998

       <S>                                       <C>       <C>
       Actuarial present value of
         accumulated postretirement
         benefit obligation:
          Retirees.............................. $21,130   22,799
          Fully eligible active plan
             participants.......................  11,786   12,974
          Other active plan participants........  20,245   23,839
                                                  53,161   59,612
          Unrecognized net loss from experience
             differences........................  (7,332)  (8,677)
                                                 $45,829   50,935
</TABLE>

       The health  care cost  trend rate  used to  determine  the
     accumulated postretirement  benefit obligation  at June  28,
     1997 was 7%,  declining ratably to 5%  by the year 2001  and
     remaining at that  level thereafter.   The health care  cost
     trend rate used to determine the accumulated  postretirement
     benefit  obligation at  June  27,  1998  was  6%,  declining
     ratably to 5% by the  year 2001 and remaining at that  level
     thereafter.    The  discount  rate  used  to  determine  the
     accumulated postretirement benefit  obligation was 8.25%  at
     June 28, 1997 and 7.25%  at June 27, 1998, respectively.   A
     1% increase  in the  health care  cost trend  rate for  each
     year would increase  the accumulated postretirement  benefit
     obligation for  health care  benefits at  June 27,  1998  by
     approximately 13% and  net postretirement  health care  cost
     by 13%.


                         GOLD KIST INC.

      Notes to Consolidated Financial Statements, Continued

                  (Dollar Amounts in Thousands)



(8) Contingent Liabilities and Commitments

  Gold  Kist is  a  party  to various  legal  and  administrative
proceedings, all of which management believes constitute ordinary
routine litigation  incident to  the business  conducted by  Gold
Kist, or are not material in amount.

  Gold Kist  received proceeds  of $20.0  million, $5.0  million,
$4.9 million and $10.2 million during 1993, 1994, 1995 and  1996,
respectively, for collateralized loans  sold with recourse to  an
insurance company, of which $11.7 million was outstanding at June
27, 1998.  No gain  or loss was recognized  on the sale of  these
loans.   A $176  thousand allowance  has been  recognized in  the
accompanying  consolidated  financial  statements  for  potential
losses that may occur.  As of  June 27, 1998, there have been  no
credit  losses  related  to  the  loans  guaranteed  under   this
agreement.

  Gold Kist is a  guarantor of amounts outstanding under a  $65.0
million secured  loan agreement  between  a commercial  bank  and
Young Pecan Company, a pecan processing and marketing partnership
in which Gold Kist holds a  25% equity interest and 35%  earnings
(loss) allocation.   At June  27, 1998,  the amounts  outstanding
under this facility were $64.8 million.

(9) Investments

  (a)  Marketable Equity Security

       At June  27,  1998, the  Association's  marketable  equity
     securities  were  carried  at  their  fair  value  of  $62.4
     million, which represents a  gross unrealized gain of  $41.7
     million.  The  1998 gross unrealized  gain, net of  deferred
     taxes of  $14.6 million, has  been reflected  as a  separate
     component of patrons' and other  equity.  At June 28,  1997,
     the Association's marketable equity securities were  carried
     at their  fair value of  $71.1 million,  which represents  a
     gross unrealized  gain of  $50.4 million.   The  1997  gross
     unrealized gain,  net  of  deferred income  taxes  of  $17.7
     million, has  been  reflected  as a  separate  component  of
     patrons'  and  other  equity.     At  June  29,  1996,   the
     marketable equity  securities  were carried  at  their  fair
     value of $54.8 million, which represents a gross  unrealized
     gain of $34.1 million.  The 1996 gross unrealized gain,  net
     of  deferred  income  taxes  of  $13.1  million,  has   been
     reflected as  a  separate component  of patrons'  and  other
     equity.

       Dividends  of  $494  thousand, $595  thousand  and  $625
     thousand are included in miscellaneous,  net for the years
     ended June  29, 1996,  June 28,  1997  and June  27, 1998,
     respectively.

  (b)  Golden Peanut Company

          Gold Kist  has  a 33  1/3%  interest in  Golden  Peanut
     Company and  Subsidiaries, a  partnership interest  ("Golden
     Peanut Company").    Gold Kist's  investment in  the  Golden
     Peanut Company amounted to  $24.1 million and $22.7  million
     at June 28, 1997 and  June 27, 1998, respectively.  In  July
     1997,  Gold  Kist   made  additional  investments  of   $1.2
     million.   In  September 1997,  Gold  Kist received  a  $5.8
     million distribution  from Golden  Peanut Company.    Golden
     Peanut  Company  has  a  $450.0  million  commercial   paper
     facility supported by seasonal  backup lines of credit  with
     various banks.     At June  27, 1998,  borrowings of  $124.0
     million  were   outstanding  under   the  commercial   paper
     facility.

                          GOLD KIST INC.

      Notes to Consolidated Financial Statements, Continued

                  (Dollar Amounts in Thousands)



     Summarized financial  information of  Golden Peanut  Company
is shown below:

<TABLE>

              Condensed Consolidated Balance Sheets
<CAPTION>
                                                       1997        1998
     <S>                                            <C>          <C>
     Current assets ......................          $164,450     182,013
     Property, plant and equipment, net
       and other noncurrent assets .......            34,775      34,036
       Total assets ......................          $199,225     216,049
     Current liabilities .................          $120,591     141,031
     Accrued postretirement benefit costs              5,703       6,383
     Other liabilities ...................               511         530
     Partners' equity ....................            72,420      68,105
       Total liabilities and partners'
         equity...........................          $199,225     216,049
</TABLE>
<TABLE>
                   Condensed Consolidated Statements of Operations
<CAPTION>
                                                   1996        1997         1998

     <S> . ..............................       <C>          <C>         <C>
     Net sales and other operating income       $428,955      426,122     425,076
     Costs and expenses .................        432,496      408,702     411,971
       Net earnings (loss) ..............       $(3,541)       17,420      13,105
</TABLE>

       In 1996, 1997  and 1998, Gold  Kist received $2.1  million
     in  rental  income  from  Golden  Peanut  Company  under  an
     operating   lease  agreement   for   peanut   shelling   and
     procurement  facilities.   Gold  Kist  received  procurement
     commissions, royalties  and administrative  service fees  of
     $3.1 million, $4.2  million and $2.5  million in 1996,  1997
     and 1998, respectively.   In addition,  Gold Kist  purchased
     $2.6 million,  $2.3 million  and $1.7  million of  inventory
     from  Golden  Peanut  Company   in  1996,  1997  and   1998,
     respectively.

(10)Discontinued Operations

   The Company's Agri-Services segment purchases or  manufactures
feed, seed, fertilizers, pesticides,  animal health products  and
other farm  supply  items  for  sale  at  wholesale  and  retail.
Additionally,  the  Agri-Services  segment  is  engaged  in   the
processing, storage and marketing of cotton, serves as a contract
procurement agent  for,  and  stores, farm  commodities  such  as
soybeans and grain, and is a partner in a major peanut processing
and marketing business  and in a  pecan processing and  marketing
business.  In May 1998, the Gold Kist Board of Directors  adopted
a plan to discontinue operations of the Agri-Services segment.

   In July  1998,  Gold  Kist  entered  into  an  Asset  Purchase
Agreement, pursuant to which the Company  has agreed to sell  and
assign the assets and certain of the liabilities of the Company's
agricultural inputs businesses (see note 1).  In August 1998, the
Company entered into an  agreement to sell  or assign the  cotton
marketing operation's  purchases and  sales commitments  for  the
1998 cotton crop.

   Accordingly,  the  operating  results  of  the   Agri-Services
segment, including  provisions for  losses during  the  phase-out
period, have  been  segregated  from  continuing  operations  and
reported separately in the consolidated statements of  operations
and cash flows for 1996, 1997 and 1998.  Net sales volume of  the
Agri-Services segment  was  $535.4 million,  $636.2  million  and
$720.0 million, respectively, in 1996, 1997 and 1998.

   The assets and liabilities of such operations at June 27, 1998
have been  reflected  as  a  net  current  asset.    The  Company
anticipates the sale of substantially all of these operations  in
fiscal 1999.


                         GOLD KIST INC.

      Notes to Consolidated Financial Statements, Continued

                  (Dollar Amounts in Thousands)


(11)  Acquisition of Minority Interest

   In January 1997, the  Gold Kist Board  of Directors adopted  a
resolution authorizing the Company's  officers to negotiate  with
Golden Poultry  Company,  Inc.  (_Golden Poultry_)  to  pursue  a
transaction in which Gold Kist would acquire all of the shares of
Golden Poultry's common stock not  currently owned by Gold  Kist.
Gold Kist  owned 10,901,802  shares or  75% of  Golden  Poultry's
14,628,435 outstanding shares.   The negotiations were  completed
and an Agreement and Plan of  Merger executed in April 1997  (the
"Merger Agreement"),  among Gold  Kist, Golden  Poultry  Company,
Inc., Agri  International, Inc.  and Golden  Poultry  Acquisition
Corp.

   Pursuant to  the Merger  Agreement, Gold  Kist agreed  to  pay
$14.25 per share  in cash for  each outstanding  share of  common
stock not already beneficially  owned by Gold  Kist.  The  Merger
Agreement  was  approved  by  the  Boards  of  Directors  of  the
Association and Golden Poultry Company, Inc. and was approved  by
a majority of the owners of  the Golden Poultry common stock  not
owned by  Gold  Kist at  a  Special Meeting  of  Shareholders  on
September 5, 1997.  The merger  became effective on September  8,
1997.  The cost  to acquire the outstanding  shares and the  fees
and  expenses  incurred  in  connection  with  the  merger   were
approximately $55.1  million.   The acquisition  of the  minority
interest  was  accounted  for   using  the  purchase  method   of
accounting.  The cost in excess over the net assets acquired  was
$24.7 million, which is being amortized  over 20 years.  The  pro
forma effect  of  goodwill amortization  on  prior years  is  not
significant.


Item 9.  Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure.

          Not Applicable.


                           PART III


Item 10.  Directors and Executive Officers of the Registrant.

     The Directors of Gold Kist are:
<TABLE>
<CAPTION>

                                                                 Years
                                                       Term      Served as
Name                Age          Office               Expires    Director
                    (as of
                    8/30/98)
<S>                  <C>    <C>                           <C>    <C>
W. P. Smith, Jr.*    69     Chairman of the Board &       1998   25
                            Director (District 1)

Herbert A. Daniel, Jr.46    Director (District 2)        1998    3

Fred K. Norris, Jr.* 70     Director (District 3)        2000    21

James E. Brady, Jr.  63     Director (District 4)        1999    14

W. Kenneth Whitehead 54     Director (District 5)        1999    5

Dan Smalley*         49     Director (District 6)        1999    13

A. Jack Nally        55     Director (District 7)        2000    7

M. Michael Davis     47     Director (District 8)        2000    4

Phil Ogletree, Jr.   65     Director (District 9)        1998    21




*   Member of Board of Directors Executive Committee.

    The Directors of Gold Kist are elected on a district
representation basis.  The districts are redrawn from time to
time by the Board of Directors, under provisions of the By-
Laws of Gold Kist, to provide for equitable representation of
members in the territory served by Gold Kist.  During the past
five years, each of the Directors has owned and managed
substantial farming operations, producing such agricultural
products as peanuts, cotton, soybeans, corn, other grains,
peaches, vegetable crops, cattle, poultry and dairy products.
While the size and types of products produced on, and
personnel employed at, each of the Director's farms varies,
each Director's business activities have been related
primarily to small agribusiness enterprises. There are no
family relationships among any of the Directors and executive
officers.


The Executive Officers of Gold Kist are:


</TABLE>
<TABLE>
<CAPTION>


                                                   Years    Years
                                                   Served   Served
                                                   In that  with
    Name            Age       Office               Office   Gold Kist
                    (as of                         (as of   (as of
                    8/30/98)                       8/30/98) 8/30/98)
<S>                 <C>       <C>                  <C>      <C>
G. O. Coan*         62   Chief Executive Officer,     3        39
                         and Chairman of the
                         Management Executive
                         Committee
John Bekkers*       53   President and Chief         3         13
                         Operating Officer
M. A. Stimpert      54   Senior Vice President,       2        15
                         Planning and Administration
Kenneth N. Whitmire 60   Group Vice President,       10        37
                         Poultry Group
J. David Dyson      51   General Counsel, Vice       6 months  18
                         President and Secretary
Peter J. Gibbons    61   Vice President, Finance     19        22
Paul G. Brower      59   Vice President,             19        19
                         Communications
Jerry L. Stewart    58   Vice President -            17        35
                         Marketing, Poultry Group
Donald W. Mabe      44   Vice President -            1         13
                         Operations, Poultry Group
Marshall Smitherman 56   Vice President -            1         19
                         Cotton Division
John K. McLaughlin  60   Vice President, Pet Food      14      14
                         and Animal Products Division
Allen C. Merritt    52   Vice President, Fertilizer    15      26
                          and Chemical Division
Stanley C. Rogers   52   Vice President,                8      20
                         AgriServices Division
Michael F. Thrailkill 50 Vice President,                6     25
                         Information Services
Stephen O. West     52   Treasurer                     15      18
W. F. Pohl, Jr.     48   Controller                    16     22

</TABLE>


*Member of Management Executive Committee

     The officers serve for terms of one year and until their
successors are elected by the Board of Directors.
     During the past five years the principal occupation of
each of the above named executive officers, with exception of
Michael A. Stimpert, Donald W. Mabe, and Marshall Smitherman,
has been as an officer or employee of Gold Kist.
     Mr. Michael A. Stimpert was elected Senior Vice
President, Planning and Administration, effective April 1,
1996.  He previously served as Vice President from January 1,
1996 until election to his current position.  From December
19, 1986 until January 1996, Mr. Stimpert served as Executive
Vice President of Golden Peanut Company, a peanut processing
and marketing company headquartered in Atlanta, Georgia.  Mr.
Stimpert was employed by Gold Kist Inc. from June 1974 until
December 1986 in a variety of positions, including Group Vice
President, Agricommodities Group and Group Vice President,
AgriProducts Group.
     Mr. Donald W. Mabe  was elected Vice President -
Operations, Poultry Group, effective July 25, 1997.  He
previously served as President of Carolina Golden Products
Company from January 1991 until  election to his current
position.
     Mr. Marshall Smitherman was elected Vice President,
Cotton Division, effective July 25, 1997.  He previously
served as Manager, Cotton Division from February 1995 until
election to his current position.  From 1988, until rejoining
the Association in 1995, he was a grain broker located in
Atlanta, Georgia.

Item 11.  Executive Compensation.

     Summary Compensation Table.  The following table sets
forth information concerning the compensation received by the
Chief Executive Officer and for each of the four other most
highly compensated executive officers:


<TABLE>
<CAPTION>

                                   Annual compensation

                                                            Other
                                                            annual    All other
                         Fiscal                             compensa- compensa-
                         year           Salary    Bonus     tion(1)   tion
                         ended          ($)       ($)       ($)       ($)
<S>                      <C>            <C>       <C>       <C>       <C>
G. O. Coan               June 27, 1998  $475,000  $0        $2,211    $9,786 (2)
 Chief Exec. Officer and June 28, 1997   470,577  50,000    1,869     12,230 (2)
 Chairman of the Manage- June 29, 1996   349,058  450,000   1,055     12,030 (2)
 ment Executive Committee

John Bekkers             June 27, 1998  $347,500  $0       $5,757     $7,186 (2)
 President and Chief     June 28, 1997   282,423  50,000    3,656     9,842 (2)
 Operating Officer       June 29, 1996   210,577 295,000    1,110     9,425 (2)

Kenneth N. Whitmire      June 27, 1998  $212,692  $0        $8,742    $7,629 (2)
 Group Vice President,   June 28, 1997   204,434  44,000     6,703    9,956 (2)
 Poultry Group           June 29, 1996   189,819  240,000    2,375     9,965 (2)

Jerry L. Stewart         June 27, 1998  $182,231  $0        $4,767    $7,270 (2)
Vice President           June 28, 1997   174,981  29,000     3,434    9,353 (2)
Marketing, Poultry Group June 29, 1996   161,727  164,000    1,889    9,569 (2)

M. A. Stimpert           June 27, 1998  $204,615  $0        $5,812    $7,518 (2)
Senior Vice President,   June 28, 1997   194,488  24,000    4,497     10,020 (2)
Planning and Admini-     June 29, 1996  87,356(3) 75,000(3) 2,280(3) 9,201(2)(3)
stration
</TABLE>


_______________________________
(1)The amounts shown for the fiscal years ended June 27, 1998,
  and June 28, 1997 set forth that portion of interest earned
  on voluntary salary and bonus deferrals under non-qualified
  deferred compensation plans above 120% of the applicable
  federal rate.  Other than such amounts, for the fiscal years
  ended June 27, 1998, June 28, 1997, and June 29, 1996, no
  amounts of "Other Annual Compensation" were paid to any of
  the above named executive officers, except for perquisites
  and other personal benefits which for each executive officer
  did not exceed the lesser of $50,000 or 10% of such
  individual's salary plus annual bonus.
(2)The amounts set forth include the following amounts that
  were contributed by the Association for fiscal years 1998,
  1997 and 1996 on behalf of the named executive officers
  pursuant to the Gold Kist Profit Sharing and Investment
  Plan, a qualified defined contribution plan (401(K)):  Mr.
  Coan - $2,400, $4,750 and $4,500 respectively, Mr. Bekkers -
  $2,814, $5,404 and $4,946 respectively; Mr. Whitmire -
  $2,425, $4,684 and $4,656 respectively; Mr. Stewart -
  $2,422, $4,439 and $4,617 respectively; and Mr. Stimpert -
  $2,450, $4,804 and $3,859 respectively.  In addition, the
  amounts set forth include for fiscal years 1996, 1997 and
  1998, the following amounts which represent the value of the
  named executive officer's benefit from premiums paid by the
  Association under a split dollar life insurance plan for the
  named executive officers:  Mr. Coan - $7,530, $7,480 and
  $7,386 respectively; Mr. Bekkers - $4,479, $4,438 and $4,372
  respectively; Mr. Whitmire - $5,309, $5,272 and $5,204
  respectively; Mr. Stewart - $4,952, $4,914 and $4,848
  respectively; and Mr. Stimpert - $5,342, $5,216 and $5,068
  respectively.  The Association uses the modified premium
  method in determining the portion of each premium dollar
  attributable to the named executive officers.  The
  Association will recover the cost of premium payments from
  the cash value of the policies.
(3)The amounts indicated reflect Mr. Stimpert's employment for
  a portion of the fiscal year from January 1996 to June 1996.

Retirement Plans.  Gold Kist maintains two noncontributory
retirement plans, one for salaried employees and the other for
hourly employees, which together cover substantially all
employees who have served at least one year with Gold Kist,
including those employees subject to collective bargaining
agreements.  The plan for salaried employees was amended in
1984 to delete the one year waiting period for credited
service.  For salaried employees, the plan provides a
retirement benefit after 30 years of credited service at age
65, which, when combined with the portion of the employee's
primary Social Security benefit attributable to his/her
employer's contributions, will equal 45% of his/her average
earnings during the period of five years in which he/she had
the highest earnings in the last ten years of employment
immediately preceding attainment of age 65, or if retired
before age 65, in the last ten years immediately preceding
early retirement.  This plan also provides an early retirement
benefit after age 55, with no reduction in benefit entitlement
due to age, when the sum of the employee's age and years of
service equal or exceed 90.  The benefit entitlement is
reduced in either case for each year of credited service less
than 30 years.  For hourly employees who work for Gold Kist
until age 65, the plan provides a monthly pension benefit
equal to $9.00 for each year of plan participation, payable at
age 65; early retirement is permitted after age 55 at reduced
benefit levels.  The plans contain a death benefit for the
surviving spouse of an active employee (who had at least five
years credited service or was at least 55 years old at the
time of death) which equals 50% of the deceased employee's
accrued retirement income benefit.  Accrued benefits under the
plans vest after the employee attains five years of service or
at age 55, and the minimum pension benefit at age 65 is $9.00
per month for each year of credited service.  Amounts
contributed for specific individuals under Gold Kist's
retirement income plan for salaried employees cannot be
readily determined.  For the plan year ended December 31,
1997, the Association made a contribution of $1,412,000 to the
pension plan for hourly employees.  Due to the full funding
limitation of the Internal Revenue Service, the Association
was not permitted to make a tax-deductible contribution to the
retirement income plan for salaried employees for the plan
year ended December 31, 1997.  Estimated annual benefits
payable upon retirement at normal retirement age (65 years) to
persons in specified years of service and remuneration
classifications, before offset of Social Security benefits,
are illustrated in the following table:

<TABLE>
<CAPTION>

                    Estimated Annual Benefits For Years of Service Indicated

Remuneration        10 Years       15 Years  20 Years     25 Years   30 Years
                                                                      or More
<S>                 <C>            <C>       <C>          <C>       <C>
$ 30,000            $  7,500       $ 11,250  $ 15,000     $ 18,750  $  22,500
$100,000              15,000         22,500    30,000       37,500     45,000
$150,000              22,500         33,750    45,000       56,250     67,500

</TABLE>


     For years after 1993, the maximum annual amount of
compensation that can be used for determining an individual's
benefit under a qualified plan is $150,000.

    The plan covers the compensation set forth in the columns
entitled "Salary" and "Bonus" in the Summary Compensation
Table.  The credited years of service as of December 31, 1997,
under the retirement income plan for the five executive
officers listed in the summary compensation table are as
follows:  Mr. Coan (30); Mr. Bekkers (13); Mr. Whitmire (30);
Mr. Stewart (30); and Mr. Stimpert (24).

     A Supplemental Executive Retirement Plan has been adopted
by the Association whereby Gold Kist makes supplemental
payments to certain employees under a non-qualified deferred
compensation plan to make up for any reduction in such
employees' retirement income under the Gold Kist salary
retirement plan resulting from restrictions placed on
qualified retirement plans under Section 415 of the Internal
Revenue Code of 1986, as amended.  Such restrictions limit the
amount of benefits payable in qualified retirement plans with
respect to the percentage of final pay to which such employees
would be otherwise entitled upon retirement.  All vested
amounts accrued under the Plan have been funded in a trust
which is secure against all contingencies except a bankruptcy
of the Association.  The following table shows the estimated
annual benefits payable upon retirement at normal retirement
age (65) to persons in specified years of service and
remuneration classifications, before offset of Social Security
benefits and without restriction imposed by the Internal
Revenue Code.  The amounts shown in the table would be reduced
by the amounts payable pursuant to the Gold Kist Retirement
Plan for Salaried Employees.



<TABLE>
<CAPTION>

Estimated Annual Benefits For Years of Service Indicated

Remuneration   10 Years  15 Years  20 Years  25 Years  30 Years 
                                                       or More
<S>            <C>       <C>       <C>       <C>       <C>
$100,000       $15,000   $ 22,500  $ 30,000  $ 37,500  $ 45,000
$150,000       22,500    33,750    45,000    56,250     67,500
$200,000       30,000    45,000    60,000    75,000     90,000
$250,000       37,500    56,250    75,000    93,750    112,500
$350,000       52,500    78,750    105,000   131,250   157,500
$500,000       75,000    112,500   150,000   187,500   225,000
$750,000       112,500   168,750   225,000   281,250   337,500
$850,000       127,500   191,250   255,000   318,750   382,500
</TABLE>


     Covered compensation, computation of the average final
compensation, and credited years of service for the five
executive officers listed in the summary compensation table
are the same as that set forth in the foregoing description of
the Gold Kist Retirement Plan for Salaried Employees.

     In addition to the retirement benefits provided by its
qualified and nonqualified retirement plans, Gold Kist has
contracted to provide certain key employees with compensation
benefits after normal retirement.  These benefits, known as
the Management Deferred Compensation Plan, are paid monthly
following retirement in an annual amount equal to 25% of the
average annual salary for the ten year period immediately
prior to retirement.  These benefits are payable, depending on
the contract, for a 10 or 15 year period following retirement
to a former key employee or his designated beneficiary.  All
vested amounts accrued under the plan have been funded in a
trust which is secure against all contingencies except a
bankruptcy of the Association.  Estimated annual benefits
payable under the Management Deferred Compensation Plan would
be based upon the following average annual salary of the
eligible named executives for the ten year period ended as of
June 27, 1998: Mr. Coan - $281,440;  Mr. Bekkers - $142,257;
Mr. Whitmire - $166,809; and Mr. Stimpert - $143,409.

     Change in Control Plans.  Under the Gold Kist officers
contingency plan, the Association has entered into identical
change in control agreements with each officer, including the
five executive officers named in the cash compensation table.
Each change in control agreement provides that following a
change in the control of the Association (as defined in the
agreements), if the officer's employment with the Association
terminates within two years after the change in control (but
prior to the officer's reaching age 65), the officer will be
entitled to receive a severance payment calculated by
determining the "Base Severance Amount" as follows:

        (1)        if the officer is age 60 or younger at the
        time of termination of his employment, the amount
        equal to the officer's compensation paid by the
        Association for the five full calendar years ending
        before the date of the change in control, or

        (2)        if the officer is older than age 60 at the
        time of his termination of employment, the amount
        equal to the officer's average annual compensation
        paid by the Association for the lesser of five full
        calendar years or the full calendar years of service
        with the Association ending before the change in
        control, multiplied by the number of years and
        fractions thereof remaining until the officer's 65th
        birthday.


The Base Severance Amount is to be adjusted for those officers
with less than 15 years of service by prorating the Base
Severance Amount with the numerator being the number of
completed calendar years of service and the denominator being
15.  However, the minimum any terminated officer would receive
would be one and one-half times the average annual
compensation paid by the Association for the actual number of
full calendar years worked, if less than five, or the annual
salary amount for an officer who has worked less than one
calendar year.  The severance payment will include an
additional amount equal to any excise tax under Section 4999
of the Internal Revenue Code of 1986 incurred by the officer,
plus all federal, state and local income taxes incurred by the
officer with respect to receipt of the additional amount.
Additionally, under such contracts, medical benefits would
remain available to current and retired officers on the same
basis as is provided at the time of a change in control.  The
Association has agreed to pay all legal fees and expenses
incurred by an officer in the pursuit of the rights and
benefits provided by the change in control agreement.  The
Association has entered into similar change in control
agreements with each director of Gold Kist.  As of June 27,
1998, no contingencies have occurred which would require the
implementation of the provisions of the change in control
agreements, and no payments or other benefits have been
provided to the five executive officers named in the summary
compensation table or to the directors.

   Director Compensation.  The By-Laws of Gold Kist provide
that the Directors shall be compensated for their services and
reimbursed for their expenses, as determined by the Board of
Directors.  Currently the Directors receive no compensation
other than an annual retainer paid at the rate of $20,000 per
year, with the Chairman receiving $21,500.  Directors and
Directors Emeriti receive a per diem of $250 with a $500
minimum, plus expenses incurred while traveling to and from
and attending meetings of the Board of Directors or other
official meetings or conferences.  Pursuant to separate
agreements, Gold Kist has arranged to provide life insurance
benefits to qualifying directors emeriti and to make available
health insurance and other medical benefits for Gold Kist
directors and directors emeriti as are available to employees
of Gold Kist from time to time pursuant to the Association
group insurance program.

   Compensation Committee Interlocks and Insider
Participation.  Director W. P. Smith, Jr., Fred K. Norris, Jr.
and Dan Smalley serve as members of the Association's
Compensation Committee.

Item 12.  Security Ownership of Certain Beneficial Owners and
          Management.

   Not Applicable.

Item 13.  Certain Relationships and Related Transactions.

   The Directors of Gold Kist are members of the Association
and, during the fiscal year ended June 27, 1998, have had
dealings in the ordinary course of business with Gold Kist as
purchasing or marketing patrons.  See Business (and
Properties) -- Patronage Refunds.

                            PART IV
                               
Item 14. Exhibits, Financial Statement Schedules, and Reports
         on Form 8-K.

     (a)1.Index to Consolidated Financial Statements

          Consolidated Financial Statements:

          Independent Auditors' Reports

          Consolidated Balance Sheets - June 28, 1997 and
          June 27, 1998

          Consolidated Statements of Operations-Years Ended
          June 29, 1996, June 28, 1997 and June 27, 1998

          Consolidated Statements of Patrons' and Other
          Equity-Years Ended June 29, 1996, June 28, 1997
          and June 27, 1998

          Consolidated Statements of Cash Flows-Years ended
          June 29, 1996, June 28, 1997 and June 27, 1998

          Notes to Consolidated Financial Statements

     (a)2.Financial Statement Schedules:

          Gold Kist Inc.

          Financial Statement Schedule:

          II. Valuation Reserves-Years Ended June 29, 1996
              June 28, 1997 and June 27, 1998
                                        
<TABLE>

                                 GOLD KIST INC.
                                        
                        Schedule II - Valuation Reserves
                                        
                          (Dollar Amounts in Thousands)
<CAPTION>


Column A       Column B            Column C            Column D       Column E
                                   Additions
               Balance at     Charge to      Charged                  Balance
               Beginning      Cost and       To Other                 At End
Description    Of Period      Expenses       Accounts  Deductions     Of Period
<S>            <C>            <C>            <C>       <C>            <C>

Deducted in the
consolidated
balance sheets
from the asset
to which it
applies:

Allowance for
doubtful
accounts:

June 29, 1996  $1,219         1,084          -         727(A)         1,576

June 28, 1997   1,576           336          -         486(A)         1,426

June 27, 1998   1,426         1,975          -         288(A)         3,113


(A) Represents accounts written off.


Allowance for
deferred tax
assets
valuation:

June 29, 1996  $1,984         -              -         578(C)         1,406

June 28, 1997   1,406         -              -         328(C)         1,078

June 27, 1998   1,078         58(B)          -         -              1,136


(B) Represents establishment of allowance for net operating deductions not
available for state income tax purposes.


(C) Represents estimate of net operating loss deductions that are realizable.
</TABLE>



(a)3.  Exhibits - Index of Exhibits

   Exhibits designated as previously filed with the Commission in the Index
   of Exhibits, below, are incorporated by reference into this Report.
<TABLE>
<CAPTION>

Designation
of Exhibit                              Document with Which        Designation
in this                                 Exhibit Was Previously   of such Exhibit
Report    Description of Exhibit        Filed with Commission    in that Document
<S>       <C>                           <C>                      <C>
B-2  Agreement of Merger, dated as of   Amendment to Schedule    Exhibit 3
     April 22, 1997, among              13D filed April 25, 1997
     Golden Poultry Company, Inc.,
     Gold Kist Inc., Agri International,
     Inc. and Golden Poultry Acquisition
     Corp.

B-3(a)    Restated and Amended          Annual Report on Form    Exhibit B-3(a)
          Articles of Incorpo-          10-K for the Fiscal
          ration of Registrant          Year ended June 26, 1993

B-3(b)    Current By-Laws of            Annual Report on Form    Exhibit B-3(b)
          Registrant, as amended        10-K for the Fiscal
          Year ended June 28, 1997

B-4(a)(1) Form of Indenture, dated      Registration filed on    Exhibit 4(a)(2)
          as of September 1, 1979,      Form S-1 (Registration
          governing the terms of the    No. 2-65587)
          Fifteen Year Subordinated
          Capital Certificates of
          Interest (Series B), including
          therein a table of contents
          and cross-reference sheet

B-4(a)(2) Form of First Supplemental    Registration filed on     Exhibit 4(a)(4)
          Indenture, dated as of        Form S-1 (Registration
          September 1, 1980, governing  No. 2-69267)
          the terms of the Fifteen
          Year Subordinated Capital
          Certificates of Interest
          (Series C)

B-4(a)(3) Form of Second Supplemental   Registration filed on     Exhibit 4(a)(5)
          Indenture, dated as of        Form S-2 (Registration
          September 1, 1982, governing  No. 2-79538)
          the terms of the Fifteen
          Year Subordinated Capital
          Certificates of Interest
          (Series D)


B-4(b)(1) Form of Indenture, dated      Registration filed on     Exhibit 4(b)(2)
          as of September 1, 1979,      Form S-1 (Registration
          governing the terms of        No. 2-65587)
          the Ten Year Subordinated
          Capital Certificates of
          Interest (Series B),
          including a table of contents
          and cross-reference sheet

B-4(b)(2) Form of First Supplemental    Registration filed on     Exhibit 4(b)(4)
          Indenture, dated as of        Form S-1 (Registration
          September 1, 1980, governing  No. 2-69267)
          the terms of the Ten Year
          Subordinated Capital
          Certificates of Interest
          (Series C)

B-4(b)(3) Form of Second Supplemental   Registration filed on     Exhibit 4(b)(5)
          Indenture, dated as of        Form S-2 (Registration
          September 1, 1982, governing  No. 2-79538)
          the terms of the Ten Year
          Subordinated Capital
          Certificates of Interest
          (Series D)

B-4(c)    Form of Indenture, dated as   Registration filed on     Exhibit 4(c)
          of September 1, 1985,         Form S-2 (Registration
          governing the terms of the         No. 33-428)
          Seven Year Subordinated
          Capital Certificates of
          Interest (Series A), including
          therein a table of contents,
          cross-reference sheet, and
          form of Seven Year Subordinated
          Capital Certificates of Interest

B-4(d)(1) Form of Indenture, dated      Registration filed on     Exhibit 4(c)(2)
          as of September 1, 1979,      Form S-1 (Registration
          governing the terms of the    No. 2-65587)
          Five Year Subordinated
          Capital Certificates of
          Interest (Series A),
          including therein a table
          of contents and cross-
          reference sheet

B-4(d)(2) Form of First Supplemental    Registration filed on     Exhibit 4(d)(2)
          Indenture, dated as of        Form S-1 (Registration
          September 1, 1980, governing  No. 2-69267)
          the terms of the Five Year
          Subordinated Capital Certifi-
          cates of Interest (Series B)

B-4(d)(3) Form of Second Supplemental   Registration filed on     Exhibit 4(d)(3)
          Indenture, dated as of        Form S-2 (Registration
          September 1, 1982, governing  No. 2-79538)
          the terms of the Five Year
          Subordinated Capital Certifi-
          cates of Interest (Series C)

B-4(e)    Form of Indenture, dated as of Registration filed on     Exhibit 4(f)(2)
          September 1, 1985, governing   Form S-2 (Registration
          the terms of the Three Year    No. 33-428)
          Subordinated Capital Certifi-
          cates of Interest (Series A),
          including therein a table of
          contents, cross-reference
          sheet, and form Capital
          Certificates of Interest

B-4(f)    Form of Indenture, dated      Registration filed on     Exhibit 4(g)
          September 1, 1980, governing  Form S-1 (Registration
          the terms of the Two Year     No. 2-69267)
          Subordinated Capital Certifi-
          cates of Interest (Series A),
          including therein a table of
          contents and cross-reference
          sheet

B-4(g)(1) Form of Indenture, dated as of     Registration filed on     Exhibit 4(h)(1)
          September 1, 1985, governing       Form S-2 (Registration
          the terms of the One Year          No. 33-428)
          Subordinated Large Denomi-
          nation Loan Certificate
          (Series A), including therein
          a table of contents, cross-
          reference sheet, and form of
          One Year Subordinated Large
          Denomination Loan Certificates


B-4(g)(2) Form of Indenture, dated as of     Registration filed on     Exhibit 4(d)(2)
          September 1, 1979, governing       Form S-1 (Registration
          the terms of the One Year          No. 2-65587)
          Subordinated Loan Certificates
          (Series B), including therein
          a table of contents and
          cross-reference sheet

B-4(g)(3) Form of First Supplemental         Registration filed on    Exhibit 4(f)(2)
          Indenture, dated as of             Form S-1 (Registration
          September 1, 1980, governing       No. 2-69267)
          the terms of the One Year
          Subordinated Loan Certificates
          (Series C)

B-4(h)    Form of Indenture, dated as   Registration filed on    Exhibit 4(i)
          of September 1, 1985,         Form S-2 (Registration
          governing the terms of the    No. 33-428)
          Six Month Subordinated
          Large Denomination Loan
          Certificate (Series A),
          including therein a table of
          contents, cross-reference
          sheet, and form of Six Month
          Subordinated Large Denomination
          Loan Certificates

B-4(i)    Agreement to furnish copies   Registration filed on    Exhibit 4(h)
          of constituent instruments    Form S-1 (Registration
          defining the rights of the    No. 2-59958)
          holders of certain industrial
          revenue bonds

B-4(j)(1) Note Agreement with the       Quarterly Report on      Exhibit B-4(q)(1)
          Prudential Insurance          Form 10-Q for the
          Company of America dated      Fiscal Quarter ended
          as of November 4, 1988        December 31, 1988

B-4(j)(2) Note Agreement with           Quarterly Report on      Exhibit B-4(q)(2)
          Pruco Life Insurance          Form 10-Q for the
          Company dated as of           Fiscal Quarter ended
          November 4, 1988              December 31, 1988


B-4(j)(3) Amendment dated as of         Registration filed on    Exhibit 4(l)(5)
          January 9, 1991, to Note      Form S-2 (Registration
          Agreements with the Prudential     No. 33-42900)
          Insurance Company of America
          and Pruco Life Insurance
          Company

B-4(j)(4) Note Agreement with the       Registration filed on    Exhibit 4(l)(6)
          Prudential Insurance Company  Form S-2 (Registration
          of America, dated as of       No. 33-42900)
          June 3, 1991

B-4(j)(5) Amendment dated as of June 26,     Registration filed on    Exhibit 4(l)(7)
          1992, to Note Agreements with      Form S-2 (Registration
          the Prudential Insurance Company   No. 33-52268)
          of America

B-4(j)(6) Amendment dated July 14, 1993,     Registration filed on    Exhibit 4(l)(8)
          to Note Agreements with the        Form S-2 (Registration
          Prudential Insurance Company of    No. 33-69204)
          America and Pruco Life Insurance
          Company

B-4(j)(7) Note Purchase and Private Shelf    Registration filed on    Exhibit 4(j)(9)
          Agreement, dated as of February    Form S-2
          11, 1997, with the Prudential      (Registration No. 333-36291)
          Insurance Company of America

B-4(j)(8) Amendment dated May 13, 1997       Registration filed on    Exhibit 4(j)(10)
          to Note Agreements with Prudential Form S-2
          Insurance Company of America       (Registration No. 333-36291)
          and with Pruco Life Insurance
          Company; Note Agreement dated
          as of June 3, 1991 with the
          Prudential Insurance Company of
          America; and Note Purchase and
          Private Shelf Agreement with the
          Prudential Insurance Company of America

B-10(a)   Form of Deferred Compensation      Registration filed on    Exhibit 11(d)
          Agreement between Gold Kist        Form S-1 (Registration
          Inc. and certain executive         No. 2-59958)
          officers*

B-10(b)(1)Gold Kist Management Bonus         Registration filed on    Exhibit 10(b)
          Program*                           Form S-1 (Registration
                                             No. 2-69267)

B-10(b)(2)Amended Gold Kist Management       Registration filed on    Exhibit 10(b)(2)
          Bonus Program*                     Form S-2 (Registration
          No. 2-79538)

B-10(b)(3)Form of Gold Kist Supplemental     Registration filed on    Exhibit 10(b)(3)
          Executive Retirement Income        Form S-2 (Registration
          non-qualified deferred             No. 33-9007)
          compensation agreement between
          Gold Kist and certain execu-
          tive officers and Resolution
          of Gold Kist Board of Directors
          authorizing the Supplemental
          Executive Retirement Plan*

B-10(b)(4)Resolution of Gold Kist Board      Registration filed on    Exhibit 10(b)(4)
          of Directors authorizing the       Form S-2 (Registration
          Gold Kist Special Award Plan*      No. 33-9007)

B-10(b)(5)Form of Gold Kist Executive's      Registration filed on    Exhibit 10(b)(5)
          Change in Control Agreement        Form S-2 (Registration
          between Gold Kist and certain      No. 33-31164)
          officers and resolution of
          Gold Kist Board of Directors
          authorizing the Officers
          Contingency Plan*

B-10(b)(6)Form of Directors Change           Registration filed on    Exhibit 10(b)(6)
          in Control Agreement               Form S-2 (Registration
          between Gold Kist and              No. 33-36938
          Directors of Gold Kist*

B-10(b)(7)Form of Director                   Registration filed on    Exhibit 10(b)(7)
          Emeritus Life Benefits             Form S-2 (Registration
          Agreement*                         No. 33-36938)

B-10(b)(8)Form of Director Emeritus          Registration filed on    Exhibit 10(b)(8)
          Agreement for Medical Benefits*    Form S-2 (Registration
                                             No. 33-36938)

B-10(b)(9)Gold Kist Executive Savings        Registration filed on    Exhibit 10(b)(9)
          Plan, as amended *                 Form S-2 (Registration
                                             No. 33-62869)

B-10(b)(10)Gold Kist Director Savings        Registration filed on    Exhibit 10(b)(10)
          Plan, as amended *                 Form S-2 (Registration
                                             No. 33-62869)

B-10(b)(11)Gold Kist Split Dollar Life       Registration filed on    Exhibit 10(b)(11)
          Insurance Plan *                   Form S-2 (Registration
                                             No. 33-62869)

B-10(c)(l)Form of Membership, Marketing,     Registration filed on    Exhibit 13(b)
          and/or Purchasing Agreement of     Form S-1 (Registration
          Gold Kist Inc., Atlanta,           No. 2-59958)
          Georgia

B-10(c)(2)Form of Membership, Marketing,     Registration filed on    Exhibit 10(c)(2)
          and/or Purchasing Agreement of     Form S-1 (Registration
          Gold Kist Inc., Atlanta,           No. 2-74205)
          Georgia, as revised October
          17, 1980

B-10(c)(3)Form of Membership, Marketing,     Registration filed on    Exhibit 10(c)(3)
          and/or Purchasing Agreement of     Form S-2 (Registration
          Gold Kist Inc., Atlanta,           No. 33-428)
          Georgia, as revised November
          l, l984

B-10(c)(4)Form of Membership, Marketing,     Registration filed on    Exhibit 10(c)(4)
          and/or Purchasing Agreement        Form S-2 (Registration
          of Gold Kist Inc., Atlanta,        No. 33-24623)
          Georgia, revised October
          29, 1987

B-10(c)(5)Form of Membership, Marketing,     Registration filed on    Exhibit 10(c)(5)
          and/or Purchasing Agreement of     Form S-2 (Registration
          Gold Kist Inc., Atlanta, Georgia,  No. 33-42900)
          revised August 21, 1991

B-10(c)(6)Form of Membership, Marketing,     Registration filed on    Exhibit 10(c)(6)
          and/or Purchasing Agreement of     Form S-2
          Gold Kist Inc., Atlanta, Georgia   (Registration No. 333-36291)
          revised July 9, 1997


B-10(d)   CF Industries, Inc., Member        Registration filed on    Exhibit 13(j)
          Product Purchase Agreement         Form S-2 (Registration
                                             No. 2-59958)

B-10(e)(1)General Partnership Agreement      Registration filed on    Exhibit 10(h)(1)
          (GC Properties) between Gold       Form S-2 (Registration
          Kist Inc. and Cotton States        No. 33-428)
          Mutual Insurance Company,
          dated as of July 1, 1984

B-10(e)(2)Lease from GC Properties,          Registration filed on    Exhibit 10(h)(2)
          dated December 11, 1984,           Form S-2 (Registration
          for home office building           No. 33-428)
          space

B-10(f)(1)General Partnership Agreement      Annual Report on Form    Exhibit B-10(f)(1)
          (Golden Peanut Company)            10-K for the Fiscal
          between Gold Kist and Archer-      Year Ended June 30, 1987
          Daniels-Midland Company, dated
          as of December 17, 1986

B-10(f)(2)Amended and Restated Partnership   Registration filed on    Exhibit 10(f)(2)
          Agreement (Golden Peanut Company)  Form S-2 (Registration
          between Gold Kist Inc., Archer-    No. 33-31164)
          Daniels-Midland Company and
          Alimenta Processing Corporation,
          dated as of March 1, 1989

B-10(f)(3)Amendment to Amended and           Registration filed on    Exhibit 10(f)(3)
          Restated Partnership Agreement     Form S-2 (Registration
          (Golden Peanut Company) between    No. 33-42900)
          Gold Kist Inc., Archer-Daniels-
          Midland Company and Alimenta
          Processing Corporation, dated
          as of June 30, 1991

B-10(f)(4)Master Commercial Facilities       Annual Report on Form    Exhibit B-10(f)(2)
          Lease Agreement between Gold       10-K for the Fiscal
          Kist and Golden Peanut Company     Year Ended June 30, 1987
          dated as of December 17, 1986

B-10(g)   Grain Procurement Agreement        Annual Report on Form    Exhibit B-10(h)
          between Gold Kist and Archer-      10-K for the Fiscal
          Daniels-Midland Company, dated     Year Ended June 30, 1987
          August 31, 1987

B-10(h)   Guaranty dated December 18,        Registration filed on    Exhibit 4(o)
          1992 by Gold Kist in favor of      Form S-2 (Registration
          NationsBank of Georgia, N.A.       No. 33-69204)

B-10(i)   Credit Agreement dated as of
          August 4, 1998, with various banks
          and lending institutions, as lendors,
          and Cooperatieve Centrale Raiffeisen-
          Boerenleen Bank B.A., New York
          Branch, as agent

B-10(j)   Asset Purchase Agreement dated     Report filed on Form     Exhibit 10(k)
          as of July 23, 1998, between       8-K dated as of
          Southern States Cooperative,       July 23, 1998
          Incorporated and Gold Kist Inc.

B-21      Subsidiaries of the Registrant     Annual Report on Form    Exhibit B-21
                                             10-K for the Fiscal Year
                                             ended June 28, 1997

B-27 Financial Data Schedule
</TABLE>

*Plans and arrangements pursuant to which executive officers and
directors of the Association receive compensation.

     (b)Reports on Form 8-K. - No reports on Form 8-K were
filed during the last quarter of the fiscal year ended June
27, 1998.  The Association filed Form 8-K dated as of July 23,
1998, to report the execution of an Asset Purchase Agreement
with Southern States, pursuant to which the Association has
agreed to sell and assign, and Southern States has agreed to
purchase and assume, the assets and certain of the obligations
of the Association's agricultural inputs business.

SIGNATURES - Pursuant to the requirements of Section 13 or
15(d) 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.
                             
                             GOLD KIST INC.

Date:  September 24, 1998    By:/s/ G. O. Coan
                             G. O. Coan, Chief Executive
                             Officer (Principal
                             Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and
on the dates indicated.


<TABLE>
<CAPTION>

SIGNATURE             TITLE                       DATE
<S>                  <C>                          <C>


/s/ G. O. Coan       Chief Executive Officer      September 24, 1998
G. O. COAN           (Principal Executive Officer)

/s/ Peter J. Gibbons  Vice President-Finance      September 24, 1998
PETER J. GIBBONS     (Principal Financial Officer)

/s/ W. F. Pohl, Jr.  Controller (Principal        September 24, 1998
W. F. POHL, JR.      Accounting Officer)

/s/ W. P. Smith, Jr.      Director                September 21, 1998
W. P. SMITH, JR.

/s/ Fred K. Norris, Jr.   Director                September 21, 1998
FRED K. NORRIS, JR.

/s/ Dan Smalley            Director               September 21, 1998
DAN SMALLEY

/s/ Phil Ogletree, Jr.      Director              September 21, 1998
PHIL OGLETREE, JR.

/s/ James E. Brady, Jr.     Director              September 21, 1998
JAMES E. BRADY, JR.

/s/ A. Jack Nally           Director              September 21, 1998
A. JACK NALLY

/s/ W. Kenneth Whitehead    Director              September 21, 1998
W. KENNETH WHITEHEAD

/s/H. Michael Davis        Director               September 21, 1998
H. MICHAEL DAVIS

/s/ Herbert A. Daniel, Jr.  Director              September 21, 1998
HERBERT A. DANIEL, JR.

</TABLE>

                                INDEX TO EXHIBITS
                                        
                                                  Sequentially
Exhibit                                           Numbered
Number     Description                            Page

B-10(i) Credit Agreement dated
        as of August 4, 1998,
        with various banks and
        lending institutions, as lendors,
        and Cooperatieve Centrale Raiffeisen-
        Boerenleen Bank B.A., New York
        Branch, as agent

B-27    Financial Data Schedule