EXHIBIT 10.40


                              EMPLOYMENT AGREEMENT


         THIS AGREEMENT is made effective as of January 14, 2000 by and between
John D. Johnson (hereafter "Johnson") and Cenex Harvest States Cooperatives, a
Minnesota cooperative corporation (together with all affiliates, the "Company").

         WHEREAS, Johnson is an integral part of the Company's management;

         WHEREAS, the Company is contemplating the possible full consolidation
         of its business with the business of Farmland Industries, Inc. through
         a merger or other similar transaction (the "Consolidation") and desires
         to assure both itself and Johnson of continuity in the event of the
         Consolidation; and

         WHEREAS, the Company or its successor, after that Consolidation,
         intends to appoint Johnson as its Chief Executive Officer on or before
         January 1, 2004;

         NOW, THEREFORE, it is hereby agreed to by and between the parties as
follows:

1.       Employment

         (a)      The Company hereby agrees to and does hereby employ Johnson as
                  President and General Manager, and Johnson hereby agrees to
                  accept employment with the Company as President and General
                  Manager, for the period set forth in Paragraph 2 below (the
                  period of employment) upon the other terms and conditions set
                  forth in this Agreement.

         (b)      Upon the Company's consolidation with Farmland Industries,
                  Inc., Johnson will be appointed President of the consolidated
                  entity. Each of the Chief Executive Officer and Johnson will
                  have direct reports from the Senior Management team, as set
                  forth on Exhibit B. The Chief Executive Officer shall not
                  demote or discharge Johnson, unilaterally change the initially
                  agreed reporting relationships, or otherwise cause a material
                  adverse change to Johnson's status without the agreement of
                  the Executive Committee of the Board of Directors. If Johnson
                  claims that any such change in his status has occurred, he
                  will be entitled to seek relief from the Executive Committee
                  of the Board of Directors. If the Executive Committee supports
                  Johnson's position, it shall remedy the change in status. If
                  the Executive Committee does not support Johnson's position,
                  he will be entitled to resign his employment and receive the
                  severance benefits described in paragraph 5(b) below.

2.       Period of Employment; Termination of Agreement

         The period of employment shall commence on the date of this Agreement
         and, subject to the provisions of Paragraphs 5 and 6 below, shall
         continue for a rolling three (3) year

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         period, provided that Johnson's employment may be earlier terminated by
         either party subject to the rights and obligations of the parties set
         forth herein.

3.       Performance

         Throughout the period of employment, Johnson agrees to devote his full
         time and attention during normal business hours to the business of the
         Company, except for earned vacations and except for illness or
         incapacity.

4.       Compensation

         (a)      For all services to be rendered by Johnson in any capacity
                  during the period of employment, Johnson shall be paid as
                  annual compensation a base salary of at least $600,000. The
                  Board will annually review Johnson's annual compensation and
                  determine what is appropriate for a cost of living increase,
                  merit increase, and/or increase in responsibilities or duties.

         (b)      During the term of his employment hereunder, Johnson shall be
                  compensated for fiscal year 2000 (ending August 31, 2000) with
                  annual variable pay of the maximum level eligible of 90% of
                  his base salary. The long term variable pay including the
                  years 1999, 2000, and 2001 shall be at the targeted level of
                  66.6% of the bonus potential. Johnson shall further be
                  entitled to any additional employee benefits separately made
                  available to him from time to time by the Board in its
                  discretion.

         (c)      The Company shall bear such ordinary and necessary business
                  expenses incurred by Johnson in performing his duties
                  hereunder as the Company determines from time to time,
                  provided that Johnson accounts promptly for such expenses to
                  the Company in the manner prescribed from time to time by the
                  Company.

5.       Termination with Severance Allowance

         (a)      Termination by the Company Not for Cause. In the event of
                  termination of the employment of Johnson by the Company during
                  the period of employment for any reason other than for cause,
                  as defined in paragraph 6(a), death or disability, the Company
                  shall:

                  (i) pay Johnson a severance allowance in the amount of 2.99
                  times the greater of

                                    (A) his then-current base salary plus
                           short-term and long-term target bonus ("Target
                           Bonus"), or

                                    (B) the amount payable in base salary plus
                           Target Bonus for calendar year 1999;

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                  (ii) provide a five-year enhancement to his retirement plan,
                  except that no such enhancement shall be provided if the
                  termination occurs after Johnson has attained the age of 60;

                  (iii) include the amount of the severance paid as salary for
                  purposes of pension cash balance calculation;

                  (iv) bear the entire cost of Johnson's COBRA family health
                  insurance coverage for one (1) year;

                  (v) continue his family health insurance thereafter up to age
                  65 (or any revised age for Medicare eligibility), upon
                  Johnson's payment of the retiree premium rate, except for any
                  period during which Johnson is eligible for coverage, without
                  any exclusions for preexisting conditions, through another
                  employee group plan; and

                  (vi) continue his existing executive perquisites for a period
                  of three (3) years.

         Said severance allowance shall be in lieu of all other severance
         payable to Johnson under Company severance policies.

         (b)      Termination by Johnson if the Consolidation is closed on or
                  before December 31, 2001. If the Consolidation is closed on or
                  before December 31, 2001; and if (i) Johnson is not appointed
                  to the position of Chief Executive Officer of the consolidated
                  Company or its successor on or before January 1, 2004, or (ii)
                  Johnson resigns his employment at any time between the closing
                  of the Consolidation and December 31, 2003 pursuant to
                  paragraph 1(b), the Company shall:

                  (i) pay Johnson a severance allowance in the amount of 2.99
                  times the greater of

                           (A) his then-current base salary plus Target Bonus,
                           or

                           (B) the amount payable in base salary plus Target
                           Bonus for calendar year 1999;

                  (ii) provide a five-year enhancement to his retirement plan,
                  except that no such enhancement shall be provided if the
                  termination occurs after Johnson has attained the age of 60;

                  (iii) include the amount of the severance paid as salary for
                  purposes of pension cash balance calculation;

                  (iv) bear the entire cost of Johnson's COBRA family health
                  insurance coverage for one (1) year;

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                  (v) continue his family health insurance thereafter up to age
                  65 (or any revised age for Medicare eligibility), upon
                  Johnson's payment of the retiree premium rate, except for any
                  period during which Johnson is eligible for coverage, without
                  any exclusions for preexisting conditions, through another
                  employee group plan; and

                  (vi) continue his existing executive perquisites for a period
                  of three (3) years.

         Said severance allowance shall be in lieu of all other severance
         payable to Johnson under Company severance policies.

         (c) Termination by Johnson if the Consolidation is not closed on or
         before December 31, 2000. If the Consolidation is not closed on or
         before December 31, 2000 and Johnson is not offered the position of
         Chief Executive Officer of the Company on or before December 31, 2000,
         this shall be deemed an event of termination without cause. In that
         event, the Company shall:

                  (i) pay Johnson a severance allowance in the amount of 2.99
                  times the greater of

                           (A) his then-current base salary plus Target Bonus,
                           or

                           (B) the amount payable in base salary plus Target
                           Bonus for calendar year 1999;

                  (ii) provide a five-year enhancement to his retirement plan,
                  except that no such enhancement shall be provided if the
                  termination occurs after Johnson has attained the age of 60;

                  (iii) include the amount of the severance paid as salary for
                  purposes of pension cash balance calculation;

                  (iv) bear the entire cost of Johnson's COBRA family health
                  insurance coverage for one (1) year;

                  (v) continue his family health insurance thereafter up to age
                  65 (or any revised age for Medicare eligibility), upon
                  Johnson's payment of the retiree premium rate, except for any
                  period during which Johnson is eligible for coverage, without
                  any exclusions for preexisting conditions, through another
                  employee group plan; and

                  (vi) continue his existing executive perquisites for a period
                  of three (3) years.

         Said severance allowance shall be in lieu of all other severance
         payable to Johnson under Company severance policies.

         (d) Additional Payments. In the event that Johnson becomes entitled to
         payments under paragraph 5(a), 5(b), or 5(c) of this Agreement, the
         Company shall cause its independent auditors promptly to review, at the
         Company's sole expense, the applicability

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         of Section 4999 of the Code to such payments. If such auditors shall
         determine that any payment or distribution of any type by the Company
         to Johnson or for his benefit, whether paid or payable or distributed
         or distributable pursuant to the terms of this Agreement or otherwise
         (the "Total Payments"), would be subject to the excise tax imposed by
         Section 4999 of the Code, or any interest or penalties with respect to
         such excise tax (such excise tax, together with any such interest and
         penalties, are collectively referred to as the "Excise Tax"), then
         Johnson shall be entitled to receive an additional cash payment (a
         "Gross-Up Payment") within 30 days of such determination equal to an
         amount such that after payment by Johnson of all taxes (including any
         interest or penalties imposed with respect to such taxes), including
         any Excise Tax, imposed upon the Gross-Up Payment, Johnson would retain
         an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
         the Total Payments. For purposes of the foregoing determination,
         Johnson's tax rate shall be deemed to be the highest statutory marginal
         state and Federal tax rate (on a combined basis) (including Johnson's
         share of F.I.C.A. and Medicare taxes) then in effect. If no
         determination by the Company's auditors is made prior to the time a tax
         return reflecting the Total Payments is required to be filed by
         Johnson, he will be entitled to receive a Gross-Up Payment calculated
         on the basis of the Total Payments reported by Johnson in such tax
         return, within 30 days of the filing of such tax return. In all events,
         if any tax authority determines that a greater Excise Tax should be
         imposed upon the Total Payments than is determined by the Company's
         independent auditors or reflected in Johnson's tax return pursuant to
         this Section 6, Johnson shall be entitled to receive the full Gross-Up
         Payment calculated on the basis of the amount of Excise Tax determined
         to be payable by such tax authority from the Company within 30 days of
         such determination.

         (e) Request and Release. In order to obtain the severance allowance
         provided for in this Agreement, Johnson must submit a request for
         severance and must sign a complete release of all claims. The Company
         shall have no obligation to pay any severance allowance unless and
         until Johnson shall have submitted the request for severance and signed
         a full and complete release of all claims, to be drafted by Legal
         Counsel for the Company.

6.       Termination without Severance Allowance

         (a)      Termination by the Company for Cause. The Company may
                  terminate Johnson's employment for cause without incurring
                  further obligation. For the purpose of this Agreement,
                  termination of Johnson's employment shall be deemed to have
                  been for cause only:

                  (i)      if termination of Johnson's employment shall have
                           been the result of an act or acts of fraud, theft or
                           embezzlement on the part of Johnson which, if
                           convicted, would constitute a felony and which
                           results or which is intended to result directly or
                           indirectly in gain or personal enrichment of Johnson
                           at the expense of the Company; or

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                  (ii)     if termination of Johnson's employment results from
                           Johnson's willful and material misconduct, including
                           willful and material failure to perform his duties,
                           and Johnson has been given written notice by the
                           Board of Directors with respect to such and Johnson
                           does not cure within a reasonable time; or

                  (iii)    if there has been a breach by Johnson during the
                           period of employment of the provisions of Paragraph 3
                           above, relating to the time to be devoted to the
                           affairs of the Company, and with respect to any
                           alleged breach of Paragraph 3 hereof, Johnson shall
                           have substantially failed to remedy such alleged
                           breach within thirty days from Johnson's receipt of
                           notice from the Board of Directors.

         (b)      Nonrenewal of Agreement. Except as otherwise provided in
                  paragraph 5(b) and/or 5(c) above, the Company may elect not to
                  renew this Agreement, and thereby to terminate Johnson's
                  employment hereunder without any severance obligations, upon
                  at least three (3) years' prior written notice to Johnson.

         (c)      Termination by Johnson. Johnson shall have the right to
                  terminate his employment in his sole discretion, with or
                  without cause, by providing thirty (30) days notice of his
                  intent to resign. Except as otherwise provided in paragraph
                  5(b) and/or 5(c) above, Johnson shall in that event receive no
                  further compensation or severance allowance.

         (d)      Death. In the event of Johnson's death during the period of
                  employment, the legal representative of Johnson shall be
                  entitled to the base or fixed salary provided for in Paragraph
                  4(a) above for the month in which death shall have occurred,
                  at the rate being paid at the time of death, and the period of
                  employment shall be deemed to have ended as of the close of
                  business on the last day of the month in which death shall
                  have occurred but without prejudice to any benefits, such as
                  life insurance, otherwise due in respect of Johnson's death.

         (e)      Disability

                  (i)      In the event of Johnson's disability during the
                           period of employment, Johnson shall be entitled to an
                           amount equal to the base or fixed salary provided for
                           in Paragraph 4(a) above, at the rate being paid at
                           the time of the commencement of disability, for the
                           period of such disability but not in excess of twelve
                           (12) months from the beginning of the period that
                           establishes such disability, as described in
                           Paragraph 6(e)(iii) below.

                  (ii)     The amount of any payments due under Paragraph
                           6(e)(i) shall be reduced by any payments to which
                           Johnson may be entitled for the same period because
                           of disability under any disability or pension plan of
                           the Company or of any division, subsidiary, or
                           affiliate thereof, or as the result of

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                           workers' compensation or nonoccupational disability
                           payments received from any government entity.

                  (iii)    The term "Disability" as used in this Agreement,
                           shall mean an illness or accident occurring during
                           the period of employment which prevents Johnson from
                           performing the essential functions of his job under
                           this Agreement, with reasonable accommodations (as
                           defined by federal and Minnesota disability laws),
                           for a period of six consecutive months. The period of
                           employment shall be deemed to have ended as of the
                           close of business on the last day of such six-month
                           period but without prejudice to any payments due
                           Johnson from any disability policy or disability
                           insurance.

7.       Performance Incentive

         If the Company and Farmland Industries, Inc. complete the Consolidation
         prior to December 31, 2001, and Johnson has not by then resigned or
         been terminated for cause, Johnson shall become eligible to receive a
         Performance Incentive payment in an aggregate amount equal to his base
         salary plus short-term and long-term target bonus for calendar year
         1999. The Performance Incentive shall be payable, in part or in whole,
         upon attainment of the objectives set forth in Exhibit A.

8.       Noncompetition

         Johnson agrees that during the term of his employment and thereafter
         for a period of two (2) years, he will not directly or indirectly
         engage in or carry on a business that is in direct competition with any
         significant business unit of the Company as conclusively determined by
         the Board of Directors. Further, Johnson agrees that during this same
         period of time he will not act as an agent, representative, consultant,
         officer, director, independent contractor or employee of any entity or
         enterprise that is in direct competition with any significant business
         unit of the Company as conclusively determined by the Board of
         Directors.

9.       Successor in Interest

         This Agreement and the rights and obligations hereunder shall be
         binding upon and inure to the benefit of the parties hereto and their
         respective legal representatives, and shall also bind and inure to the
         benefit of any successor of the Company by merger or consolidation or
         any purchaser or assignee of all or substantially all of its assets,
         but, except to any such successor, purchaser, or assignee of the
         Company, neither this Agreement nor any rights or benefits hereunder
         may be assigned by either party hereto.

10.      Construction

         Whenever possible, each provision of this Agreement shall be
         interpreted in such a manner as to be effective and valid under
         applicable law, but if any provision of this Agreement shall be
         prohibited by or invalid under applicable law, such provision shall be
         ineffective

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         only to the extent of such prohibition or invalidity without
         invalidating the remainder of such provision or the remaining
         provisions of this Agreement.

11.      Governing Laws

         This Agreement shall be governed by and construed and enforced in
         accordance with the laws of the State of Minnesota.

12.      Notices

         Any notice required or permitted to be given under this Agreement shall
         be sufficient if in writing, sent by Certified Mail, Return Receipt
         Requested:

         If to Johnson:             John D. Johnson
                                    10 Echo Lake Blvd.
                                    Mahtomedi, MN 55115

         If to the Company:         Chairman of the Board
                                    Cenex Harvest States Cooperatives
                                    5500 CENEX Drive
                                    Inver Grove Heights, MN 55077

         With a copy to:            General Counsel
                                    Cenex Harvest States Cooperatives
                                    5500 CENEX Drive
                                    Inver Grove Heights, MN 55077

13.      Entire Agreement

         This Agreement shall constitute the entire agreement between the
         parties, superseding the parties' Agreement of June 16, 1999 and any
         prior agreements. This Agreement may not be modified or amended, and no
         waiver shall be effective, unless by written document signed by the
         Chairman of the Board and Johnson.


         IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date set forth above.



                                        CENEX HARVEST STATES COOPERATIVES


  /s/ John D. Johnson                   By:     /s/ Steven Burnet
------------------------------               ------------------------------
     John D. Johnson
                                        Its:    Chairman of the Board
                                             ------------------------------

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