EXHIBIT 10.18

                                 LOAN AGREEMENT



            THIS LOAN AGREEMENT (the "Agreement") is made and entered into as of
November 5, 1997, by and between Alliance Farms Cooperative Association, a
Colorado cooperative association (the "Borrower"), and Farmland Industries,
Inc., a Kansas corporation (the "Lender").

                                   RECITALS:

            A.    The Borrower is engaged in the business of producing feeder
pigs for sale to its members and third parties.

            B.    Previously, the Borrower has constructed its feeder pig
production facilities by using the proceeds from a sale of a block of seventeen
(17) shares of its common stock, together with the proceeds of loans from
CoBank, ACB, pursuant to the CoBank Loan Documentation (as hereinafter defined).

            C.    The Borrower now desires to construct a feeder pig production
facility in Yuma County, Colorado, by using the proceeds of the Loan (as
hereinafter defined) from the Lender and the proceeds of additional advances
under the CoBank Loan Documentation.

                            SECTION 1 - DEFINITIONS

            1.1.  Defined Terms.  As used in this Loan Agreement, the following
terms have the following meanings:

          "Applicable Rate" means the per annum rate equal to the sum of (a) one
and one-quarter percent (1.25% or 125 basis points), plus (b) the National
Variable Rate.

            "Business Day" means a day other than a Saturday, Sunday or business
holiday in the State of Missouri.

            "CoBank" means CoBank, ACB (formerly National Bank for
Cooperatives), the Borrower's primary lender.

            "CoBank Loan Documentation" collectively means the Master Loan
Agreement (MLA No. E039), dated as of May 19, 1995, between CoBank and the
Borrower, as supplemented by the Multiple Advance Term Loan Supplement (Loan No.
E039T01), dated as of May 19, 1995, and the Revolving Term Loan Supplement (Loan
No. E039T02), dated as of May 19, 1995, and the related Loan Agreement (No.
T2300), dated as of September 21, 1994, between CoBank and the Borrower, as
amended by the Term Loan Amendment (Loan No. T2300A), dated as of May 19, 1995,
true and correct copies of which are attached hereto as Exhibit D.

            "Contractual Obligation" means, with respect to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or undertaking to which such person is a party or by which it or any of its
properties is bound.

          "Event of Default" means any of the events described in Section 7,
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.

          "GAAP" means generally accepted accounting principles in the United
States of America in effect from time to time.

            "Governmental Authority" means any nation or government, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled (through
stock or capital ownership or otherwise) by any of the foregoing.

            "Indebtedness" means, with respect to any Person, at a particular
time, any indebtedness, obligation or liability in respect of which such Person
is an obligor, whether matured or unmatured, liquidated or unliquidated, direct
or contingent, joint or several.

            "Lien" means and includes any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction).

          "Loan" shall have the meaning ascribed to such term in Section 2.1
hereof.

          "Mortgage" collectively means the Colorado Deed of Trust,
substantially in the form of Exhibit C, to be executed and delivered by the
Borrower to the Lender, and all additional deeds of trust and mortgages as may
from time to time be executed and delivered to or in favor of the Lender by the
Borrower.

          "National Variable Rate" means the rate most recently announced by
CoBank as its "National Variable Rate." The National Variable Rate is one of
CoBank's Applicable Rates and serves as a basis upon which effective rates of
interest are calculated for those loans making reference thereto, and is
evidenced by the recording thereof after its announcement in such internal
publication or publications as CoBank may designate.

            "Note" means the Promissory Note, substantially in the form of
Exhibit A, to be executed and delivered by the Borrower to the Lender.

            "Person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.

            "Requirement of Law" means, with respect to any Person, the
certificate of incorporation and bylaws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or any
interpretation thereof by a Governmental Authority, or any determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its properties or to which such Person
or any of its properties is subject.

            "Security Agreement" means the Security Agreement, substantially in
the form of Exhibit B, to be executed and delivered by the Borrower in favor of
the Lender.

            "Security Documents" means and includes the Security Agreement and
the Mortgage and all additional security agreements and pledge agreements as may
from time to time be executed and delivered to or in favor of the Lender by the
Borrower.

            1.2   Construction.  (a)  Unless otherwise defined therein, all
terms defined in this Loan Agreement shall have their respective herein defined
meanings when used in the Note, the Security Documents, or any certificate or
other document made or delivered pursuant hereto or thereto.  All such
certificates and documents and all Exhibits and Schedules attached to this Loan
Agreement are a part hereof for all purposes.

            (b)   Unless the context otherwise requires or unless otherwise
provided herein, the terms defined in this Loan Agreement which refer to a
particular agreement, instrument or document also refer to and include all
renewals, extensions, modifications, amendments, and restatements of such
agreement, instrument or document, provided, however, that nothing contained in
this sentence shall be construed to authorize any such renewal, extension,
modification, amendment or restatement other than in accordance with subsection
8.1.

            (c)   As used in this Loan Agreement and in the Note and in any
certificate or other document made or delivered pursuant to this Loan Agreement,
accounting terms, to the extent not defined in this Agreement, shall have the
respective meanings given to them under GAAP.

            (d)   Words of the masculine gender shall be deemed and construed to
include correlative words of the feminine and neuter genders.  Unless the
context shall otherwise indicate, words importing the singular number shall
include the plural and vice versa, and words importing person shall include
individuals, corporations, partnerships, joint ventures, associations,
joint-stock companies, trusts, unincorporated organizations and governments and
any agency or political subdivision thereof.

            (e)   The table of contents, captions and headings in this Loan
Agreement are for convenience only and in no way define, limit or describe the
scope or intent of any provisions or sections of this Loan Agreement.

            1.3   Calculations.  All interest and fees accruing under this Loan
Agreement, the Note or any Security Document or under any other document or
instrument delivered pursuant hereto or thereto shall be calculated on the basis
of actual days elapsed and a year of 360 days.


                        SECTION 2 - LENDING ARRANGEMENT

            2.1.  The Loan.  The Lender agrees, on the terms and subject to the
satisfaction of the conditions hereinafter set forth, to make a loan to the
Borrower, by means of one or more advances, in the aggregate principal amount of
One Million Three Hundred Sixty Thousand Dollars ($1,360,000.00) (the "Loan"),
which shall be evidenced by the Note.  The Loan shall be payable as to principal
and interest on the first to occur of (a) the closing date with respect to the
Borrower's next issuance and sale of a block of at least seventeen (17) shares
of its common stock, $.01 par value, and (b) the 5th day of November, 2007. The
Borrower shall not close any issuance and sale of shares of its common stock,
$.01 par value unless (a) not less than seventeen (17) shares of its common
stock, $.01 par value, are issued and sold in connection with such closing, and
(b) concurrently with the closing of the Borrower's next issuance and sale of a
block of at least seventeen (17) shares of its common stock, $.01 par value, the
Borrower shall cause the repayment in full of the principal and the accrued and
compounded interest due hereunder.

            2.2.  Interest.

            (a)   The Borrower agrees to pay interest on the unpaid principal
amount of the Loan from the date the proceeds thereof are made available to the
Borrower until maturity (whether by acceleration or otherwise) at a rate per
annum equal to the Applicable Rate.  The Applicable Rate shall be adjusted
annually based on the National Variable Rate in effect on the anniversary date
of this Loan Agreement.

            (b)   Overdue principal and, to the extent permitted by law, overdue
interest in respect of the Loan shall bear interest at a rate per annum equal to
the lower of two percent (2%) above the Applicable Rate in effect from time to
time or the maximum rate of interest allowed by applicable law; provided,
however, that in no event shall the Loan bear interest after maturity at a rate
per annum less than the rate of interest applicable thereto at maturity.

            (c)   Interest shall accrue from and including the date of the Loan
to but excluding the date of any repayment thereof and shall compound on the
first day of December, 1997, and the first day of each successive month
thereafter, and such accrued and compounded interest shall be payable, at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.

            2.3.  Payment.  Except as otherwise specifically provided herein,
all payments due under this Loan Agreement shall be made to the Lender not later
than 12:00 noon (central time) on the date when due and shall be made in lawful
money of the United States of America in immediately available funds at the
Lender's principal office.  Whenever any payment to be made hereunder or under
the Note shall be stated to be due on a day which is not a Business Day, payment
shall be made on the next successive Business Day with the same effect as though
made on the due date.

            2.4.  Prepayment.  The Borrower shall have the right to prepay all
or any portion of the Loan at any time and from time to time without premium or
penalty of any kind.

            2.5.  Additional Costs.  If, due to either (i) any Requirement of
Law or (ii) compliance by the Lender with any request from any Governmental
Authority, there shall be any increase in the cost to the Lender of agreeing to
make or making, funding or maintaining the Loan, the Borrower shall from time to
time, upon demand by the Lender, pay to the Lender additional amounts sufficient
to indemnify the Lender against such increased costs.  The determination of such
increased costs by the Lender shall be conclusive if made reasonably and in good
faith.

                   SECTION 3 - REPRESENTATIONS AND WARRANTIES

            To induce the Lender to make the Loan hereunder, the Borrower and
the Guarantor hereby represent and warrant to the Lender as follows:

            3.1.  Financial Condition.  The Borrower has furnished the Lender
with the audited balance sheet of the Borrower as at the end of the most recent
fiscal year of the Borrower and the related statement of operations, statement
of shareholder's equity and statement of cash flows for the fiscal year then
ended, which fairly present the financial position and results of operations of
the Borrower at the times and for the periods covered thereby, all in accordance
with GAAP, and which indicate all contingent liabilities which reasonably would
be expected to have a material adverse effect on the Borrower.

            3.2.  No Change.  Since the date of the end of the most recent
fiscal year of the Borrower, there has been no material adverse change in the
business, operations, assets or financial or other condition of the Borrower.

            3.3.  Corporate Existence; Compliance with Law. The Borrower is duly
organized and validly existing under applicable law, is qualified to do business
and is in good standing in each jurisdiction where required and has complied
with all laws necessary to conduct its business as presently conducted.

            3.4.  Corporate Power and Authority.  The Borrower has authority,
and has completed all proceedings and obtained all approvals and consents
necessary to execute, deliver, and perform this Loan Agreement, the Note, the
Security Documents and the transactions contemplated hereby and thereby.

            3.5.  Enforceable Obligations.  This Loan Agreement, the Note and
the Security Documents, when executed by the Borrower and delivered to the
Lender, will constitute the legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms, except as may
be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally.

            3.6.  No Legal Bar.  The execution, delivery and performance by the
Borrower of this Loan Agreement, the Note and the Security Documents, the
borrowings by the Borrower hereunder, the use of the proceeds thereof and the
granting of the security interests pursuant to the Security Documents will not
violate any Requirement of Law or any Contractual Obligation of the Borrower
(including, without limitation, Borrower's obligations under the CoBank Loan
Documentation) and will not result in or require the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation, except for the Liens created
pursuant to the Security Documents.

            3.7.  No Litigation.  No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the best
knowledge of the Borrower, threatened by or against the Borrower or against any
of its properties or revenues (a) with respect to this Loan Agreement, the Note
or any of the Security Documents or any of the transactions contemplated hereby
or thereby, or (b) which reasonably would be expected to have a material adverse
effect on the business, operations, assets or financial or other condition of
the Borrower .

            3.8.  No Default.  The Borrower is not in default under any
agreement to which it is a party or by which it may be bound (including, without
limitation, under the CoBank Loan Documentation) that reasonably would be
expected to materially adversely affect the Borrower or the Borrower's ability
to perform and observe the obligations binding on it under this Loan Agreement,
the Security Documents and the Note.

            3.9.  Taxes.  All tax returns required of the Borrower have been
filed, there is, to the Borrower's knowledge, no proposed tax assessment or
liability against the Borrower or its properties which would be material to the
Borrower, and no extension of time for the assessment of any tax of the Borrower
is in effect or has been requested, except as disclosed in financial statements
previously furnished to the Lender.

            3.10. Use of Proceeds.  All proceeds of the Loan shall be used by
the Borrower for the construction of a feeder pig production facility in Yuma
County, Colorado.

            3.11. Subsidiaries.  The Borrower, as of the date of this Loan
Agreement, has no subsidiaries.

            3.12. Security Documents.

            (a)   Each Security Document will be effective to create in favor of
the Lender a legal, valid and enforceable security interest in all right, title
and interest of the Borrower in the collateral described therein.  When
financing statements have been duly filed and, when appropriate, possession of
such collateral has been taken by the Lender, each of such Security Documents
shall constitute a fully perfected security interest in all right, title and
interest of the Borrower in such collateral (subject only to any security
interest held by CoBank).

            (b)   The Mortgage will be effective to grant to the Lender a legal,
valid and enforceable mortgage lien on the mortgaged property thereunder.  When
the Mortgage is duly  recorded and all recording fees and taxes in respect
thereof are paid, the Mortgage shall constitute a fully perfected first lien on
such mortgaged property, subject only to the encumbrances and exceptions to
title set forth therein and any lien held by CoBank.  All such interests of the
Lender shall, except as noted above, be superior in right to any Lien, existing
or future, which the Borrower or any third Person may have against the mortgaged
property or interests therein.

            3.13. Representations and Warranties to CoBank.  Each representation
and warranty set forth in the CoBank Loan Documentation is true and correct in
all material respects as of the date hereof, and the Borrower hereby makes and
confirms such representations and warranties to the Lender as if such
representations and warranties were contained in this Loan Agreement and
directly made to the Lender as of the date hereof.

                        SECTION 4 - CONDITIONS PRECEDENT

            The Lender shall have no obligation to make any advance of the Loan
hereunder unless, on or prior to the date of the Loan, the Lender shall have
received the following items (all in form satisfactory to the Lender):

            (a)  the Note, duly executed by the Borrower;

            (b)  the Security Agreement, duly executed by the Borrower;

            (c)  the Mortgage, duly executed by the Borrower; and

            (d)  any other documents, instruments and reports as the Lender
shall reasonably request including, without limitation, itemized statements and
evidence of expenses incurred by the Borrower in connection with the
construction contemplated by this Loan Agreement.

                       SECTION 5 - AFFIRMATIVE COVENANTS

            So long as any part of the indebtedness contemplated hereby shall
remain unpaid, the Borrower covenants and agrees as follows:

            5.1.  Financial Statements.  (a) The Borrower shall furnish to the
Lender, as soon as available and in any event within 120 days after the end of
each fiscal year of the Borrower, a copy of the annual audited balance sheet of
the Borrower, and the related statement of operations, statement of
shareholder's equity and statement of cash flows for such fiscal year, all
accompanied by the report by independent certified public accountants of
recognized standing acceptable to the Lender.

            (b)   The Borrower shall furnish to the Lender, as soon as available
and in any event within 45 days after the end of each of the first three
quarterly periods of each fiscal year of the Borrower, a copy of the unaudited
balance sheet of the Borrower as at the end of each such quarter and the related
statement of operations, statement of shareholder's equity and statement of cash
flows for such quarterly period and the portion of the fiscal year through such
date, setting forth in each case in comparative form the figures for the
previous fiscal year, certified by the Borrower's chief financial officer
(subject to normal year-end audit adjustments).

            (c)   All such financial statements shall be complete and correct in
all material respects and be prepared in reasonable detail and in accordance
with GAAP (consistent with the financial statements referred to in subsection
3.1) and applied consistently throughout the periods reflected therein.

            5.2.  Certificates.  The Borrower shall furnish to the Lender,
promptly after becoming aware thereof, notice of the occurrence of any event or
condition which would constitute an Event of Default under this Loan Agreement.

            5.3.   Contractual Obligations, Requirements of Law.  The Borrower
shall duly and promptly comply with each Contractual Obligation and Requirement
of Law to which it is subject or by which any of its properties is bound.

            5.4.  Payment of Indebtedness.  The Borrower shall pay, discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all its Indebtedness, except when the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower.

            5.5.  Maintenance of Existence.  The Borrower shall preserve and
maintain its corporate existence, franchises and privileges in its jurisdiction
of incorporation, and qualify and remain qualified as a foreign corporation in
each jurisdiction where such qualification is necessary and the failure to be so
qualified would materially adversely affect the business of the Borrower.

            5.6.  Insurance.  The Borrower shall maintain insurance reasonably
satisfactory to the Lender with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower operates.

            5.7.  Books and Records.  The Borrower shall maintain proper books
of record and account in accordance with GAAP.

            5.8.  Notices.  The Borrower shall promptly notify the Lender in
writing of the occurrence of any event which reasonably would be expected to
materially adversely affect the Borrower.

            5.9.  Further Assurances.  The Borrower shall execute and file all
such further instruments and perform such other acts as the Lender may
reasonably determine are necessary or advisable to maintain the priority of the
liens and security interests created by the Security Documents in all property
subject thereto.

                         SECTION 6 - NEGATIVE COVENANTS

            So long as any part of the Loan shall remain unpaid, the Borrower
covenants and agrees that the Borrower shall not, without the prior written
consent of the Lender, (a) take any actions, or permit to occur any events,
described in the Sections of the CoBank Loan Documentation presently titled
"Negative Covenants", regardless of whether CoBank otherwise agrees thereto, or
(b) supplement, amend or otherwise modify the CoBank Loan Documentation.

                              SECTION 7 - DEFAULT

            If any of the following events occurs and is continuing:

      (a)   failure by the Borrower to pay in full when due any amount of
     principal or interest on the Note; or

      (b)   failure by the Borrower to perform or observe any of the provisions
     contained in Section 6; or

      (c)   failure by the Borrower to perform or observe any of the provisions
     contained in any other subsection hereof if such failure is not cured
     within thirty (30) days of the Borrower's knowledge of the failure; or

      (d)   failure of any Security Document, for any reason, to be in full
     force and effect or any party thereto shall default in the observance or
     performance of any of the covenants or agreements contained therein or a
     default or an event of default shall occur under any Security Document; or

      (e)   any representation or warranty made by the Borrower herein shall be
     false or misleading in any material respect; or

      (f)   the Borrower shall default in the payment when due (subject to any
     applicable grace period), whether by acceleration or otherwise, of any
     other Indebtedness for borrowed money of, or guaranteed by, the Borrower
     (including, without limitation, any Indebtedness under the CoBank Loan
     Documentation), or the Borrower shall be in default (after giving effect to
     any applicable grace period), or an event of default has occurred, under
     the terms and conditions of the CoBank Loan Documentation or any other
     agreement or evidence of other Indebtedness of the Borrower; or

      (g)   any admission by the Borrower of its inability to pay its debts as
     they mature, the commencement of any bankruptcy, insolvency, arrangement,
     reorganization or other debt-relief proceedings by, or the dissolution,
     termination of existence or insolvency (however evidenced) of, the Borrower
     or any action authorized, taken or suffered by the Borrower with a view
     toward any of the same; or

      (h)   failure by the Borrower within sixty (60) days after the institution
     of any proceedings against the Borrower under any law relating to
     bankruptcy, insolvency, arrangement, reorganization or relief of debtors or
     similar law to have such proceeding dismissed;

then the Lender may, at its election and without demand or notice of any kind,
which are hereby expressly waived, refuse to make further advances of the Loan
hereunder, declare the unpaid balance of any outstanding Note and accrued
interest thereon immediately due and payable, proceed to collect same, and
exercise any and all other rights, powers and remedies given it by this Loan
Agreement, the Note, the Security Documents or by law or in equity.

                           SECTION 8 - MISCELLANEOUS

          8.1. Amendment and Waiver.  Neither this Loan Agreement, the Note or
any other instrument or document entered into in connection herewith, nor any
provisions hereof or thereof, may be supplemented, amended, modified, waived,
discharged or terminated orally, but only by an instrument in writing signed by
an authorized officer of the Borrower and of the Lender, respectively.

          8.2. Notices.  All notices, demands or other communications hereunder
shall be given or made in writing and shall be delivered personally, or sent by
telex, telecopier or registered or certified mail, postage prepaid, return
receipt requested, to the party or parties to whom they are directed at the
following addresses, or at such other addresses as may be designated by notice
from such party to all other parties.

     To the Borrower:    Alliance Farms Cooperative Association
                         3315 N. Oak Trafficway
                         P. O. Box 7305
                         Kansas City, Missouri 64116
                         Attention:  Paul Miller, Dept. 189

     To the Lender:      Farmland Industries, Inc.
                         3315 N. Oak Trafficway
                         P. O. Box 7305
                         Kansas City, Missouri 64116
                         Attention: Randy Vance, Dept. 160

Any notice, demand or other communication given in a manner prescribed in this
paragraph shall be deemed to have been delivered on receipt.

          8.3. No Waiver; Cumulative Remedies.  Any forbearance, failure, or
delay by the Lender in exercising any right, power or remedy shall not preclude
the further exercise thereof, and all of the Lender's rights, powers and
remedies shall continue in full force and effect until specifically waived in
writing by the Lender.  The rights, remedies, powers and privileges herein or
therein are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.  The Borrower shall pay all reasonable and necessary
expenses (including reasonable attorney's fees and disbursements) incurred in
connection with the collection or enforcement of this Loan Agreement and the
Note.

          8.4. Survival.  The representations and warranties of the Borrower
contained herein shall survive the making of Loan and the making of the advances
of the Loan, and shall remain effective until all indebtedness contemplated
hereby shall have been paid by the Borrower in full.

          8.5. Payment of Expenses and Taxes.  The Borrower shall (a) pay all
reasonable out-of-pocket costs and expenses of the Lender incurred in the
collection, enforcement and prosecution of its rights and remedies hereunder,
whether or not involving a case, action or proceeding before any state or
federal court (including, without limitation, the reasonable fees and
disbursements of legal counsel) and (b) indemnify and hold the Lender harmless
from and against any and all current and future stamp and other similar taxes
with respect to the foregoing matters and from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to the Lender) to pay such taxes.

          8.6. Indemnity.  The Borrower shall indemnify and hold the Lender
harmless from and against all liabilities, obligations, claims, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
whatsoever which may be imposed on, incurred by or asserted against the Lender
(whether or not caused by the Lender's negligence) growing out of or resulting
from this Loan Agreement, the Note, the Security Documents and any other
document or instrument delivered hereunder or thereunder and all transactions
and events at any time associated therewith (including the enforcement of any
right of the Lender or the defense of any action or inaction by the Lender in
connection therewith), except to the limited extent such liabilities,
obligations, claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements are proximately caused by the Lender's gross
negligence or willful misconduct.

          8.7. Right of Setoff.  In addition to any rights now or hereafter
granted under applicable law or otherwise and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, the Lender is hereby
authorized at any time and from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other Person, any
such notice being hereby expressly waived, to setoff and to appropriate and
apply any and all indebtedness at any time held or owing by the Lender to or for
the credit of the Borrower against and on account of the obligations and
liabilities of the Borrower to the Lender under this Loan Agreement and the
Note, including (without limitation) all claims of any nature or description
arising out of or connected with this Loan Agreement and the Note, irrespective
of whether or not the Lender shall have made any demand hereunder and although
said obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.

          8.8. Successors and Assigns.  This Loan Agreement shall be binding
upon and inure to the benefit of the Borrower, the Lender and their respective
successors and assigns; provided, however, that the Borrower may not assign or
otherwise transfer any of its interest under this Loan Agreement without prior
written consent of the Lender.

          8.9. Counterparts.  This Loan Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one agreement, and
any party hereto may execute this Loan Agreement by signing any such
counterpart.

          8.10.     Severability.  In case any one or more of the provisions
contained in this Loan Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.

          8.11.     Governing Law.  This Loan Agreement and all rights hereunder
shall be governed by and construed in accordance with the laws of the State of
Missouri, without reference to conflict of laws principles of said state.

          8.12.     Acknowledgments and Admissions.  The Borrower hereby
represents, warrants, acknowledges and admits that (a) the Borrower has made an
independent decision to enter into this Loan Agreement and such other
instruments and documents, without reliance on any representation, warranty,
covenant or undertaking by the Lender, whether written, oral or implicit, other
than as expressly set forth in this Loan Agreement, (b) the Lender has not made
any representation, covenant or undertaking to the Borrower in connection with
the rights and obligations of the Borrower pursuant to this Loan Agreement or
any such instruments and documents, (c) there are no representations,
warranties, covenants or undertakings or agreements by the Lender as to this
Loan Agreement or such instruments and documents except as expressly set forth
herein or therein, (d) the relationship between the Lender and the Borrower,
pursuant to this Loan Agreement and such instruments and documents, is and shall
be solely that of creditor and debtor, respectively, (e) the Lender has relied
upon the truthfulness of the foregoing acknowledgments in deciding to execute
and deliver this Loan Agreement and to accept the Note.

          8.13.     Entire Agreement.  This Loan Agreement and the Exhibits
attached hereto embody the entire agreement and understanding between the
parties hereto and supersedes all prior agreements and understandings relating
to the subject matter hereof.

          IN WITNESS WHEREOF, the parties have executed and delivered this Loan
Agreement as of the date first above written.

                                   ALLIANCE FARMS COOPERATIVE
                                   ASSOCIATION


                                   By:                      
                                   Name:                         
                                   Title:                        

                                   FARMLAND INDUSTRIES, INC.


                                   By:                      
                                   Name:                         
                                   Title:                        



                          EXHIBIT A - PROMISSORY NOTE

                                PROMISSORY NOTE



         $1,360,000.00                                          November 5, 1997


          FOR VALUE RECEIVED, the undersigned, Alliance Farms Cooperative
Association, a Colorado corporation ("Borrower"), hereby promises to pay to the
order of Farmland Industries, Inc. a Kansas cooperative corporation ("Lender"),
the principal sum of One Million Three Hundred Sixty Thousand and No/100 DOLLARS
($1,360,000.00), or such lesser amount as may constitute the unpaid principal
amount of the Loan made pursuant to the Loan Agreement of even date herewith
between Borrower and Lender.

          Interest will be charged and compounded on the first day of December,
1997, and the first day of each successive month thereafter on the outstanding
principal balance of this Note or so much thereof as shall be advanced, at the
per annum rate equal to the sum of (a) one and one-quarter percent (1.25% or 125
basis points), plus (b) the National Variable Rate (collectively, the
"Applicable Rate") with the understanding that the National Variable Rate shall
be the rate most recently announced by CoBank, ACB (the "Bank") as its "National
Variable Rate."  The National Variable Rate is one of the Bank's base rates and
serves as a basis upon which effective rates of interest are calculated for
those loans making reference thereto, and is evidenced by the recording thereof
after its announcement in such internal publication or publications as the Bank
may designate.  The Applicable Rate shall be adjusted annually based on the
National Variable Rate in effect on the anniversary date of this Note.  Interest
shall be computed on the basis of a 360-day year.

          It is acknowledged that the Applicable Rate effective on the date of
the execution of this Note is nine and three-quarters percent (9.75%) per annum,
and this Note will initially bear interest at the rate of nine and three-
quarters percent (9.75%) per annum.

          The principal and accrued and compounded interest due hereunder shall
be payable on the first to occur of (i) the closing date with respect to
Borrower's next issuance and sale of a block of at least seventeen (17) shares
of its common stock, $.01 par value, and (ii) the 5th day of November, 2007.

          Overdue principal and, to the extent permitted by law, overdue
interest shall bear interest at a rate per annum equal to the lower of two
percent (2%) above the Applicable Rate in effect from time to time or the
maximum rate of interest allowed by applicable law; provided, however, that in
no event shall any amount due hereunder bear interest after maturity at a rate
per annum less than the rate of interest applicable thereto at maturity.

          The Borrower reserves the right to prepay all or any portion of this
Note at any time and from time to time without premium or penalty of any kind.

          All payments made hereunder shall be made in lawful currency of the
United States of America at Farmland Industries, P.O. Box 7305, Kansas City,
Missouri 64116, Attn: Paul Miller, or at such other place as the Lender may
designate in writing.  All payments made hereunder, whether the scheduled
repayment, a prepayment, or payment as a result of acceleration, shall be
allocated first to accrued but unpaid interest, next to premiums, penalties, or
liquidated damage amounts, if any, due hereunder, next to installments of
principal overdue or currently due, and then to installments of principal
remaining outstanding hereunder in the inverse order of their maturity.

          For the purposes of this Note, the following terms shall have the
following meanings:

          (a)  "Borrower" shall mean, jointly and severally, Alliance Farms
Cooperative Association, a Colorado corporation, its successors and assigns, and
all other persons or entities succeeding to the interest of the named Borrower
in the property encumbered by the Deed of Trust and any person or entity
becoming liable on this Note, the Deed of Trust, or any of the other Loan
Documents.

          (b)  "Default" shall mean the failure of Borrower to pay or perform as
required hereunder or as required under the Deed of Trust or the Loan Documents.

          (c)  "Event of Default" shall mean a Default for which there is no
opportunity to cure or for which all opportunities to cure have expired.
          (d)  "Lender" shall mean Farmland Industries, Inc., a Kansas
cooperative corporation, and its successors and assigns.

          (e)  "Loan Documents" shall mean collectively this Note, the Mortgage
and any and all other instruments, agreements and documents now or hereafter
evidencing, securing or otherwise relating to the debt evidenced by this Note.

          (f)  "Mortgage" shall mean that certain Colorado Deed of Trust
executed by Borrower, securing this Note and granting Lender a security interest
in and to Buyer's right, title and interest in certain property described
therein.

          Each person liable hereon agrees, to the extent permitted by law, to
pay all reasonable costs of collection, including attorneys' fees, paid or
incurred by the Lender in enforcing this Note or the rights and remedies herein
provided.

          This Note is secured by the Mortgage.  It is expressly agreed that all
of the covenants, conditions and agreements contained in those Mortgage and the
Loan Documents are hereby made part of this Note.  This Note will be considered
in default (1) upon failure to pay any installment of principal or interest as
required herein on the due date thereof, or (2) upon any default under the
Mortgage or the Loan Documents, or (3) upon the occurrence of any event by which
under the terms of the Mortgage or the Loan Documents this Note may or shall
become due and payable.  Upon the occurrence of an Event of Default, and after
expiration of the applicable cure period, Lender may, at its option, declare all
unpaid indebtedness, evidenced by this Note, and any modifications thereof, plus
any other sums owed by Borrower to Lender at the time of such declaration, to be
accelerated and immediately due and payable without notice regardless of the
date of maturity.

          Failure at any time to exercise the foregoing or any other options
shall not constitute a waiver of the right to exercise the same or any other
option at any other time in respect of the same event or any other event.

          The Borrower, for itself and/or any other entity or persons now or
hereafter liable hereon, hereby waives demand of payment, presentment for
payment, protest, notice of nonpayment or dishonor and any and all other notices
and demands whatsoever, and any and all delays or lack of diligence in the
collection hereof, and expressly consents and agrees to any and all extensions
or postponements of the time of payment hereof from time to time at or after
maturity and any other indulgence and waives all notice thereof.

          By executing this Note on behalf of the Borrower, any individual
and/or entity which has signed this Note in a representative capacity on behalf
of Borrower does hereby represent to the Lender that such individual and/or
entity is duly authorized and empowered to execute and deliver this Note on
behalf of the Borrower and that this Note constitutes the legal and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms.

          This Note shall be governed by and construed and enforced in
accordance with the laws of the State of Missouri (without reference to conflict
of laws principles of such state),  except to the extent preempted by United
States federal law.

          IN WITNESS WHEREOF, the undersigned has duly caused this Note to be
executed and delivered at the place specified above and as of the date first
written above.

                              ALLIANCE FARMS COOPERATIVE ASSOCIATION, a Colorado
                              corporation


                              By                            
                              Printed Name:                      
                              Title:                             

                                                  BORROWER






                         EXHIBIT B - SECURITY AGREEMENT

                               SECURITY AGREEMENT



          THIS SECURITY AGREEMENT is made and entered into as of the 5th day of
November, 1997, by and between Alliance Farms Cooperative Association, a
Colorado cooperative association ("Debtor"), whose mailing address is Alliance
Farms Cooperative Association, c/o Farmland Industries, Inc., Attention: Paul
Miller, Dept. 189, and Farmland Industries, Inc., a Kansas corporation ("Secured
Party"), whose mailing address is Farmland Industries, Inc., Attention:  Randy
Vance, Dept. 160, Kansas City, Missouri 64116.

          In consideration of the mutual covenants and obligations set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Debtor and Secured Party agree as
follows:

I.   COLLATERAL; LIABILITIES AND OBLIGATIONS SECURED.

          1.   Debtor hereby grants to Secured Party a security interest in all
personal property, interests in property and fixtures of Debtor solely with
respect to the feeder pig production facility to be constructed in Yuma County,
Colorado by Debtor using the proceeds of advances made or to be made under the
Loan Agreement, dated as of November 5, 1997, between Debtor and Secured Party
(the "Loan Agreement"), and the proceeds of additional advances made or to be
made under the CoBank Loan Documentation (as defined in the Loan Agreement),
whether now owned or existing or hereafter acquired and wherever located
(collectively the "Collateral"), including, without limiting the generality of
the foregoing:

          (a)  all structures, buildings, improvements, facilities, additions,
fixtures, equipment, inventory, farm products, and breeding stock and the
offspring therefrom (except to the extent the breeding stock and offspring are
sold by the Debtor in the ordinary course of business), whether presently or
hereafter located on or used in connection with the property described in
Exhibit A attached hereto; and

          (b)  any and all additions, accessions, replacements and substitutions
to or for any of the foregoing and any and all proceeds and products of any of
the foregoing.

          2.   The security interest described herein is granted to Secured
Party to secure the performance and payment of any and all obligations and
liabilities of Debtor to Secured Party now existing or hereafter arising, direct
or indirect, absolute or contingent, joint or several, due or to become due,
including without limitation any renewa1s or extensions thereof and
substitutions therefor and any future advances (such obligations and liabilities
being referred to herein as the "Secured Obligations").

II.  ADDITIONAL REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF DEBTOR.

          Debtor represents, warrants, covenants and agrees as follows:

          1.   The Collateral will not be misused, abused, wasted or allowed to
deteriorate, except for the ordinary wear and tear of its primary use.  Debtor
will notify Secured Party immediately, orally and in writing, of any event
causing material loss or depreciation in value of the Collateral and the amount
of such loss or depreciation and of any other event that materially affects the
Collateral.

          2.   The Collateral will be kept at the location described in Exhibit
A attached hereto or at such other location as may be consented to in writing by
Secured Party, except for temporary removal consistent with such Collateral's
ordinary primary use.  Secured Party may examine and inspect the Collateral at
any reasonable time or times wherever it is located.  Secured Party may also
examine and inspect Debtor's books and records during normal business hours.

          3.   No item of the Collateral is a part of or attached to any real
property or fixtures not subject to the Mortgage (as defined in the Loan
Agreement) or to any personal property not subject to this Security Agreement.
Debtor will not permit any item of the Collateral to otherwise become a part of
or attached to any real property or fixtures or to any personal property without
the prior written consent of Secured Party.

          4.   Debtor has a place of business only in Yuma County, Colorado and
Wayne County, Illinois.  Debtor's chief executive office is at 302 Idlewild
Street, Yuma, Colorado 80759. Debtor will notify Secured Party in writing prior
to any change or discontinuance of Debtor's place or places of business. The
Debtor's taxpayer identification number is 84-1270685.

          5.   Debtor will maintain such property and casualty insurance
respecting the collateral with such insurance companies, in such amounts, and
covering such risks, as are usually carried by companies engaged in the same or
similar business and similarly situated and make such increases in the type or
amount of coverage as the Secured Party may reasonably request. Such insurance
shall be payable to Secured Party and Debtor as their respective interests may
appear.  All such policies of insurance shall provide for at least 30 days'
prior written notice of cancellation or modification to Secured Party.  Debtor
shall furnish Secured Party with certificates or other evidence satisfactory to
Secured Party of compliance with all of the foregoing insurance provisions.
Secured Party is hereby granted authority to act as attorney for Debtor in
obtaining, adjusting and settling any such insurance and endorsing any drafts
issued in connection therewith.  Secured Party may apply the proceeds of any
such insurance toward payment of any of the Secured Obligations, whether or not
the same is due and in any order of priority.

          6.   No financing statements covering any of the Collateral are on
file in any public office except as may show Secured Party or CoBank, ACB as
secured party.  Upon the oral or written request of Secured Party, Debtor will
execute in form satisfactory to Secured Party one or more financing statements
pursuant to the applicable Uniform Commercial Code and such other documents as
Secured Party may from time to time reasonably request.  Debtor hereby
authorizes Secured Party to file or record one or more financing statements
signed only by Secured Party in any location in any jurisdiction where such
authorization is permitted by law.  If applicable law requires Debtor to sign
any financing statement for filing or recording purposes, Debtor hereby appoints
Secured Party or any representative of Secured Party as Debtor's attorney and
agent, with full power of substitution, to sign or endorse Debtor's name on any
such financing statement, and Debtor authorizes Secured Party to file or record
the same.  Debtor will pay the cost of filing or recording the financing
statements and other documents referred to above in this paragraph and this
Security Agreement in all public offices where filing or recording is deemed by
Secured Party to be necessary or desirable.  A photographic or other
reproduction of this Security Agreement or any financing statement related
hereto shall be sufficient as a financing statement in any jurisdiction where
filing or recording of such a reproduction is permitted by law.

          7.   Debtor has the power and authority to own and possess the
Collateral, subject to the interest of Secured Party and CoBank, ACB therein.
Debtor has, on the date hereof, or, as to Collateral acquired by Debtor after
the date hereof will have, as soon as Debtor has rights therein, good and
marketable title to the Collateral.  Except for the security interest granted
hereby and any security interest of CoBank, ACB granted in connection with the
CoBank Loan Documentation (the "CoBank Security Interest"), Debtor owns the
Collateral free from any prior or adverse lien, charge, security interest or
encumbrance, and Debtor will defend the Collateral against all claims and
demands of all persons at any time claiming the same or any interest therein.

          8.   Debtor will keep the Collateral free from all unpaid charges,
liens, encumbrances and security interests, other than the security interest
granted hereby and the CoBank Security Interest, will pay promptly all taxes and
assessments with respect to the Collateral or its use or operation, will not use
the Collateral in violation of any ordinance or state or federal statute or any
administrative rule or regulation or any other law or any policy of insurance
thereon and will not sell, transfer, lease, assign or otherwise dispose or
alienate the ownership of the Collateral or any portion thereof or interest
therein in any manner whatsoever except to the extent the breeding stock and
offspring are sold by Debtor in the ordinary course of business.  Secured Party
is hereby authorized at its option and in its sole discretion to discharge any
taxes, assessments, liens, security interests, charges or encumbrances at any
time levied or placed on the Collateral, to pay for insurance on the Collateral,
and to pay any costs or expenses incurred in the custody, maintenance or
preservation of the Collateral.  Debtor agrees to reimburse Secured Party on
demand for any payment made or any expense incurred by Secured Party pursuant to
the foregoing authorization, and the amount of any such payments or expenses
shall be part of the Secured Obligations and secured by and under this Security
Agreement.

          9.   All financial information with respect to Debtor that has been or
is hereafter furnished by or on behalf of Debtor to Secured Party is or will be,
as of the date furnished to Secured Party, accurate, correct and complete in all
material respects.

          10.  Debtor shall from time to time, at its expense, promptly execute
and deliver all further instruments and documents (including without limitation
financing or continuation statements and amendments thereto) and take all
further action that may be necessary or desirable or that Secured Party may
reasonably request in order to evidence, establish, protect or perfect any
security interest granted or purported to be granted hereby or to enable Secured
Party to exercise and enforce its rights and remedies hereunder.

III.  EVENTS OF DEFAULT.

          The term "Event of Default" as used herein shall mean any one or more
of the following events:

          1.   The occurrence of an Event of Default (as such term is defined in
the Loan Agreement).

          2.   Default in the performance of or compliance with any covenant or
agreement of Debtor contained herein.

          3.   Any  representation or warranty made by the Debtor herein shall
be false or misleading in any material respect.

          4.   Loss, theft, damage, destruction, danger of confiscation or
danger of misuse, abuse, waste or deterioration (except for the ordinary wear
and tear of its primary use) of any material part of the Collateral; the making
of any levy, seizure or attachment of or on the Collateral or any portion
thereof; or the issuance of any injunction with respect to the use or sale of
the Collateral or any portion thereof.

          5.   Service of any warrant of attachment or garnishment or the making
or issuance of any lien, levy or similar process on or with respect to Debtor.

          UPON THE OCCURRENCE OF ANY OF THE FOREGOING DEFAULTS OR EVENTS OF
DEFAULT, DEBTOR SHALL IMMEDIATELY NOTIFY SECURED PARTY OF THE SAME.

IV.  SECURED PARTY'S RIGHTS AND REMEDIES.

          1.   Secured Party may assign this Security Agreement without the
consent of Debtor.  In the event of such assignment, the assignee shall be
entitled, upon notifying Debtor, to the performance of all obligations of Debtor
hereunder and to all rights and remedies of Secured Party hereunder.  Debtor
will assert no claims or defenses that Debtor may have against Secured Party
against any assignee hereof.

          2.   Upon the occurrence of an Event of Default and at any time
thereafter, Secured Party may, without notice or demand, declare any or all of
the Secured Obligations immediately due and payable, notwithstanding any
provision to the contrary contained in any agreement or instrument evidencing or
relating to any of the Secured Obligations, and may exercise any and all rights
and remedies of the Secured Party in the enforcement of its security interest
granted or purported to be granted hereby under this Security Agreement, under
the Uniform Commercial Code of the State of Colorado, or under any other
applicable law or in equity, including, without limitation, any or all of the
following remedies:

          (a)  Secured Party may notify the obligors on any or all Collateral
consisting of accounts, chattel paper, general intangibles, contract rights,
instruments, insurance policies, things in action or the like to make payment
thereon directly to Secured Party, and Secured Party may demand, collect,
receipt for, settle, compromise, adjust, sue for, foreclose or realize upon or
with respect to such Collateral.  Until Secured Party elects to exercise any
such right, Debtor is authorized, as agent of Secured Party, to collect and
enforce all such obligations.

          (b)  Secured Party may receive, open and dispose of mail addressed to
Debtor and endorse notes, checks, drafts, money orders, documents of title or
other evidences of payment, shipment or storage or any other item constituting
or relating to the Collateral on behalf of and in the name of Debtor.

          (c)  Secured Party may take control of any or all proceeds
constituting a part of the Collateral.

          (d)  Secured Party may set off any deposits or other moneys due from
Secured Party to Debtor against any of the Secured Obligations, whether or not
the same is due and in any order of priority.

          (e)  Secured Party shall have all of the rights and be entitled to all
of the remedies of a secured party under the Uniform Commercial Code in effect
in the State of Colorado, including without limitation the right to take
possession of, and to use, occupy and control, the Collateral or any portion
thereof and the premises wherever the foregoing may be, the right to sell, lease
or otherwise dispose of the Collateral or any portion thereof (including the
right to purchase at any public sale) and the right to recover reasonable
expenses of retaking, holding, preparing for sale or lease, selling, leasing and
the like and, to the extent not prohibited by law, reasonable attorneys' fees
and legal expenses incurred by Secured Party.

          (f)  Secured Party may require Debtor to assemble the Collateral and
make it available to Secured Party at a place to be designated by Secured Party
which is reasonably convenient to both parties, or, if Debtor fails or refuses
to so assemble the Collateral, Secured Party may, and Debtor hereby authorizes
and empowers Secured Party to, enter upon the premises wherever the Collateral
may be in order to remove the same.

          3.   Secured Party's costs of collection, enforcement and prosecution
of its rights and remedies hereunder or otherwise arising, whether or not
involving a case, action or other proceeding before any state or federal court
or other body, including without limitation attorneys' fees and expenses, shall
be borne solely by Debtor.

          4.   No delay or omission by Secured Party to exercise any of its
rights or remedies hereunder or otherwise arising shall impair any of such
rights or remedies, nor shall any such delay or omission be construed as a
waiver of any default or Event of Default hereunder, and Secured Party may
exercise every such right and remedy from time to time as often as Secured Party
may deem expedient.  All rights and remedies of Secured Party whether or not
granted hereunder shall be cumulative and may be exercised singularly or
concurrently, and no such right or remedy is intended to be exclusive of any
other right or remedy of Secured Party.

          5.   No waiver by Secured Party of any default or Event of Default
hereunder shall be effective unless in writing and signed and delivered by
Secured Party, and no such waiver of any default or Event of Default shall
extend to or affect any subsequent or other default or Event of Default or shall
impair any rights or remedies consequent thereon.

          6.   To the extent permitted by law, Debtor hereby waives all benefits
and advantages otherwise afforded Debtor under any laws now or hereafter in
force providing for any stay or extension that would affect the terms of
performance of Debtor under this Security Agreement or providing for the
valuation or appraisal of the Collateral or any portion thereof or for any
rights of redemption thereof, and Debtor will not in any other way hinder, delay
or impede the execution of any right or remedy of Secured Party.

          7.   Unless the Collateral threatens to decline speedily in value or
is of a type customarily sold on a recognized market, Secured Party will give
Debtor reasonable notice of the time and place of any public sale of the
Collateral or any portion thereof or of the time after which any private sale or
other intended disposition thereof is to be made.  The requirements of
reasonable notice shall be met if such notice is mailed, postage prepaid, to
Debtor at least 10 days prior to the date of such sale or disposition.

V.   GENERAL.

          1.   Secured Party shall have no duty as to collection or protection
of the Collateral or any income thereon, nor as to the preservation of rights
against prior parties, nor as to the preservation of any rights pertaining
thereto beyond any duty imposed by law to use reasonable care in the custody and
preservation of Collateral in Secured Party's possession.

          2.   With respect to any situation in which Secured Party has been
authorized to act for or on behalf of or in the name of Debtor, Debtor hereby
grants to Secured Party and any officer or representative of Secured Party, and
each of them, jointly and severally, with full power of substitution, Debtor's
power of attorney, coupled with an interest and irrevocable so long as any of
the Secured Obligations are outstanding.  Debtor hereby ratifies and confirms
any and all such actions taken by Secured Party or any such officer or
representative and will hold Secured Party and any such officer or
representative harmless against any claim made by any person or entity by reason
of such actions.

          3.   This Security Agreement shall inure to the benefit of and shall
be binding upon Debtor and Secured Party and their respective successors and
assigns.

          4.   Any demand upon or notice or other communication to Debtor shall
be effective if delivered by hand delivery or deposited in the mails, postage
prepaid, addressed to Debtor at the address of Debtor set forth at the beginning
of this Security Agreement, or, if Debtor has notified Secured Party in writing
of a change of address, to the last address of which Secured Party has been so
notified.

          5.   This Security Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.

          6.   If any provision of this Security Agreement is contrary to,
prohibited by or deemed invalid under applicable laws or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.  If any provision of this Security
Agreement is contrary to, prohibited by or deemed invalid under the applicable
laws or regulations of any jurisdiction, such provision shall not thereby be
rendered invalid in any other jurisdiction.

          7.   This Security Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
shall constitute but one and the same instrument.

          8.   The headings used in this Security Agreement are for convenience
of reference only and shall in no way define, limit or describe the scope or
intent of any provision of this Security Agreement.

          IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement on the day and year first above written.

                              FARMLAND INDUSTRIES, INC.


                              By:                      
                              Name:                         
                              Title:                        

                              ALLIANCE FARMS COOPERATIVE
                              ASSOCIATION


                              By:                      
                              Name:                         
                              Title:                        


                                   EXHIBIT A



      A parcel of land in the Southwest Quarter (SW1/4) of Section 8, Township 1
South, Range 47 West of the Sixth Principal Meridian, Yuma County, Colorado,
said parcel being more particularly described as follows:

      Commencing at the Southwest corner of said Section 8; thence North
89.54'40" East along the South line of said Section 8 a distance of 1536.8 feet
to the true point of beginning; thence North 0.51'30" West a distance of 1612.0
feet; thence North 89.54'40" East a distance of 1081.0 feet to a point on the
East line of said SW1/4; thence South 0.51'30" East along the East line of said
SW1/4 a distance of 1612.0 feet to the Southeast corner of said SW1/4; thence
South 89.54'40" West along the South line of said Section 8 a distance of 1081.0
feet to the point of beginning and containing 40.00 acres, more or less, subject
to a county road right-of-way along the South line of said Section 8.





                              EXHIBIT C - MORTGAGE

                             COLORADO DEED OF TRUST

     THIS DEED OF TRUST is made and entered into this 5th day of November, 1997,
by and between Alliance Farms Cooperative Association, a Colorado cooperative
corporation, whose address is 201 South Main Street, Yuma Colorado, 80759,
hereinafter referred to as Borrower, and the Public Trustee of the County of
Yuma, State of Colorado, hereinafter referred to as Trustee, and Farmland
Industries, Inc., a Kansas cooperative corporation, whose address is P.O. Box
7305, Kansas City, Missouri 64116, hereinafter referred to as Lender.

     WITNESSETH:  that Borrower, in consideration of the debt and trust
hereinafter mentioned and created, and the sum of One Dollar to Borrower paid by
Trustee, the receipt of which is hereby acknowledged, does by these presents
grant, bargain, sell and convey unto Trustee all of, and grant a security
interest unto Trustee in all of the real estate, chattels, property, rights,
privileges and franchises situated in the County  of Yuma in the State of
Colorado, which is legally described on Exhibit A attached hereto, and
incorporated herein by this reference, together with all rights, privileges,
easements, appurtenances, royalties, mineral, oil and gas rights and profits,
water, water rights and irrigation and drainage rights of every kind and
description, however evidenced or manifested, water stock and unharvested crops
thereunto attaching or belonging (whether now existing or hereafter arising);
and the rents, issues and profits thereof; and all buildings and improvements
now erected, or hereafter to be erected, upon said premises; and all
condemnation or eminent domain awards, compensations, settlements or other
payments payable as respects said premises (all of the aforesaid herein
sometimes referred to as the "Mortgaged Premises").  To have and to hold in
trust, nevertheless that in case of default of this Deed of Trust, the Note, as
hereinafter defined, or any other Loan Documents, as hereinafter defined, the
beneficiary hereunder or the legal holder of the indebtedness secured hereby may
declare a violation of any of the covenants herein contained and elect to
advertise said property for sale and demand such sale, then, upon filing notice
of such election and demand for sale with the Trustee, who shall upon receipt of
such notice of election and demand for sale cause a copy of the same to be
recorded in the recorder's office of the county in which said real estate is
situated, it shall and may be lawful for the Trustee to sell  and dispose of the
same at public auction at the door of the Court House in the County of Yuma,
State of Colorado, for the highest and best price the same will bring in cash,
four weeks' public notice having been previously given of the time and place of
such sale, by advertisement, weekly, in some newspaper of  general circulation
at that time published in said County of Yuma, State of Colorado.

     IN TRUST, HOWEVER, for the following purposes:

     WHEREAS, Borrower, being justly indebted to Lender in the principal sum of
One Million Three Hundred Sixty Thousand and NO/100 Dollars ($1,360,000.00) for
money borrowed, has executed and delivered to Lender one certain promissory note
(said note or other obligation referred to above is hereinafter called the
"Note") bearing even date herewith.

     AND WHEREAS, Borrower further agrees with Lender as follows:

I.    To pay all taxes and assessments of every kind or nature upon the
Mortgaged Premises, when the same are by law due and payable.  Upon receipt by
Lender, Borrower will immediately deliver to Lender a paid receipt evidencing
payment of said taxes and assessments.

II.   To immediately procure, maintain, pay all premiums on, and keep in the
possession of Lender without lapse, policies of insurance in companies
acceptable to Lender.  Said polices shall be against fire and the other risks
covered by the broadest available form of extended coverage insurance, in an
amount equal to 100% of the full replacement cost of the Mortgage Premises,
covering the Mortgaged Premises, and shall be maintained until the Note is paid
in full.  Said policies shall have mortgage clauses attached thereto making
loss, if any, payable to Lender, as its interest may appear.  In the event of
loss, Borrower shall give immediate notice to Lender and Lender is hereby
authorized to make proofs of loss if the same are not made promptly by Borrower.
Said insurance companies are hereby authorized to make payments for such loss
directly to Lender, and the proceeds of such insurance, or any part thereof, may
be applied by Lender, at is option, either to the reduction of the Note, or to
the restoration or repair of the damaged property.  In the event of foreclosure
of this Deed of Trust, or in the event transfer of  title to the Mortgaged
Premises in extinguishment of the Note, all right, title and interest of
Borrower in and to the insurance policies then in force shall pass to the
purchaser or grantee, as the case may be.  Borrower will deliver to Lender,
concurrently with the execution of this Deed of Trust, a certificate of
insurance evidencing insurance complying with the requirements of this Deed of
Trust in effect, and Borrower shall deliver to Lender replacement certificates
prior to the expiration of any insurance policy. Each policy of insurance shall
provide that it cannot be canceled, terminated or amended except upon thirty
(30) days prior written notice to Lender.

III.  To keep and maintain the buildings and other improvements now or hereafter
a part of the Mortgaged Premises in good condition and repair at all times, and
not suffer waste or permit a nuisance thereon or perform any work thereon which
will materially lessen the value of the Mortgaged Premises.

IV.   To keep the Mortgaged Premises free from all statutory or other lien
claims of every kind.

V.    To comply with all building, zoning and other laws, ordinances or
regulations and to comply with the terms of any easements, restrictions, home
association or other agreements to which the title to the Mortgaged Premises is
or may be subject.

VI.   That if Borrower sells, assigns, contracts to sell, leases or otherwise
conveys away the Mortgaged Premises or any part thereof or interest therein, or
if title to the Mortgaged Premises becomes vested in any other person or
persons, then Lender may, at its option, declare the Note as immediately due and
payable.

VII.  That in the event of any default or failure to perform by Borrower as
respects any of its duties or obligations hereunder, Lender may, but shall not
be obligated to, cure such defaults or failures, and any sums or amounts
expended by Lender in so doing shall bear interest at the rate provided in the
Note, be payable on demand or, at Lender's option, be added to the principal of
the Note and be secured hereby.

VIII. That this Deed of Trust shall secure all of the debt due at any time under
the Note or hereunder, including but not limited to late charges and other
amounts required to be paid by the Note or hereunder.

IX.   To pay all and singular the costs, charges, and expenses, including
attorneys' fees and expenses, abstract and/or title insurance costs and
expenses, publication fees and court costs and litigation expenses, incurred or
paid at any time by Lender because of the failure of Borrower to perform the
terms hereof or the exercise by Lender of any of its rights hereunder.

X.   To pay all recording costs, real estate transfer taxes, expenses or other
similar costs incurred in connection with the execution or recording of this
Deed of Trust.

XI.  To pay and comply with all of the terms and provisions of the Note and this
Deed of Trust.
XII. To pay when due all indebtedness secured by, and to perform when due all
covenants and agreements under, any mortgages or other liens which have or may
attain priority over the lien of this Deed of Trust.

XIII.That in the event that (a) an order for relief shall be entered with
respect to Borrower under the United States Bankruptcy Code, or (b) Borrower
proposes or enters into an arrangement with any of its creditors or makes an
assignment for the benefit of creditors, or (c) a receiver is appointed for
Borrower or for the Mortgaged Premises or any part thereof and not removed in
thirty (30) days, or (d) Borrower files a petition or institutes proceedings in
bankruptcy or is adjudicated a bankrupt under any state law for the relief of
debtors or under the bankruptcy laws of the United States, then, or any other
time thereafter, the whole of the aforesaid indebtedness and all other sums
secured by this Deed of Trust and any other agreement given pursuant hereto
shall become due and payable at once at the option of Lender and Lender shall be
entitled to declare this Deed of Trust to be in default and to have all remedies
provided hereunder.

XIV. That in the event of default in the performance of any of the terms,
conditions or provisions of the Note or this Deed of Trust, Lender shall be
entitled to the immediate possession of the Mortgaged Premises, together with
all rents, issues and profits to be derived therefrom until the indebtedness
secured is fully paid.  In addition to such remedy, after the happening of any
default and during the continuance thereof, or upon the commencement of any
proceedings to foreclose this Deed of Trust, or to enforce the specific
performance hereof, or in aid thereof, or upon the commencement of any other
judicial proceedings to enforce any right of Lender hereunder, Lender shall be
entitled, as a matter of strict right, if Lender shall so elect, without the
giving of notice to any party and without regard to the adequacy or inadequacy
of any security for the indebtedness represented by the Note and any advances
made by Lender hereunder or the solvency or insolvency of Borrower, either
before or after declaring the unpaid principal of the Note to be due and
payable, to the appointment of a receiver for the Mortgaged Premises.

XV.  That the covenants, conditions and terms herein contained shall bind and
the benefits and advantages shall inure to the heirs, legal representatives,
successors and assigns of Borrower and the successors and assigns of Lender.
Whenever employed herein and where the context requires, the singular term and
the related pronoun shall include the plural, and the masculine gender shall
include the feminine and neuter, and vice versa.

XVI. That if all or any part of the Mortgaged Premises be taken or damaged by
the exercise of this power of eminent domain, Borrower may contest the same in
good faith so long as Borrower is not in default in any payment of the Note, but
the award for any property so taken is hereby assigned to Lender, its heirs,
successors or assigns, and Lender, its heirs, successors or assigns, upon such
award becoming final, is hereby authorized, in the name of Borrower, to execute
and deliver acquittances for, and release of, any such award and to collect and
apply the proceeds to the payment of all indebtedness hereby secured including
both principal and interest, whether mature or unmatured (such application to be
in such order and to such portion of the secured indebtedness as Lender may
elect), and the remainder, if any, shall be paid to those legally entitled
thereto.

XVII. Borrower covenants, agrees and warrants that Borrower has good and clear
title to the Mortgaged Premises, free and clear of liens and encumbrances, and
that Borrower has good right and lawful authority to mortgage, convey and grant
a security interest respecting the same in the manner and form herein set forth.

     NOW, if the Note and the interest thereon be paid when due, and the
agreements set forth in the Note and this Deed of Trust be faithfully performed
as aforesaid, then these presents, shall be void, and the property hereinbefore
conveyed shall be released at the cost of Borrower; but if default be made in
the payment of the Note or any part thereof, or in the faithful performance of
any of said agreements set forth in the Note or this Deed of Trust, then Lender
hereunder or the legal holder of the indebtedness secured hereby may declare a
violation of any of the covenants herein contained and exercise its power of
sale and demand that Trustee sell and dispose of the same at public auction at
the door of the Court House in the County of Yuma, State of Colorado.  Trustee
shall receive the proceeds of such sale, out of which he shall pay:  first the
cost and expense of executing this trust, including publication fees, mailing
charges, title charges, attorneys' fees of Lender and/or Trustee and lawful
compensation to Trustee for his services; next, he shall repay any money paid by
Lender in accordance with the terms of this Deed of Trust, with interest
thereon, as above provided; next, the amount unpaid on the Note, together with
interest accrued thereon, and all overdue payments and charges provided for in
the Note or this Deed of Trust, and the remainder, if any, shall be paid to such
parties as may be entitled thereto.

     And Trustee covenants faithfully to perform the trust herein created.

     And Trustee hereby lets the Mortgaged Premises to Borrower until a sale be
had under the foregoing provision therefor, upon the following terms and
conditions:  Borrower, and every and all persons claiming or possessing the
Mortgage Premises, and any part thereof, by, through or under Borrower, shall
pay rent therefor during said term at the rate of one cent per month payable
monthly upon demand and shall and will surrender peaceable possession of the
Mortgaged Premises, and any and every part thereof, sold under the provisions
hereof, to Trustee, his successors, assignees or purchasers thereof under such
sale, within ten days after making of such sale, without notice or demand
therefor.

     The rights and remedies granted to Lender in this Deed of Trust shall not
be exclusive but shall be in addition to all other rights and remedies at law or
in equity.  Without limiting the generality of the foregoing, Lender shall at
all times have the right,  at Lender's option, to enforce Lender's rights
hereunder by legal or equitable court action.  In the event of foreclosure
Borrower shall be fully liable for any deficiency.

     The failure of Lender to assert any of its rights hereunder at any time
shall not be construed as a waiver of its right to assert the same at any later
time, and to insist upon and enforce strict compliance with all the terms and
provisions of the Note and of this Deed of Trust.  Notice of the exercise of any
option granted herein to Lender shall not be required.  Lender may resort for
the payment and performance of the obligations secured by this Deed of Trust to
any other security therefor held by Lender in such order and manner as Lender
may elect.

     To the extent permitted by law, Borrower waives any and all rights of
redemption.

     IN WITNESS WHEREOF, Borrower has caused this Deed of Trust to be executed
as of the day and year first above written.


                              BORROWER:

                              Alliance Farms Cooperative Association, a Colorado
                              cooperative corporation


                              By:                                
                              Printed Name:                      
                              Title:                                  



                           CORPORATION ACKNOWLEDGMENT


STATE OF MISSOURI)
                  ) SS.
COUNTY OF CLAY    )

     On this 7th day of November, 1997, before me, Carol D. Mason, a Notary
Public in and for said State, personally appeared Scott Webster, to me
personally known, who being by me duly sworn did say that he is the Vice
President of Alliance Farms Cooperative Association, a Colorado cooperative
corporation, and that said instrument was signed on behalf of said corporation
by authority of its Board of Directors, and said Scott Webster acknowledged said
instrument to be the free act and deed of said corporation.

     IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal at my office in Kansas City, Missouri, the day and year last above written.


                                                            
                              Printed Name:  Carol D. Mason
                              Notary Public in and for said State
                              Commissioned in Jackson County

                    My commission expires:                  
                                   EXHIBIT A

                              (Legal Description)


A parcel of land in the Southwest Quarter (SW1/4) of Section 8, Township 1
South, Range 47 West of the Sixth Principal Meridian, Yuma County, Colorado,
said parcel being more particularly described as follows:

      Commencing at the Southwest corner of said Section 8; thence North
89.54'40" East along the South line of said Section 8 a distance of 1536.8 feet
to the true point of beginning; thence North 0.51'30" West a distance of 1612.0
feet; thence North 89.54'40" East a distance of 1081.0 feet to a point on the
East line of said SW1/4; thence South 0.51'30" East along the East line of said
SW1/4 a distance of 1612.0 feet to the Southeast corner of said SW1/4; thence
South 89.54'40" West along the South line of said Section 8 a distance of 1081.0
feet to the point of beginning and containing 40.00 acres, more or less, subject
to a county road right-of-way along the South line of said Section 8.







                     EXHIBIT D - COBANK LOAN DOCUMENTATION