SECURITIES AND EXCHANGE COMMISSION
                    WASHINGTON D.C.   20549


                 _________________________________
 

                              FORM 10-Q

            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)       
               OF THE SECURITIES EXCHANGE ACT OF 1934

                      ________________________   
            
      
For the Quarter Ended November 30, 1996  Commission File No.0-5131



                  ART'S-WAY MANUFACTURING CO., INC.
        (Exact name of registrant as specified in its charter)


           DELAWARE                          42-0920725
     State of Incorporation     I.R.S. Employee Identification No.

        Armstrong, Iowa                        50514
Address of principal executive offices        Zip Code

Registrant's telephone number, including area code: (712) 864-3131

Indicate by check mark whether the registrant (1) has filed all 
reports required to be filed by Section 13 or 15 (d) of the 
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filling requirements for the 
past 90 days.  Yes  X  No __
 

Number of shares of common stock outstanding on 
January 11, 1997: 1,237,631





                   PART I -  FINANCIAL INFORMATION	
				ITEM 1
			 FINANCIAL STATEMENTS


                  ART'S-WAY MANUFACTURING CO., INC.	
 		      STATEMENTS OF OPERATIONS												
												
 QUARTERS AND YEAR TO DATE NOVEMBER 30, 1996 AND NOVEMBER 30, 1995
                           (Unaudited)			
												
	
		              QUARTER           YEAR TO DATE	
	 	 		 	 				 		 	 	 	
		          1996	      1995	1996	 1995		
									 			 		
NET SALES	      $3,319,955 $3,514,267 $7,275,685 $6,314,287
COST OF GOODS SOLD     2,555,952  2,684,581  5,534,036  4,844,443
GROSS PROFIT	         764,003    829,686  1,741,649  1,469,844

EXPENSES:
   Engineering            73,175     79,277    137,278    160,865
   Selling	         299,238    372,205    620,544    765,001 
   General and           496,951    508,596    954,132  1,012,187 
    administrative	
      Total		 869,364    960,078  1,711,954  1,938,053

INCOME (LOSS) FROM      (105,361)  (130,392)    29,695  (468,209)
  OPERATIONS	
OTHER DEDUCTIONS:	
    Interest expense	 (80,389)  (109,201)  (203,001) (260,126)
    Other		  (9,192)   (20,725)    (9,857)  (20,794)
 Total other (deductions)(89,581)  (129,926)  (212,858) (280,920)
	
LOSS BEFORE INCOME TAXES(194,942)  (260,318)  (183,163) (749,129)

INCOME TAX BENEFIT	 (68,230)   (91,111)   (64,107) (262,195)

NET LOSS                (126,712)  (169,207)  (119,056) (486,934)

LOSS PER SHARE(NOTE 2)	 ($0.10)    ($0.15)     ($0.10)   ($0.45)
												
See accompanying notes to consolidated financial statements.											
												
Memo:												
Earnings(loss) before 
interest, taxes,
depreciation and
amortization	         37,447      (6,886)	307,236  (200,541)

Earnings(loss) before
interest and taxes	(114,553)  (151,117)     19,838  (489,003)
												

                                    2

												
ART'S-WAY MANUFACTURING CO., INC.	
BALANCE SHEETS	
 		                           November 30,    May 31,
		                             1996	    1996
		                           (Unaudited)	
ASSETS	

CURRENT ASSETS:													
 Cash and cash equivalents                   $8,995        $91,513
 Accounts receivable-customers,	
  net of allowance for doubtful accounts
  of $31,359 in November and $26,975 in
  May, respectively                       1,512,902      2,464,241	
 Inventories (Note 4)                     4,888,759      6,200,743
 Current recoverable income taxes           142,500 	       -	
 Deferred income taxes                      734,522        734,522
 Other current assets	                    277,375	    87,475
         Total current assets	          7,565,053      9,578,494
						

PROPERTY, PLANT AND EQUIPMENT,	
 at cost                                 10,175,664      9,091,255	
   Less accumulated depreciation	  7,071,339      6,783,941
    Net property, plant and equipment     3,104,325	 2,307,314	
	
         TOTAL	                      $	 10,669,378   $ 11,885,808
		 				
See accompanying notes to consolidated financial statements.

                                 3


                                        November 30,       May 31,
                                           1996		    1996										
		                        (Unaudited)	
LIABILITIES AND STOCKHOLDERS' EQUITY			
															
CURRENT LIABILITIES:				
    Notes payable to bank                 $521,423      $2,281,809
    Current portion of long-term
      debt (Note 6)                        426,000	   426,000
Accounts payable                           590,006	   506,912
    Customer deposits (Note 3)              96,070         371,801
    Accrued expenses (Note 5)              681,929       1,007,326
      Total current liabilities          2,315,428       4,593,848

LONG-TERM DEBT, excluding current 
    portion (Note 6)	                 1,807,000	 1,420,000
DEFERRED INCOME TAXES                      160,038         160,038
	
STOCKHOLDERS' EQUITY:	
 Common stock - $.01 par value.
 Authorized 5,000,000 shares;
 issued 1,340,778 shares	            13,408          13,408
   Additional paid-in capital            1,641,042       2,295,089
   Retained earnings	                 5,721,813	 5,840,870
 		                         7,376,263 	 8,149,367

Less cost of common shares in treasury of			
103,147 in November and 254,147 in May     989,351       2,437,445				
    Total stockholders' equity		 6,386,912       5,711,922

         TOTAL	                       $10,669,378     $11,885,808

See accompanying notes to financial statements.


                                 4

														
            ART'S-WAY MANUFACTURING CO., INC. AND SUBSIDIARY	
                        STATEMENTS OF CASH FLOWS	
        QUARTERS ENDED NOVEMBER 30, 1996 AND NOVEMBER 30, 1995	
                                  (Unaudited)	
                                                 YEAR TO DATE
		                           1996		    1995
CASH FLOW FROM OPERATIONS:
  Net loss                              $ (119,056)	$(486,934)
  Adjustment to reconcile net loss 
    to net cash provided (used) by operations:				
    Depreciation	                   287,398        288,462
    Changes in assets and liabilities:				
      (Increase) decrease in:				
       Accounts receivable	           951,339      2,045,480 
       Inventories	                 1,311,984      1,387,424 
       Sundry                             (189,900)	  (67,994)
     Increase (decrease) in:	
       Accounts payable	                    83,094     (1,347,836)
       Customer deposits	          (275,731)        64,218
       Accrued expenses                   (325,397)      (114,372)
       Income taxes, net                  (142,500)       379,186 
	
        Total adjustments	         1,700,287      2,634,568
		
        Net cash provided by operations	 1,581,231      2,147,634
	
CASH USED IN INVESTING ACTIVITIES -	
 Purchasesof property,plantandequipment (1,084,409)          0 
	
CASH FLOWS FROM FINANCING ACTIVITIES:	
  Proceeds from issuance of common 	
  stock from treasury	                   794,046 	    30,895
Increase (decrease) in short term loan	(1,760,386)    (2,578,399)
Increase (decrease) in long-term loan	   387,000         450,166

Net cash provided by financing activities (579,340)    (2,097,338)

Net increase (decrease) in cash and
   temporary cash investments              (82,518)         50,296

Cash and temporary cash investments
   at beginning of period	            91,513          86,051

Cash and temporary cash investments at
   end of the period	                    $8,995 	  $136,347
	
Supplemental disclosures of cash flow information:

  Cash paid during the year for:	
    Interest	                          $173,426        $311,046
    Income taxes                            20,339           6,327

See accompanying notes to consolidated financial statements.



                               5



                   ART'S-WAY MANUFACTURING CO., INC.

                    NOTES TO FINANCIAL STATEMENTS




1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Statement Presentation

    The financial statements are unaudited and reflect all 
    adjustments (consisting only of normal recurring adjustments)
    which are, in the opinion of management, necessary for a  
    fair presentation of the financial position and operating 
    results for the interim periods.  The financial statements
    should be read in conjunction with the financial statements 
    and notes thereto contained in the Company's Annual Report
    on Form 10-K for the fiscal year ended May 31, 1996.  The 
    results of operations for the second quarterended November 30,
    1996 are not necessarily indicative of the results for the
    entire fiscal year ending May 31, 1997.


2.  LOSS PER SHARE

    Loss per common share is based on the weighted average number
    of shares outstanding of 1,228,708 	for the quarter and 
    1,157,281 for the six months in 1996; and 1,077,288 for 
    the quarter and 1,075,475 for the six months in 1995. 
    Outstanding stock options have no material dilutive effect
    upon loss per share.

3.  CUSTOMER DEPOSITS

    The Company receives customer deposits for equipment to be 
    delivered at a later date.  As equipment is invoiced and
    shipped, customer deposits are applied to accounts receivable
    created by these invoices.

4.  INVENTORIES

    Major classes of inventory are:    November 30,    May 31,
                                          1996          1996 

      Raw material                      $ 531,952     $ 631,354  
 
      Work-in-process                   1,868,018     2,235,737

      Finished goods                    2,765,789     3,683,652

      Inventory market write-down        (277,000)     (350,000)

          Total                        $4,888,759    $6,200,743

5.  ACCRUED EXPENSES

    Major components of accrued 
    expenses are:                     November 30,     May 31,
                                         1996           1996  

    Salaries, wages and commissions     $ 163,824     $ 305,413

    Provision for pending claims          135,000       160,000

    Other                                 383,105       541,913

         Total                          $ 681,929    $1,007,326

6.  NOTES PAYABLE - LONG-TERM

    A summary of the Company's long-term debt at November 30, 1996
    is as follows:
    
    Installment promissory note dated August 31, 1995, in the 
    original principal sum of $2,130,000, payable in monthly 
    installments of $35,500 plus interest for twenty-four months
    with the final payment due during the twenty-fourth month
    unless the revolving credit facility is renewed.  In the
    event that the term of the revolving credit facility is
    subsequently extended, the term loan shall continue to 
    amortize based upon the payment schedule outlined above.
                                                        $1,633,000

    State of Iowa Community Development Block Grant promissory 
    notes at zero percent interest, maturity 2006  with quarterly
    principal payments to begin October, 1997.
                                                           350,000

    State of Iowa Community Development Block Grant local 
    participation promissory notes at 4% interest, maturity 2006.
    Interest is payable quarterly beginning in November 1996
    and principal payments begin in November 1998.
                	                                   250,000

			Total long-term debt	         2,233,000


	Less current portion of long-term debt             426,000

	Long-term debt, excluding current portion	$1,807,000


                                     7



                                Item 2

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

(a)  Liquidity and Capital Resources

    At November 30, 1996, the Company's liquidity had increased 
    since fiscal year end, May 31, 1996. The quick ratio at 
    November 30, 1996, was .65:1 as compared to .56:1 at May 31,
    1996.  The current ratio was 3.26:1 at November 30, 1996, 
    as compared to 2.08:1 at May 31, 1996.  This increase in
    liquidity is partially the result of a reduction in customer 
    accounts receivable of $951,000 and inventories of $1,312,000,
    a decrease in short term borrowings of $1,760,000 and a 
    decrease in customer deposits of $276,000.  

    As of November 30, 1996, the Company had no material 
    commitments for capital expenditures.

    The Company anticipates that funds which may be required for 
    future working capital requirements, capital expenditures and
    business acquisitions will be obtained from future operations, 
    long-term and short-term debt and short-term lines of credit.

(b)  Results of Operations

     Overall sales were 6% lower than a year ago, reflecting 
     management's intention to produce nearer the season of use, 
     increase profitability, and to optimize working capital. 
     Sales to our major OEM customer were down almost 50% as they 
     adjusted dealer inventories.  Our beet equipment sales were 
     sharply lower than last year because our strong sales in the
     first quarter cleared out our available inventory for post 
     season activity. Sales arising from our Logan acquisition 
     were over $300,000 as we caught the tail-end of the 1996 
     harvest with our own manufacture of potato handling equipment
     and sold planting equipment for next year's crop.  The 
     majority of Logan sales will occur in the fourth quarter of 
     the fiscal year.  Business with our new OEM fiberglass 
     customer continues to exceed earlier expectations.  We were
     successful in reducing our inventory of aged wholegoods, and 
     dramatically increased sales of our SupRaMix product over 	
     last year's levels.  Sales arising from our acquisition of
     the DMI grain wagon line will occur in the fourth quarter.

     Second quarter gross profits were down 2% from last year on 
     the 6% lower sales.  The ratio of cost of goods sold to net 
     sales declined to 77.0% from 77.8% a year ago as we continue 
     to improve manufacturing efficiencies and product mix.  
     Operating expenses were 4% lower and interest and financing 
     costs were down 31% on much lower debt levels. The company 
     achieved a $65,000 improvement at the pre-tax level, reducing
     the pre-tax loss from $260,000 to $195,000.

     In September, the Company consummated two product line 
     acquisitions.  The first is a line of potato farm equipment, 
     including harvesters, windrowers, planters, bulk beds and 
     associated service parts.  The product line was previously
     owned by Logan Harvesters, Inc., based in Idaho Falls, Idaho.
     The second acquisition is a line of grain wagons and 	
     associated service parts previously owned by DMI, Inc.,
     based in Goodfield Illinois.  The acquisitions, which include
     inventory, were financed by the issuance of 145,000 shares 	
     of Art's-Way common stock, loans from the State of Iowa and
     local sources obtained through the State of Iowa Community
     Development Block Grant program and borrowings under the 
     Company's short term line of credit.

                                   8


                       Part II - Other Information

ITEM 1.  LEGAL PROCEEDINGS

    Various legal actions and claims are pending against the 
    Company.  In the opinion of management, appropriate provisions
    have been made in the accompanying financial statements for
    all pending legal actions and other claims.






                                    9



                               SIGNATURES


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

                ART'S-WAY MANUFACTURING CO., INC.




Date___January 13, 1997_____     /s/J. David Pitt
                              (J. David Pitt, President)


Date__January 13, 1997_____      /s/ William T. Green
                               (William T. Green, Executive 
                                Vice President, Chief
                                Financial Officer)







                                 10