================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

---------------

FORM 10-Q

---------------

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 1999.

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO .

COMMISSION FILE NUMBER 333-17865

---------------

CENEX HARVEST STATES COOPERATIVES
(Exact name of registrant as specified in its charter)

MINNESOTA 41-0251095
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

5500 CENEX DRIVE, (651) 451-5151
INVER GROVE HEIGHTS, MN 55077 (Registrant's telephone number
(Address of principal executive offices including area code)
and zip code)

---------------

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

YES _X_ NO ___

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

NONE NONE
---- ----
(Class) (Number of shares outstanding at
November 30, 1999)

================================================================================

INDEX

PAGE
NO.
----
PART I. FINANCIAL INFORMATION

CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES

Item 1. Financial Statements

Consolidated Balance Sheets as of August 31, 1999, November 30, 1999
(unaudited) and November 30, 1998 (unaudited) ............................. 2

Consolidated Statements of Operations for the three months ended
November 30, 1999 and 1998 (unaudited) .................................... 3

Consolidated Statements of Cash Flows for the three months ended
November 30, 1999 and 1998 (unaudited) .................................... 4

Notes to Consolidated Financial Statements (unaudited) .................... 5

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ..................................................... 7

Item 3. Quantitative and Qualitative Disclosures about Market Risk ........ 10

OILSEED PROCESSING AND REFINING DEFINED BUSINESS UNIT
(A DEFINED BUSINESS UNIT OF CENEX HARVEST STATES COOPERATIVES)

Item 1. Financial Statements

Balance Sheets as of August 31, 1999, November 30, 1999 (unaudited) and
November 30, 1998 (unaudited) ............................................. 11

Statements of Operations for the three months ended November 30, 1999
and 1998 (unaudited) ...................................................... 12

Statements of Cash Flows for the three months ended November 30, 1999
and 1998 (unaudited) ...................................................... 13

Notes to Financial Statements (unaudited) ................................. 14

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ..................................................... 15

WHEAT MILLING DEFINED BUSINESS UNIT
(A DEFINED BUSINESS UNIT OF CENEX HARVEST STATES COOPERATIVES)

Item 1. Financial Statements

Balance Sheets as of August 31, 1999, November 30, 1999 (unaudited) and
November 30, 1998 (unaudited) ............................................. 17

Statements of Operations for the three months ended November 30, 1999
and 1998 (unaudited) ...................................................... 18

Statements of Cash Flows for the three months ended November 30, 1999
and 1998 (unaudited) ...................................................... 19

Notes to Financial Statements (unaudited) ................................. 20

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ..................................................... 21

PART II. OTHER INFORMATION

Items 1 through 5 have been omitted since all items are inapplicable or
answers are negative

Item 6. Exhibits and Reports on Form 8-K .................................. 24

SIGNATURE PAGE ............................................................. 25

PART I. FINANCIAL INFORMATION

SAFE HARBOR STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

This Quarterly Report on Form 10-Q may contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements involve risks and uncertainties that may cause the
Company's actual results to differ materially from the results discussed in the
forward-looking statements. Factors that might cause such differences include,
but are not limited to the following:

SUPPLY AND DEMAND FORCES. The Company may be adversely affected by supply
and demand relationships, both domestic and international. Supply may be
affected by weather conditions, disease, insect damage, acreage planted,
government regulation and policies and commodity price levels. Demand may be
affected by foreign governments and their programs, relationships of foreign
countries with the United States, the affluence of foreign countries, acts of
war, currency exchange fluctuations, and substitution of commodities. The
current monetary crises in Asia has impacted, and is expected to continue to
impact exports of U.S. agricultural products. Reduced demand for U.S.
agricultural products may also adversely affect the demand for fertilizer,
chemicals, and petroleum products sold by the Company and used to produce crops.
Demand may also be affected by changes in eating habits, population growth and
increased or decreased per capita consumption of some products.

PRICE RISKS. Upon purchase, the Company has risks of carrying grain and
petroleum, including price changes and performance risks (including delivery,
quality, quantity and shipment period), depending upon the type of purchase
contract. The Company is exposed to risk of loss in the market value of
positions held, consisting of grain and petroleum inventory and purchase
contracts at a fixed or partially fixed price, in the event market prices
decrease. The Company is also exposed to risk of loss on its fixed price or
partially fixed price sales contracts in the event market prices increase. To
reduce the price change risks associated with holding fixed priced positions,
the Company generally takes opposite and offsetting positions by entering into
commodity futures contracts (either a straight futures contract or an option
futures contract) on regulated commodity futures exchanges.

OILSEED PROCESSING AND REFINING BUSINESS COMPETITION. This industry is
highly competitive. Competitors are adding new plants and expanding capacity of
existing plants. Unless exports increase or existing refineries are closed, this
extra capacity is likely to put additional pressure on prices and erode margins,
adversely affecting the profitability of the Oilseed Processing and Refining
Defined Business Unit.

MILLING BUSINESS COMPETITIVE TRENDS. Certain major competitors of the Wheat
Milling Defined Business Unit have developed long-term relationships with
customers by locating plants adjacent to pasta manufacturing plants. This trend
could potentially decrease the future demand for semolina from nonintegrated
millers. In addition, baking and bread flour demand declined during a period
when the milling industry has been expanding, which will continue to put
pressure on gross margins.

YEAR 2000. To date, the Company has not experienced any significant year
2000-related failures. The Company's management believes that the Company has
taken the steps reasonably necessary to resolve the year 2000 issue with respect
to matters within its control. While the Company has taken steps to determine
the extent of remediation efforts undertaken by key customers and suppliers,
there is no guarantee that the systems of other companies on which this Company
relies have been remediated in order to avoid having a material adverse effect
on the Company's operations or its financial results.

The forward-looking statements herein are qualified in their entirety by
the cautions and risk factors set forth in Exhibit 99, under the caption
"Cautionary Statement" to this Quarterly Report on Form 10-Q for the quarter
ended November 30, 1999.

CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES
ITEM 1. FINANCIAL STATEMENTS

CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

ASSETS

AUGUST 31, NOVEMBER 30, NOVEMBER 30,
1999 1999 1998
---------- ------------ ------------
(DOLLARS IN THOUSANDS) (UNAUDITED) (UNAUDITED)

CURRENT ASSETS:
Cash and cash equivalents .................................. $ 75,667 $ 56,142 $ 58,402
Receivables ................................................ 606,641 721,771 627,924
Inventories ................................................ 549,703 673,647 514,392
Other current assets ....................................... 39,414 40,030 29,500
---------- ---------- ----------
Total current assets ...................................... 1,271,425 1,491,590 1,230,218

INVESTMENTS ................................................. 427,896 416,966 347,713

PROPERTY, PLANT AND EQUIPMENT ............................... 968,333 978,815 928,997

OTHER ....................................................... 120,010 119,676 113,363
---------- ---------- ----------
Total assets .............................................. $2,787,664 $3,007,047 $2,620,291
========== ========== ==========

LIABILITIES AND EQUITIES
CURRENT LIABILITIES:
Notes payable .............................................. $ 196,986 $ 229,354 $ 30,000
Current portion of long-term debt .......................... 21,562 21,221 14,577
Patrons' credit balances ................................... 44,970 47,639 62,953
Patrons' advance payments .................................. 127,755 250,552 186,508
Drafts outstanding ......................................... 30,654 17,146 23,646
Accounts payable ........................................... 449,774 473,030 474,215
Book cash overdraft ........................................ 17,951 19,754 42,195
Accrued expenses ........................................... 119,728 133,522 98,099
Patronage dividends and equity retirements payable ......... 43,000 36,089 46,887
---------- ---------- ----------
Total current liabilities ................................. 1,052,380 1,228,307 979,080

LONG-TERM DEBT .............................................. 461,104 455,601 437,672

OTHER LIABILITIES ........................................... 88,173 79,697 78,333

MINORITY INTERESTS IN SUBSIDIARIES .......................... 68,371 121,165 57,322

COMMITMENTS AND CONTINGENCIES

EQUITIES .................................................... 1,117,636 1,122,277 1,067,884
---------- ---------- ----------
Total liabilities and equities ............................ $2,787,664 $3,007,047 $2,620,291
========== ========== ==========

The accompanying notes are an integral part of the consolidated
financial statements (unaudited).

CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

FOR THE
THREE MONTHS ENDED
NOVEMBER 30,
-------------------------
1999 1998
---------- ----------
(DOLLARS IN THOUSANDS)

REVENUES:
Net Sales:
Grain and oilseed ................................ $1,002,882 $1,057,871
Energy ........................................... 659,270 329,868
Processed grain and oilseed ...................... 136,152 137,555
Feed and farm supplies ........................... 118,391 122,835
Agronomy ......................................... 102,063 107,602
---------- ----------
2,018,758 1,755,731
Patronage dividends ............................... 258 469
Other revenues .................................... 25,980 27,211
---------- ----------
2,044,996 1,783,411
---------- ----------

COSTS AND EXPENSES:
Cost of good sold ................................. 1,984,813 1,727,676
Marketing, general and administrative ............. 39,292 37,271
Interest .......................................... 12,956 9,550
Minority interests ................................ 537 (1,401)
---------- ----------
2,037,598 1,773,096
---------- ----------

INCOME BEFORE INCOME TAXES ......................... 7,398 10,315

INCOME TAXES ....................................... (1,721) 2,000
---------- ----------

NET INCOME ......................................... $ 9,119 $ 8,315
========== ==========

The accompanying notes are an integral part of the consolidated
financial statements (unaudited).

CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

FOR THE
THREE MONTHS ENDED
NOVEMBER 30,
-----------------------
1999 1998
--------- ---------
(DOLLARS IN THOUSANDS)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ......................................................... $ 9,119 $ 8,315
--------- ---------
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization .................................... 22,178 19,975
Noncash net loss (income) from joint ventures .................... 823 (4,669)
Adjustment of inventories to market value ........................ -- 10,742
Noncash portion of patronage dividends received .................. (70) (175)
Gain on sale of property, plant and equipment .................... (76) (797)
Changes in operating assets and liabilities:
Receivables ..................................................... (115,292) (159,199)
Inventories ..................................................... (69,545) (45,400)
Other current assets and other assets ........................... (1,068) (7,237)
Patrons' credit balances ........................................ 2,669 21,629
Patrons' advance payments ....................................... 122,797 38,487
Accounts payable and accrued expenses ........................... 37,050 69,781
Drafts outstanding and other liabilities ........................ (21,984) (189)
--------- ---------
Total adjustments ............................................. (22,518) (57,052)
--------- ---------
Net cash used in operating activities ......................... (13,399) (48,737)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment ....................... (31,854) (33,815)
Proceeds from disposition of property, plant and equipment ......... 456 3,212
Investments ........................................................ (3,164) (2,217)
Investments redeemed ............................................... 11,589 4,462
Changes in notes receivable ........................................ 53 1,357
Other investing activities, net .................................... (22) (221)
--------- ---------
Net cash used in investing activities ......................... (22,942) (27,222)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Changes in notes payable ........................................... 32,368 29,525
Principal payments on long-term debt ............................... (5,844) (4,628)
Changes in book cash overdraft ..................................... 1,803 13,819
Retirements of equity .............................................. (11,511) (9,271)
Cash patronage dividends paid ...................................... -- (15,092)
--------- ---------
Net cash provided by financing activities ..................... 16,816 14,353
--------- ---------
NET DECREASE IN CASH AND
CASH EQUIVALENTS ................................................... (19,525) (61,606)

CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD .......................................................... 75,667 120,008
--------- ---------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD .......................................................... $ 56,142 $ 58,402
========= =========

The accompanying notes are an integral part of the consolidated
financial statements (unaudited).

CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS)

NOTE 1. ACCOUNTING POLICIES

The unaudited consolidated statements of operations and cash flows for the
three months ended November 30, 1999 and 1998, reflect, in the opinion of
management of Cenex Harvest States Cooperatives (the Company), all normal,
recurring adjustments necessary for a fair statement of the results of
operations and cash flows for the interim periods. The results of operations and
cash flows for any interim period are not necessarily indicative of results for
the full year. The consolidated balance sheet data as of August 31, 1999 was
derived from audited consolidated financial statements but does not include all
disclosures required by generally accepted accounting principles.

The unaudited consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated.

Reclassifications have been made to the prior year's financial statements
to conform to the current year presentation.

These statements should be read in conjunction with the financial
statements and footnotes for the year ended August 31, 1999, included in the
Company's Report on Form 10-K previously filed with Securities and Exchange
Commission on November 22, 1999.

NOTE 2. RECEIVABLES

AUGUST 31, NOVEMBER 30, NOVEMBER 30,
1999 1999 1998
---------- ------------ ------------

Trade .................................... $595,403 $739,048 $641,889
Other .................................... 34,493 6,399 9,097
-------- -------- --------
629,896 745,447 650,986
Less allowance for doubtful accounts ..... 23,255 23,676 23,062
-------- -------- --------
$606,641 $721,771 $627,924
======== ======== ========

NOTE 3. INVENTORIES

AUGUST 31, NOVEMBER 30, NOVEMBER 30,
1999 1999 1998
---------- ------------ ------------

Energy ................................... $209,661 $319,992 $169,235
Grain and oilseed. ....................... 202,166 207,662 189,761
Agronomy. ................................ 69,050 80,943 76,843
Processed grain and oilseed .............. 14,342 11,066 13,741
Feed and farm supplies. .................. 50,908 50,953 62,071
Other .................................... 3,576 3,031 2,741
-------- -------- --------
$549,703 $673,647 $514,392
======== ======== ========

NOTE 4. COMPREHENSIVE INCOME

During the three months ended November 30, 1999 and 1998, total
comprehensive income amounted to $9,152 and $9,715 respectively. Accumulated
other comprehensive (loss) income at August 31, 1999, November 30, 1999 and 1998
was $(1,170), $(1,137) and $1,301, respectively.

NOTE 5. SEGMENT REPORTING

The Company's businesses are organized, managed and internally reported as
four segments. These segments, which are based on products and services, include
agronomy, energy, grain marketing and farm marketing & supply, and processed
grain and consumer products. Due to cost allocations and intersegment activity,
management does not represent that these segments if operated independently,
would report the income before income taxes and other financial information
presented.

Segment information for the three months ended November 30, 1999 and 1998
is as follows:

GRAIN MARKETING PROCESSED GRAIN
AND FARM AND CONSUMER
AGRONOMY ENERGY MARKETING & SUPPLY PRODUCTS OTHER TOTAL
---------- ---------- ------------------ --------------- ---------- ----------

For the three months ended
November 30, 1999:
Net sales .......................... $ 102,063 $ 659,270 $1,121,273 $ 136,152 $2,018,758
Patronage dividends ................ 111 14 74 $ 59 258
Other revenues ..................... (7,810) 1,942 21,506 5,246 5,096 25,980
---------- ---------- ---------- ---------- ---------- ----------
94,364 661,226 1,142,853 141,398 5,155 2,044,996

Cost of goods sold ................. 95,570 644,004 1,119,342 125,897 1,984,813
Marketing, general and
administrative .................... 4,412 11,921 13,577 4,635 4,747 39,292
Interest ........................... 1,331 5,748 4,289 1,536 52 12,956
Minority interests ................. 514 23 537
---------- ---------- ---------- ---------- ---------- ----------
(Loss) income before income
taxes ............................. $ (6,949) $ (961) $ 5,645 $ 9,330 $ 333 $ 7,398
========== ========== ========== ========== ========== ==========
Total identifiable assets ........ $ 393,150 $1,206,680 $ 857,897 $ 322,006 $ 227,314 $3,007,047
========== ========== ========== ========== ========== ==========
For the three months ended
November 30, 1998:
Net sales .......................... $ 107,602 $ 329,868 $1,180,706 $ 137,555 $1,755,731
Patronage dividends ................ 316 22 71 $ 60 469
Other revenues ..................... 586 19,194 2,905 4,526 27,211
---------- ---------- ---------- ---------- ---------- ----------
107,918 330,476 1,199,971 140,460 4,586 1,783,411

Cost of goods sold ................. 104,414 318,068 1,176,191 129,003 1,727,676
Marketing, general and
administrative .................... 4,790 13,801 10,768 3,803 4,109 37,271
Interest ........................... 299 3,669 4,245 1,338 (1) 9,550
Minority interests ................. (1,429) 28 (1,401)
---------- ---------- ---------- ---------- ---------- ----------
(Loss) income before income
taxes ............................. $ (1,585) $ (3,633) $ 8,767 $ 6,316 $ 450 $ 10,315
========== ========== ========== ========== ========== ==========
Total identifiable assets ........ $ 328,241 $ 886,907 $ 870,293 $ 313,640 $ 221,210 $2,620,291
========== ========== ========== ========== ========== ==========

Assets included in "Other" primarily consisted of intercompany transactions
and corporate facilities.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

In May 1999, the Company and Farmland Industries, Inc. (Farmland) announced
their intention to work towards a combination of the two companies. The Board of
Directors approved a resolution recommending this combination to the Company's
membership and a transaction agreement was signed as of September 23, 1999. On
November 23, 1999 the members of both companies voted on the merger. Farmland
members approved the merger with 89 percent voting in favor. The Company's vote
fell just short of the two-thirds needed, at 64 percent.

The Company is in the process of establishing joint ventures with Farmland
and Land O' Lakes, Inc. in agronomy and seed operations. Although an agreement
has not been signed, the companies are in the final stages of negotiations. It
is anticipated that the new joint venture will have its own financing.

RESULTS OF OPERATIONS

COMPARISON OF THREE MONTHS ENDED NOVEMBER 30, 1999 AND 1998

The Company's consolidated net income for the three months ended November
30, 1999 and 1998 was $9.1 million and $8.3 million, respectively, which
represents a $.8 million (10%) increase during the current three-month period.
This increase in profitability is primarily attributable to an increase in the
Company's income from its consumer products packaging joint venture and also a
tax benefit as a result of net non-patronage losses. These increases to net
income were partially offset by a $5.3 million pre-tax reduction in Agronomy
results, which have become more sensitive to seasonality because of a larger
asset base.

Consolidated net sales of $2.0 billion for the three months ended November
30, 1999 increased approximately $.3 billion (15%) compared to the same three
months ended in 1998.

Grain and oilseed sales of $1.0 billion decreased $55.0 million (5%) during
the three months ended November 30, 1999 when compared to the same three months
ended in 1998. Although grain volumes increased 15.3 million bushels, the
primary cause for the decreased sales is a decline of 42 cents per bushel in the
average sales price of all grain and oilseed marketed by the Company.

Energy sales of $659.3 million increased $329.4 million (almost 100%)
during the three months ended November 30, 1999 compared to the same three
months of a year ago. This increase is primarily attributable to the formation
of a refinery joint venture whereby the Company, through its 75% ownership in
National Cooperative Refinery Association (NCRA), which in turn owns
approximately 57% of the refining joint venture (Cooperative Refining, LLC),
consolidates the sales made to the minority owner. In addition, there was an
increase in the average sales price of refined fuels of 21 cents per gallon.
These increases were offset by a 28% decrease in propane volumes due to
unusually warm weather during the current three-month period.

Processed grain and oilseed sales of $136.2 million were essentially
unchanged for the three months ended November 30, 1999 compared to the same
three months ended in 1998.

Feed and farm supplies sales of $118.4 million during the three months
ended November 30, 1999 were essentially unchanged when compared to the same
three months ended in 1998.

Agronomy sales of $102.1 million decreased $5.5 million (5%) during the
three months ended November 30, 1999 compared to the same three months ended in
1998. Crop protection sales declined $6.8 million in 1999 compared to 1998,
which was partially offset by a 15% increase in plant food volumes.

Other revenues of $26.0 million decreased $1.2 million (5%) during the
three months ended November 30, 1999 compared to the same three months ended in
1998. The most significant change within other revenues was an increase in the
Company's share of income from joint ventures. Joint venture income from food
packaging, grain marketing and agronomy increased by $2.2 million and $2.2
million, and decreased by $7.8 million, respectively. This net decrease was
offset by an increase in other miscellaneous revenues.

Cost of goods sold of approximately $2.0 billion decreased $257.1 million
(15%) during the three months ended November 30, 1999 compared to the same three
months ended in 1998. During the three months ended November 30, 1999 the
average cost per bushel of all grains and oilseed procured by the Company
through its grain marketing and country elevator system decreased by 40 cents
per bushel offset by an increase in the average selling price of refined fuels
of 21 cents per gallon. Also during the

three months ended November 30, 1999 agronomy cost of goods decreased by $8.8
million compared to the same three months ended in 1998.

Marketing, general and administrative expenses of $39.3 million for the
three months ended November 30, 1999 increased $2.0 million (5%) compared to the
same three months ended in 1998. This increase is primarily related to
additional locations and expansion of many of the Company's business segments.

Interest expense of $13.0 million for the three months ended November 30,
1999 increased by $3.4 million (36%) compared to the same three months ended in
1998. The average seasonal borrowings during 1999 increased as a result of
higher working capital needs, and long-term borrowings which reflected financial
activities related to the acquisition of property, plant and equipment,
generated most of this additional expense.

Minority interests in operations of $0.5 million for the three months ended
November 30, 1999 increased $1.9 million compared to the same three months ended
in 1998. Substantially all of the minority interest is in National Cooperative
Refinery Association (NCRA), which operates a petroleum refinery near McPherson,
Kansas. The Company owns approximately 75% of NCRA. This net change in minority
interests during the current year is reflective of more profitable operations
within NCRA.

An income tax benefit of $1.7 million for the three months ended November
30, 1999 is the result of a net non-patronage loss of approximately $4.3
million. Income tax expense of $2.0 million for the three months ended November
30, 1998 produced an effective tax rate of 19.4%. Income tax expense or benefit
and the resulting effective tax rates change from period to period based upon
the profitability and non-patronage business activity during each of the
comparable periods.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOWS FROM OPERATIONS

Operating activities of the Company used net cash of $13.4 million and
$48.7 million for the three months ended November 30, 1999 and 1998,
respectively. For the period ended in 1999, net income of $9.1 million and net
non-cash income and expenses of approximately $22.9 million were offset by
increased working capital requirements of approximately $45.4 million. For the
three-month period ending November 30, 1998, net income of $8.3 million and net
non-cash income and expenses of approximately $25.1 million were offset by
increased working capital requirements of approximately $82.1 million.

CASH FLOWS FROM INVESTING

Investing activities of the Company used net cash of $22.9 million during
the three-month period ended November 30, 1999. Expenditures for the acquisition
of property, plant and equipment of $31.9 million and the net change in
investments of $3.2 million were partially offset by investments redeemed of
$11.6 million, proceeds from the disposition of property, plant and equipment
and the net change in notes receivable. For the fiscal year ending August 31,
2000, the Company projects that total expenditures for the acquisition of
property, plant and equipment will be approximately $139.6 million.

Investing activities of the Company used net cash of $27.2 million during
the three-month period ended November 30, 1998. Expenditures for the acquisition
of property, plant and equipment of $33.8 million and additional investments in
joint ventures of $2.2 million were partially offset by proceeds from the
disposition of property, plant and equipment, proceeds from the redemption of
investments and the net change in notes receivable.

CASH FLOWS FROM FINANCING

The Company finances its working capital needs through short-term lines of
credit with a syndication of banks. In June 1998 the Company established a
364-day credit facility of $400 million, which was renewed in May, 1999, and a
five-year revolving facility of $200 million, all of which is

committed. In addition to these lines of credit, the Company has a 364-day
credit facility dedicated to NCRA, with a syndication of banks in the amount of
$50.0 million, all of which is committed. On November 30, 1999 and 1998, the
Company had total short-term indebtedness on these various facilities and other
short-term notes payable totaling $229.4 million and $30.0 million,
respectively. On August 31, 1999 the Company had $197.0 million outstanding on
its short-term lines of credit and other notes payable.

The Company has financed its long-term capital needs in the past, primarily
for the acquisition of property, plant and equipment, with long-term loan
agreements through the banks for cooperatives. In June, 1998, the Company
established a long-term credit agreement through the banks for cooperatives.
This facility committed $200.0 million of long-term borrowing capacity to the
Company, with repayments through the fiscal year 2009. The commitment expired on
May 31, 1999. The amount outstanding on this credit agreement was $164.0
million, $162.4 million and $134.0 million on August 31, 1999 and November 30,
1999 and 1998, respectively, with zero remaining available on both August 31,
1999 and November 30, 1999. Repayments of $1.6 million were made on this
facility during the three months ended November 30, 1999.

Also in June 1998, the Company entered into a private placement with
several insurance companies for long-term debt in the amount of $225 million.
Repayments will be made in equal installments of $37.5 million each in the years
2008 through 2013.

On November 30, 1999 the Company had total long-term debt outstanding of
$476.8 million, of which approximately $224.4 million was bank financing, $225.0
million was private placement proceeds and $27.4 million was industrial revenue
bonds, capitalized leases and miscellaneous notes payable. Long-term debt
through NCRA represented $57.6 million of the total long-term debt outstanding
on November 30, 1999. On August 31, 1999 and November 30, 1998 the Company had
long-term debt outstanding of $482.7 million and $452.2 million, respectively.

During the three-month periods ended November 30, 1999 and 1998 the Company
repaid long-term debt of $5.8 million and $4.6 million, respectively, and had no
additional long-term borrowings during either period.

In accordance with the By-Laws and by action of the Board of Directors,
annual net savings from patronage sources are distributed to consenting patrons
following the close of each year and are based on amounts reportable for federal
income tax purposes as adjusted in accordance with the By-Laws. The patronage
earnings from the fiscal year ended August 31, 1999 are expected to be
distributed in January 2000. The cash portion of this distribution, deemed by
the Board of Directors to be 75% for Equity Participation Units and 30% for
regular earnings, is expected to be approximately $17.3 million and is
classified as a current liability on the August 31, 1999 and the November 30,
1999 balance sheets. For the three months ended November 30, 1998 the Company
paid out $15.1 million from the patronage earnings of the former Harvest States
Cooperatives fiscal year ended May 31, 1998.

The current equity redemption policy, as authorized by the Board of
Directors, allows for the redemption of capital equity certificates held by
inactive direct members and patrons and active members and patrons at age 72 or
death who were age 61 or older on June 1, 1998. For active direct members and
patrons who were age 60 or younger on June 1, 1998, and member cooperatives,
equities will be redeemed annually based on a prorata formula where the
numerator is dollars available for such purpose as determined by the Board of
Directors, and the denominator is the sum of the patronage certificates held by
such eligible members and patrons. Such redemptions related to the year ended
August 31, 1999, to be distributed in the current fiscal year, are expected to
be approximately $25.7 million, of which approximately $11.5 million was
redeemed during the three months ended November 30, 1999. During the three
months ended November 30, 1998 the Company redeemed approximately $9.3 million
of equity.

During the year ended May 31, 1997, the Company offered securities in the
form of Equity Participation Units (EPUs) in its Wheat Milling and Oilseed
Processing and Refining Defined Business

Units. These EPUs give the holder the right and obligation to deliver to the
Company a stated number of bushels in return for a prorata share of the
undiluted grain based patronage earnings of these respective Defined Business
Units. The offering resulted in the issuance of such equity with a stated value
of $13,870,000 and generated additional capital and cash of $10,837,000, after
issuance cost and conversion privileges. Conversion privileges allowed a member
to elect to use outstanding patrons' equities for the payment of up to one-sixth
the purchase price of the EPUs.

Holders of the EPUs will not be entitled to payment of dividends by virtue
of holding such units. However, holders of the units will be entitled to receive
patronage refunds attributable to the patronage sourced income from operations
of the applicable defined business unit on the basis of wheat or soybeans
delivered pursuant to the Member Marketing Agreement. The Board of Directors'
goal is to distribute patronage refunds attributable to the EPUs in the form of
75% cash and 25% capital equity certificates, and to retire those capital equity
certificates on a revolving basis seven years after declaration. However, the
decision as to the percentage of cash patronage will be made each fiscal year by
the Board of Directors and will depend upon the cash and capital needs of the
respective Defined Business Units and is subject to the discretion of the Board
of Directors. The redemption policy will also be subject to change at the
discretion of the Board of Directors.

EFFECT OF INFLATION AND FOREIGN CURRENCY TRANSACTIONS

The Company believes that inflation and foreign currency fluctuations have
not had a significant effect on its operations.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 133, a new standard related to the accounting for derivative transactions
and hedging activities. In July 1999, the FASB issued SFAS No. 137 which defers
the effective date of SFAS No. 133 to all fiscal quarters of all fiscal years
beginning after June 15, 2000. While management does not believe this standard
will materially impact the financial position and results of operations of the
Company, it is currently evaluating the reporting requirements under this new
standard.

YEAR 2000

In preparation for the year 2000, the Company engaged an information
technology consulting firm specializing in year 2000 systems projects. The scope
of the program management effort at the Company has included internal mainframe,
midrange, and LAN based systems as well as facilities, package software vendors,
and interfaces with external vendors, processors and customers. Remediation and
upgrades of these systems have been completed for all mission critical systems.
Through December 31, 1999, the Company has expensed approximately $2.1 million
to review and correct its own computer systems.

To date, the Company has not experienced any significant Year 2000-related
failures. The Company's management believes that the Company has put in place an
effective program to address the year 2000 issue and that it has taken the steps
reasonably necessary to resolve this issue with respect to matters within its
control. However, it also recognizes that failure by other parties to
sufficiently resolve all aspects of the year 2000 issue in a timely fashion
continues to present substantial risks for the Company. While the Company has
taken steps to determine the extent of remediation efforts undertaken by key
customers and suppliers, there is no guarantee that the systems of other
companies on which this Company relies have been remediated in order to avoid
having a material adverse effect on the Company's results of operations or its
financial position.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There were no material changes during the quarter ended November 30, 1999.

OILSEED PROCESSING AND REFINING DEFINED BUSINESS UNIT
ITEM 1. FINANCIAL STATEMENTS

OILSEED PROCESSING AND REFINING DEFINED BUSINESS UNIT
(A DEFINED BUSINESS UNIT OF CENEX HARVEST STATES COOPERATIVES)

BALANCE SHEETS

ASSETS

AUGUST 31, NOVEMBER 30, NOVEMBER 30,
1999 1999 1998
---------- ------------ ------------
(DOLLARS IN THOUSANDS) (UNAUDITED) (UNAUDITED)

CURRENT ASSETS:
Receivables ................................................. $24,650 $26,876 $31,930
Inventories ................................................. 17,084 16,016 23,784
Other current assets ........................................ 25 240
------- ------- -------
Total current assets ....................................... 41,734 42,917 55,954

PROPERTY, PLANT AND EQUIPMENT ................................ 39,001 39,060 36,558
------- ------- -------
Total assets ............................................... $80,735 $81,977 $92,512
======= ======= =======
LIABILITIES AND DEFINED BUSINESS UNIT EQUITY

CURRENT LIABILITIES:
Due to Cenex Harvest States Cooperatives .................... $ 9,546 $ 9,537 $24,111
Accounts payable ............................................ 5,768 5,380 6,146
Accrued expenses ............................................ 4,227 5,866 3,778
------- ------- -------
Total current liabilities .................................. 19,541 20,783 34,035

COMMITMENTS AND CONTINGENCIES

DEFINED BUSINESS UNIT EQUITY ................................. 61,194 61,194 58,477
------- ------- -------
Total liabilities and defined business unit equity ......... $80,735 $81,977 $92,512
======= ======= =======

The accompanying notes are an integral part of the financial statements
(unaudited)

OILSEED PROCESSING AND REFINING DEFINED BUSINESS UNIT
(A DEFINED BUSINESS UNIT OF CENEX HARVEST STATES COOPERATIVES)

STATEMENTS OF OPERATIONS
(UNAUDITED)

FOR THE
THREE MONTHS ENDED
NOVEMBER 30,
----------------------
1999 1998
-------- --------
(DOLLARS IN THOUSANDS)

REVENUES:
Processed oilseed sales ............................... $83,557 $95,462
Other revenue ......................................... 329 4
------- -------
83,886 95,466
------- -------
COSTS AND EXPENSES:
Cost of goods sold .................................... 77,364 88,973
Marketing, general and administrative ................. 1,356 1,310
Interest .............................................. 302
------- -------
78,720 90,585
------- -------

INCOME BEFORE INCOME TAXES ............................. 5,166 4,881

INCOME TAX EXPENSE ..................................... 300 80
------- -------

NET INCOME ............................................. $ 4,866 $ 4,801
======= =======

The accompanying notes are an integral part of the financial statements
(unaudited)

OILSEED PROCESSING AND REFINING DEFINED BUSINESS UNIT
(A DEFINED BUSINESS UNIT OF CENEX HARVEST STATES COOPERATIVES)

STATEMENTS OF CASH FLOWS
(UNAUDITED)

FOR THE
THREE MONTHS ENDED
NOVEMBER 30,
---------------------
1999 1998
-------- --------
(DOLLARS IN THOUSANDS)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ....................................................... $ 4,866 $ 4,801
------- -------
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation ................................................... 624 547
Gain on disposal of property, plant and equipment .............. 35
Changes in operating assets and liabilities:
Receivables ................................................... (2,226) (3,227)
Inventories ................................................... 1,068 (5,215)
Other current assets .......................................... (25) (240)
Accounts payable and accrued expenses ......................... 1,251 605
------- -------
Total adjustments ........................................... 727 (7,530)
------- -------
Net cash provided by (used in) operating activities ......... 5,593 (2,729)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment ..................... (718) (1,509)
------- -------
Net cash used in investing activities ....................... (718) (1,509)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in due to Cenex Harvest States Cooperatives ............... (9) 9,039
Defined business unit equity distributed to the Company .......... (4,866) (4,801)
------- -------
Net cash (used in) provided by financing activities ......... (4,875) 4,238
------- -------

INCREASE (DECREASE) IN CASH ....................................... -- --

CASH AT BEGINNING OF PERIOD ....................................... -- --
------- -------

CASH AT END OF PERIOD ............................................. -- --
======= =======

The accompanying notes are an integral part of the financial statements
(unaudited)

OILSEED PROCESSING AND REFINING DEFINED BUSINESS UNIT
(A DEFINED BUSINESS UNIT OF CENEX HARVEST STATES COOPERATIVES)

NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1. ACCOUNTING POLICIES

The unaudited statements of operations and cash flows for the three months
ended November 30, 1999 and 1998, reflect, in the opinion of management of Cenex
Harvest States Cooperatives (the Company), all normal, recurring adjustments
necessary for a fair statement of the results of operations and cash flows for
the interim periods. The results of operations and cash flows for any interim
period are not necessarily indicative of results for the full year. The balance
sheet data as of August 31, 1999 was derived from audited financial statements
but does not include all disclosures required by generally accepted accounting
principles.

These statements should be read in conjunction with the financial
statements and footnotes included in the Wheat Milling Defined Business Unit
financial statements for the year ended August 31, 1999, which are included in
the Cenex Harvest States Cooperatives Report on Form 10-K previously filed with
the Securities and Exchange Commission on November 22, 1999.

NOTE 2. RECEIVABLES

AUGUST 31, NOVEMBER 30, NOVEMBER 30,
1999 1999 1998
---------- ------------ ------------

Trade ....................................... $25,045 $27,271 $32,325
Less allowance for doubtful accounts ........ 395 395 395
------- ------- -------
$24,650 $26,876 $31,930
======= ======= =======

NOTE 3. INVENTORIES

AUGUST 31, NOVEMBER 30, NOVEMBER 30,
1999 1999 1998
---------- ------------ ------------

Processed oilseed products .................. $11,918 $ 9,272 $12,004
Oilseed ..................................... 5,166 6,744 11,780
------- ------- -------
$17,084 $16,016 $23,784
======= ======= =======

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

See the Management Discussion and Analysis for the Company in regard to new
accounting pronouncements and also the Year 2000.

RESULTS OF OPERATIONS

Patronage refunds to the Oilseed Processing and Refining Defined Business
Unit holders are calculated on the basis of tax earnings per bushel. Because of
this, the Company believes that the calculation below is an important measure of
the Defined Business Unit's performance.

THREE MONTHS ENDED
NOVEMBER 30,
---------------------
1999 1998
(IN THOUSANDS EXCEPT PER BUSHEL INFORMATION) -------- --------

Income before income taxes ........................ $ 5,166 $ 4,881
Income from purchased oil ......................... (1,541) (753)
Nonpatronage joint venture income ................. (153)
Book to tax differences ........................... 24
-------- --------
Taxable income .................................... $ 3,496 $ 4,128
======== ========
Bushels processed ................................. 9,227 8,065
Income per bushel ................................. $ 0.379 $ 0.512

Certain operating information pertaining to the Oilseed Processing and
Refining Defined Business Unit is set forth below, as a percentage of processed
oilseed sales.

THREE MONTHS ENDED
NOVEMBER 30,
---------------------
1999 1998
-------- --------
Gross margin ...................................... 7.41% 6.80%
Marketing, general and administrative ............. 1.62% 1.37%
Interest .......................................... 0.00% 0.32%

COMPARISON OF THREE MONTHS ENDED NOVEMBER 30, 1999 AND 1998

The Oilseed Processing and Refining Defined Business Unit net income of
$4.9 million for the three months ended November 30, 1999 represents a $0.1
million increase (1%) compared to the same period in 1998. While the gross
margin for soymeal declined approximately $10 per ton during the three-month
period ended November 30, 1999 compared to the same period ended in 1998, and
refined oil margins remained essentially unchanged, increased volume for both
products contributed to this slight improvement to net income.

Net sales of $83.6 million for the three months ended November 30, 1999
decreased by $11.9 million (12%) compared to the same period in 1998. A
reduction in the sales price for refined oil of approximately $0.08 per pound
was partially offset by a 12% increase in sales volume for processed soybean
products and a 12% increase in refined oil volume. The average sales price for
soymeal was essentially the same during the two periods.

Other revenues increased approximately $0.3 million during the three months
ended November 30, 1999 compared to the same period in 1998. During the 1999
period, the Defined Business Unit received approximately $0.2 million from an
oilseed joint venture, and also recognized interest income of $0.2 million
during that same period. During the three-month period ended November 30, 1998,
the Oilseed Processing and Refining Defined Business Unit generated essentially
no other revenue.

Cost of goods sold of $77.4 million for the three months ended November 30,
1999 decreased $11.6 million (13%) compared to the same period in 1998. A
reduced cost for soybeans averaging $0.92 per bushel and reduced cost for crude
soybean oil averaging $0.085 per pound during the three months ended November
30, 1999, compared to the three months ended November 30, 1998 were partially
offset

by a 14% increase in crush volume (approximately 1.2 million bushels) and an 11%
increase in refining volume (approximately 16.4 million pounds).

Marketing, general and administrative expenses of approximately $1.4
million for the three months ended November 30, 1999 were essentially unchanged
compared to the three months ended November 30, 1998.

During the three month period ended November 30, 1999, the Oilseed
Processing and Refining Defined Business Unit incurred no net interest expense
compared to interest expense of approximately $0.3 million during the same
period ended in 1998. This favorable variance is primarily attributable to the
lower price of raw material and finished products which resulted in no
borrowings based on average daily outstanding balances, as discussed in the
sales and cost of goods sold section of this analysis.

Income tax expense of $0.3 million and $0.1 million for the three-month
periods ended November 30, 1999 and 1998, respectively, resulted in effective
tax rates of 5.8% and 1.6%. The effective tax rate changes from period to period
based upon the percentage of non-patronage business activity to total business
activity.

LIQUIDITY AND CAPITAL RESOURCES

The Oilseed Processing and Refining Defined Business Unit's cash
requirements relate primarily to capital improvements and a need to finance
additional inventories and receivables based on increased raw material costs and
levels. These cash needs are expected to be fulfilled by the Company.

CASH FLOWS FROM OPERATIONS

Operating activities for the three months ended November 30, 1999 provided
net cash of $5.6 million. Net income of $4.9 million, non-cash expenses of $0.6
million and a reduction in working capital requirements of $0.1 million
generated this net cash. For the three-month period ending November 30, 1998,
operating activities used $2.7 million of net cash. During that period, net
income of $4.8 million and non-cash expenses of approximately $0.5 million were
offset by increased working capital requirements of approximately $8.0 million
to produce this net use of cash for operating activities.

CASH FLOWS FROM INVESTING

During the three month periods ended November 30, 1999 and 1998, the
Oilseed Processing and Refining Defined Business Unit used cash for investing
activities of $0.7 million and $1.5 million respectively. These amounts were for
the acquisition of property, plant and equipment.

CASH FLOWS FROM FINANCING

The Oilseed Processing and Refining Defined Business Unit's financing
activities are coordinated through the Company's cash management department.
Cash from all of the Company's operations is deposited with the Company's cash
management department and disbursements are made centrally. As a result, the
Oilseed Processing and Refining Defined Business Unit has a zero cash position.
Financing is available from the Company to the extent of the Company's working
capital position and corporate loan agreements with various banks, and cash
requirements of all other Company operations.

Working capital requirements for each division and defined business unit of
the Company are reviewed on a periodic basis, and could potentially be
restricted based upon management's evaluation of the prevailing business
conditions and availability of funds.

The Oilseed Processing and Refining Defined Business Unit had debt
outstanding to the Company of approximately $9.5 million on August 31, 1999 and
November 30, 1999. These interest bearing balances reflect working capital and
fixed asset financing requirements as of these balance sheet dates.

WHEAT MILLING DEFINED BUSINESS UNIT
ITEM 1. FINANCIAL STATEMENTS

WHEAT MILLING DEFINED BUSINESS UNIT
(A DEFINED BUSINESS UNIT OF CENEX HARVEST STATES COOPERATIVES)

BALANCE SHEETS

ASSETS

AUGUST 31, NOVEMBER 30, NOVEMBER 30,
1999 1999 1998
---------- ------------ ------------
(DOLLARS IN THOUSANDS) (UNAUDITED) (UNAUDITED)

CURRENT ASSETS:
Receivables ................................................. $ 30,960 $ 38,115 $ 31,661
Inventories ................................................. 14,339 21,386 21,314
Other current assets ........................................ 210 267 165
-------- -------- --------
Total current assets ....................................... 45,509 59,768 53,140

PROPERTY, PLANT AND EQUIPMENT ................................ 110,547 109,569 106,157
INTANGIBLE ASSETS ............................................ 9,415 9,148 10,215
-------- -------- --------
Total assets ............................................... $165,471 $178,485 $169,512
======== ======== ========

LIABILITIES AND DEFINED BUSINESS UNIT EQUITY

CURRENT LIABILITIES:
Due to Cenex Harvest States Cooperatives .................... $ 48,938 $ 56,138 $ 42,092
Accounts payable ............................................ 7,238 15,542 11,203
Accrued expenses ............................................ 4,440 4,388 2,102
Current portion of long-term debt ........................... 10,005 10,005 10,005
-------- -------- --------
Total current liabilities .................................. 70,621 86,073 65,402

LONG-TERM DEBT ............................................... 28,510 26,072 36,077

COMMITMENTS AND CONTINGENCIES

DEFINED BUSINESS UNIT EQUITY ................................. 66,340 66,340 68,033
-------- -------- --------
Total liabilities and defined business unit equity ......... $165,471 $178,485 $169,512
======== ======== ========

The accompanying notes are an integral part of the financial statements
(unaudited)

WHEAT MILLING DEFINED BUSINESS UNIT
(A DEFINED BUSINESS UNIT OF CENEX HARVEST STATES COOPERATIVES)

STATEMENTS OF OPERATIONS
(UNAUDITED)

FOR THE
THREE MONTHS ENDED
NOVEMBER 30,
-----------------------
1999 1998
-------- --------
(DOLLARS IN THOUSANDS)

REVENUES:
Processed grain sales ................................. $52,594 $42,093
------- -------
COSTS AND EXPENSES:
Cost of goods sold .................................... 48,533 40,031
Marketing, general and administrative ................. 2,733 2,239
Interest .............................................. 1,495 943
------- -------
52,761 43,213
------- -------

LOSS BEFORE INCOME TAXES ............................... (167) (1,120)

INCOME TAX BENEFIT ..................................... (15) (100)
------- -------

NET LOSS ............................................... $ (152) $(1,020)
======= =======

The accompanying notes are an integral part of the financial statements
(unaudited)

WHEAT MILLING DEFINED BUSINESS UNIT
(A DEFINED BUSINESS UNIT OF CENEX HARVEST STATES COOPERATIVES)

STATEMENTS OF CASH FLOWS
(UNAUDITED)

FOR THE
THREE MONTHS ENDED
NOVEMBER 30,
------------------------
1999 1998
--------- ---------
(DOLLARS IN THOUSANDS)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss .......................................................... $ (152) $ (1,020)
-------- --------
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:
Depreciation and amortization ................................... 1,690 1,265
Changes in operating assets and liabilities:
Receivables .................................................... (7,155) 3,566
Inventories .................................................... (7,047) (2,419)
Other current assets ........................................... (57) 265
Accounts payable and accrued expenses .......................... 8,252 635
-------- --------
Total adjustments ............................................ (4,317) 3,312
-------- --------
Net cash (used in) provided by operating activities .......... (4,469) 2,292
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment ...................... (445) (9,728)
-------- --------
Net cash used in investing activities ........................ (445) (9,728)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in due to Cenex Harvest States Cooperatives ................ 7,200 8,854
Principal payments on long-term debt .............................. (2,438) (2,438)
Defined business unit equity distributed to the Company ........... 152 1,020
-------- --------
Net cash provided by financing activities .................... 4,914 7,436
-------- --------

INCREASE (DECREASE) IN CASH ........................................ -- --

CASH AT BEGINNING OF PERIOD ........................................ -- --
-------- --------

CASH AT END OF PERIOD .............................................. -- --
======== ========

The accompanying notes are an integral part of the financial statements
(unaudited)

WHEAT MILLING DEFINED BUSINESS UNIT
(A DEFINED BUSINESS UNIT OF CENEX HARVEST STATES COOPERATIVES)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1. ACCOUNTING POLICIES

NOTE 2. RECEIVABLES

AUGUST 31, NOVEMBER 30, NOVEMBER 30,
1999 1999 1998
---------- ------------ ------------
(DOLLARS IN THOUSANDS)

Trade ........................................ $32,274 $39,715 $31,926
Other ........................................ 454 228 445
------- ------- -------
32,728 39,943 32,371
Less allowance for doubtful accounts ......... 1,768 1,828 710
------- ------- -------
$30,960 $38,115 $31,661
======= ======= =======

NOTE 3. INVENTORIES

AUGUST 31, NOVEMBER 30, NOVEMBER 30,
1999 1999 1998
---------- ------------ ------------
(DOLLARS IN THOUSANDS)

Grain ........................................ $11,915 $19,593 $18,881
Processed grain products ..................... 1,815 1,125 1,737
Other ........................................ 609 668 696
------- ------- -------
$14,339 $21,386 $21,314
======= ======= =======

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

See the Management Discussion and Analysis for the Company in regard to new
accounting pronouncements and also the Year 2000.

RESULTS OF OPERATIONS

Patronage refunds to the Wheat Milling Defined Business Unit holders are
calculated on the basis of tax earnings per bushel. Because of this, the Company
believes that the calculation below is an important measure of the Defined
Business Unit's performance.

THREE MONTHS ENDED
NOVEMBER 30,
-----------------------
1999 1998
-------- --------
(IN THOUSANDS EXCEPT PER BUSHEL INFORMATION)

Loss before income tax ........................... $ (167) $ (1,120)
Book to tax differences .......................... 101 --
-------- --------
Tax basis loss ................................... $ (66) $ (1,120)
======== ========
Bushels processed ................................ 10,868 8,304
Loss per bushel .................................. $ (0.006) $ 0.135)

Certain operating information pertaining to the Wheat Milling Defined
Business Unit is set forth below, as a percentage of sales.

THREE MONTHS ENDED
NOVEMBER 30,
-----------------------
1999 1998
-------- --------

Gross margin ..................................... 7.72% 4.90%
Marketing, general and administrative ............ 5.20% 5.32%
Interest ......................................... 2.84% 2.24%

COMPARISON OF THREE MONTHS ENDED NOVEMBER 30, 1999 AND 1998

The Wheat Milling Defined Business Unit incurred a net loss of
approximately $0.2 million for the three months ended November 30, 1999 compared
to a net loss of $1.0 milling for the same period in 1998, for an increase of
approximately $0.8 million. This improvement in operating results is primarily
attributable to a $0.20 per hundred weight increase in the average margin for
all products and a 31% increase in volume.

Net sales of $52.6 million for the three months ended November 30, 1999
increased approximately $10.5 million (25%) compared to the same period in 1998.
A reduction to the average sales price of $0.40 per hundred weight was offset by
a 1.6 million hundred weight volume increase. Essentially all of the increased
volume was generated from the Huron mill, which during the 1998 period, was
under conversion of one of its lines from semolina to bakery flour, and from the
Mount Pocono mill, which commenced operations in January of 1999.

Cost of goods sold of $48.5 million for the three months ended November 30,
1999 increased $8.5 (21%) compared to the same period in 1998. While the average
cost per bushel of raw material declined $0.26 during the three months ended
November 30, 1999 compared to the same three months of a year ago, increased
bushel grind of approximately 2.6 million bushels and increased milling expense
of approximately $0.6 million offset this price variance. Essentially all of the
increased mill expense is attributable to Mount Pocono, which was not operating
during the 1998 period.

Marketing, general and administrative expenses of $2.7 million for the
three months ended November 30, 1999 increased approximately $0.5 million (22%)
compared to the three months ended November 30,1998. Most of this increase is
attributable to activities at or for the Mount Pocono mill, which was not
operating during the 1998 period.

Interest expense of $1.5 million during the three months ended November 30,
1999 increase approximately $0.6 million (59%) compared to the three-month
period ended November 30, 1998. Most of this increase in interest expense is
attributable to the construction of the Mount Pocono mill.

An income tax benefit of $15 thousand for the three months ended November
30, 1999 is based upon an effective tax rate of 8.9% applied to the pretax loss
of approximately $0.2 million. For the three months ended November 30, 1998, an
income tax benefit of $0.1 million was based upon an effective tax rate of 8.9%
applied to a pretax loss of $1.1 million. The effective tax rate changes from
period to period based upon the percentage of non-patronage business activity to
total business activity.

LIQUIDITY AND CAPITAL RESOURCES

The Wheat Milling Defined Business Unit's cash requirements result from
capital improvements and the need to finance additional inventories and
receivables based on increased raw material costs and levels. These cash needs
are expected to be fulfilled by the Company.

The Cenex Harvest States Board of Directors has authorized the purchase of
land near Orlando, Florida as the site for a new mill. The Board has authorized
expenditures up to $1.8 million for the cost of the land and an access road. The
land was purchased during the second quarter of the prior fiscal year at a cost
of approximately $1.2 million. Plans for the mill are subject to due diligence,
routine regulatory review and cost verification. Anticipated costs for this mill
are approximately $35.0 million, and may be financed with debt, open member
equity, additional equity participation units, or a combination of these
financing alternatives. No determination has been made at this time as to when
construction will commence.

CASH FLOWS FROM OPERATIONS

Operating activities for the three months ended November 30, 1999 used net
cash of approximately $4.5 million. The net operating loss of approximately $0.2
million and increased working capital requirements of approximately $6.0 million
offset non-cash expenses of $1.7 million. Increased working capital requirements
were primarily attributable to increased volume activity.

Operating activities for the three months ended November 30, 1998 provided
net cash of approximately $2.3 million. Non cash expenses of $1.3 million and a
reduction in working capital requirements of $2.0 million offset the net
operating loss of approximately $1.0 million.

CASH FLOWS FROM INVESTING

Cash expended for the acquisition of property, plant and equipment during
the three-month periods ended November 30, 1999 and 1998, totaled approximately
$0.4 million and $9.7 million respectively. The majority of the capital
expenditure dollars during the 1998 period were for the completion of the Mount
Pocono mill.

CASH FLOWS FROM FINANCING

The Wheat Milling Defined Business Unit's financing activities are
coordinated through the Company's cash management department. Cash from all of
the Company's operations is deposited with the Company's cash management
department and disbursements are made centrally. As a result, the Defined
Business Unit has a zero cash position. Financing is available from the Company
to the extent of the Company's working capital position and corporate loan
agreements and cash requirements of all other Company operations.

Working capital requirements for each division and defined business unit of
the Company are reviewed on a periodic basis, and could potentially be
restricted based upon availability of funds.

The Wheat Milling Defined Business Unit had short-term debt outstanding and
payable to the Company of $56.1 million on November 30, 1999 compared with $48.9
million on August 31, 1999. This increase in short-term debt is primarily
attributable to additional financing required for accounts receivables and
inventories due to increased volume activity.

The Wheat Milling Defined Business Unit had long-term debt outstanding and
payable to the Company of $36.1 million on November 30, 1999 compared with $38.5
million on August 31, 1999. Principal payments of long-term debt totaled $2.4
million for each of the three-month periods ended November 30, 1999 and 1998.
This debt, net of subsequent repayments, was incurred for the acquisition,
expansion, and construction of certain mills within the Wheat Milling Defined
Business Unit. Approximately $10.0 million of the current balance is payable
within the next twelve months.

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

EXHIBIT DESCRIPTION
------- ------------------------------------------------------------------
10.37 $50 Million 364-Day Revolving Loan Credit Agreement dated as of
December 21, 1999 among National Cooperative Refinery Association,
CoBank, ACB, Mercantile Bank and Bank of America, N.A.
99 Cautionary Statement
27 Financial Data Schedule (EDGAR filing only)

(b) Reports on Form 8-K

None.

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.

CENEX HARVEST STATES COOPERATIVES
-----------------------------------------
(Registrant)

NAME TITLE DATE
---- ----- ----

/S/ JOHN SCHMITZ Senior Vice-President -- January 12, 2000
- ------------------ Chief Financial Officer
John Schmitz