Exhibit 20
LETTER TO OUR STOCKHOLDERS

February 10, 1997

Dear Stockholder:

We have  begun  to turn the  corner  and move in a more  positive  direction  as
indicated by our earnings  performance  in the second quarter of fiscal 1997. In
addition, we have reduced our long-term debt by $7 million as the result of cash
flows generated from operations during the first two quarters of the year.

Our second quarter net income of $1,205,000, or $0.12 per share was considerably
higher than the net income of $195,000,  or $0.02 per share that we  experienced
in the second  quarter of fiscal 1996.  Our sales in this year's second  quarter
amounted to $55,249,000, down just slightly from the same period the prior year,
when we had sales of $55,751,000.

Due to a first  quarter net loss of  $346,000,  our net income for the first six
months  of  fiscal  1997  totaled  $859,000,  or  $0.09  per  share  on sales of
$108,422,000.  For the first six  months  of fiscal  1996,  we had a net loss of
$2,182,000, or $0.22 per share on sales of $102,911,000.

Our second quarter  earnings  improvement  resulted  primarily from a decline in
grain  prices  compared to both the second  quarter of fiscal 1996 and the first
quarter of fiscal 1997,  and  strengthened  demand for our premium wheat starch,
beverage  alcohol  and  distillers  feed.  The  realization  of an even  greater
improvement  was partially  prevented by a carryover of higher priced grain from
the first quarter, and a dramatic rise in energy costs in the latter part of the
second  quarter due to greatly  increased  prices for natural gas. These factors
contributed  to a reduction in  operational  efficiencies.  Since the end of the
quarter,  grain prices have  continued  to ease down toward more normal  levels.
Prices for natural gas have also  tapered  off, but remain above where they were
at this time a year ago.

Demand for our vital wheat  gluten  continues to be  suppressed  by a heavy
flow of gluten imports from the European Union (E.U.).  In addition to seeking a
negotiated  solution to this problem,  the Wheat Gluten Industry  Council of the
United States  recently  filed a Section 301 petition  requesting  that the U.S.
Trade Representative  investigate  subsidies and other measures which allow E.U.
gluten producers lopsided competitive  advantages.  The petition,  if fav orably
acted on by the Trade  Representative,  calls for an international  panel of the
World Trade Organization to examine the protectionist and predatory practices of
the E.U.  and could  ultimately  provide  the U.S.  with the right to  implement
retaliatory  measures.  The Wheat Gluten Council is prepare d to seek additional
legal  action  should a  satisfactory  remedy  not  appear  forthcoming.  In the
meantime,  we are experiencing  increased interest in our specialty wheat gluten
products, which are being developed for value-added niche markets.

As I have previously  reported,  growth in the specialty  gluten markets is
expected to be gradual and, therefore, will not have a significant impact on our
results in the near term. It was with this same  understanding  that we launched
the development of our modified and specialty wheat starches seve ral years ago.
Today, these starches account for a sizeable portion of our total starch output.






While conditions in our alcohol markets  generally  remain healthy,  prices
for food grade alcohol for beverage and  industrial  applications  have declined
since the end of the second quarter due to a combination of seasonal factors and
the start-up of new production  capacities  throughout  the industry.  Increased
supplies of fuel grade  alcohol have caused prices in that market to soften some
as well.  We are  prepared to meet this new  competition  by  strengthening  our
operational efficiencies as grain prices continue to reach more normal levels.

Sincerely,

s/Ladd M. Seaberg
Ladd M. Seaberg
President and CEO