SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the fiscal year ended July 31, 1998 Commission File No. 0-8675

OIL-DRI CORPORATION OF AMERICA
(Exact name of registrant as specified in its Charter)

Delaware 36-2048898
--------------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer identifi-
incorporation or organization) cation no.)

410 North Michigan Avenue
Chicago, Illinois 60611
--------------------------------- ---------------------------
(Address of principal executive (Zip Code)
offices)

Registrant's telephone number, including area code: (312) 321-1515

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of each class on which registered
------------------- -------------------
Common Stock, par value $.10 per share New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None
----
(Title of Class)

Number of Shares of each class of Registrant's common stock outstanding as of
September 30, 1998:

Common Stock - 5,456,098 shares (including 1,031,960 treasury shares)
Class B Stock - 1,779,420 shares (including 342,241 treasury shares)
Class A Common Stock - 0 shares

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 (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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

Aggregate market value of Registrant's Common Stock owned by non-affiliates -
$53,926,544 (based on the closing price on September 30, 1998).

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DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated herein by reference:

1. Registrant's Proxy Statement for its 1998 Annual Meeting of
Stockholders ("Proxy Statement"), which will be filed with the
Securities and Exchange Commission not later than November 27,
1998 (120 days after the end of Registrant's fiscal year ended
July 31, 1998), is incorporated into Part III of this Annual
Report on Form 10-K, as indicated herein.

2. The following portions of Registrant's 1998 Annual Report to
Stockholders ("Annual Report"), which is an exhibit to this
Annual Report on Form 10-K, are incorporated into Parts I, II
and IV of this Annual Report on Form 10-K, as indicated herein
(page numbers refer to the Annual Report):

a) Common Stock on page 36.

b) Ten-Year Summary of Financial Data on pages 12 and 13.

c) Management's Discussion and Analysis of Financial Condition
and Results of Operations on pages 14 to 17.

d) Consolidated Statements of Income on page 20.

e) Consolidated Statements of Stockholders' Equity on page 21.

f) Consolidated Balance Sheets on pages 18 and 19.

g) Consolidated Statements of Cash Flows on page 22.

h) Notes to Consolidated Financial Statements on pages 23 to 36.

i) Independent Auditor's Report on page 37.

j) Selected Quarterly Financial Data on page 36.

k) Financial Highlights, including Sales Trends, on page 1.

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PART I

Item 1. BUSINESS

Oil-Dri Corporation of America was incorporated in 1969 in Delaware as the
successor to an Illinois corporation incorporated in 1946 which was the
successor to a partnership which commenced business in 1941. Except as otherwise
indicated herein or as the context otherwise requires, references herein to
"Registrant" or to "Company" are to Oil-Dri Corporation of America and its
subsidiaries. The Registrant is a leader in developing, manufacturing and
marketing sorbent products and related services for the consumer, industrial,
environmental, agricultural and fluids purification markets. The Registrant's
products are principally produced from clay minerals and, to a lesser extent,
other sorbent materials. Consumer products, consisting primarily of cat litter,
are sold through the grocery products industry, mass merchandisers, warehouse
clubs, and pet specialty retail outlets. Industrial and environmental products,
consisting primarily of oil, grease and water sorbents (both clay and non-clay),
are sold to distributors of industrial cleanup and automotive products,
environmental service companies, and retail outlets. Agricultural products,
which include carriers for crop protection chemicals and fertilizers, drying
agents, soil conditioners, pellet binders for animal feeds and flowability aids,
are sold to manufacturers of agricultural chemicals and distributors of other
agricultural products. Fluids purification products, consisting primarily of
bleaching, filtration and clarification clays, are sold to processors and
refiners of edible and petroleum-based oils.

The Registrant's sorbent technologies include absorbent and adsorbent products.
Absorbents, like sponges, draw liquids up into their many pores. Examples of
Oil-Dri's absorbent products are CAT'S PRIDE(R) Premium Cat Litter and other cat
litters, OIL-DRI ALL PURPOSE(R) clay floor absorbent and AGSORB(R) granular
agricultural chemical carriers.

Adsorbent products attract liquids, impurities, metals and surfactants to
themselves and form low level chemical bonds. The Registrant's adsorbents are
used for cleanup and filtration mediums. The Registrant's adsorbent products
include OIL-DRI LITE(R) Sorbents for industrial and environmental cleanup,
PURE-FLO(R), PURE-FLO(R) SUPREME, Perform(TM) and Select(TM) Bleaching Clays for
edible oils, fats and tallows, and ULTRA-CLEAR(R) Clarification Aids for
petroleum based oils and by-products.

The Registrant has pursued a strategy of developing value-added and branded
products for consumer, industrial and environmental, agricultural and fluids
purification uses, where the Registrant's marketing and research and development
capabilities can play important roles. The Registrant's products are sold
through its specialized divisional sales staffs supported by technical service
representatives and through a network of industrial distributors and food
brokers. The Registrant maintains its own research and development facility and
staff.

Certain financial information about Registrant's foreign and domestic operations
is contained in Note 4 of Notes to Consolidated Financial Statements on pages 25
and 26 of the Annual Report and is incorporated herein by reference. Certain
financial information on revenues from classes of similar products and services
is contained in Sales Trends on page 1 of the Annual Report to Stockholders and
incorporated herein by reference.

Consumer Products

The Registrant's cat litter products, in both coarse granular and fine granular
clumping (scoopable) forms, are sold under the Registrant's CAT'S PRIDE(R) and
LASTING PRIDE(TM) brand names, and FRESH STEP(R) brand manufactured for The
Clorox Company and private label cat litters manufactured for mass
merchandisers, wholesale clubs, drug chains, pet superstores and retail grocery
stores. The registrant also packages and markets Cat's Pride(R) Kat Kit(TM)
which contains cat litter in a disposable tray. These products are sold through
independent food brokers and the Registrant's representatives to major grocery
outlets such as Food Lion, Publix, Kroger, Stop and Shop, and others. LASTING
PRIDE(TM) is principally sold to mass merchandisers such as Wal-Mart and K-Mart.
During fiscal year 1998, the Registrant developed

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both traditional coarse, as well as scoopable cat litter products made from
recycled paper. These products, sold under the Registrant's DUST STOPPER(TM)
and SCOOP `N FLUSH(TM) brands, are expected to produce incremental sales in
fiscal 1999 and years beyond.

The Registrant and The Clorox Company have long-term arrangements under which
they developed FRESH STEP(R) premium-priced cat litter products. FRESH STEP(R)
brand, which is owned, trademarked and marketed by The Clorox Company, utilizes
the Registrant's special low density, highly absorbent clay mineral. FRESH
STEP(R) contains microencapsulated odor controllers which are activated by the
cat. The Registrant has a long-term exclusive right to supply The Clorox
Company's requirements for FRESH STEP(R) up to certain levels. According to
independently published supermarket industry reports, FRESH STEP(R) Scoopable
was the largest dollar grossing branded cat litter sold through grocery chains
in the United States during the year ended August 9, 1998.

Traditional coarse granular clay litters once represented approximately 98% of
the market. Beginning in 1990, the cat litter market changed and traditional
coarse litters are now complemented by new, fine granule clumping (scoopable)
products. These clumping products have the characteristic of binding together
and expanding when moisture is introduced. The Registrant's clumping cat litter
is based on naturally occurring organic ingredients which are biodegradable. On
an industry-wide basis, clumping cat litters have assumed market shares in
excess of 49% of retail dollar sales volume in the grocery industry and 61% of
retail dollar sales volume in the mass merchandiser industry in the 52 week
period ended August 9, 1998, compared with 46% and 57%, respectively, in a
similar period last year.

Industrial and Environmental Products

Products for industrial applications include the Registrant's oil, grease, and
water sorbents, which are cost effective floor maintenance products that provide
a nonslip and nonflammable surface for workers. These products are sold through
a wide range of distribution channels and have achieved a high level of brand
name recognition. The Registrant distributes clay-based sorbents sold in
granular form and in other configurations such as pillows and socks. The
Registrant also distributes non-clay sorbents including its OIL-DRI(R)
Industrial Pad and OIL-DRI(R) Industrial Rug, which are made of needle-punched
polypropylene.

The Registrant sells its industrial and environmental products through a
distributor network that includes industrial, auto parts, safety, sanitary
supply, chemical and paper distributors and environmental service companies. The
Registrant supports the efforts of the industrial distributors with specialized
divisional sales personnel.

The Registrant also produces for the consumer market OIL-DRI(R) Automotive, a
floor absorbent for home and garage use. This product is sold through automobile
parts distributors and mass merchandisers.

Agrisorbents Product Group

The Registrant produces and markets a wide range of granular and powdered
mineral absorbent products that are used with crop protection chemicals, animal
feed, fertilizers and other horticultural applications. Products include
AGSORB(R) agricultural chemical carriers and drying agents; FLO-FRE(R), a highly
absorbent microgranule flowability aid; PEL-UNITE(R) and CONDITIONADE(TM),
pelleting aids, used in the manufacture of animal feeds, and TERRA GREEN(R) Soil
Conditioner.

The AGSORB(R) Carriers are used as mediums of distribution for crop protection
chemicals, including herbicides, fungicides, insecticides, and fertilizers.
AGSORB(R) customized carriers are designed to reduce dust and to increase
accuracy of application. The Registrant's AGSORB(R) Drying Agent is used to
prevent clogging in specialized farm machinery and enables farmers to evenly
apply granular fertilizers and liquid pesticides to their fields in one
application.

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The Registrant has also developed AGSORB(R) as a blending agent for fertilizers
and chemicals used in the lawn and garden market.

Agricultural products are marketed in the United States by technical salesmen
employed by the Company who sell to crop protection chemical manufacturers, feed
producers and agricultural product distributors. The Registrant's principal
customers for these products include the agricultural groups of Monsanto,
DowElanco and Zeneca.

Fluids Purification Products Group

Fluids purification products include PURE-FLO(R) Bleaching Clays, ULTRA-CLEAR(R)
clarification aids, and PURE-FLO(R) Supreme. These products are supported by a
team of technical sales and support representatives employed by the Company and
the services of the Registrant's research and development group. The products
are marketed in the United States and international markets.

PURE-FLO(R) Bleaching Clays, used in the bleaching of edible oils, remove
impurities and color bodies from these oils. The primary customers for these
products are refiners of food oils. ULTRA-CLEAR(R) Clarification Aid is used as
a filtration and purification medium for jet fuel and other petroleum based
oils. This product adsorbs unwanted moisture and other impurities, and is
primarily sold to oil refiners.

The Registrant also produces PERFORM(TM) and SELECT(TM) which offer performance
advances to refiners. The Perform(TM) products are the next generation of
bleaching clays, providing increased activity for hard-to-bleach oils. The
SELECT(TM) line of products is used earlier in the process stream to remove a
variety of impurities from edible oils. SELECT(TM) can also be used to replace
the water wash step in the caustic refining of edible oils.

Transportation Services

In the second quarter of fiscal 1998, the Registrant exited the transportation
business and formed a strategic alliance with CRST, who will service the
majority of the Registrant's over-the-road shipping requirements.

Patents

Registrant has obtained or applied for patents for certain of its processes and
products. These patents expire at various times, beginning in 1998. Patented
processes and products are not material to Registrant's overall business.

Foreign

SAULAR(R), manufactured and marketed by Favorite Products Company, Ltd. (d.b.a.
Oil-Dri Canada), the Registrant's wholly-owned Canadian subsidiary, is a leading
brand of cat litter sold in Canada. Favorite Products Company, Ltd. also
packages and markets the SAULAR KAT-KIT which contains cat litter in a
disposable tray. Certain of the products sold in Canada are blends of clay and
synthetic sorbent materials.

The Registrant's wholly-owned subsidiary in England, Oil-Dri, U.K., LTD.,
packages clay granules produced by the Registrant's domestic manufacturing
facilities and, for certain applications, blends a synthetic sorbent material
which it manufactures locally. Oil-Dri, U.K., LTD. markets these products,
primarily in the United Kingdom, as an oil and grease absorbent and as a cat
litter.

The Registrant's wholly-owned subsidiary in Switzerland, Oil-Dri S.A., performs
various management, sales and administrative functions for the Registrant and
its foreign subsidiaries.

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The Company's foreign operations are subject to the normal risks of doing
business overseas, such as currency devaluations and fluctuations, restrictions
on the transfer of funds and import/export duties. The Registrant to date has
not been materially affected by these risks.

Backlog; Seasonality

At July 31, 1998 and 1997, Registrant's backlog of orders was approximately
$7,741,000 and $3,049,000, respectively. The Registrant does not consider its
clay sorbent business, taken as a whole, to be seasonal to any material extent.
However, certain business activities of certain customers of the Registrant
(such as agricultural) are subject to such factors as crop acreage planted and
product formulation cycles.

Customers

Sales to Wal-Mart Stores, Inc. and its affiliate Sam's Club accounted for
approximately 23% of the Registrant's net sales for the fiscal year ended July
31, 1998. Sales to The Clorox Company accounted for approximately 9% of the
Registrant's net sales for the fiscal year ended July 31, 1998. Clorox and the
Registrant are parties to a long-term supply contract. The loss of any other of
Registrant's customers would not have a materially adverse effect on the
Registrant.

Competition

Registrant has approximately seven principal competitors in the United States,
some of which have substantially greater financial resources than the Company,
which compete with the Registrant in certain markets and with respect to certain
products. Price, service and technical support, product quality and delivery are
the principal methods of competition in Registrant's markets and competition has
historically been very vigorous. The Registrant believes that it can compete
favorably in all of its present markets.

Reserves

Registrant mines sorbent materials, consisting of either montmorillonite,
attapulgite or diatomaceous earth on leased or owned land near its mills in
Mississippi, Georgia, Illinois and Oregon, and on leased and owned land in
Florida (see "Item 2- Properties" below). The Registrant estimates that its
proven recoverable reserves of these sorbent materials aggregate approximately
498,205,000 tons. Based on its rate of consumption during the 1998 fiscal year,
Registrant considers its proven recoverable reserves adequate to supply
Registrant's needs for over 40 years. It is the Registrant's policy to attempt
to add to reserves in most years, but not in the most recent year, an amount at
least equal to the amount of reserves consumed in that year. Registrant has a
program of exploration for additional reserves and, although reserves have
increased, Registrant cannot assure that such reserves will continue to
increase. The Registrant's use of these reserves will be subject to compliance
with existing and future federal and state statutes and regulations regarding
mining and environmental compliance. Also, requirements for environmental
compliance may restrict exploration or use of lands that might otherwise be
utilized as a source of reserves. During the fiscal year ended July 31, 1998,
the Registrant utilized these reserves to produce substantially all of the
sorbent minerals that it sold.

In 1997, the Registrant acquired mineral reserves on approximately 4,735 acres
in Nevada. This acreage is in addition to approximately 598 acres acquired in
1991 in Washoe County, Nevada of which 415 acres are mineral in character. The
Registrant estimates that there are 298 million tons of proven reserves of
sorbent materials on the combined acreage. Mining these reserves requires the
approval of federal, state and local agencies, which approvals the Registrant is
in the process of seeking. In the future, the Registrant hopes to develop
facilities so as to use these reserves as a source of supply for its West Coast
customers. However, there can be no assurance that this will be accomplished.

In 1998, mineral reserves on approximately 778 acres in Tennessee and 755 acres
in Illinois were acquired in conjunction with the purchase of Oil-Dri, Mounds
Production Company.

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Mining Operations

The Registrant has conducted mining operations in Ripley, Mississippi since
1963; in Ochlocknee, Georgia since 1971; in Christmas Valley, Oregon since 1979;
in Blue Mountain, Mississippi since 1989; and in Mounds, Illinois beginning in
1998.

The Registrant's raw materials are open pit mined on a year round basis,
generally using large earth moving scrapers and bulldozers to remove overburden,
and then loaded into dump trucks with backhoe or dragline equipment for movement
to the processing facilities. The mining and hauling of the Registrant's clay is
performed by the Registrant and by independent contractors.

The Registrant's current operating mines range in distance from immediately
adjacent to several miles from its processing plants. Access to processing
facilities from the mining areas is generally by private road; and in some
instances public highways are utilized.

Each of the Registrant's processing facilities maintains stockpiles of
unprocessed clay of approximately one to three weeks production requirements.

Proven reserves are those reserves for which (a) quantity is computed from
dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or
quality are computed from results of detailed sampling, and (b) the sites for
inspection, sampling and measurement are spaced so closely and the geologic
character is so well defined that size, shape, depth and mineral content of
reserves are well established. Probable reserves are computed from information
similar to that used for proven reserves, but the sites for inspection,
sampling, and measurement are farther apart or are otherwise less adequately
spaced. The degree of assurance, although lower than that for proven reserves,
is high enough to assume continuity between points of observation.

The Registrant employs a staff of geologists and mineral specialists who
estimate and evaluate existing and potential reserves in terms of quality,
quantity and availability.

The following schedule summarizes, for each of the Registrant's manufacturing
facilities the net book value of land and other plant and equipment.

PLANT AND
LAND EQUIPMENT
------------ ------------

Ochlocknee, Georgia $ 1,785 $ 15,989
Ripley, Mississippi $ 1,513 $ 12,856
Mounds, Illinois $ 325 $ 8,563
Blue Mountain, Mississippi $ 939 $ 7,340
Christmas Valley, Oregon $ 68 $ 535

Employees

As of July 31, 1998, the Registrant employed 705 persons, 55 of whom were
employed by the Registrant's foreign subsidiaries. The Registrant's corporate
offices, research and development center and manufacturing facilities are
adequately staffed and no material labor shortages are anticipated.
Approximately 44 of the Registrant's employees in the U.S. and approximately 13
of the Registrant's employees in Canada are represented by labor unions, which
have entered into separate collective bargaining agreements with the Company.
Employee relations are considered satisfactory.

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Environmental Compliance

The Registrant's mining and manufacturing operations and facilities in Georgia,
Mississippi and Oregon are required to comply with state strip mining statutes
and various federal, state and local statutes, regulations and ordinances which
govern the discharge of materials, water and waste into the environment and
restrict mining on "wetlands" or otherwise regulate the Registrant's operations.
In recent years, environmental regulation has grown increasingly stringent, a
trend which the Registrant expects will continue. The Registrant endeavors to
stay in substantial compliance with applicable environmental controls and
regulations and to work with regulators to correct any deficiency. As a result,
expenditures relating to environmental compliance have increased over the years;
however, in recent years expenditures have not been material. The Registrant
continues, and will continue, to incur costs in connection with reclaiming
exhausted mining sites. The costs of reclamation have not had a material effect
on its mining costs. These costs are treated as part of the Registrant's mining
expense.

In addition to the environmental requirements relating to mining and
manufacturing operations and facilities, there is increasing federal and state
legislation and regulation with respect to the labeling, use, and disposal after
use, of various of the Registrant's products. The Registrant endeavors to stay
in substantial compliance with that legislation and regulation and to assist its
customers in that compliance.

The Registrant cannot assure that, despite its best efforts, it will always be
in compliance with environmental legislation and regulations or with
requirements regarding the labeling, use, and disposal after use, of its
products; nor can it assure that from time to time enforcement of such
requirements will not have an adverse impact on its business.

Energy

The Registrant uses natural gas and recycled fuel oil as energy sources for the
processing of its clay products. In prior years, the Registrant has switched
from natural gas to fuel oil during the winter months due to the seasonal
unavailability and higher cost of natural gas relative to fuel oil.

Research and Development

At the Registrant's research facility, the research and development staff
develops new products and applications and improves existing products. The staff
and various consultants consist of geologists, mineralogists and chemists. In
the past several years, the Registrant's research efforts have resulted in a
number of new sorbent products and processes including PURE-FLO(R) Supreme,
PURE-FLO(R) B80, B81, PERFORM(TM), SELECT(TM) CAT'S PRIDE(R) Scoopable, LASTING
PRIDE(TM), Dust Stopper(TM) and Scoop 'N Flush(TM). The technical center
produces prototype samples and tests new products for customer trial and
evaluation.

Registrant spent approximately $2,376,000, $2,049,000 and $2,026,000 during its
fiscal years ended July 31, 1998, 1997 and 1996, respectively, for research and
development. None of such research and development was customer sponsored, and
all research and development costs are expensed in the year in which incurred.

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Item 2. PROPERTIES

Registrant's properties are generally described below:

LAND HOLDINGS & MINERAL RESERVES
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LAND LAND PROVEN PROBABLE
OWNED LEASED TOTAL RESERVES RESERVES TOTAL
--------------------------------------------------------------------------------------------------------
(acres) (acres) (acres) (000s of tons) (000s of tons) (000s of tons)
- ------------------------------------------------------------------------------------------------------------------------------------

Florida 537 446 983 4,512 1,092 5,604
Georgia 1,852 1,804 3,656 44,295 10,894 55,189
Illinois 161 598 759 9,000 6,000 15,000
Mississippi 2,354 1,431 3,785 129,235 118,633 247,868
Nevada 415 6,747 7,162 306,830 250,874 557,704
Oregon 360 640 1,000 83 420 503
Tennessee 778 -- 778 4,250 4,250 8,500
----------------------------------------------------------------------------------------------------
6,457 11,666 18,123 498,205 392,163 890,368
======== ======== ======== ======= ======== ========
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See "Item 1. Business-Reserves"

There are no mortgages on the property owned by Registrant. The Mississippi,
Georgia, Oregon, Florida and Illinois land is used primarily for mining. Parcels
of such land are also sites of mills operated by Registrant. The Illinois land
also includes the site of Registrant's research and development facility. The
Registrant owns approximately one acre of land in Laval, Quebec, Canada, which
is the site of the processing and packaging facility for the Registrant's
Canadian subsidiary.

The Registrant's mining operations are conducted on leased or owned land. The
Georgia, Illinois, Florida and Mississippi mining leases, with expiration dates
ranging from 1999 to 2053, no one of which is material, generally provide for a
lease term which continues as long as the Registrant pays a minimum monthly
rental. This rental payment is applied against a royalty related to the number
of unprocessed, or in some cases processed, tons of mineral extracted from the
leased property.

The Registrant operates mills at Ripley, Mississippi, Ochlocknee, Georgia,
Christmas Valley, Oregon, Blue Mountain, Mississippi and Mounds, Illinois;
production and packaging plants at Laval, Quebec, Canada and Wisbech, United
Kingdom; and a dog biscuit manufacturing plant in Kiel, Wisconsin. Registrant's
facilities at Ripley, Mississippi; Ochlocknee, Georgia; Christmas Valley,
Oregon; Mounds, Illinois; Kiel, Wisconsin; Laval, Quebec, Canada and Wisbech,
United Kingdom are wholly owned by Registrant and Registrant's mill at Blue
Mountain, Mississippi is owned in-part by Registrant, with the balance leased as
herein after described. Registrant is a party to leases that relate to certain
plant acquisition and expansion projects at the Registrant's mill at Blue
Mountain, Mississippi. The Blue Mountain, Mississippi lease was entered into
with The Town of Blue Mountain, Mississippi in 1988 in connection with the
issuance by the Town of $7,500,000 in aggregate principal amount of industrial
revenue bonds, ($5,000,000 of which has been subsequently retired), full payment
of which is guaranteed by the Registrant. Upon expiration of the leases in 2008,
a subsidiary of the Registrant has the right to purchase the leased property for
$100 upon full payment of the bonds. The land on which the mill at Wisbech,
United Kingdom is located is leased pursuant to a long-term lease arrangement
with the Port Authority of Wisbech which expires in 2032. The facility in Kiel,
Wisconsin is leased.

All of Registrant's domestic mills, whether owned or leased, consist of related
steel frame, sheet steel covered or brick buildings of various heights, with
concrete floors and storage tanks. The buildings occupy approximately 208,000
square feet at Ripley, Mississippi, 247,000

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square feet at Ochlocknee, Georgia, 129,000 square feet at Mounds, Illinois,
18,000 square feet at Christmas Valley, Oregon, 16,000 square feet at Kiel,
Wisconsin and 140,000 square feet at Blue Mountain, Mississippi. Registrant
maintains railroad siding facilities near the Ripley, Mississippi; Ochlocknee,
Georgia, Blue Mountain, Mississippi and Mounds, Illinois mills. Equipment at all
mills is in good condition, well maintained and adequate for current processing
levels.

All of the Registrant's foreign facilities are owned and consist of related
steel frame, sheet steel covered or brick buildings of various heights, with
concrete floors and storage tanks. The buildings occupy 22,500 square feet at
Laval, Quebec, Canada and 66,850 square feet at Wisbech, United Kingdom.

Registrant's research and development facility is located on land in Vernon
Hills, Illinois and consists of brick buildings of approximately 19,100 square
feet, including a pilot plant facility.

Registrant's principal office, consisting of approximately 20,000 square feet in
Chicago, Illinois, is presently occupied under a lease expiring on June 30,
2008.

Item 3. LEGAL PROCEEDINGS

There are no material pending legal proceedings.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

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Item 401(b) OF REGULATION S-K. EXECUTIVE OFFICERS OF REGISTRANT

The following table gives certain information with respect to the Executive
Officers of the Registrant.

PRINCIPAL OCCUPATION
NAME (3) FOR LAST FIVE YEARS AGE
-------- ------------------- ---

Richard M. Jaffee Chairman of the Board of the Registrant; President from 1960 62
to June, 1995; Chief Executive Officer from 1962 until
1997.

Daniel S. Jaffee (2) President and Chief Executive Officer of the Registrant; 34
President and Chief Operating Officer from June, 1995
until August , 1997; Chief Executive Officer of Favorite
Products Company, Ltd., a subsidiary of the Registrant
since 1990; Chief Financial Officer of the Registrant
from 1990 to 1995; Group Vice President, Consumer
Products of the Registrant from 1994 to 1995; Group Vice
President Canadian Operations and Consumer Products -
Grocery from 1992 until June, 1994.

Joseph C. Miller Vice-Chairman of The Board of the Registrant; Senior Vice 56
President for Consumer, Industrial & Environmental and
Transportation from 1993 to 1995; Group Vice President
for Sales, Marketing and Distribution, from 1990 to 1993.

Michael L. Goldberg Executive Vice-President & Chief Financial Officer of the 48
Registrant; Vice President & Chief Financial Officer from
May, 1996 until August, 1997; Vice President &
Controller, Alberto-Culver USA, Inc. from August 1991
until April, 1996.

Richard V. Hardin (1) Group Vice-President, Technology, of the Registrant. 59

Daniel J. Jones Vice-President of Favorite Products Co., LTD, a subsidiary of 36
the Registrant; Div. III National Sales Manager - Grocery
of the Registrant 1994 to 1996; National Sales Manager,
Favorite Products Co. 1990 to 1994.

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Eugene W. Kiesel Vice President & General Manager, Global Fluids Purification 41
Group of the Registrant since October, 1997;
Vice-President of Radian International, LLC, a subsidiary
of Dow Chemical Company from July, 1996 to October, 1997;
General Manager of ACS, a division of Dow Chemical
Company from November, 1993 to July, 1996; Director of
Gas Applications for AGA Gas, Inc. from June, 1990 to
November, 1993.

Steven M. Levy Vice-President & General Manager, Consumer Products Group of 38
the Registrant; General Manager Consumer Products Div.
1995 to 1996; Miles, Inc. Director of Marketing, 1992 to
1995.

The term of each executive officer expires at the 1998 Annual Meeting of the
Stockholders and when his successor is elected and qualified.

(1) Richard V. Hardin is Richard M. Jaffee's son-in-law.

(2) Daniel S. Jaffee and Richard M. Jaffee, his father, are the nephew and
brother, respectively, of Robert D. Jaffee, a director of the
registrant.

(3) Of the persons in this table, only Richard M. Jaffee and Daniel S.
Jaffee are directors.

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13

PART II

Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SECURITY HOLDER MATTERS

Information concerning stock prices and dividends with regard to the Common
Stock of Registrant, which is traded on the New York Stock Exchange, and
information concerning dividends with regard to the Class B Stock of Registrant,
for which there is no established public trading market, is contained in Note 14
of the "Notes to Consolidated Financial Statements" in the Annual Report,
incorporated herein by reference. No shares of Class A common stock are
outstanding. Registrant's ability to pay dividends is limited by the
Registrant's Credit Agreement with Harris Trust and Savings Bank dated September
21, 1994. See Note 5 of "Notes to Consolidated Financial Statements" in the
Annual Report, incorporated herein by reference.

Item 6. SELECTED FINANCIAL DATA

See the "Ten Year Summary of Financial Data" on pages 12 and 13 of the Annual
Report, and "Financial Highlights" on page 1 incorporated herein by reference.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 14 to 17 of the Annual Report, incorporated herein by
reference.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See "Consolidated Statements of Income," "Consolidated Statements of
Stockholders' Equity," "Consolidated Balance Sheets," "Consolidated Statements
of Cash Flows," "Notes to Consolidated Financial Statements" and "Independent
Auditor's Report" on pages 18 to 37 of the Annual Report, "Ten Year Summary of
Financial Data" on page 12 and 13 of the Annual Report, and "Selected Quarterly
Financial Data" on page 36 of the Annual Report, incorporated herein by
reference.

Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

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14

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item is (except for information in Part I,
hereof, concerning executive officers) contained in the Registrant's Proxy
Statement for its 1998 Annual Meeting of stockholders ("Proxy Statement") under
the caption "Election of Directors" and is incorporated herein by this
reference.

Item 11. EXECUTIVE COMPENSATION

The information required by this Item is contained in the Registrant's Proxy
Statement under the captions "Executive Compensation," "Report of the
Compensation and Stock Option Committees of Oil-Dri Corporation of America on
Executive Compensation," "Compensation Committee Interlocks and Insider
Participation" and "Performance Graph" and is incorporated herein by this
reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this Item is contained in the Registrant's Proxy
Statement under the captions "General - Principal Stockholders" and "Security
Ownership of Management" and is incorporated herein by this reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is contained in the Registrant's Proxy
Statement under the caption "Compensation Committee Interlocks and Insider
Participation" and is incorporated herein by this reference.

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15

PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K

(a)(1) The following financial statements are contained on pages 18 to 37 of
the Annual Report and are incorporated herein by this reference:

Consolidated Balance Sheets as of July 31, 1998 (audited) and July 31,
1997 (audited).

Consolidated Statements of Income for the fiscal years ended July 31,
1998 (audited), July 31, 1997 (audited) and July 31, 1996 (audited).

Consolidated Statements of Stockholders' Equity for the fiscal years
ended July 31, 1998 (audited), July 31, 1997 (audited) and July 31,
1996 (audited).

Consolidated Statements of Cash Flows for the fiscal years ended July
31, 1998 (audited), July 31, 1997 (audited) and July 31, 1996
(audited).

Notes to Consolidated Financial Statements.

Independent Auditor's Report.

(a)(2) The following financial statement schedules are contained herein:

Independent Auditor's Report on Schedules.

Schedules to Financial Statements, as follows:

Schedule II - Valuation and Qualifying Accounts, years ended July 31,
1998, 1997 and 1996.

(a)(3) The following documents are exhibits to this Report:

(3)(a)(1) Articles of Incorporation of Registrant, as amended.

(3)(b)(2) By-Laws of Registrant, as amended of June 16, 1995.

(10)(c)(1)(3) Agreement ("Clorox Agreement") dated January 12,
1981 between The Clorox Company and Registrant, as
amended. (Confidential treatment of certain
portions of this Exhibit has been granted.)

- ---------------------------------
(1) Incorporated by reference to Exhibit (4.1) to Registrant's
Registration Statement on Form S-8 (Registration No. 333-57625), made
effective on June 24, 1998.

(2) Incorporated by reference to Exhibit (3)(b) to
Registrant's Annual Report on Form 10-K for the fiscal year ended July
31, 1995.

(3) Incorporated by reference to Exhibit 10(f) to Registrant's
Registration Statement on Form S-2 (Registration No. 2-97248) made
effective on May 29, 1985.

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16

Exhibit
Index

(10)(c)(2)(4) Amendment to Clorox Agreement dated March 3, 1989,
as accepted by the Registrant on March 20, 1989,
between The Clorox Company and the Registrant.
(Confidential treatment of certain portions of this
Exhibit has been granted.)

(10)(c)(3)(5) Amendment to Clorox Agreement dated February 14,
1991, between The Clorox Company and Registrant
(Confidential treatment of certain portions of this
Exhibit has been granted).

(10)(d)(6) Description of 1987 Executive Deferred Compensation
Program.*

(10)(e)(1)(7) Salary Continuation Agreement dated August 1, l989
between Richard M. Jaffee and the Registrant ("1989
Agreement").*

(10)(e)(2) Extension and Amendment, dated October 9, 1998, to
the 1989 Agreement.*

(10)(f)(8) 1988 Stock Option Plan.*

(10)(g)(9) Note Agreement, dated April 5, 1991, between
Registrant and the Teacher's Insurance and Annuity
Association of America regarding $8,000,000 9.38%
Senior Notes due November 15, 2001.

(10)(h)(10) Note Agreement, dated as of April 15, 1993, between
Registrant and the Teacher's Insurance and Annuity
Association of America regarding $6,500,000 7.17%
Senior Notes due August 15, 2004.

- ---------------------------------
(4) Incorporated by reference to Exhibit 10(e)(2) to
Registrant's Annual Report on Form 10-K for the fiscal year ended July
31, 1989.

(5) Incorporated by reference to Exhibit 10(e)(3) to
Registrant's Annual Report on Form 10-K for the fiscal year ended July
31, 1991.

(6) Incorporated by reference to Exhibit 10(f) to Registrant's
Annual Report on Form 10-K for the fiscal year ended July 31, 1988.

(7) Incorporated by reference to Exhibit 10(g) to Registrant's
Annual Report on Form 10-K for the fiscal year ended July 31, 1989.

(8) Incorporated by reference to Exhibit 4(a) to Registrant's
Registration Statement on Form S-8, filed June 30, 1989, Registration
No. 33-29650.

(9) Incorporated by reference to Exhibit 10(h) to Registrant's
Annual Report on Form 10-K for the fiscal year ended July 31, 1991.

(10) Incorporated by reference to Exhibit 10(i) to
Registrant's Annual Report on Form 10-K for the fiscal year ended July
31, 1993.

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17

Exhibit
Index

(10)(i)(11) Credit Agreement, dated as of September 21, 1994,
between Registrant and Harris Trust and Savings Bank
regarding $5,000,000 7.78% Term Loan Note and
$5,000,000 Revolving Credit Note.

(10)(i)(12) Credit Agreement, dated as of September 21, 1994,
between Registrant and Harris Trust and Savings Bank
regarding $5,000,000 7.78% Term Loan Note and
$5,000,000 Revolving Credit Note.

(10)(j)(13) The Oil-Dri Corporation of America Deferred
Compensation Plan adopted November 15, 1995 and
related resolution.*

(10)(k)(14) Oil-Dri Corporation of America 1995 Long Term
Incentive Plan as amended through July 31, 1998.*

(10)(l) $10,000,000 unsecured line of credit agreement
dated as of July 25, 1996 between Registrant and
Harris Trust and Savings Bank incorporated by
reference to Exhibit 10(l) to Registrant's Annual
Report on Form 10-K for the fiscal year ended July
31, 1996.

(10)(m)(15) $25,000,000 Note Purchase Agreement dated as of
April 15, 1998 between the Company and Teachers
Insurance and Annuity Association of America and
Cigna Investments, Inc.

23 (10)(n) Oil-Dri Corporation of America Outside Director
Stock Plan effective June 9, 1998.*

40 (11) Statement re: computation of per share earnings.

41 (13) 1998 Annual Report to Stockholders of Registrant.

78 (21) Subsidiaries of Registrant.

79 (23) Consent of Blackman Kallick Bartelstein, LLP.

80 (27) Financial Data Schedule.

*Management contract or compensatory plan or arrangement.

- ----------------------------------
(11) Incorporated by reference to Exhibit 10(i) to
Registrant's Annual Report on Form 10-K for the fiscal year ended July
31, 1994.

(12) Incorporated by reference to Exhibit 10(i) to
Registrant's Annual Report on Form 10-K for the fiscal year ended July
31, 1994.

(13) Incorporated by reference to Exhibit 10(j) to
Registrant's Annual Report on Form 10-K for the year ended July 31,
1995.

(14) Incorporated by reference to Exhibit 10(k)(I) to
Registrant's Report on Form 8-K dated April 20, 1998.

(15) Incorporated by reference to Exhibit (10)(m) to
Registrant's Quarterly Report on Form 10-Q for the quarter ended April
30, 1998.

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18

The Registrant agrees to furnish the following agreements upon
the request of the Commission:

Exhibit 4(b) Letter of Credit Agreement, dated as of October
1, 1988 between Harris Trust and Savings Bank and
Blue Mountain Production Company in the amount of
$2,634,590 in connection with the issuance by
Town of Blue Mountain, Mississippi of
Variable/Fixed Rate Industrial Development
Revenue Bonds, Series 1988 B (Blue Mountain
Production Company Project) in the aggregate
principal amount of $2,500,000 and related
Indenture of Trust, Lease Agreement, Remarketing
Agreement and Guaranties.

(b) On May 7, 1998, the Company filed a Report on Form 8-K
announcing that the Company completed the purchase of the
Fuller's Earth absorbent business of American Colloid Company
pursuant to an Asset Purchase Agreement dated as of April 20,
1998.

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19

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

OIL-DRI CORPORATION OF AMERICA
(Registrant)

By /s/ Daniel S. Jaffee
---------------------------------------------
Daniel S. Jaffee,
President and Chief Executive Officer
Director

Dated: October 20, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated:

/s/ Richard M. Jaffee October 20, 1998
---------------------------------------------
Richard M. Jaffee
Chairman of the Board of Directors

/s/ Michael L. Goldberg October 20, 1998
---------------------------------------------
Michael L. Goldberg
Executive Vice President and
Chief Financial Officer
Principal Financial Officer

/s/ James F. Japczyk October 20, 1998
---------------------------------------------
James F. Japczyk
Corporate Controller
Principal Accounting Officer

/s/ Robert D. Jaffee October 20, 1998
---------------------------------------------
Robert D. Jaffee
Director

/s/ J. Steven Cole October 20, 1998
---------------------------------------------
J. Steven Cole
Director

/s/ Arnold W. Donald October 20, 1998
---------------------------------------------
Arnold W. Donald
Director

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20

/s/ Ronald B. Gordon October 20, 1998
---------------------------------------------
Ronald B. Gordon
Director

/s/ Edgar D. Jannotta October 20, 1998
---------------------------------------------
Edgar D. Jannotta
Director

/s/ Joseph C. Miller October 20, 1998
---------------------------------------------
Joseph C. Miller
Director

/s/ Paul J. Miller October 20, 1998
---------------------------------------------
Paul J. Miller
Director

/s/ Haydn H. Murray October 20, 1998
---------------------------------------------
Haydn H. Murray
Director

/s/ Allan H. Selig October 20, 1998
---------------------------------------------
Allan H. Selig
Director

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21

INDEPENDENT AUDITOR'S REPORT ON SCHEDULES

Board of Directors
Oil-Dri Corporation of America
Chicago, Illinois

In connection with our audit of the consolidated financial statements
of OIL-DRI CORPORATION OF AMERICA AND SUBSIDIARIES as of July 31, 1998
and 1997 and for each of the three years in the period ended July 31,
1998, which report thereon dated September 18, 1998, is incorporated by
reference in this Annual Report on Form 10-K, we also examined the
financial statement schedules listed in the accompanying index at Item
14(A)(2). In our opinion, these financial statement schedules present
fairly, when read in conjunction with the related consolidated
financial statements, the financial data required to be set forth
therein.

Blackman Kallick Bartelstein, LLP

September 18, 1998

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22

OIL-DRI CORPORATION OF AMERICA AND SUBSIDIARIES

Valuation and Qualifying Accounts

Years Ended July 31, 1998, 1997 and 1996

Additions*
Balance at Charged to Balance
Beginning Costs and at End
Description of Period Expenses Deductions** of Period
- ----------- --------- -------- ---------- ---------
Allowance for doubtful accounts:

Year Ended July 31, 1998 $260,530 $201,901 $111,094 $351,337
======== ======== ======== ========
Year Ended July 31, 1997 $225,970 $125,000 $ 90,440 $260,530
======== ======== ======== ========
Year Ended July 31, 1996 $180,602 $202,690 $157,322 $225,970
======== ======== ======== ========

*Includes transfers from Restructuring Reserve.
**Net of recoveries.

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