UNITED STATES SECURITIES AND EXCHANGE COMMISSION ~~WASHINGTON, D. C. 20549~~

WASHINGTON, D. C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: ~~May~~November 3130, 2011

o TRANSITION REPORT PURSUANT TO SECTION 13 AND 15(d) OF THE
SECURITES EXCHANGE ACT OF 1934

Commission file: No. 33-94644

MINN-DAK FARMERS COOPERATIVE ~~(Exact named of Registrant as specified in its charter)~~

North Dakota		23-7222188
(State or other jurisdiction of		(I.R.S. Employer
Incorporation or organization)		Identification No.)
7525 Red River Road
Wahpeton, North Dakota		58075
(Address of principal		(Zip Code)
executive offices)

(Exact named of Registrant as specified in its charter)

(701) 642-8411 (Registrant’s telephone number, including area code)

North Dakota	23-7222188
(State or other jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification No.)

7525 Red River Road Wahpeton, North Dakota	58075
(Address of principal executive offices)	(Zip Code)

~~Not Applicable~~ (~~Former name, former address and former fiscal year, if changed since last report~~701) 642-8411

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year,
if changed since last report)

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

YES x

NO o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months.

YES o

NO o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer x Smaller Reporting Co o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES o

NO x

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

~~Class of Common Stock~~	Class of Common Stock	~~Outstanding at June 23, 2011~~		Outstanding at January 12, 2012
~~$250 Par Value~~	$250 Par Value	~~476~~		475

Minn-Dak Farmers Cooperative (“The Company” or the “Registrant”) has previously registered securities for offer and sale pursuant to the Securities Act of 1933, as amended (the “Securities Act”). As a result of that previous registration under the Securities Act, under Sections 15(d) and 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is obligated to file quarterly reports on form 10-Q, annual reports on Form 10-K and supplemental reports on Form 8-K. However, the Company has not registered any of its securities under Section 12(g) of the Exchange Act. The Company is exempt from any obligation to register its securities under the Exchange Act due to the provisions of Section 12(g)(2)(E), which exempts from Exchange Act registration any security of an issuer, such as the Company, which is a “cooperative association” as defined in the Agricultural Marketing Act of 1929. As a result, those provisions of the Exchange Act, which are applicable only to securities registered under Section 12 of that act, do not apply to shares issued by the Company. The provisions, which do not apply to the Company’s shares, include the regulation of proxies under Section 14 of the Exchange Act and the reporting and other obligations of directors, officers and principal stockholders under Section 16 of the Exchange Act.

This report contains forward-looking statements and information based upon assumptions by the Company’s management, including assumptions about risks and uncertainties faced by the Company. Any statements regarding future market prices, anticipated costs, agricultural results, operating results and other statements that are not historical facts contained in this annual report are considered forward-looking statements. The words “expect”, “project”, “estimate”, “believe”, “anticipate”, “plan”, “intend”, “could”, “may”, “predict”, and similar expressions are also intended to be identified as forward-looking terminology. Such statements involve risks, uncertainties and assumptions, including, without limitation, market factors, the effect of weather and economic conditions, farm and trade policy, the available supply of sugar, available quantity and quality of sugarbeets and other factors detailed elsewhere in this and other Company filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MINN-DAK FARMERS COOPERATIVE CONSOLIDATED BALANCE SHEETS ASSETS (In Thousands)

	May 31, 2011			Aug 31, 2010
	Nov 30, 2011 (Unaudited)				Aug 31, 2011 (Audited)
ASSETS	~~(Unaudited)~~			~~(Audited)~~
CURRENT ASSETS
Cash	$	~~277~~161		$	~~129~~$	46
Current bond trust		~~4,845~~561			~~4,731~~	1,644
Receivables
Trade accounts		18,~~684~~482			~~12,731~~	19,288
Growers		16,998			13,763
Patrons		1,548				15,460
Receivable from affiliates		~~9,642~~806			—	4,456
Other receivables		3109			3	109
Total Receivables		4520,~~327~~945			~~26,496~~	39,313
Inventories
Refined sugar, in-process sugar, pulp and molasses to be sold on a pooled basis		~~100~~69,~~732~~208			~~29,770~~	38,834
Non-member refined sugar		~~9,446~~455			~~1,717~~	4,730
Sugarbeet inventory		—77,060			~~3,121~~	—
Yeast		~~217~~183			~~237~~	157
Beet chemicals		4,063			—	4,063
Materials and supplies		1315,~~966~~644			~~13,403~~	15,761
Total Inventories		~~128~~166,~~424~~613			~~48,249~~	63,545
Deferred charges		~~1,138~~143			—	1,693
Prepaid expenses		2,~~510~~271			~~2,039~~	2,111
Prepaid beet seed		—			8
Current deferred income tax asset		11				11
Other current assets		870			—
Total Current Assets		190,705				108,363
Current deferred income tax asset		11			—
PROPERTY, PLANT AND EQUIPMENT
Total Current Assets		183,402			81,653
Land and land improvements		29,622				28,742
PROPERTY, PLANT AND EQUIPMENT
Buildings		37,964				37,883
Land and land improvements		28,164			28,164
Factory/Agricultural equipment		163,884				159,371
Buildings		37,883			37,883
Other equipment		6,620				6,620
Factory/Agricultural equipment		153,199			152,493
Capitalized leases		3,353				3,353
Other equipment		5,294			5,301
Construction in progress		10,318				13,917
Capitalized leases		3,353			3,353
Total Property, Plant and Equipment		251,761				249,886
Construction in progress		16,694			5,214
Less accumulated depreciation		(146,777	)			(144,527	)
Total Property, Plant and Equipment		244,587			232,408
Net Property, Plant and Equipment		104,984				105,359
Less accumulated depreciation		(142,121	)		(135,638	)
OTHER ASSETS
Net Property, Plant and Equipment		102,466			96,769
Investment in other cooperatives and other corporations		10,945				10,921
OTHER ASSETS
Investment in unconsolidated marketing subsidiaries		201				181
Investment in other cooperatives, unconsolidated marketing subsidiaries and other corporations		11,342			11,116
Bond trust		102				1,912
Bond trust and financing costs		4,899			2,493
Bond financing costs		487				297
Other long-term assets		31,~~110~~854			~~5,035~~	3,446
Total Other Assets		1913,~~351~~589			~~18,643~~	16,757
TOTAL ASSETS	$	~~305~~309,~~219~~278		$	~~197,065~~$	230,479

See Notes to Consolidated Financial Statements.

MINN-DAK FARMERS COOPERATIVE CONSOLIDATED BALANCE SHEETS LIABILITIES AND ~~MEMBERS~~PATRONS’ INVESTMENT (In Thousands)

	May 31, 2011 (Unaudited)			Aug 31, 2010 (Audited)
	Nov 30, 2011 (Unaudited)				Aug 31, 2011 (Audited)
LIABILITIES AND MEMBERS’ INVESTMENT
LIABILITIES AND PATRONS’ INVESTMENT
CURRENT LIABILITIES
Short-term notes payable	$	6172,~~276~~014		$	~~27,558~~$	40,646
Current portion of long-term debt, capital leases and bonds payable		3,007			2,977
Current portion of long-term debt and capital leases		3,012				3,012
Accounts payable:
Trade		2711,~~710~~577			~~10,144~~	18,459
Checks outstanding		~~859~~1,861			~~1,008~~	928
Deferred liabilities		—			8,825
Patrons		70,221				24,377
Growers		37,735			13,874
Total Accounts Payable		83,659				43,764
Total Accounts Payable		66,304			33,851
Income tax		4				—
Income tax		1			195
Payable to affiliates		1,837				1,674
Payable to affiliates		—			283
Accrued liabilities		3,837				3,788
Accrued liabilities		5,902			3,101
Total Current Liabilities		164,363				92,884
Total Current Liabilities		136,490			67,965
LONG-TERM DEBT, CAPITAL LEASES, AND BONDS PAYABLE, NET OF CURRENT PORTION		41,945				42,901
LONG-TERM DEBT, CAPITAL LEASES, AND BONDS PAYABLE, NET OF CURRENT PORTION		43,861			37,930
LONG-TERM DEFERRED INCOME TAX LIABILITY		155				177
LONG-TERM DEFERRED INCOME TAX LIABILITY		199			266
OTHER LONG-TERM LIABILITIES		681				753
LONG-TERM PENSION LIABILITY		2117,~~064~~916			~~19,630~~	17,050
COMMITMENTS AND CONTINGENCIES
Total Liabilities		~~201~~225,~~614~~060			~~125,791~~	153,765
MEMBERS’ INVESTMENT
PATRONS’ INVESTMENT
Preferred stock:
Class A - 100,000 shares authorized, $105 par value; 72,200 shares issued and outstanding		7,581			~~7,581~~	7,581
Class B - 100,000 shares authorized, $75 par value; 72,200 shares issued and outstanding		5,415			~~5,415~~	5,415
Class C - 100,000 shares authorized, $76 par value; 72,200 shares issued and outstanding		5,487			~~5,487~~	5,487
Total Preferred stock		18,483			~~18,483~~	18,483
Common stock, 600 shares authorized, $250 par value; issued and outstanding, 476 shares at May 31, 2011 and 477 shares at August 31, 2010		119			119
Common stock, 600 shares authorized, $250 par value; issued and outstanding, 476 shares at November 30, 2011 and 476 shares at August 31, 2011		119				119
Paid in capital in excess of par value		32,094			~~32,094~~	32,094
Unit retention capital		3,104			—	3,104
Nonqualified allocated patronage		5735,~~881~~717			~~28,299~~	28,299
Accumulated other comprehensive loss		(19,262	)		(18,837	)
Accumulated other comprehensive loss-interest swap		(858	)			(903	)
Retained earnings		11,186			11,116
Accumulated other comprehensive loss-pension		(15,556	)			(15,571	)
Total Members’ Investment		103,605			71,274
Retained earnings		11,115				11,089
TOTAL LIABILITIES AND MEMBERS’ INVESTMENT	$	305,219		$	197,065
Total Patrons’ Investment		84,218				76,714
TOTAL LIABILITIES AND PATRONS’ INVESTMENT	$	309,278			$	230,479

See Notes to Consolidated Financial Statements.

MINN-DAK FARMERS COOPERATIVE
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands)
(Unaudited)

	Three-Months Ended					~~Nine-Months Ended~~
	May 31, 2011		May 31, 2010			May 31, 2011			May 31, 2010
	Nov 30, 2011			Nov 30, 2010
REVENUE:
Sales of sugar, co-products and yeast, net of discounts	$	8476,~~021~~861	$	~~54,926~~$	74,379	$	~~241,388~~		$	~~167,394~~
Changes in finished goods inventory and in-process sugar at NRV		830,~~390~~374		~~8,989~~	50,517		~~78,253~~			~~34,911~~
Total Revenue		92107,~~411~~235		~~63,915~~	124,896		~~319,641~~			~~202,305~~
EXPENSES:
Production costs of sugar, in-process sugar, co-products and yeast sold		2024,~~092~~305		~~17,198~~	29,504		~~73,472~~			~~59,632~~
Sales and distribution costs		1217,~~272~~805		~~8,670~~	15,089		~~40,595~~			~~30,576~~
General and administrative		1,~~948~~953		~~1,618~~	2,025		~~6,040~~			~~5,033~~
Interest		~~645~~636		~~485~~	581		~~1,985~~			~~1,500~~
(Gain) on disposition of property and equipment		—		—			(1	)		(122	)
(Gain) loss on disposition of property and equipment		4			(1	)
Total Expenses		3444,~~957~~703		~~27,971~~	47,198		~~122,091~~			~~96,619~~
TOLLING & OTHER REVENUE		~~873~~178		~~536~~	71		~~1,064~~			~~7,624~~
NET PROCEEDS RESULTING FROM MEMBER AND NON-MEMBER BUSINESS BEFORE INCOME TAXES		58,327		36,480			198,614			113,310
NET PROCEEDS RESULTING FROM PATRON AND NON-PATRON BUSINESS BEFORE INCOME TAXES		62,710			77,769
INCOME TAX BENEFIT (EXPENSE)		2217		~~(484~~	)22		61			~~(612~~	)
NET PROCEEDS RESULTING FROM MEMBER AND NON-MEMBER BUSINESS	$	58,349	$	35,996		$	198,675		$	112,698
NET PROCEEDS RESULTING FROM PATRON AND NON-PATRON BUSINESS	$	62,727		$	77,791
DISTRIBUTION OF NET PROCEEDS
Credited to members’ investment
Credited to patrons’ investment
Components of net income
Income from non-member business	$	27	$	1,266		$	70		$	1,510
Income from non-patron business	$	27		$	23
Patronage income		97,~~795~~418		~~4,938~~	9,709		~~29,606~~			~~21,485~~
Net income credited to members’ investment		9,821		6,204			29,676			22,995
Net income credited to patrons’ investment		7,445			9,732
Allocated costs of sugarbeets paid or payable to growers for production to date	$	48,528	$	29,792		$	168,999		$	89,703
Allocated costs of sugarbeets paid or payable to patrons for production to date	$	55,282		$	68,059
NET PROCEEDS RESULTING FROM MEMBER AND NON-MEMBER BUSINESS	$	58,349	$	35,996		$	198,675		$	112,698
NET PROCEEDS RESULTING FROM PATRON AND NON-PATRON BUSINESS	$	62,727		$	77,791

See Notes to Consolidated Financial Statements.

MINN-DAK FARMERS COOPERATIVE
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)

	Nine-Months Ended
	Three-Months Ended
	May 31, 2011			May 31, 2010
	Nov 30, 2011				Nov 30, 2010
OPERATING ACTIVITIES
Net income credited to members’ investment	$	29,676		$	22,995
Net income credited to patrons’ investment	$	7,445			$	9,732
Add (deduct) noncash items:
Accumulated other comprehensive gain/(loss)-interest swap		45				—
Depreciation		6,505			6,617
Add (deduct) noncash items:
Amortization		389			290
Depreciation		2,405				2,162
(Gain) on property and equipment disposals		(1	)		(122	)
Amortization		174				154
Loss allocated from unconsolidated marketing subsidiaries		(4	)		1
(Gain) loss on property and equipment disposals		4				(1	)
Noncash portion of patronage capital credits		(584	)		(735	)
Loss allocated from unconsolidated marketing subsidiaries		(5	)			(1	)
Deferred income taxes		(77	)		(40	)
Noncash portion of patronage capital credits		(23	)			(32	)
Changes in operating assets and liabilities
Deferred income taxes		(22	)			(22	)
Accounts receivable and advances		(18,830	)		(1,613	)
Changes in operating assets and liabilities
Inventory and prepaid expenses		(81,507	)		(33,639	)
Accounts receivable and advances		18,368				6,067
Deferred charges and other assets		651			1,088
Inventory and prepaid expenses		(103,229	)			(146,677	)
Accounts payable, accrued liabilities and other liabilities		43,018			10,394
Deferred charges and other assets		2,777				3,370
Net cash (used in)/provided by operating activities		(20,764	)		5,236
Accounts payable, accrued liabilities and other liabilities		46,164				72,064
INVESTING ACTIVITIES
Net cash (used in)/provided by operating activities		(25,897	)			(53,184	)
Proceeds from disposition of property, plant and equipment		1			123
INVESTING ACTIVITIES
Change in other assets		—			(4,400	)
Proceeds from disposition of property, plant and equipment		—				1
Tax exempt bond draw		6,782			—
Tax exempt bond trust draw		2,893				4,731
Capital expenditures		(122,~~204~~034	)		~~(2,797~~	)(3,662	)
Net proceeds from patronage refunds and equity revolvements		—			1,135
Net cash (used in)/provided by investing activities		859				1,070
Patronage received from other coops		412			—
FINANCING ACTIVITIES
Net cash (used in)/provided by investing activities		(5,009	)		(5,939	)
Net proceeds from issuance of short-term debt		31,368				57,233
FINANCING ACTIVITIES
Checks outstanding		933				206
Net proceeds from issuance of short-term debt		33,718			9,045
Payment of long-term debt and capital leases		(956	)			(950	)
Checks outstanding		(149	)		102
Payment of financing fees		—				(390	)
Payment of long-term debt and capital leases		(2,854	)		(4,082	)
Equity payment to estate		—				(10	)
Payment of financing fees		(750	)		(743	)
Payment of allocated patronage		(6,192	)			(4,020	)
Equity payment to estate		(24	)		—
Net cash (used in)/provided by financing activities		25,153				52,069
Payment of allocated patronage		(4,020	)		(3,626	)
NET INCREASE/(DECREASE) IN CASH		115				(45	)
Net cash (used in)/provided by financing activities		25,921			696
CASH, BEGINNING OF YEAR		46				129
NET INCREASE/(DECREASE) IN CASH		148			(7	)
CASH, END OF PERIOD	$	161			$	84
CASH, BEGINNING OF YEAR		129			94
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH, END OF PERIOD	$	277		$	87
Cash payments for (Receipts from)
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest	$	426			$	381
Cash payments for (Receipts from)
Income taxes, net of refunds	$	1			$	548
Interest	$	1,477		$	1,352
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Income taxes, net of refunds	$	361		$	68
Unit retain deductions from patron payable	$	—			$	2,456
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Proceeds for bond issuance transferred to restricted investment	$	—			$	8,815
Unit retain deductions from grower payable	$	3,104			—
Proceeds for bond issuance transferred to restricted investment	$	8,815			7,000
Equipment purchased by issuance of capital lease	$	—		$	392

See Notes to Consolidated Financial Statements.

MINN-DAK FARMERS COOPERATIVE ~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED MAY 31, 2011 and 2010 (Unaudited)~~

1.NOTES ~~The~~TO ~~consolidated~~CONSOLIDATED ~~financial~~FINANCIAL statements of the Company and that of its wholly owned subsidiary companies Minn-Dak Yeast Company (“Minn-Dak Yeast”) and Link Acquisition Company LLC (“Link”) for the three-month and nine-month periods ended May 31, 2011 and 2010 are unaudited and reflect all adjustments consisting of normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim period. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2010. The results of operations for the three-month and nine-month periods ended May 31, 2011 are not necessarily indicative of the results for the entire fiscal year ending August 31, 2011. 2. Inventories of refined sugar, in-process sugar, pulp and molasses to be sold on a pooled basis are valued at net realizable value, while third-party purchased refined sugar to be sold on a pooled basis is valued at the lower of cost or market. Third-party refined sugar costs include product, delivery, poll adjustment, and refining fee costs. Inventory of yeast is valued at the lower of average cost or market. Materials and supplies are valued at most recent purchase price that approximates cost. During the periods when sugarbeets are purchased from shareholder/growers and/or non-members, but not yet converted into refined sugar or in-process sugar, that sugarbeet inventory is valued at grower and/or non-members payment cost. In valuing inventories at Net Realizable Value (“NRV”), the Company, in effect sells the remaining inventory to the subsequent period’s sugar and co-product pool. Pooled product inventories will normally increase to a peak valuation at the end of the processing campaign and decrease to a low point of valuation at or near fiscal year end. 3. In September 2010, and effective as of August 31, 2010, the Company declared a revolvement of the remaining 66 percent of the allocated patronage for the 2003-crop totaling $2.9 million and 31 percent of the allocated patronage for the 2004-crop totaling $1.1 million. These amounts were accrued as of August 31, 2010 and paid to the shareholders on September 17, 2010. 4. In November 2010, the Company allocated to shareholders $4.0 million of patronage from the 2009-crop in the form of non-qualified allocated patronage credits. 5. The Company’s Board of Directors authorized a $3.1 million per unit retain deduction from the 2010-crop, and as of May 31, 2011, this has been deducted and allocated to shareholders’ equity accounts. 6. Short term credit utilized as of May 31, 2011 consisted of $61.3 million; $32.1 million has been borrowed from CoBank (the “Bank”) and $29.2 million from the USDA Commodity Credit Corporation “CCC”. That leaves the Company with a remaining short-term credit capacity totaling $23.0 million. The increase in seasonal debt from August 31, 2010 to May 31, 2011 is due to normal seasonal operations for a 3.1 million ton crop.STATEMENTS

Source	Capacity		Utilized		Unused Capacity
	(In Millions)
Co-Bank	$	45.0	$	32.1	$	12.9
CCC	$	39.3	$	29.2	$	10.1
Total	$	84.3	$	61.3	$	23.0

FOR THE THREE MONTHS ENDED

7.NOVEMBER ~~On November 15~~30, ~~2010 the Company renewed the Revolving Credit Supplement with the Bank through December 31,~~ 2011. ~~The~~and ~~Revolving Credit Supplement was renewed at $85.0 million for the time period from November 15,~~ 2010 ~~to May 31, 2011; then it is reduced to $45.0 million through December 31, 2011.~~

7(Unaudited)

8.	On December 7, 2009, the Company applied for and received approval from Richland County to re-finance its tax-exempt long-term bonds. All variable rate bonds outstanding as of January 15, 2010 were called and new variable rate bonds (currently at 0.22 percent interest rate) were issued with a single maturity date of February 1, 2023 with no associated gains or losses. In addition, $7.0 million in new tax-exempt bonds, which are also exempt from alternative minimum taxes, were approved by Richland County to finance future capital expenditures. These variable rate bonds (currently at 0.13 percent interest rate) were issued on February 18, 2010 with a single maturity date of February 1, 2025. The letters of credit from the Bank associated with these bonds were also renewed as of the date of the issuance of the bonds. The new tax-exempt bonds are held as a restricted investment in a bond trust until qualified expenditures related to the bonds have been expended by the Company.
9.	On November 30, 2010, the Company applied for and received approval from Richland County to sell $8.8 million of new tax-exempt bonds, which are also exempt from alternative minimum taxes, to finance future capital expenditures. These variable rate bonds (currently at 0.13 percent interest rate) were issued on November 30, 2010 with a single maturity date of November 1, 2025. The letters of credit from the Bank associated with all of the bonds were also renewed as of the date of the issuance of the November 30, 2010 bonds, with the letters of credit increasing $9.1 million, representing the $8.8 million in principal plus interest. These newly issued tax-exempt bonds are held as a restricted investment in a bond trust until qualified expenditures related to the bonds have been expended by the Company.
10.	Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
	The fair value hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:
		Level 1: Quoted prices in active markets for identical assets or liabilities
		Level 2: Includes the following inputs:
			•	Quoted prices in active markets for similar assets or liabilities
			•	Quoted prices for identical or similar assets or liabilities in markets that are not active
			•	Or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
		Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities.
	•	Long-Term Debt, Inclusive of Current Maturities - Based upon discounted cash flows and current borrowing rates with similar maturities, the book value of the long-term debt as of May 31, 2011, was approximately $18.8 million of Bank debt in comparison to the fair value of $18.8 million. Also included in the Company’s long-term debt is $28.1 million in tax-exempt bonds, in comparison to the fair value of $28.1 million.
	•	Proceeds for Bond Issuance Transferred to Restricted Investment – included in the Company’s current and long-term Restricted Investments was $4.1 million in comparison to the fair value of $4.1 million. Current and long-term Restricted Investments are invested in short-term government backed securities.
	•	Investments in CoBank, Dakota Valley Electric, and Investments in Marketing Cooperatives - The Company believes it is not practical to estimate the fair value of these investments without incurring excessive costs because there is no established market for these securities and equity interests, and it is inappropriate to estimate future cash flows which are largely dependent on future earnings of these organizations.
	•	Foreign Currency Forward Contracts — there were no open foreign currency forward contracts as of May 31, 2011.

1. The consolidated financial statements of the Company and that of its wholly owned subsidiary companies Minn-Dak Yeast Company (“Minn-Dak Yeast”) and Link Acquisition Company LLC (“Link”) for the three-month period ended November 30, 2011 and 2010 are unaudited and reflect all adjustments consisting of normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim period. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2011. The results of operations for the three-month period ended November 30, 2011 are not necessarily indicative of the results for the entire fiscal year ending August 31, 2012.

82. Inventories of refined sugar, in-process sugar, pulp and molasses to be sold on a pooled basis are valued at Net Realizable Value (“NRV”), while third-party purchased refined sugar to be sold on a pooled basis is valued at the lower of cost or market. Third-party refined sugar costs include product, delivery, poll adjustment, and refining fee costs. Inventory of yeast is valued at the lower of average cost or market. Materials and supplies (including conventional seed and chemicals) are valued at most recent purchase price that approximates cost. During the periods when sugarbeets are purchased from shareholder/growers and/or non-members, but not yet converted into refined sugar or in-process sugar, that sugarbeet inventory is valued at grower and/or non-members payment cost. In valuing inventories at NRV, the Company, in effect sells the remaining inventory to the subsequent period’s sugar and co-product pool. Pooled product inventories will normally increase to a peak valuation at the end of the processing campaign and decrease to a low point of valuation at or near fiscal year end.

•3. ~~Interest~~In ~~Rate~~September ~~Contracts~~2011, —and ~~Based~~effective onas ~~the~~of ~~zero~~August ~~coupon~~31, ~~method~~2011, ~~in which~~ the ~~term,~~Company ~~notional~~revolved ~~amount,~~the ~~and~~remaining ~~repricing~~76% ~~date~~ of the ~~interest~~allocated ~~rate~~patronage for ~~swap~~the ~~match~~fiscal ~~the~~year ~~term~~ended August 31, ~~repricing~~2005 ~~date~~totaling $3,706,906 and ~~principal~~59% ~~amount~~ of the ~~interest-bearing~~allocated ~~liability~~patronage onfor ~~which~~ the ~~hedging~~fiscal ~~interest~~year ~~payments~~ended ~~are~~August 31, ~~due~~2006, ~~the~~totaling ~~fair~~$2,485,193. ~~value~~In ofaddition, for the ~~interest~~fiscal ~~rate~~period ~~contracts~~ending asAugust ~~of May~~ 31, 2011 ~~was~~the aCompany ~~liability~~revolved of $~~0.5~~23,830 ~~million. Inputs used to measure the fair value~~ of ~~the~~allocated patronage ~~interest rate swap contracts are quoted prices in active markets for similar assets or liabilities~~ and ~~therefore~~$4,451 ~~are contained within level 2~~ of ~~the~~unit ~~fair~~retains ~~value~~to ~~hierarchy.~~certain ~~See~~deceased ~~the~~members ~~tables below~~estates.

Interest Rate Swaps (In Millions)				Fair Value of Liabilities as of May 31, 2011
Fiscal Year	Notional Amt		Ave Interest Rate	Level 1		Level 2		Level 3		Total
2011	$	10.0 Million	0.440%	$	—	$	<0.1	$	—	$	<0.1
2012	$	30.0 Million	0.853%	$	—	$	0.1	$	—	$	0.1
2013	$	25.0 Million	1.870%	$	—	$	0.2	$	—	$	0.2
2014	$	15.0 Million	2.879%	$	—	$	0.1	$	—	$	0.1
2015	$	5.0 Million	2.943%	$	—	$	<0.1	$	—	$	<0.1
				$	—	$	0.5	$	—	$	0.5

4. In November 2011, the Company allocated to shareholders $6.2 million of patronage from the 2010-crop in the form of non-qualified allocated patronage credits.

11.	FASB ASC 815 (formerly SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities) requires the Company to recognize all derivatives, as defined, on the balance sheet at fair value.
	The Company, as a result of its operating and financing activities, is exposed to changes in foreign currency exchange rates and interest rates which may adversely affect its results of operations and financial position. In seeking to minimize the risks and/or costs associated with such activities, the Company may enter into derivative contracts.
	The Company manages its foreign currency related risks primarily through the use of foreign currency forward contracts. At May 31, 2011 and at August 31, 2010, the Company had no foreign currency derivative instruments.
	The Company is exposed to interest risk primarily through its borrowing activities. The Company uses variable rate interest on substantially all of its debt obligations. To manage the interest rate risk on its debt, the Company uses interest rate swaps for the underlying interest rate of similar maturity debt instruments. These interest rate swaps are matched with future fiscal year periods. The Company has designated these interest rate swap contracts as a cash flow hedge.
	The Company does not consider its interest rate swaps Level 1 inputs because they are not exchange traded. The Company considers its interest rate swaps to be Level 2 inputs because they are observable in the marketplace.
	The Company reviews the hedging activity for effectiveness on a quarterly basis. The Company did not hold any hedging activity to review prior to the 2nd quarter of the current fiscal year. No ineffectiveness was recognized in earnings during the three-month and nine-month periods ended May 31, 2011.
	The current period loss as a result of reclassifying prior Interest Rate Liabilities to Interest Rate Expense was <$0.1 and <$0.1 million for the three-month and nine-month periods ended May 31, 2011 respectively. There was no activity for the three-month and nine-month periods ended May 31, 2010 respectively.
	The Company has swap agreements in place by individual Fiscal Year with different interest rates for each Fiscal Year.

5. Short term credit capacity as of November 30, 2011 totaled $93.0 million; $56.0 million has been borrowed from CoBank (the “Bank”) and $16.0 million from the USDA Commodity Credit Corporation “CCC”. That leaves the Company with a remaining short-term credit capacity totaling $21.0 million. The increase in seasonal debt from August 31, 2011 to November 30, 2011 is due to normal seasonal operations for a 1.9 million ton crop.


Source	Capacity		Utilized		Unused Capacity
	(In Millions)

Co-Bank	$	65.0	$	56.0	$	9.0
CCC	$	28.0	$	16.0	$	12.0
Total	$	93.0	$	72.0	$	21.0

~~Interest~~6. On ~~Rate~~November ~~Swaps~~15, 2011, the Company and its Bank agreed to a temporary increase in ~~effect~~the ~~May~~seasonal line of credit from $45.0 million to $65.0 million through December 31, 2011:. On December 22, 2011, the Company and the Bank agreed to establish the seasonal line of credit from January 1, 2012 through December 31, 2012 at $65.0 million.

Interest Rate Swaps
Fiscal Year	Notional Amount		Average Interest Rate		Mark to Market Short Term Liab.		Mark to Market Long Term Liab.
2011	$	10.0 Million		0.440%	$	<0.1 Million	$	0.0 Million
2012	$	30.3 Million		0.853%	$	<0.1 Million	$	0.1 Million
2013	$	25.0 Million		1.870%	$	0.0 Million	$	0.2 Million
2014	$	15.0 Million		2.879%	$	0.0 Million	$	0.1 Million
2015	$	5.0 Million		2.943%	$	0.0 Million	$	0.1 Million
					$	0.1 Million	$	0.4 Million

~~Interest~~7. On ~~Rate~~November ~~Swaps~~30, in2010, ~~effect~~the ~~August~~Company 31applied for and received approval from Richland County to sell $8.8 million of new tax-exempt bonds, which are also exempt from alternative minimum taxes, to finance future capital expenditures. These variable rate bonds (currently at 0.16 percent interest rate) were issued on November 30, 2010: with a single maturity date of November 1, 2025. The letters of credit from the Bank associated with all of the bonds were also renewed as of the date of the issuance of the November 30, 2010 bonds, with the letters of credit increasing $9.1 million, representing the $8.8 million in principal plus interest. These tax-exempt bond proceeds are held as a restricted investment in a bond trust until qualified expenditures related to the bonds have been expended by the Company.

~~Interest~~8. Fair ~~Rate~~value is defined as the price that would be received from selling an asset or paid to transfer a liability in an ~~Swaps~~orderly -transaction ~~None~~between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

~~12.~~ The ~~Company’s~~fair ~~shareholder/growers~~value ~~harvested~~hierarchy ~~3,108,004~~requires ~~tons of sugarbeets from~~ the ~~2010-crop, which created a revised (in June 2011) estimated payment liability of $170.9 million, or a payment estimate of $55.00 per average ton. 13. The sugar beet industry and the~~ Company ~~have~~to ~~been or are currently involved in various litigations concerning~~ maximize the ~~approval~~use of ~~Roundup~~observable ~~Ready®~~inputs ~~sugarbeets for planting in 2011~~ and ~~forward.~~minimize ~~The legal proceedings to date have resulted in~~ the ~~finding~~use ~~that,~~of ~~for~~unobservable ~~the~~inputs ~~2011-crop,~~when itmeasuring ~~was~~fair ~~legal for the Company’s shareholder/growers to plant Roundup Ready® sugarbeet seed~~value. ~~However,~~A ~~the~~financial ~~Company believes that there will continue to be legal challenges to the USDA~~instrument’s categorization ~~partial~~within ~~deregulation of~~ the ~~Roundup~~fair ~~Ready®~~value ~~sugarbeet~~hierarchy ~~seed.~~is ~~The ability of shareholder/growers to plant Roundup Ready® sugarbeets in subsequent years will be~~ based upon ~~actions by~~ the ~~USDA,~~lowest ~~which~~level ~~may be subject to further challenge by certain groups who oppose the partial deregulation. Environmental law restrictions on the use~~ of ~~Roundup~~input ~~Ready®~~that ~~sugarbeet~~is ~~seeds or other restriction relating to sugarbeet seeds or herbicides could have a~~ significant, ~~negative financial impact on the Company and its shareholder/growers. The Company has incurred $4.1 million in costs related~~ to the ~~raising~~fair ofvalue ~~conventional seed for the 2012-crop year~~measurement. Three ~~These~~levels ~~costs are reflected as inventory and the method~~ of ~~allocating~~inputs ~~these~~may ~~costs~~be ~~back~~used to ~~the~~measure ~~2012-crop~~fair ~~patrons has not been determined. 14. The following schedule provides the components of Net Periodic Benefit Cost for the Nine-Months Ended, May 31, 2011 and 2010.~~value:

(In 000’s)	Pension Plan						Other Than Pension Plan
	2011			2010			2011		2010
Service Cost	$	960		$	753		$	—	$	—
Interest Cost		1,493			1,383			—		—
Expected return on plan assets		(1,249	)		(1,119	)		—		—
Amortization of prior service cost		24			24			—		—
Amortization of transition cost		—			—			—		—
Amortization of net (gain) loss		814			457			—		—
Net periodic benefit cost	$	2,042		$	1,498		$	—	$	—

Level 1: Quoted prices in active markets for identical assets or liabilities

~~Through~~Level ~~the nine-months~~2: ~~ended~~Includes ~~May 31, 2011,~~ the ~~Company~~following has made $0.9 million of contributions as compared to $0.8 million through the nine-months ended May 31, 2010. The Company anticipates contributing $0.9 million in additional funds to its pension plan in Fiscal Year 2011, for a total of $1.8 million. Contributions in Fiscal Year 2010 totaled $1.5 million.inputs:

10· Quoted prices in active markets for similar assets or liabilities

~~15.~~· Quoted ~~Recently~~prices ~~Issued~~for ~~Accounting~~identical ~~Pronouncements:~~or Insimilar ~~December, 2010, the FASB issued authoritative guidance to improve goodwill impairment testing. Under this guidance, goodwill and other intangible~~ assets ~~testing is a two-step test. When a goodwill impairment test is performed (either on an annual~~ or ~~interim~~liabilities basis), an entity must assess whether the carrying amount of a reporting unit exceeds its fair value (Step 1). If it does, an entity must perform an additional test to determine whether goodwill has been impaired and to calculate the amount of that impairment (Step 2). This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. Early adoption is not permitted. This Update will be implemented for the quarter ending November 2011. The Company does not expect that this authoritative guidance on impairment testing will have a material effect on the Company’s financial statements. In May, 2011, The FASB issued ASU 2011-4 - amendments to achieve common Fair Value Measurement and Disclosure requirements in ~~U.S~~markets ~~GAAP and IFRSs. This amendment is to ensure~~ that ~~fair value has the same meaning in U.S. GAAP and IFRSs and that their respective fair value measurement and disclosure requirements~~ are ~~the same. This guidance is effective for the third quarter of 2012. The Company does~~ not expect that this authoritative guidance will have any material effect on the Company’s financial statements. In June, 2011, The FASB issued ASU 2011-5. This objective of this amendment is to improve the comparability, consistence, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. This guidance is effective in the first quarter of 2013. The Company does not expect that this authoritative guidance will have any material effect on the Company’s financial statements. 16. Change in Accounting Standards: In June and December 2009, the FASB issued authoritative guidance to improve financial reporting by enterprises involved with variable interest entities and to provide more relevant and reliable information to users of financial statements. This guidance became effective for the Company in Fiscal Year 2011. The Company does not consider the adoption of this guidance to have a material effect on its financial statements. In July 2010, the FASB issued authoritative guidance regarding disclosures about credit quality of financing receivables and the allowance for credit losses. This guidance is effective for the quarter ending February, 28, 2010. However, in January 2011, the FASB issued guidance regarding deferral of the effective date of disclosures about troubled debt restructurings in Update No. 2010-20. The deferral of the disclosures was effective upon issuance. The deferred portions of Update No. 2010-20 is anticipated to be effective for interim and annual reporting periods after June 15, 2011 17. Subsequent Events: The Company has considered subsequent events through the date the financial statements were issued.active

~~ITEM~~· ~~2. MANAGEMENT’S~~Or ~~DISCUSSION~~other ~~AND~~inputs ~~ANALYSIS~~that OFare ~~FINANCIAL~~observable ~~CONDITION AND~~or ~~RESULTS~~can OFbe ~~OPERATIONS~~corroborated by observable market data for substantially the full term of the assets or liabilities.

~~This Discussion~~Level ~~should~~3: beUnobservable ~~read~~inputs inthat ~~conjunction~~are ~~with~~supported ~~information~~by ~~contained in the~~little ~~Consolidated~~or ~~Financial~~no ~~Statements~~market activity and ~~Notes~~that ~~thereto~~are ~~and~~significant into the ~~Company’s~~fair ~~Annual Report~~value onof ~~Form~~assets ~~10-K~~or ~~for fiscal year ended August 31, 2010~~liabilities.

~~OVERVIEW~~· Long-Term Debt, Inclusive of Current Maturities – Based upon discounted cash flows and current borrowing rates with similar maturities, the book value of the Bank debt of approximately $15.0 million and $15.8 million compares to fair values of $15.0 million and $15.8 million respectively as of November 30, 2011 and August 31, 2011. Also included in the Company’s long-term debt was $28.1 million and $28.1, million in tax exempt bonds, in comparison to the fair value of $28.1 million and $28.1 million respectively as of November 30, 2011 and August 31, 2011.

~~The following~~· ~~discussion~~ ~~and~~Proceeds ~~analysis~~for ~~relates~~Bond toIssuance ~~the~~Transferred ~~financial~~to ~~condition~~Restricted ~~and~~Investment ~~results~~– ~~of operations~~included ofin ~~Minn-Dak Farmers Cooperative (~~the “Company”’s orcurrent bond ~~the~~trust ~~“Registrant”) for~~and ~~the~~restricted ~~three~~long-~~month~~term ~~and~~other ~~nine-month~~assets ~~periods~~was ~~ended~~$0.7 ~~May~~million ~~31,~~and ~~2011~~$3.6 ~~(the~~million ~~third quarter~~in ofcomparison to the ~~Company’s~~fair ~~2011~~value ~~fiscal~~of ~~year)~~$0.7 ~~The~~million and ~~Company’s~~$3.6 ~~fiscal~~million ~~year~~as ~~runs~~of ~~from September~~November 130, to2011 and August 31., 2011.

11· Investments in Other Cooperatives and Other Corporations – The Company believes it is not practical to estimate the fair value of these investments without incurring excessive costs because there is no established market for these securities and equity interests, and it is inappropriate to estimate future cash flows which are largely dependent on future earnings of these organizations.

~~Any statements~~· ~~regarding~~Investments ~~future market prices, anticipated costs, agricultural results, operating results and other statements that are not historical facts contained~~ in ~~this~~Unconsolidated ~~Quarterly~~Marketing ~~Report~~Subsidiaries on– ~~Form 10-Q are forward-looking statements.~~ The ~~words “expect”,~~Company ~~“project”,~~believes ~~“estimate”,~~it ~~“believe”,~~is ~~“anticipate”,~~not ~~“plan”,~~practical ~~“intend”, “could”, “may”, “predict” and similar expressions are also intended~~ to ~~identify forward-looking~~estimate ~~statements.~~the ~~Such statements involve risks, uncertainties and~~fair ~~assumptions,~~value ~~including, without limitation, market factors, the effect~~ of ~~weather and~~these ~~economic~~investments ~~conditions,~~without ~~farm~~incurring ~~and~~excessive ~~trade~~costs ~~policy,~~because ~~the~~there ~~available~~is ~~supply~~no ofestablished ~~sugar, available~~market ~~quantity~~for ~~and~~these ~~quality~~securities ~~of sugarbeets~~ and ~~other risks~~equity interests, ~~including those set forth in the Company’s reports filed with the Securities~~ and ~~Exchange Commission,~~it ~~including~~is ~~Item~~inappropriate 1Ato ofestimate ~~Part~~future Icash offlows ~~the~~which ~~Company’s~~are ~~Annual~~largely ~~Report~~dependent on ~~Form 10-K~~future ~~for~~earnings ~~the year ended August 31, 2010. Should one or more~~ of these ~~risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated~~organizations. These forward-looking statements are made as of the date of this report and the Company assumes no obligation to update such forward-looking statements, or to update the reasons why actual results could differ materially from those anticipated in such forward-looking statements.

~~Critical~~· Foreign ~~Accounting~~Currency Forward Contracts – there were no open foreign currency forward contracts as of November 30, ~~Policies~~2011 ~~and~~or ~~Estimates~~August 31, 2011.

The only material changes to the Company’s critical accounting policies and estimates since the filing of its Annual Report on form 10-K for the year ended August 31, 2010 has been the Derivative and Hedging Activities. 8

· Interest Rate Contracts – Based on the zero coupon method in which the term, notional amount, and re-pricing date of the interest rate swap match the term, re-pricing date, and principal amount of the interest-bearing liability on which the hedging interest payments are due, the fair value of the interest rate contracts as of November 30, 2011 was a liability of $0.9 million and August 31, 2011 was a liability of $0.9 million. The ~~Company’s~~current portion of the liability ($0.2 million as of November 30, 2011 and $0.2 million as of August 31, 2011) is included in accrued liabilities and the long-term portion of the liability ($0.7 million as of November 30, 2011 and $0.7 million as of August 31, 2011) is included in other long-term liabilities. Inputs used to measure the fair value of the interest rate swap contracts are quoted prices in active markets for similar assets or liabilities and therefore are contained within level 2 of the fair value hierarchy. Because the critical ~~accounting~~terms ~~policies~~of the swap contracts and ~~estimate~~the notes payable are the same, the swap contracts effectively hedge the risk of changes ~~include~~in interest payments. Due to this, the ~~following~~changes in the fair value of the swap contracts have been excluded from the statement of operations. Financial instruments recorded at fair value on a recurring basis are as follows:

Derivative and Hedging Activities


Interest Rate Swaps (In Millions)				Fair Value of Liabilities as of November 30, 2011

Fiscal Year	Notional Amt		Ave Interest Rate	Level 1		Level 2		Level 3		Total

2012	$	45.0 Million	0.587%	$	—	$	0.1	$	—	$	0.1
2013	$	40.0 Million	1.607%	$	—	$	0.4	$	—	$	0.4
2014	$	30.0 Million	2.305%	$	—	$	0.3	$	—	$	0.3
2015	$	5.0 Million	3.685%	$	—	$	0.1	$	—	$	0.1

Total				$	—	$	0.9	$	—		0.9

FASB ASC 815 (formerly SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities) requires the Company to recognize all derivatives, as defined, on the balance sheet at fair value.


Interest Rate Swaps (In Millions)				Fair Value of Liabilities as of August 31, 2011

Fiscal Year	Notional Amt		Ave Interest Rate	Level 1		Level 2		Level 3		Total

2012	$	30.0 Million	0.853%	$	—	$	0.2	$	—	$	0.2
2013	$	25.0 Million	1.870%	$	—	$	0.3	$	—	$	0.3
2014	$	15.0 Million	2.879%	$	—	$	0.3	$	—	$	0.3
2015	$	5.0 Million	3.685%	$	—	$	0.1	$	—	$	0.1

Total				$	—	$	0.9	$	—	$	0.9

9. The Company~~, as~~’s ashareholder/growers ~~result~~harvested of1,954,638 ~~its~~tons ~~operating~~of ~~and~~sugarbeets ~~financing~~from ~~activities~~the 2011-crop, iswhich ~~exposed~~created toa ~~changes in~~revised ~~foreign~~(in ~~currency~~December ~~exchange~~2011) ~~rates~~estimated ~~and~~payment ~~interest~~liability ~~rates~~of ~~which~~$130.8 ~~may~~million. ~~adversely~~As ~~affect its~~a ~~results~~result of ~~operations~~increased ~~and~~net ~~financial~~sales, ~~position.~~the Inestimate ~~seeking~~was revised to ~~minimize~~$66.91 ~~the risks~~per ~~and/or~~ton ~~costs~~(average ~~associated~~quality ~~with~~beets) ~~such~~or ~~activities,~~$0.2267457 ~~the~~per ~~Company~~harvested/bonus ~~may~~extractible ~~enter~~pound ~~into derivative~~of ~~contracts~~sugar.

10. The sugar beet industry and the Company ~~manages~~ ~~its~~have ~~foreign~~been ~~currency~~or ~~related~~are ~~risks~~currently ~~primarily~~involved ~~through~~in ~~the~~various ~~use~~litigation ofconcerning ~~foreign~~the approval ~~currency~~of ~~forward~~Roundup ~~contracts.~~Ready® Atsugarbeets ~~May~~for ~~31,~~planting ~~2011~~in 2012 and atforward. ~~August~~The 31legal proceedings to date have resulted in the finding that, ~~2010~~for the 2012-crop, it is legal for the Company’s shareholder/growers to plant ~~had~~Roundup noReady® ~~foreign~~sugarbeet ~~currency~~seed. ~~derivative~~However, ~~instruments~~the Company believes that there will continue to be legal challenges to the USDA’s partial deregulation of the Roundup Ready® sugarbeet seed. The ability of shareholder/growers to plant Roundup Ready® sugarbeets in subsequent years will be based upon actions by the USDA, which may be subject to further challenge by certain groups who oppose the partial deregulation.

~~The~~Environmental ~~Company~~law ~~is exposed~~restrictions toon ~~interest~~the ~~risk~~use ~~primarily~~of ~~through~~Roundup ~~its borrowing activities. The~~Ready® ~~Company~~sugarbeet ~~uses~~seeds ~~variable~~or ~~rate~~other ~~interest~~restriction onrelating ~~substantially~~to ~~all~~sugarbeet ofseeds ~~its~~or ~~debt obligations.~~herbicides Tocould ~~manage~~have ~~the~~a ~~interest rate risk on its debt~~significant, ~~the~~negative ~~Company~~financial ~~uses~~impact ~~interest~~on ~~rate swaps for~~ the ~~underlying interest rate of similar maturity debt instruments. These interest rate swaps are matched with future fiscal year periods. The~~ Company ~~has~~and ~~designated~~its ~~these interest rate swap contracts as a cash flow hedge~~shareholder/growers.

The Company ~~does~~ ~~not~~has ~~consider~~incurred ~~its~~$4.1 ~~interest~~million ~~rate~~in ~~swaps~~costs ~~Level~~related 1to ~~inputs~~the ~~because~~raising of ~~they~~conventional ~~are~~seed ~~not exchange~~for ~~traded~~the 2012-crop year. ~~The~~These ~~Company~~costs ~~considers~~are ~~its~~reflected ~~interest~~as ~~rate~~inventory ~~swaps~~and tothe bemethod ~~Level~~of 2allocating these costs back ~~inputs~~to ~~because~~the ~~they~~2012-crop ~~are~~patrons ~~observable~~has innot ~~the~~been ~~marketplace~~determined.

The Company reviews the hedging activity for effectiveness on a quarterly basis. The Company did not hold any hedging activity to review prior to the 2nd quarter of the current fiscal year. No ineffectiveness was recognized in earnings during the three-month and nine-month periods ended May 31, 2011. 9

11. The ~~current period~~following ~~loss~~schedule asprovides athe ~~result~~components of ~~reclassifying~~Net ~~prior~~Periodic ~~Interest~~Benefit ~~Rate~~Cost ~~Liabilities to Interest Rate Expense was <$0.1 and <$0.1 million~~ for the ~~three~~Three-~~month~~Months ~~and nine-month~~Ended, ~~periods ended May 31~~November 30, 2011 ~~respectively. There was no activity for the three-month~~ and ~~nine-month periods ended May 31,~~ 2010 ~~respectively~~.

ESTIMATED FISCAL YEAR 2011/ CROP YEAR 2010 INFORMATION


(In 000’s)	Pension Plan						Other Than Pension Plan
	FY2012			FY2011			FY2012		FY2011
Service Cost	$	326		$	320		$	—	$	—
Interest Cost		525			498			—		—
Expected return on plan assets		(493	)		(416	)		—		—
Amortization of prior service cost		8			8			—		—
Amortization of transition cost		—			—			—		—
Amortization of net (gain) loss		221			271			—		—
Net periodic benefit cost	$	587		$	681		$	—	$	—

~~This discussion~~Through ~~contains a summary of~~ the ~~Company’s~~three-months ~~current~~ended ~~estimates~~November of30, ~~the financial~~2011, ~~results to be obtained from~~ the Company’s ~~processing~~has ofmade ~~the 2010 sugarbeet crop~~$0.0 ~~Given~~million ~~the nature~~ of ~~the~~contributions ~~estimates~~as ~~required~~compared ~~in connection with the payments~~ to ~~shareholder/growers~~$0.0 ~~for~~million ~~their~~through ~~sugarbeets,~~the ~~this discussion includes forward~~three-~~looking~~months ~~statements~~ended ~~regarding~~November ~~the~~30, ~~quantity of sugar to be produced from the~~ 2010. ~~sugarbeet crop, the net selling price for the sugar and~~The ~~co-products produced by the~~ Company ~~and~~anticipates ~~the~~contributing ~~Company’s operating costs~~$4.3 ~~These forward-looking~~million ~~statements~~in ~~are~~additional ~~based~~funds ~~largely~~to ~~upon~~its ~~the~~pension ~~Company’s~~plan ~~expectations and~~in ~~estimates~~Fiscal ofYear ~~future events; as a result~~2012, ~~they~~for ~~are subject to~~ a ~~variety~~total of ~~risks~~ ~~and uncertainties~~$4. ~~Some of those estimates, such as the selling price for~~3 ~~the~~million. ~~Company’s~~Contributions ~~products, the quantity of sugar produced from the sugarbeet crop, changes~~ in ~~plant~~Fiscal ~~production~~Year ~~efficiencies~~2011 ~~and~~totaled ~~sugarbeet storage conditions are beyond the Company’s control~~$1.8 ~~The actual results experienced by the Company could differ materially from the forward-looking statements contained herein~~million.

12. Recently Issued Accounting Pronouncements:

~~The~~In ~~Company’s shareholder/growers~~May, ~~harvested 3.1 million tons of sugarbeets from the 2010-crop~~2011, ~~approximately 42 percent more than~~ the ~~most~~FASB ~~recent~~issued ~~5-year~~ASU ~~average. Sugar content of the 2010~~2011-~~crop was 1 percent above the average of the five most recent years. Due to the higher harvested tons and sugar content~~4, ~~the Company’s~~amendments ~~initial production of sugar from the 2010-crop sugarbeets was expected~~ to beachieve ~~23 percent~~common ~~more~~Fair ~~than~~Value ~~the~~Measurement ~~average~~and ofDisclosure ~~the~~requirements ~~five~~in ~~most~~U.S ~~recent~~GAAP ~~years~~and ~~of sugar production~~IFRSs. ~~Unfavorable~~This ~~storage~~amendment ~~temperatures~~is into ~~October,~~ensure ~~combined~~that ~~with~~fair ~~excessively~~value ~~high~~has ~~storage~~the ~~heights~~same ofmeaning ~~non-ventilated piles resulted~~ in ~~the disposal of an estimated 0~~U.2S. ~~million~~GAAP ~~tons~~and ofInternational ~~beets.~~Financial ~~The~~Reporting ~~need~~Standards to(IFRSs) ~~dispose~~and ofthat antheir ~~estimated~~respective fair ~~0.2~~value ~~million~~measurement ~~tons~~and ofdisclosure ~~beets~~requirements ~~resulted~~are inthe ~~approximately $3~~same.0 ~~million~~This inguidance ~~beet disposal~~is ~~costs~~effective during the ~~company’s~~interim ~~2nd~~and ~~quarter.~~annual ~~The~~periods ~~Board of~~beginning ~~Directors~~after ~~has~~December ~~authorized~~15, ~~capital~~2011. ~~expenditures~~The toCompany ~~add~~does anot ~~sufficient~~expect ~~quantity~~that ~~of forced~~this ~~air~~authoritative ~~ventilation~~guidance ~~and~~will ~~extended~~have ~~pile~~any ~~grounds~~material toeffect ~~significantly~~on ~~reduce~~ the ~~risk~~ ~~of having to discard beets in future years under the same size crop and~~Company’s ~~weather~~financial ~~circumstances~~statements.

~~The~~In ~~Company’s initial~~December, ~~sugarbeet~~2011 ~~payment~~the ~~estimate~~FASB ~~totaled~~issued ~~$56.86~~ASU ~~per~~2011-12 ~~ton or $0.19369042 per~~deferring ~~harvested~~the ~~/bonus~~effective ~~extractible~~date ~~pound~~for ofamendments ~~sugar.~~to ~~As a result of~~ the ~~loss~~presentation ~~of sugarbeets in storage (as discussed above)~~ and ~~deterioration~~reclassification of ~~the~~items ~~remaining sugar~~out ~~beets,~~of ~~the~~accumulated ~~payment~~other ~~estimate~~comprehensive ~~was~~income in ~~revised~~ASU ~~to $53~~2011-05.57 ~~per~~This ~~ton~~update oris ~~$0.182508248 per~~effective ~~harvested/bonus~~for ~~extractible~~fiscal ~~pound~~years, ofand ~~sugar~~interim ~~during~~periods ~~the~~within ~~Company’s~~those ~~second quarter~~years, ~~the~~beginning ~~payment~~after ~~estimate~~December ~~was~~15, 2011. ~~again~~In ~~revised~~June, ~~after~~2011, the ~~completion~~FASB ofissued ~~the Company’s~~ASU ~~2010~~2011-~~crop campaign to $55~~5.00 ~~per~~The ~~ton~~objective orof ~~$0.18736914~~this ~~per harvested/bonus~~amendment ~~extractible~~is ~~pound~~to ofimprove ~~sugar; with~~ the ~~final~~comparability, ~~sugarbeet payment~~consistency, ~~determined~~and intransparency ~~October~~ of ~~2011.~~financial ~~This~~reporting ~~revised~~and ~~projected~~to ~~payment~~increase ~~is 16 percent more than~~ the ~~final~~prominence ~~2009-crop~~of ~~payment~~items ~~per~~reported ~~ton~~in ~~and~~other 2comprehensive ~~percent more per pound of extractible sugar~~income. ~~The~~This ~~higher projected 2010-crop payment per ton results from~~guidance ~~more~~is ~~total~~effective ~~tons~~for offiscal ~~beets processed~~years, ~~higher~~and ~~sugar~~interim ~~content~~periods inwithin ~~the~~those ~~sugarbeets~~years, ~~decreased~~ ~~operating~~beginning ~~and~~after ~~fixed~~December ~~costs per ton as well as improved sugar prices; offset to some degree by more beet discards~~15, ~~versus the prior year~~2011. The ~~price per~~Company ~~pound~~does ofnot expect ~~extractible~~that ~~sugar~~this ~~was~~authoritative ~~diluted~~guidance bywill ~~6.5~~have ~~percent~~any ~~due~~material toeffect ~~bonus~~on ~~sugar for~~ the ~~2010-crop~~Company’s ~~vs.~~financial ~~2.3~~statements ~~percent~~as ~~for~~it ~~the~~only ~~2009-crop. Bonus sugar is an~~requires ~~incentive~~a ~~payment~~change tothe ~~shareholder/growers~~format toof ~~deliver sugarbeets prior to main harvest. Harvest for~~ the ~~2010-crop~~Consolidated ~~began~~Statements onof ~~August~~Changes ~~18,~~in ~~2010~~Members’ ~~vs.~~Investment ~~the~~and ~~2009-crop beginning~~Comprehensive ~~on September 8, 2009~~Income.

AsIn ofSeptember, ~~the date of this report~~2011, the ~~Company~~FASB ~~has~~issued ~~taken~~ASU ~~into~~2011-08. ~~consideration~~The objective ~~key indicators~~ of ~~actual~~ ~~results~~this ~~vs.~~amendment ~~projections~~is ~~used~~to ~~for~~simplify ~~the~~how ~~revised~~entities ~~sugarbeet~~test ~~payment~~goodwill ~~estimate. Consideration~~for ~~has~~impairment ~~been~~allowing ~~given~~an entity to ~~beet~~use ~~inventory~~a ~~storage~~qualitative ~~conditions, projected~~approach ~~net~~to ~~selling~~test ~~prices,~~goodwill ~~factory~~for ~~operation~~impairment. ~~costs,~~This ~~and~~guidance ~~sugar,~~is ~~pulp~~effective ~~and~~for ~~molasses production.~~annual Noand ~~change~~interim ingoodwill ~~the~~impairment ~~revised~~tests ~~estimated~~performed ~~beet~~for ~~payment, as announced in~~fiscal ~~the~~years ~~8-K~~beginning ~~filed~~after ~~June~~December 2815, 2011~~, has resulted from this review~~. ItThe ~~is the~~ Company~~’s policy~~ todoes ~~update~~not ~~its~~expect ~~estimate~~that ofthis ~~yearly~~authoritative ~~crop~~guidance ~~payments~~on ~~only~~impairment ~~when~~testing will have a material ~~change~~ iseffect ~~sufficiently~~on ~~certain and~~ the ~~amount~~Company’s offinancial ~~such change is reasonably calculable~~statements.

OnIn ~~June 1~~December, 2011, ~~Minn~~the FASB issued ASU 2011-~~Dak~~10. ~~Farmers~~The ~~Cooperative~~objective of ~~employees~~this ~~represented~~amendment byis to resolve the ~~American~~diversity in practice about whether the guidance in Subtopic 360-20 applies to a parent that ~~Federation~~ceases ofto ~~Grain~~have ~~Millers~~a ~~AFL~~controlling financial interest in a subsidiary that is in substance real-~~CIO~~estate ~~Local~~as ~~405~~a ~~ratified~~result ~~the~~of ~~labor~~default ~~agreement~~on the ~~reached~~subsidiary’s bynonrecourse ~~the~~debt. ~~company~~This ~~and~~guidance ~~union~~is ~~officials.~~effective ~~The~~for ~~negotiated~~fiscal ~~agreement~~years ~~extends through~~ending ~~May~~after 31June 15, ~~2013~~2012, and interim and annual periods thereafter. This authoritative guidance will not have any effect on the Company’s financial statements.

~~RESULTS~~In OFDecember, 2011, the FASB issued ASU 2011-11. The amendments ~~OPERATIONS~~in this Update require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.

~~Comparison of the three-months ended May 31, 2011 and 2010~~ 10

~~In the Consolidated Statements of Operations, Distribution of Net Proceeds, allocated costs of sugarbeets paid or payable to shareholder/growers for production to date totaled $48~~13.~~5 million, an increase of $18.7 million or 62.9 percent from~~ ~~the~~Change ~~prior~~in ~~year~~Accounting period. As of May 31, 2011, Management has revised the estimated Fiscal 2011 payment to shareholder/growers for sugarbeets to $170.9 million, which is $75.9 million or 79.8 percent more than the prior year. Standards:

~~The~~There ~~increase in~~were ~~payments~~no tochanges ~~shareholder/growers is based upon (i) an average delivered sugar content of 16.8 percent, an 8.7 percent increase from the 2009-crop, (ii) a total shareholder/grower sugarbeet crop~~ to ~~process~~Accounting ofStandards ~~3.1~~for ~~million tons less an estimated 0.2 million tons discarded and (iii)~~ the ~~Company’s increased projected~~ ~~selling~~quarter ~~price~~ending ~~for~~November ~~its sugar~~30, ~~pulp and yeast; offset to some degree by lower molasses prices when compared to the previous year~~2011.

~~Revenues for~~14. ~~the~~Subsequent ~~three-month period ended May 31, 2011 were comprised of Sugar 87 percent, Pulp 6 percent, Molasses 4 percent and Yeast 3 percent.~~ Events:

13The Company has considered subsequent events through the date the financial statements were issued.

~~Consolidated revenue~~ITEM ~~for the three-month period ended May 31, 2011 from the sales of Sugar, Pulp, Molasses and Yeast, increased $29~~2.1 ~~million~~MANAGEMENT’S orDISCUSSION ~~53.0~~AND ~~percent~~ANALYSIS ~~from~~OF ~~the three-month~~FINANCIAL ~~period~~CONDITION ~~ended~~AND ~~May~~RESULTS ~~31,~~OF ~~2010. The table below reflects the percentage changes in product revenues, prices and volumes for the three-month period ended May 31, 2011.~~ OPERATIONS

Product	Revenue $ Million			Change vs. 2010				Revenue Percent Change		Selling Price Percent Change		Volume Percent Change
Sugar		$	72.6		$	28.7		65.2	%	20.5	%	44.7	%
Pulp		$	5.3		$	0.8		18.1	%	1.2	%	16.9	%
Molasses		$	3.4		$	0.9		35.9	%	-9.0	%	44.9	%
Yeast		$	2.7		$	(1.3	)	-31.7	%	-3.4	%	-28.3	%
Total		$	84.0		$	29.1

This Discussion should be read in conjunction with information contained in the Consolidated Financial Statements and Notes thereto and in the Company’s Annual Report on Form 10-K for fiscal year ended August 31, 2011.

The increase in volume of sugar sold is attributable a larger 2010-crop, delivered by shareholder/growers coupled with a very high demand from customers. The net increase in volume of co-products sold is attributable to a larger 2010-crop causing an earlier start to manufacturing on a pool wide basis. Overall returns per ton for Pulp are projected to be higher and the overall returns per ton for Molasses are projected to be lower for the Fiscal Year ended August 31, 2011. Returns for Pulp and Molasses throughout the fiscal year will be impacted by prior period carry-over sales, inventory levels, product mix and timing of sales. Yeast sales volume decreased due to existing customers’ decreased demand for yeast, the loss of one high-volume customer and above normal demand from a large customer in the 2010 period. OVERVIEW

The ~~value~~following ~~of finished~~discussion ~~product~~and ~~inventories~~analysis ~~for~~relates to the ~~three-month~~financial ~~period~~condition and ~~ended~~results ~~May~~of ~~31,~~operations ~~2011 increased~~of ~~$8.4~~Minn-Dak ~~million,~~Farmers ~~$0.6~~Cooperative ~~million~~(the ~~less~~“Company” ~~than~~or the “Registrant”) for the three-month period ended ~~May 31~~November 30, ~~2010.~~2011 ~~The~~(the ~~change~~first inquarter ~~Sugar~~of ~~and~~the ~~Juice~~Company’s ~~inventories~~2012 ~~accounted~~fiscal ~~for~~year). ~~substantially~~The Company’s fiscal year runs ~~all~~from ofSeptember ~~the~~1 ~~change~~to ~~vs.~~August ~~2010~~31.

Any ~~Expenses~~statements ~~for~~regarding ~~the~~future ~~three-month~~market ~~period~~prices, ~~ended~~anticipated ~~May~~costs, 31agricultural results, ~~2011~~operating ~~increased~~results ~~$7.0~~and ~~million.~~other $2statements that are not historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements.9 ~~million~~The ~~increased~~words ~~due~~“expect”, to“project”, ~~production~~“estimate”, “believe”, ~~costs~~“anticipate”, ~~$3.6~~“plan”, ~~million~~“intend”, ~~increased~~“could”, ~~due~~“may”, “predict” and similar expressions are also intended to ~~Sales~~identify forward-looking statements. Such statements involve risks, uncertainties and ~~Distribution~~assumptions, ~~Costs~~including, ~~associated~~without limitation, market factors, the effect of weather and economic conditions, farm and trade policy, ~~with~~the available supply of sugar, available quantity and quality of sugarbeets and other risks, including those set forth in the ~~larger~~Company’s reports ~~crop~~filed with the Securities and $0Exchange Commission, including Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended August 31, 2011.5 ~~million~~Should ~~increased~~one ~~due~~or tomore ~~General~~of these risks or uncertainties materialize, ~~Administrative~~or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. These forward-looking statements are made as of the date of this report and ~~Interest~~the ~~costs.~~Company assumes no obligation to update such forward-looking statements, or to update the reasons why actual results could differ materially from those anticipated in such forward-looking statements.

~~Comparison~~Critical ofAccounting ~~the~~Policies ~~nine-months ended May 31, 2011~~ and ~~2010.~~ Estimates

InThere ~~the~~have ~~Consolidated Statements~~been ofno ~~Operations,~~material ~~Distribution~~changes ofto ~~Net~~the ~~Proceeds,~~Company’s ~~allocated costs of~~critical ~~sugarbeets~~accounting ~~paid~~policies orand ~~payable~~estimates tosince ~~shareholder/growers~~the ~~for~~filing ~~production to date totaled $169.0 million, an increase~~ of ~~$79.3~~its ~~million~~Annual orReport ~~88.4~~on ~~percent~~form ~~from~~10-K for the ~~prior~~ year ~~period.~~ended AsAugust ~~of May~~ 31, 2011~~, Management has revised the estimated Fiscal 2011 payment to shareholder/growers for sugarbeets to $170~~.~~9 million, which is $75.9 million or 79.8 percent more than the prior year.~~

~~The~~ESTIMATED ~~increase in~~FISCAL ~~payments~~YEAR ~~to shareholder~~2012/~~growers~~ isCROP ~~based~~YEAR ~~upon (i) an average delivered sugar~~2011 ~~content~~INFORMATION of 16.8 percent, an 8.7 percent increase from the 2009-crop, (ii) a total shareholder/grower sugarbeet crop to process of 3.1 million tons less an estimated 0.2 million tons discarded and (iii) the Company’s increased projected selling price for its sugar, pulp and yeast; offset to some degree by lower molasses prices when compared to the previous year.

~~Revenues~~This discussion contains a summary of the Company’s current estimates of the financial results to be obtained from the Company’s processing of the 2011 sugarbeet crop. Given the nature of the estimates required in connection with the payments to shareholder/growers for their sugarbeets, this discussion includes forward-looking statements regarding the ~~nine~~quantity of sugar to be produced from the 2011 sugarbeet crop, the net selling price for the sugar and co-~~month~~products ~~period~~produced ~~ended~~by ~~May~~the 31Company and the Company’s operating costs. These forward-looking statements are based largely upon the Company’s expectations and estimates of future events; as a result, ~~2011~~they ~~were~~are ~~comprised~~subject to a variety of ~~Sugar~~risks 85and ~~percent~~uncertainties. Some of those estimates, such as the selling price for the Company’s products, the quantity of ~~Pulp~~sugar 7produced ~~percent~~from the sugarbeet crop, ~~Molasses~~changes 5in ~~percent~~plant production efficiencies and ~~Yeast~~sugarbeet 3storage ~~percent~~conditions are beyond the Company’s control. The actual results experienced by the Company could differ materially from the forward-looking statements contained herein.

~~Consolidated revenue~~The ~~for~~Company’s ~~the~~shareholder/growers ~~nine-month~~harvested ~~period~~1.95 ~~ended~~million ~~May~~tons of ~~31,~~sugarbeets from the 2011-crop, ~~resulting~~approximately ~~from~~20 percent less than the ~~sale of~~most ~~Sugar,~~recent ~~Pulp,~~5-year ~~Molasses~~average. ~~and~~Sugar ~~Yeast~~content ~~increased~~of ~~$74~~the 2011-crop was 5.0 ~~million~~percent orabove 44the average of the five most recent years.2 ~~percent~~Due ~~from~~ to the ~~nine-month~~lower ~~period~~harvested ~~ended~~tons ~~May~~and 31higher sugar content, ~~2010.~~the Company’s ~~The~~production ~~table~~of ~~below~~sugar ~~reflects~~from the ~~percentage~~ ~~changes~~2011-Crop insugarbeets ~~product~~is ~~revenues,~~expected ~~prices~~to ~~and~~be ~~volumes~~20.0 ~~for~~percent less than the ~~nine-month~~average of the five ~~period~~most ~~ended~~recent ~~May~~years ~~31,~~of ~~2011.~~sugar production.

1411

Product	Revenue $ Million			Change vs. 2010				Revenue Percent Change		Selling Price Percent Change		Volume Percent Change
Sugar		$	204.8		$	71.3		53.4	%	17.3	%	36.1	%
Pulp		$	15.7		$	2.5		19.0	%	-18.9	%	37.9	%
Molasses		$	11.7		$	2.7		30.0	%	-9.8	%	39.8	%
Yeast		$	9.3		$	(2.5	)	-21.3	%	-0.5	%	-20.8	%
Total		$	241.5		$	74.0

The Company’s initial sugarbeet payment estimate totaled $64.72 per ton or $0.2196174 per harvested /bonus extractible pound of sugar. As a result of increased net sales, the estimate was revised to $66.91 per ton (average quality beets) or $0.2267457 per harvested/bonus extractible pound of sugar and it is anticipated this revision to the beet payment estimate will be approved by the board of directors prior to the February 2012 beet payment. This revised projected payment is 28 percent more than the final 2010-crop payment per ton and 15 percent more per pound of extractible sugar. The higher projected 2011-crop payment per ton results from higher sugar content in the sugarbeets, improved sugar prices, offset by some degree by; increased operating and fixed costs per ton, less total tons of beets processed, offset by less beet discards, versus the prior year. The price per pound of extractible sugar was diluted by 0.7 percent due to bonus sugar for the 2011-crop vs. 6.5 percent for the 2010-crop. Bonus sugar is an incentive payment to shareholder/growers to deliver sugarbeets prior to main harvest. Harvest for the 2011-crop began on September 21, 2011 vs. the 2010-crop beginning on August 18, 2010.

~~The~~As ~~increase in volume~~ of ~~sugar~~the ~~sold~~date isof ~~attributable~~this ~~a larger 2010 crop~~report, ~~delivered~~the ~~by shareholder/growers~~Company ~~coupled~~has ~~with~~taken ainto ~~very high demand from customers. The~~consideration ~~increase~~key inindicators ~~volume~~ of ~~co-products~~actual ~~sold~~results ~~is attributable to a larger 2010-crop causing an earlier start to manufacturing on a pool wide basis~~vs. ~~Overall~~projections ~~returns per~~used ~~ton~~ for ~~Pulp are projected to be higher and~~ the ~~overall~~revised ~~returns~~sugarbeet ~~per~~payment ~~ton~~estimate. ~~for Molasses~~Consideration ~~are~~has ~~projected~~been given to bebeet ~~lower~~inventory ~~for~~storage ~~the~~conditions, ~~Fiscal~~projected ~~Year~~net ~~ended~~selling ~~August 31~~prices, ~~2011. Returns~~factory ~~for~~operation ~~Pulp~~costs, and ~~Molasses~~sugar, ~~throughout~~pulp ~~the~~and ~~fiscal~~molasses ~~year~~production. No ~~will~~change bein ~~impacted~~the ~~by prior~~revised ~~period~~estimated ~~carry-over~~beet ~~sales,~~payment ~~inventory~~has ~~levels,~~resulted ~~product~~from ~~mix~~this ~~and timing of sales~~review. ~~Yeast~~It ~~sales~~is ~~volume~~the ~~decreased~~Company’s ~~due~~policy to ~~existing~~update ~~customers’~~its ~~decreased demand~~estimate ~~for yeast, the loss~~ of ~~one~~yearly ~~high-volume~~crop ~~customer~~payments ~~and~~only ~~above~~when ~~normal demand from~~ a ~~large~~ ~~customer~~material inchange ~~the~~is ~~2010~~sufficiently ~~period.~~certain ~~Selling~~and ~~prices~~the ~~for~~amount ~~all~~of ~~products~~such ~~increased~~change ~~or decreased~~is ~~due~~reasonably ~~to general market conditions~~calculable.

~~The~~RESULTS ~~value~~OF of finished product inventories for the nine-month period ended May 31, 2011 increased $78.3 million, $43.3 million more than the increase for the nine-month period ended May 31, 2010. A significant portion of the increase is a reflection of the tolling the Company did for another processor during the three-months ended February 28, 2010, and which did not take place in current year. In addition, the start of campaign on August 20, 2010 allowed the Company to be manufacturing at full capacity on September 1, 2010 the first day of the nine-month period ended May 31, 2011. The change in Sugar and Juice inventories accounted for almost all of the change in inventory vs. 2010. OPERATIONS

~~Tolling~~Comparison ~~and Other~~of ~~Income decreased by $6.6 million due to~~ the ~~Company~~three-months ~~not~~ended ~~having~~November a30, ~~tolling agreement~~2011 inand ~~place. The Company determined that it did not have excess capacity~~2010 ~~in the current year to process sugarbeets for other processors.~~

~~Expenses~~In ~~for~~ the ~~nine-month~~Consolidated ~~period~~Statements ~~ended~~of ~~May 31~~Operations, ~~2011~~Distribution ~~increased~~of ~~$25.5 million; $13.8 million~~Net ~~increased~~Proceeds, ~~due~~allocated ~~to the production~~ costs ~~for~~of asugarbeets ~~campaign~~paid ~~that~~or ~~has~~payable ~~incurred~~to ~~twenty four~~shareholder/growers ~~more~~for ~~operating days in 2011 vs. 2010. The~~ production ~~costs~~to ~~include~~date totaled $355.~~0 million~~3 ~~in beet disposal costs; higher grower delivery and trucking costs~~million, ~~higher~~ ~~trucking re-haul costs, higher energy costs, and higher maintenance~~a ~~costs.~~decrease ~~Other than beet disposal costs, production costs were related to the larger crop and higher levels~~ of ~~operations.~~ $1012.08 million ~~increased~~or ~~due~~18.8 ~~to Sales~~percent ~~and~~from ~~Distribution Costs associated with~~ the ~~larger~~prior ~~crop~~year ~~and $1~~period.6 ~~million increased~~As ~~due~~of toNovember ~~General~~30, ~~Administrative~~2011, ~~and~~Management ~~Interest~~has ~~costs.~~revised ~~Interest~~the ~~cost~~estimated ~~increases~~Fiscal ~~are~~2012 ~~due~~payment ~~primarily~~ to ~~higher~~shareholder/growers ~~levels~~for ofsugarbeets ~~seasonal borrowing due~~ to ~~the larger crop~~$130.8 ~~Administrative~~million, ~~cost~~which ~~increases~~is ~~are~~$49.8 ~~due~~million ~~primarily~~or to27.6 ~~the~~percent ~~recording of~~less ~~bonuses~~than ~~and related costs vs.~~ the prior year ~~when no similar costs were recorded due to the lower crop size~~.

~~LIQUIDITY~~The ~~AND~~decrease in payments to shareholder/growers is based upon (i) ~~CAPITAL~~a ~~RESOURCES~~total shareholder/grower sugarbeet crop to process of 1.95 million tons with no discarded sugarbeets which is a 37 percent decrease from the 2010-crop, (ii) an average delivered sugar-content of 17.4 percent, which is a 3.5 percent increase from the 2010-crop and (iii) the Company’s increased projected selling price for its sugar, pulp, molasses and yeast when compared to the previous year.

~~Because~~Revenues ~~the Company operates as a cooperative, payment~~ for ~~shareholder/grower-delivered sugarbeets,~~ the ~~principal raw material used in producing the sugar and co~~three-~~products~~month ~~it sells, are subordinated to all shareholder/grower business expenses. In addition, actual cash payments to shareholder/growers are spread over a~~ period ofended ~~approximately~~November ~~one year following delivery of sugarbeet crops to the Company and are net of per unit retains and patronage allocated to them~~30, ~~both~~ of2011 ~~which remain available to meet the Company’s capital requirements. This~~were ~~shareholder~~comprised ~~financing arrangement may result in an additional source~~ of ~~liquidity~~ ~~and~~Sugar ~~reduced~~86 ~~outside financing requirements in comparison to a similar business operated on a non-cooperative basis. However~~percent, ~~because~~Pulp ~~sugar~~5 ~~is sold throughout the year (while sugarbeets are processed primarily between September and April) and because substantial amounts of equipment are required for its operations~~percent, ~~the~~Molasses ~~Company~~5 ~~has~~percent ~~utilized substantial outside financing on both a seasonal~~ and ~~long-term~~Yeast ~~basis~~4 ~~to fund such operations~~percent. The short and long-term financing has been primarily provided by CoBank (the “Bank”). The Company also has the ability to borrow money on a short-term basis from the USDA Commodity Credit Corporation “CCC” using the Company’s sugar inventory as collateral.

15Consolidated revenue for the three-month period ended November 30, 2011 from the sales of Sugar, Pulp, Molasses and Yeast as well as changes in finished goods inventory and in-process sugar at NRV, decreased $17.7 million or 14.1 percent from the three-month period ended November 30, 2010. The table below reflects the percentage changes in product revenues, prices and volumes for the three-month period ended November 30, 2011.

May 31, 2011 Seasonal Debt Information


	Revenue $ Million			Change vs. 2010				Revenue Percent Change		Selling Price Percent Change		Volume Percent Change

Sugar		$	66.0		$	3.6		5.8	%	16.9	%	(11.1	%)
Pulp			4.0			(1.5	)	(27.7	)	22.6		(50.3	)
Molasses			4.0			0.8		25.4		4.2		21.2
Yeast			2.9			(0.4	)	(12.0	)	(4.0	)	(8.0	)
Finished Goods/NRV			30.3			(20.2	)

Total		$	107.2		$	(17.7	)	(14.1	%)

Source	Capacity		Utilized		Unused Capacity
		(In Millions)
Co-Bank	$	45.0	$	32.1	$	12.9
CCC	$	39.3	$	29.2	$	10.1
Total	$	84.3	$	61.3	$	23.0

~~During~~The ~~the nine-month~~decrease ~~period~~in ~~ended~~volume ~~May~~of ~~31,~~sugar ~~2011~~sold ~~the~~is ~~Company~~attributable ~~was~~to ~~reimbursed~~a ~~from~~smaller 2011-crop, ~~the~~delivered ~~bond trust~~by ~~for~~shareholder/growers ~~qualified~~coupled ~~capital~~with ~~expenditures~~a invery ~~the~~high ~~amount~~demand offrom $6customers.8 ~~million~~The net decrease in volume of co-products ~~accordance~~sold ~~with~~is ~~the~~attributable ~~sale~~to ofa ~~$7.0~~smaller ~~million~~2011-crop incausing ~~tax~~a ~~exempt~~later ~~bonds~~start ~~during~~to ~~fiscal 2010~~manufacturing on a pool wide basis. InOverall ~~addition,~~returns ~~the~~per ~~Company~~ton for isPulp ~~eligible~~and Molasses are projected to ~~have~~be anhigher ~~additional~~for $4the Fiscal Year ended August 31, 2012.8 ~~million reimbursed~~Returns ~~from~~for Pulp and Molasses throughout the ~~bond~~fiscal ~~trust~~year aswill ofbe ~~May~~impacted 31by prior period carry-over sales, ~~2011~~inventory aslevels, anproduct ~~additional~~mix ~~source~~and timing of ~~available~~ ~~cash~~sales. Yeast sales volume decreased due to existing customers’ decreased demand for yeast in the 2011 period.

OnThe ~~November 30,~~value ~~2010, the Company sold $8.8 million~~ of ~~new~~finished ~~tax~~product ~~exempt~~inventories ~~bonds~~for ~~resulting from~~ the ~~Federal~~three-month ~~Government’s~~period ~~economic~~ended ~~stimulus~~November ~~legislation.~~30, ~~The~~2011 ~~proceeds~~increased of$30.3 ~~these~~million, ~~bonds~~$20.2 ~~are~~million ~~required~~less tothan ~~be placed in a trust account until~~ the ~~Company~~three-month ~~makes~~period ~~qualifying~~ended ~~capital investments~~November ~~that~~30, ~~allow for the use of the proceeds of these bonds~~2010. The ~~Company~~change ~~intends~~in toSugar ~~use~~and ~~all~~Juice ofinventories ~~the~~accounted ~~proceeds~~for ~~from~~substantially ~~the~~all ~~bond~~of ~~issuance on qualifying capital expenditures within~~ the ~~time~~change ~~period required in the bond indenture~~vs. ~~The Company intends to make the qualifying expenditures by August 31, 2012~~2010.

~~The~~Expenses ~~loan agreements~~for ~~between~~ the ~~Bank~~three-month ~~and~~period ~~the~~ended ~~Company~~November ~~obligate~~30, ~~the~~2011 ~~Company~~decreased $2.5 million. $5.2 million decreased due to ~~maintain~~fewer operating days, ~~“In~~ ~~accordance~~$2.7 million increased due to Sales and Distribution Costs associated with ~~GAAP”,~~third ~~the~~party ~~following~~sugar ~~financial~~purchases ~~covenants:~~and less than $0.1 million decreased due to General, Administrative, and Interest costs.

•LIQUIDITY ~~Maintain~~AND aCAPITAL current ratio of no less than 1.10 for the first quarter of a fiscal year and 1.15 for all other quarter and fiscal year ends; • Maintain a long-term debt and capitalized leases to equity ratio of not greater than .8:1; • Maintain available cash flow to current long-term debt ratio as defined in the agreement of not less than 1.25:1, as measured at fiscal year-end.RESOURCES

AsBecause the Company operates as a cooperative, payment for shareholder/grower-delivered sugarbeets, the principal raw material used in producing the sugar and co-products it sells, are subordinated to all Company business expenses. In addition, actual cash payments to shareholder/growers are spread over a period of ~~May~~approximately 31one year following delivery of sugarbeet crops to the Company and are net of per unit retains and patronage allocated to them, both of which remain ~~2011~~available to meet the Company’s ~~was~~capital requirements. This shareholder financing arrangement may result in ~~compliance~~an ~~with~~additional source of liquidity and reduce outside financing requirements in comparison to a similar business operated on a non-cooperative basis. However, because sugar is sold throughout the year (while sugarbeets are processed primarily between September and April) and because substantial amounts of equipment are required for its ~~loan~~operations, ~~agreement~~the ~~covenants~~Company has utilized substantial outside financing on both a seasonal and long-term basis to fund such operations. The short-term financing has been primarily provided by Co-Bank (the Bank). Long-term financing has been a combination of conventional loans with the Bank and tax exempt bonds whose required letters of credit have been provided by The Bank. The Company also has the ability to borrow money on a short-term basis from the USDA Commodity Credit Corporation “CCC” using the Company’s sugar inventory as collateral.

~~Net~~On ~~Cash~~November ~~used in~~15, ~~operations~~2011, ~~totaled~~the ~~$20.8~~Company ~~million~~and ~~for~~its ~~the~~Bank ~~nine-month~~agreed ~~period~~to ~~ended~~a ~~May 31,~~temporary ~~2011,~~increase ~~compared~~in tothe ~~$5.2~~seasonal ~~million~~line ~~provided~~of ~~for~~credit ~~the~~from ~~previous period~~$45.0 ~~This~~million ~~decrease of~~to $2565.90 million inthrough ~~net~~December ~~cash~~31, ~~used vs~~2011. ~~the~~On ~~period~~December ~~ended~~22, ~~May 31~~2011, ~~2010 was~~the ~~primarily~~Company ~~due~~and to the ~~differences~~Bank inagreed ~~the sugarbeet projected payments recorded liability, actual payments~~ to ~~shareholder/growers,~~establish ~~and~~ the ~~associated additional~~seasonal ~~inventory~~line ~~needs~~of ~~for~~credit ~~processing materials~~ from ~~the~~January ~~record~~1, ~~2010-crop. Beet~~2012 ~~disposal~~through ~~costs~~December ~~were~~31, ~~$3.0~~2012 ~~million.~~at ~~Also,~~ $465.0 million ~~was used to fund crop chemical needs for the 2012 crop, should conventional sugarbeet seed be determined to be the planting requirement for shareholder/growers~~.

~~The~~November ~~net cash used in investing activities totaled $5.0 million for the nine-month period ended May 31~~30, 2011, ~~compared~~Seasonal toDebt $5.9 million used the period ended May 31, 2010. The conversion of $6.8 million in restricted bond assets to cash during the current period was offset by an increase of $9.4 million in capital expenditures vs. the period ended May 31, 2010. Information:

The net cash provided by financing activities totaled $25.9 million for the nine-month period ended May 31, 2011 compared to $0.7 million for the period ended May 31, 2010. This increase of $25.2 million was primarily due to a $24.7 million increase in short term debt obligations required for the payment of sugarbeets from the record 2010-crop. All other factors totaled $0.5 million.


Source	Capacity		Utilized		Unused Capacity
		(In Millions)

Co-Bank	$	65.0	$	56.0	$	9.0
CCC	$	28.0	$	16.0	$	12.0
Total	$	93.0	$	72.0	$	21.0

~~The~~During the three-month period ended November 30, 2011 the Company ~~retained~~was reimbursed from the bond trust for qualified capital expenditures in the amount of $32.19 million asin aaccordance ~~non-cash~~with ~~item~~the ~~from~~sale of $8.8 million in tax exempt bonds during fiscal 2011. In addition, the ~~2010-crop~~Company ~~initial~~is ~~beet~~eligible ~~payment~~to have an additional $0.6 million inreimbursed from the ~~form~~bond trust as of ~~non-qualified~~November ~~per~~30, ~~unit~~2011 ~~retains.~~as an additional source of available cash.

16The loan agreements between the Bank and the Company obligate the Company to maintain, “In accordance with GAAP”, the following financial covenants:

~~The~~• ~~Company anticipates~~Maintain ~~that~~a ~~the~~current ~~funds~~ratio ~~necessary~~of no less than 1.10 for ~~working~~the ~~capital~~first ~~requirements~~quarter of a fiscal year and ~~future~~ ~~capital~~1.15 ~~expenditures~~for ~~will~~all beother ~~derived~~quarter ~~from~~and ~~operations,~~fiscal ~~short~~year ends; • Maintain a long-term ~~borrowings,~~ ~~depreciation,~~debt ~~patronage~~ and capitalized leases to equity ratio of not greater than .8:1; • Maintain available cash flow to current long-term ~~borrowings~~debt ratio as defined in the agreement of not less than 1.25:1, as measured at fiscal year-end.

~~Working capital~~As ~~increased~~of ~~$33.2~~November ~~million~~30, ~~for~~2011 the ~~for~~Company ~~the~~was ~~nine-month~~in ~~period~~compliance ~~ended~~with ~~May 31, 2011. The Company funds~~ its ~~capital expenditure and debt retirement needs~~loan ~~primarily~~agreement ~~from~~covenants ~~operating~~with ~~activities. The Company anticipates using~~ the ~~majority of the remaining $9~~Bank.~~0 million in economic stimulus bonds as a source of funding for the fiscal 2011 capital expenditures.~~

~~Cash increased $0.1 million for the for the nine-month period ended May 31, 2011.~~ 13

~~Capital expenditures~~Net ~~for~~Cash ~~fiscal~~used ~~year~~in ~~2011~~operations ~~have~~totaled ~~been approved at~~ $2225.39 million. ~~The~~for the three-month ~~capital~~period ~~expenditures~~ended ~~are~~November ~~for~~30, ~~equipment~~2011, compared to ~~improve~~$53.2 ~~efficiency,~~million ~~improved~~used ~~beet storage,~~for ~~improved~~the ~~rail~~previous ~~facilities~~period. ~~and~~This ~~safety~~decrease ~~and~~of ~~replacement activities~~$27.3 million in net cash ~~Failure~~used byvs. the ~~Company~~period toended ~~make~~November ~~capital~~30, ~~expenditures~~2011; ~~over~~was aprimarily ~~period~~due ofto ~~years could~~the ~~result~~differences in the ~~Company~~sugarbeet ~~being~~projected ~~less~~payments ~~competitive~~recorded liability, ~~due~~actual payments to ~~its~~shareholder/growers ~~failure~~, toand ~~reduce costs,~~the ~~increase~~associated ~~operating~~additional ~~efficiencies~~inventory orneeds ~~increase~~for ~~revenues~~processing materials from the record 2010-crop vs. the 2011-crop.

The ~~Bonds~~net ~~are secured~~cash provided by ainvesting ~~letter~~activities oftotaled ~~Credit~~$0.9 ~~from~~million for the ~~Bank.~~three-month ~~The~~period ~~letter~~ended ofNovember ~~credit~~30, is2011, ~~ultimately secured~~compared byto ~~the~~$1.1 ~~plant~~million ~~and~~provided ~~property~~by offor the ~~Company’s~~period ~~facility~~ended atNovember ~~Wahpeton~~30, ND2010. The primary change was the result of less Capital Expenditures and less Tax Exempt Bond Trust draws.

The ~~Company~~net iscash provided by financing activities totaled $25.2 million ~~not~~for ~~aware~~the ofthree-month ~~any~~period ~~known~~ended ~~trends,~~November ~~demands~~30, ~~commitments~~2011 compared to $52.1 million for the period ended November 30, ~~events~~2010. orThis ~~uncertainties~~decrease ~~that~~of ~~will~~$26.9 ~~likely~~million ~~result~~was primarily due to a $25.9 million decrease in ~~the~~short ~~Company’s~~term ~~liquidity~~debt ~~increasing~~obligations orrequired ~~decreasing~~for the payment of sugarbeets ~~materially~~from the record 2011-crop vs. 2010-crop. All other factors totaled $1.1 million.

~~Other~~The ~~than~~Company ~~those items~~anticipates ~~described~~that ~~above,~~ the ~~Company~~funds isnecessary ~~not~~for ~~aware~~working ~~of any known material trends,~~capital ~~either~~requirements ~~favorable~~and orfuture ~~unfavorable,~~capital ~~that~~expenditures ~~would~~will ~~cause~~be ~~the~~derived ~~mix~~from ofoperations, ~~equity~~short-term toborrowings, ~~debt~~depreciation, orpatronage and ~~the~~long-term ~~cost of debt to materially change~~borrowings.

~~OTHER~~Working capital increased $10.9 million for the for the three-month period ended November 30, 2011. The Company funds its capital expenditure and debt retirement needs primarily from operating activities.

~~Estimated~~Cash ~~Fiscal Year 2012 Information The Company’s Board of Directors~~ increased ~~the planting~~$0.1 ~~level~~million for the ~~2011-crop~~for ~~vs.~~ the ~~2010~~three-~~crop~~month ~~level~~period onended November ~~May 9~~30, 2011 ~~due primarily to a late planting start that resulted from wet field conditions~~. ~~As of the date of this report, 120,910 acres or a planting tolerance of 1.67 had been planted, with no additional planted acres anticipated.~~

~~Nearly~~Capital ~~100~~expenditures for fiscal year 2012 have been approved at ~~percent~~$9.0 ofmillion. ~~the~~The ~~2011-crop~~capital ~~utilized~~expenditures ~~Roundup-Ready®~~are ~~sugarbeet~~for ~~seed~~equipment to improve efficiency, improved beet storage, improved rail facilities and safety and replacement activities. AsFailure ofby the ~~date~~ Company to make capital expenditures over a period of ~~this~~years ~~report,~~could result in the ~~crop,~~Company asbeing ~~planted~~less competitive due to its failure to reduce costs, ~~had~~increase ~~the~~operating ~~potential~~efficiencies ~~for~~or ~~normal~~increase ~~harvest results~~revenues.

~~Environmental~~ The ~~Company~~Bonds isare ~~subject~~secured toby ~~extensive~~a ~~federal~~Letters ~~and~~of ~~state environmental~~Credit ~~laws~~from ~~and~~the ~~regulations with respect to water and air quality, solid waste disposal and odor control~~Bank. The ~~Company conducts an ongoing compliance~~ ~~program~~letter ~~designed~~of tocredit ~~meet these environmental laws and regulations. The Company believes that it~~ is inultimately ~~substantial~~secured ~~compliance~~by ~~with~~the ~~applicable~~plant ~~environmental laws~~ and ~~regulations.~~property ~~From~~of ~~time to time, however,~~ the Company’s ~~may~~facility beat ~~involved in~~Wahpeton, ~~investigations or determinations regarding matters that may arise in the ordinary course of business~~ND. The Company works closely with all affected government agencies to resolve environmental issues that have arisen and believes such issues will be resolved without any material adverse effect on the Company.

The Company~~’s sugar~~ ~~manufacturing process~~ is ~~energy~~not ~~intensive~~aware ~~and generates carbon dioxide and other “Greenhouse Gases” (GHGs). Several bills have been passed or introduced in the United States Senate and House~~ of ~~Representatives~~any ~~that~~known ~~would regulate GHGs and carbon dioxide emissions to reduce the impact of global climate change. The Company believes it is likely that industries generating GHGs~~trends, ~~including the Company~~demands, ~~will at some future date be subject to either~~commitments, ~~federal~~events or ~~state~~uncertainties ~~regulation~~that ~~relating to climate change policies. These policies, if adopted,~~ will ~~increase~~likely ~~the~~result ~~Company’s~~in ~~energy and other operating costs. Depending on how these policies address imports,~~ the ~~domestic sugar market may have a competitive disadvantage compared with imported sugar. These policies could have a significant negative impact on the~~ Company’s ~~beet~~liquidity ~~payment to~~increasing ~~shareholder/growers~~or ifdecreasing ~~the Company is not able to pass the increased costs on to the Company’s customers~~materially.

~~ITEM~~Other 3.than those items described above, the Company is not aware ~~QUANTITATIVE~~of ~~AND~~any ~~QUALITATIVE~~known ~~DISCLOSURES~~material ~~ABOUT~~trends, ~~MARKET~~either ~~RISK~~favorable or unfavorable, that would cause the mix of equity to debt or the cost of debt to materially change.

~~There have been no material changes to the Company’s Quantitative and Qualitative Disclosures About Market Risk since the filing of the Company’s 10-K for the Fiscal Year ended August 31, 2010.~~ OTHER

17Estimated Fiscal Year 2013 Information

~~ITEM~~The 4TCompany’s Board of Directors initial planting level for the 2012-crop has been established at a minimum of 140% and a maximum of 160% times units of stock. The Company’s Board of ~~CONTROLS~~Directors ~~AND~~is ~~PROCEDURES~~authorized to modify the Company’s planting level based upon changing facts and circumstances.

Evaluation of Disclosure Controls and Procedures As required by Rule 13a-15(b) under the Exchange Act, the Company conducted an evaluation, under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer (together the “Certifying Officers”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of May 31, 2011, the end of the period covered by this report. Based upon that evaluation, the Certifying Officers concluded that the Company’s disclosure controls and procedures were effective. Environmental

~~Inherent~~The ~~Limitations~~Company ~~on Effectiveness of Controls Management~~ is ~~responsible~~subject ~~for~~to ~~establishing~~extensive federal and ~~maintaining~~state ~~adequate internal~~environmental ~~control~~laws ~~over~~and ~~financial~~regulations ~~reporting~~with respect to ~~provide~~water ~~reasonable~~and ~~assurance~~air ~~regarding~~quality, ~~the reliability~~solid ofwaste ~~financial~~disposal ~~reporting~~ and ~~the~~odor ~~preparation~~control. The ofCompany ~~financial~~conducts ~~statements~~an ~~for~~ongoing ~~external~~compliance ~~purposes~~program indesigned ~~accordance~~to ~~with~~meet ~~U.S.~~these ~~generally~~environmental ~~accepted~~laws ~~accounting principles~~and regulations. The ~~Internal~~Company ~~control~~believes ~~over~~that ~~financial~~it ~~reporting~~is ~~includes those policies~~in ~~and~~substantial ~~procedures~~compliance ~~that~~with ~~(i)~~applicable ~~pertain~~environmental tolaws ~~the~~and ~~maintenance~~regulations. From oftime ~~records~~to ~~that~~time, ~~in reasonable detail~~however, ~~accurately and fairly reflect~~ the ~~transactions~~Company ~~and~~may be ~~dispositions~~involved ofin ~~assets;~~investigations ~~(ii)~~or ~~provide~~determinations ~~reasonable~~regarding ~~assurance~~matters that ~~transactions~~may ~~are recorded~~arise asin ~~necessary~~the toordinary ~~permit~~course ~~preparation~~ of ~~financial statements in accordance with U~~business.S. The ~~generally accepted accounting principles, and that~~Company ~~receipts~~works ~~and~~closely ~~expenditures~~with ~~are~~all ~~being~~affected ~~made~~government ~~only~~agencies into ~~accordance~~resolve ~~with~~environmental ~~authorizations of~~issues ~~the~~that ~~management~~have ~~and~~arisen ~~the Board;~~ and ~~(iii)~~believes ~~provide~~such ~~reasonable~~issues ~~assurance~~will ~~regarding~~be ~~prevention~~resolved orwithout ~~timely~~any ~~detection of unauthorized acquisition, use or disposition of Company assets that could have a~~ material adverse effect on the ~~financial~~ ~~statements~~Company.

Management personnel, including the Certifying Officers, recognize that the Company’s internal control over financial reporting cannot prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. 14

~~Changes~~The inCompany ~~Internal~~cannot ~~Control~~predict ~~over~~whether ~~Financial Reporting~~future ~~There have been no material~~ changes toin ~~the~~environmental laws ~~Company’s~~or ~~internal~~regulations ~~control~~might ~~over financial~~increase ~~reporting since~~ the ~~filing~~cost of ~~the~~operating ~~Company’s~~its ~~Form~~facilities ~~10-Q~~and ~~for~~conducting ~~the~~its ~~period ended~~business. ~~February~~Any ~~28,~~such ~~2011~~changes ~~that~~could ~~has~~have financial ~~materially~~consequences ~~affected,~~for orthe isCompany ~~reasonably~~and ~~likely to materially affect,~~ its ~~internal control over financial reporting~~members.

~~PART~~ITEM II3. ~~OTHER~~ ~~INFORMATION~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~Item~~There 1.have been no material changes to the Company’s Quantitative ~~Legal~~and ~~Proceedings~~Qualitative Disclosures About Market Risk since the filing of the Company’s 10-K for the Fiscal Year ended August 31, 2011.

InITEM ~~March 2005, the U~~4.S. ~~Department~~CONTROLS ofAND Agriculture (the “USDA”) made a determination that Roundup Ready® sugarbeets should be deregulated. On January 23, 2008, a coalition group including the Center for Food Safety, the Sierra Club and two organic seed groups filed a lawsuit challenging the USDA’s determination. On September 21, 2009, the U.S. District Court for the Northern District of California (the “District Court”) ruled that the USDA violated the National Environmental Policy Act by failing to prepare an Environmental Impact Statement (“EIS”) before deregulating Roundup Ready® sugarbeets. The District Court also ordered the USDA to complete an EIS. The USDA has said that it expects to complete the EIS by May of 2012. PROCEDURES

OnEvaluation ~~February 4, 2011the USDA issued an Environmental Assessment (EA) to address an administrative action on its part to partially deregulate the use~~ of ~~Roundup Ready®~~Disclosure ~~sugarbeet~~Controls ~~seed for sugarbeet crops in the U.S. Plaintiffs tried to stop seed~~ and root plantings for the 2011 crop by asking the Ninth District Court for a Temporary Restraining Order and Temporary Injunction. That was denied. The final result of all of the legal proceedings to date means that as of this filing it is legal for the Company’s shareholder/growers to plant Roundup Ready® sugarbeet seed in 2011. However, the Company believes that the Plaintiffs will continue to challenge by legal means the USDA’s partial deregulation of the Roundup Ready® sugarbeet seed going forward. The ability of shareholder/growers to plant Roundup Ready® sugarbeets in subsequent years will be based upon actions by the USDA, which may be subject to further challenge in the future by the Plaintiffs or other groups also. Procedures

18As required by Rule 13a-15(b) under the Exchange Act, the Company conducted an evaluation, under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer (together the “Certifying Officers”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of November 30, 2011, the end of the period covered by this report. Based upon that evaluation, the Certifying Officers concluded that the Company’s disclosure controls and procedures were effective.

OnInherent ~~February~~Limitations ~~4, 2011~~on ~~the~~Effectiveness ~~Company, along with the rest~~ of the sugarbeet industry, filed suit in U.S. district court in the District of Columbia against the USDA, the Center for Food Safety and the Sierra Club challenging some of the more onerous requirements set forth in the conditions for partial deregulation of the Roundup Ready® sugarbeet seed and requesting that the judge render a declaratory judgment that the partial deregulation complies with the National Environmental Protection Act (NEPA) and the Plant Protection Act (PPA). Controls

~~According~~Management ~~to the~~is ~~USDA,~~responsible ~~Roundup~~for ~~Ready®~~establishing ~~varieties~~and ~~accounted~~maintaining ~~for~~adequate internal ~~about~~control 95over ~~percent~~financial ofreporting ~~the planted~~to ~~acres~~provide inreasonable ~~the~~assurance ~~2009/10~~regarding ~~crop~~the ~~year.~~reliability ~~The~~of ~~Company’s~~financial ~~Board~~reporting ~~of Directors~~and ~~authorized~~ the ~~planting~~preparation of ~~Roundup~~financial ~~Ready®~~statements ~~sugarbeets~~for ~~beginning~~external purposes in accordance with ~~the~~U.S. ~~2008 crop~~generally accepted accounting principles. Internal Ofcontrol ~~the~~over ~~sugarbeet~~financial ~~crop~~reporting ~~processed~~includes bythose policies and procedures that (i) pertain to the ~~Company~~maintenance of records that, in ~~2010~~reasonable detail, accurately and fairly reflect the ~~Company~~transactions and dispositions of assets; (ii) provide reasonable ~~estimates~~assurance that ~~nearly~~transactions ~~100~~are ~~percent~~recorded ~~was~~as ~~grown~~necessary ~~with~~to ~~Roundup~~permit ~~Ready®~~preparation ~~seed~~of financial statements in accordance with U.S. ~~Nearly~~generally ~~100~~accepted ~~percent~~accounting ofprinciples, ~~the~~and ~~sugarbeet~~that ~~crop~~receipts ~~planted~~and inexpenditures ~~2011~~are isbeing ~~planted~~made ~~with~~only ~~Roundup Ready®~~in ~~seed.~~accordance ~~Environmental~~with ~~law~~authorizations ~~restrictions~~of onthe management and the ~~use~~Board; ofand ~~Roundup~~(iii) provide ~~Ready® sugarbeet~~reasonable ~~seeds~~assurance orregarding ~~other~~prevention ~~restriction~~or ~~relating~~timely todetection ~~sugarbeet~~of ~~seeds~~unauthorized acquisition, use or ~~herbicides~~ disposition of Company assets that could have a ~~significant,~~material ~~negative~~effect ~~financial impact~~ on the ~~Company~~financial ~~and its shareholder/growers~~statements.

InManagement ~~May~~personnel, ~~2011~~including the Certifying Officers, recognize that the Company,’s ~~along~~internal ~~with~~control ~~others~~over infinancial ~~the~~reporting ~~sugar~~cannot ~~industry~~prevent ~~(collectively~~or ~~the “Plaintiffs”),~~detect ~~filed~~all aerror ~~lawsuit~~and inall Ufraud.S. ~~District~~A ~~Court~~control system, ~~Central~~no ~~District~~matter ~~of California~~how ~~against~~well ~~the~~designed ~~Corn~~and ~~Refiners~~operated, ~~Association~~can ~~and~~provide ~~its~~only ~~member~~reasonable, ~~companies (collectively~~not ~~the~~absolute, ~~“Defendants”)~~assurance ~~and~~that ~~asked~~ the ~~Court~~control ~~to: (1) enjoin the~~system’s ~~Defendants~~objectives ~~from~~will ~~continuing~~be tomet. ~~make~~The ~~false~~design ~~and/or~~of ~~misleading~~a ~~representations~~control ~~of fact~~system ~~about~~must ~~high~~reflect ~~fructose~~the ~~corn~~fact ~~syrup~~that ~~(HFCS);~~there ~~(2)~~are ~~award~~resource ~~Plaintiffs~~constraints, ~~damages~~and ~~for~~ the ~~harms~~benefits of ~~they~~controls ~~have~~must ~~suffered~~be ~~and~~considered ~~continue~~relative to ~~suffer~~their ascosts. aFurther, ~~result~~because of the ~~Defendants’ false~~inherent ~~and/or~~limitations ~~misleading~~in ~~advertising,~~all ~~promotion~~control ~~and/or~~systems, ~~marketing~~no evaluation of ~~HFCS, including~~controls acan ~~corrective~~provide ~~advertising~~absolute ~~award~~assurance ~~and~~that ~~(3)~~misstatements ~~award~~due ~~Plaintiffs~~to ~~their~~error ~~costs~~or fraud will not occur or that all control issues and ~~expenses~~instances of ~~the~~fraud, ~~lawsuit~~if any, have been detected. The ~~outcome~~design of ~~this~~any ~~lawsuit~~system of controls is ~~unknown~~based atin ~~this time~~part ~~and~~on certain assumptions about the ~~Company~~likelihood ~~does~~of ~~not~~future ~~know~~events, ~~what~~and ~~financial~~there ~~impact,~~can ifbe ~~any,~~no assurance that ~~this lawsuit~~any design will ~~have~~succeed onin ~~the~~achieving ~~Company~~its ~~and~~stated ~~its~~goals under ~~shareholder/growers.~~all potential future conditions.

~~Item 1A. Risk~~Changes ~~Factors. There have been no material changes from risk factors as previously disclosed~~ in ~~the~~Internal ~~Company’s~~Control ~~Form~~over ~~10-K.~~Financial For a detailed discussion of certain risk factors that could affect the Company’s operations, financial condition or results for future periods, see Item 1 A, Risk factors in the Company’s 2010 Annual Report on Form 10-K. Reporting

~~Item~~There have been no material changes to the Company’s internal ~~2. Unregistered~~control ~~Sales~~over offinancial ~~Equity~~reporting ~~Securities~~since ~~and~~the ~~Use~~filing of ~~Proceeds.~~the Company’s Form 10-K for the period ended August 31, 2011 that has ~~None~~materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

~~Item 3~~PART II. ~~Defaults~~OTHER ~~Upon Senior Securities None~~ INFORMATION

Item 4 1. ~~Submission of Matters to a Vote of Security Holders~~ Legal ~~None~~ Proceedings

See Item 5 3. ~~Other~~ ~~Information~~Legal Proceedings in the Company’s 2011 Annual ~~None.~~Report on Form 10-K.

Item 6 1A. ~~Exhibits~~ Risk ~~a) Exhibits~~ Factors

~~Item~~There ~~#31.1~~have ~~Section~~been ~~302~~no ~~Certification~~material ofchanges ~~the~~from ~~President~~risk ~~and~~factors ~~Chief~~as ~~Executive~~previously disclosed ~~Officer~~in ~~Item #31.2 Section 302 Certification of~~ the ~~Executive~~Company’s ~~Vice~~Form ~~President and Chief Financial Officer Item #31~~10-K.3 ~~Section~~For ~~302~~a ~~Certification~~detailed discussion of ~~the~~certain ~~Controller~~risk ~~and~~factors ~~Chief~~that ~~Accounting~~could ~~Officer~~affect ~~Item~~the ~~#32.1~~Company’s operations, ~~Section~~financial ~~906~~condition ~~Certification~~or ofresults ~~the~~for ~~President~~future ~~and~~periods, ~~Chief~~see ~~Executive Officer~~ Item ~~#32.2~~1 ~~Section~~A, ~~906~~Risk ~~Certification~~factors ofin the ~~Executive~~Company’s ~~Vice~~2011 ~~President~~Annual ~~and~~Report on ~~Chief~~Form ~~Financial Officer~~10-K.

1915

~~SIGNATURES~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~Pursuant to the requirement 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.~~ None

		MINN-DAK FARMERS COOPERATIVE
		(Registrant)
Date:	JULY 11, 2011	/s/ DAVID H. ROCHE
		David H. Roche
		President and Chief Executive Officer
Date:	JULY 11, 2011	/s/ STEVEN M. CASPERS
		Steven M. Caspers
		Executive Vice President and Chief Financial Officer

Item 3. Defaults Upon Senior Securities

20None

Item 4. Submission of Matters to a Vote of Security Holders

None

Item 5. Other Information

None

Item 6. Exhibits

a) Exhibits

Item #31.1 Section 302 Certification of the President and Chief Executive Officer

Item #31.2 Section 302 Certification of the Vice President and Chief Financial Officer

Item #32.1 Section 906 Certification of the President and Chief Executive Officer

Item #32.2 Section 906 Certification of the Vice President and Chief Financial Officer

b) Bylaws

Item 3(iv) Amended Bylaws of Minn-Dak Farmers Cooperative. Incorporated by reference as filed on Form 8-k on December 12, 2011.

SIGNATURES

Pursuant to the requirement 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.


		MINN-DAK FARMERS COOPERATIVE
		(Registrant)

Date:	JANUARY 12, 2012	/s/ DAVID H. ROCHE
		David H. Roche
		President and Chief Executive Officer


Date:	JANUARY 12, 2012	/s/ RICHARD J. KASPER
		Richard J. Kasper
		Vice President and Chief Financial Officer

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