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<SEC-DOCUMENT>0000897101-03-000012.txt : 20030114
<SEC-HEADER>0000897101-03-000012.hdr.sgml : 20030114
<ACCEPTANCE-DATETIME>20030109165026
ACCESSION NUMBER:		0000897101-03-000012
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20021130
FILED AS OF DATE:		20030109

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CENEX HARVEST STATES COOPERATIVES
		CENTRAL INDEX KEY:			0000823277
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-FARM PRODUCT RAW MATERIALS [5150]
		IRS NUMBER:				410251095
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			0831

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	333-17865
		FILM NUMBER:		03509452

	BUSINESS ADDRESS:	
		STREET 1:		5500 CENEX DRIVE
		CITY:			INVER GROVE HEIGHTS
		STATE:			MN
		ZIP:			55077
		BUSINESS PHONE:		6129469433

	MAIL ADDRESS:	
		STREET 1:		5500 CENEX DRIVE
		CITY:			INVER GROVE HEIGHTS
		STATE:			MN
		ZIP:			55077

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	HARVEST STATES COOPERATIVES
		DATE OF NAME CHANGE:	19961212
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>cenex026059_10q.txt
<DESCRIPTION>CENEX HARVEST STATES COOPERATIVES FORM 10Q
<TEXT>
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 10-Q

                               -----------------
(Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 2002.

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


                        COMMISSION FILE NUMBER 333-17865

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

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

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

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

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

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


                                    YES_X_  NO ___


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

                                       (Number of shares outstanding at
         (Class)                             November 30, 2002)
         -------                       --------------------------------
          NONE                                      NONE

================================================================================
<PAGE>


                                      INDEX


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

 Item 1. Financial Statements

 Consolidated Balance Sheets as of November 30, 2002 (unaudited),
 August 31, 2002 and November 30, 2001 (unaudited) .......................     2

 Consolidated Statements of Operations for the three months ended
 November 30, 2002 and 2001 (unaudited) ..................................     3

 Consolidated Statements of Cash Flows for the three months ended
 November 30, 2002 and 2001 (unaudited) ..................................     4

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

 Item 2. Management's Discussion and Analysis of Financial Condition
 and Results of Operations ...............................................     9

 Item 3. Quantitative and Qualitative Disclosures about Market Risk ......    14

 Item 4. Controls and Procedures .........................................    14


PART II. OTHER INFORMATION

 Item 4. Submission of Matters to a Vote of Security Holders .............    15

 Item 6. Exhibits and Reports on Form 8-K ................................    15


SIGNATURE PAGE ...........................................................    16


SECTION 302 CERTIFICATIONS ...............................................    17


                                        i
<PAGE>


                          PART I. FINANCIAL INFORMATION


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

     This Quarterly Report on Form 10-Q may contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements involve risks and uncertainties that may cause the
Company's actual results to differ materially from the results discussed in the
forward-looking statements. These factors include those set forth in Exhibit
99.1, under the caption "Cautionary Statement" to this Quarterly Report on Form
10-Q for the quarterly period ended November 30, 2002.





                                        1
<PAGE>


CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES
ITEM 1. FINANCIAL STATEMENTS


               CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                     ASSETS
                                                                 NOVEMBER 30,     AUGUST 31,     NOVEMBER 30,
                                                                     2002            2002            2001
                                                                --------------   ------------   -------------
(DOLLARS IN THOUSANDS)                                            (UNAUDITED)                    (UNAUDITED)
<S>                                                               <C>            <C>             <C>
CURRENT ASSETS:
 Cash and cash equivalents ..................................     $  138,823     $  108,192      $  106,453
 Receivables ................................................        824,899        741,578         642,542
 Inventories ................................................        929,995        759,663         547,949
 Other current assets .......................................        202,828        140,944          93,390
                                                                  ----------     ----------      ----------
  Total current assets ......................................      2,096,545      1,750,377       1,390,334
INVESTMENTS .................................................        489,289        496,607         461,448
PROPERTY, PLANT AND EQUIPMENT ...............................      1,068,786      1,057,421       1,026,075
OTHER ASSETS ................................................        181,068        177,322         214,574
                                                                  ----------     ----------      ----------
  Total assets ..............................................     $3,835,688     $3,481,727      $3,092,431
                                                                  ==========     ==========      ==========

                            LIABILITIES AND EQUITIES
CURRENT LIABILITIES:
 Notes payable ..............................................     $  246,061     $  332,514      $  110,815
 Current portion of long-term debt ..........................         89,026         89,032          15,669
 Customer credit balances ...................................         91,792         26,461          62,590
 Customer advance payments ..................................        222,137        169,123         102,847
 Checks and drafts outstanding ..............................         70,150         84,251          60,063
 Accounts payable ...........................................        642,537        517,667         464,480
 Accrued expenses ...........................................        231,003        225,704         139,788
 Patronage dividends and equity retirements payable .........         72,088         56,510          91,024
                                                                  ----------     ----------      ----------
  Total current liabilities .................................      1,664,794      1,501,262       1,047,276
LONG-TERM DEBT ..............................................        654,196        483,092         568,588
OTHER LIABILITIES ...........................................        116,144        118,280         105,372
MINORITY INTERESTS IN SUBSIDIARIES ..........................         94,877         89,455          88,369
COMMITMENTS AND CONTINGENCIES
EQUITIES ....................................................      1,305,677      1,289,638       1,282,826
                                                                  ----------     ----------      ----------
  Total liabilities and equities ............................     $3,835,688     $3,481,727      $3,092,431
                                                                  ==========     ==========      ==========
</TABLE>

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


                                        2
<PAGE>


               CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                   FOR THE THREE MONTHS ENDED
                                                          NOVEMBER 30,
                                                  -----------------------------
                                                       2002            2001
(DOLLARS IN THOUSANDS)                            -------------   -------------
REVENUES:
 Net sales ....................................    $2,626,628      $1,871,952
 Patronage dividends ..........................           166             721
 Other revenues ...............................        35,089          32,076
                                                   ----------      ----------
                                                    2,661,883       1,904,749
Cost of goods sold ............................     2,562,794       1,804,364
Marketing, general and administrative .........        43,148          42,898
                                                   ----------      ----------
OPERATING EARNINGS ............................        55,941          57,487
Interest ......................................        12,813          10,815
Equity income from investments ................        (8,165)         (3,942)
Minority interests ............................         5,431           3,036
                                                   ----------      ----------
INCOME BEFORE INCOME TAXES ....................        45,862          47,578
INCOME TAXES ..................................         5,506           6,223
                                                   ----------      ----------
NET INCOME ....................................    $   40,356      $   41,355
                                                   ==========      ==========

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


                                        3
<PAGE>


               CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                        FOR THE THREE MONTHS ENDED
                                                                               NOVEMBER 30,
                                                                        ---------------------------
                                                                            2002           2001
(DOLLARS IN THOUSANDS)                                                  ------------   ------------
<S>                                                                      <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income .........................................................    $   40,356     $  41,355
 Adjustments to reconcile net income to net cash provided by
  operating activities:
   Depreciation and amortization ....................................        25,866        24,699
   Noncash net income from equity investments .......................        (8,165)       (3,942)
   Minority interests ...............................................         5,431         3,036
   Adjustment of inventories to market value ........................            --        14,885
   Noncash portion of patronage dividends received ..................          (184)         (766)
   Loss (gain) on sale of property, plant and equipment .............           463        (2,348)
   Other, net .......................................................           446           (60)
   Changes in operating assets and liabilities:
    Receivables .....................................................       (72,422)       46,053
    Inventories .....................................................      (170,332)      (52,391)
    Other current assets and other assets ...........................       (66,814)      (25,890)
    Customer credit balances ........................................        65,331        24,104
    Customer advance payments .......................................        53,014        (6,288)
    Accounts payable and accrued expenses ...........................       131,211       (44,259)
    Other liabilities ...............................................        (2,136)        5,466
                                                                         ----------     ---------
      Net cash provided by operating activities .....................         2,065        23,654
                                                                         ----------     ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Acquisition of property, plant and equipment .......................       (40,613)      (21,808)
 Proceeds from disposition of property, plant and equipment .........         4,748         6,116
 Investments ........................................................        (1,384)       (6,125)
 Equity investments redeemed ........................................        15,313        14,092
 Investments redeemed ...............................................         1,713         1,328
 Changes in notes receivable ........................................       (11,241)       (2,163)
 Acquisition of intangibles .........................................          (379)      (27,469)
 Distribution to minority owners ....................................          (463)       (3,985)
 Other investing activities, net ....................................           444         1,090
                                                                         ----------     ---------
      Net cash used in investing activities .........................       (31,862)      (38,924)
                                                                         ----------     ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Changes in notes payable ...........................................       (86,453)       13,620
 Long-term debt borrowings ..........................................       175,000        30,000
 Principal payments on long-term debt ...............................        (3,902)       (5,780)
 Payments on derivative instruments .................................        (7,574)           --
 Changes in checks and drafts outstanding ...........................       (14,101)      (27,745)
 Proceeds from sale of preferred stock, net of expenses .............            64            --
 Preferred stock dividends paid .....................................          (184)           --
 Retirements of equities ............................................        (2,422)       (1,830)
                                                                         ----------     ---------
      Net cash provided by financing activities .....................        60,428         8,265
                                                                         ----------     ---------
NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS ...................................................        30,631        (7,005)
CASH AND CASH EQUIVALENTS AT BEGINNING
 OF PERIOD ..........................................................       108,192       113,458
                                                                         ----------     ---------
CASH AND CASH EQUIVALENTS AT END
 OF PERIOD ..........................................................    $  138,823     $ 106,453
                                                                         ==========     =========
</TABLE>

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


                                        4
<PAGE>


              CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES

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


NOTE 1. ACCOUNTING POLICIES

     The unaudited consolidated balance sheets as of November 30, 2002 and 2001,
and the statements of operations and cash flows for the three months ended
November 30, 2002 and 2001 reflect, in the opinion of management of Cenex
Harvest States Cooperatives (the Company), all normal recurring adjustments
necessary for a fair presentation of the financial position and results of
operations and cash flows for the interim periods presented. The results of
operations and cash flows for interim periods are not necessarily indicative of
results for a full fiscal year because of, among other things, the seasonal
nature of the Company's businesses. The consolidated balance sheet data as of
August 31, 2002 has been derived from audited consolidated financial statements
but does not include all disclosures required by accounting principles generally
accepted in the United States of America.

     The consolidated financial statements include the accounts of the Company
and all of its wholly-owned and majority-owned subsidiaries and limited
liability companies. The effects of all significant intercompany accounts and
transactions have been eliminated.

     These statements should be read in conjunction with the consolidated
financial statements and notes thereto for the year ended August 31, 2002,
included in the Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission on November 25, 2002.


GOODWILL AND OTHER INTANGIBLE ASSETS

     The Company has $27.5 million of goodwill as of November 30, 2002, and
during the three months then ended, the Company disposed of $0.4 million due to
sales of related assets in the Energy segment.

     Intangible assets subject to amortization primarily include trademarks,
tradenames, customer lists and non-compete agreements, and are amortized on a
straight-line basis over the number of years that approximate their respective
useful lives (ranging from 2 to 15 years). The gross carrying amount of these
intangible assets is $43.1 million with total accumulated amortization of $8.5
million as of November 30, 2002. Intangible assets of $0.4 million were acquired
during the three months ended November 30, 2002. Total amortization expense for
intangible assets during the three-month period ended November 30, 2002 was
approximately $1.2 million. The estimated amortization expense related to
intangible assets subject to amortization for the next five years will
approximate $4.0 million annually.


RECENT ACCOUNTING PRONOUNCEMENTS

     The Financial Accounting Standards Board (FASB) issued SFAS No. 143,
"Accounting for Asset Retirement Obligations" which addresses financial
accounting and reporting for obligations associated with the retirement of
tangible long-lived assets and the associated asset retirement costs. SFAS No.
143 is effective for financial statements issued for fiscal years beginning
after June 15, 2002. The Company is in the process of finalizing its analysis of
adopting this standard. The Company's Energy segment operates oil refineries and
related pipelines for which the Company would be subject to Asset Retirement
Obligations (ARO) if such assets were to be dismantled. The Company, however,
expects to operate its refineries and related pipelines indefinitely. Since the
time period to dismantle these assets is indeterminate, a corresponding ARO is
not currently estimable and therefore has not been recorded. The Company
continues to assess whether any other ARO's exist related to its remaining
operations, however, based on available information to date, no other ARO's have
been identified. As such, the Company believes that the effects of adopting this
standard do not have a material effect on the Company.


                                        5
<PAGE>


NOTE 2. RECEIVABLES

<TABLE>
<CAPTION>
                                                    NOVEMBER 30,     AUGUST 31,     NOVEMBER 30,
                                                        2002            2002            2001
                                                   --------------   ------------   -------------
<S>                                                <C>              <C>            <C>
 Trade .........................................      $797,559        $717,888        $636,935
 Other .........................................        53,992          49,846          31,308
                                                      --------        --------        --------
                                                       851,551         767,734         668,243
 Less allowances for doubtful accounts .........        26,652          26,156          25,701
                                                      --------        --------        --------
                                                      $824,899        $741,578        $642,542
                                                      ========        ========        ========
</TABLE>

NOTE 3. INVENTORIES

<TABLE>
<CAPTION>
                                          NOVEMBER 30,     AUGUST 31,     NOVEMBER 30,
                                              2002            2002            2001
                                         --------------   ------------   -------------
<S>                                      <C>              <C>            <C>
 Grain and oilseed ...................      $556,962        $393,095        $262,630
 Energy ..............................       217,155         229,981         182,296
 Feed and farm supplies ..............       102,553          91,138          79,380
 Processed grain and oilseed .........        44,904          36,264          19,770
 Other ...............................         8,421           9,185           3,873
                                            --------        --------        --------
                                            $929,995        $759,663        $547,949
                                            ========        ========        ========
</TABLE>

NOTE 4. INVESTMENTS

     The following provides summarized unaudited financial information for the
Company's unconsolidated significant subsidiaries Ventura Foods, LLC and
Agriliance, LLC, of which the Company has a 50% and 25% equity ownership,
respectively, for the three-month periods as indicated below.

                               VENTURA FOODS, LLC

                           FOR THE THREE MONTHS ENDED
                                  NOVEMBER 30,
                            -------------------------
                                2002          2001
                            -----------   -----------
   Net sales ............    $287,025      $258,400
   Gross profit .........      49,728        41,101
   Net income ...........      20,791        15,244

                                 AGRILIANCE, LLC

                           FOR THE THREE MONTHS ENDED
                                  NOVEMBER 30,
                            -------------------------
                                2002          2001
                            -----------   -----------
   Net sales ............    $ 592,730     $ 677,047
   Gross profit .........       48,522        45,904
   Net income ...........      (20,110)      (21,152)


NOTE 5. DEBT

     In October 2002, the Company entered into a private placement with several
insurance companies for long-term debt in the amount of $175.0 million which was
layered into two series. The first series of $115.0 million has an interest rate
of 4.96% and will be repaid in equal semi-annual installments of approximately
$8.8 million during the years 2007 through 2013. The second series of $60.0
million has an interest rate of 5.60% and will be repaid in equal semi-annual
installments of approximately $4.6 million during fiscal years 2012 through
2018.


NOTE 6 EQUITIES

     As of November 30, 2002 the Company had $9.5 million (9,454,874 shares) of
8% Preferred Stock outstanding, and expenses related to the issuance of the
shares were $3.5 million. Sales of the preferred shares have been suspended, as
the Company is in the process of registering a new offering as noted below.


                                        6
<PAGE>


     The Board of Directors authorized the sale and issuance of up to 2,875,000
shares of 8% Cumulative Redeemable Preferred Stock at a price of $25.00 per
share. The Company filed a registration statement on Form S-2 on December 17,
2002 with the Securities and Exchange Commission registering the preferred
shares, however, the registration statement is not yet effective.


NOTE 7. COMPREHENSIVE INCOME

     For the three months ended November 30, 2002 and 2001, total comprehensive
income amounted to $34.6 million and $42.4 million, respectively. Accumulated
other comprehensive loss on November 30, 2002, August 31, 2002 and November 30,
2001 was $57.7 million, $51.9 million and $0.9 million, respectively.


NOTE 8. NON-CASH FINANCING ACTIVITIES

     During the three months ended November 30, 2002 and 2001 the Company
accrued patronage dividends and equity retirements payable of $18.0 million and
$20.7 million, respectively.


NOTE 9. SEGMENT REPORTING

     Segments, which are based on products and services, include Agronomy,
Energy, Country Operations, Grain Marketing and Processed Grains and Foods.
Reconciling Amounts represent the elimination of intracompany sales between
segments. Due to cost allocations and intersegment activity, management does not
represent that these segments, if operated independently, would report the
income before income taxes and other financial information as presented.


                                        7
<PAGE>


                 Segment information for the three months ended
                    November 30, 2002 and 2001 is as follows:

<TABLE>
<CAPTION>
                                                                          COUNTRY
                                           AGRONOMY       ENERGY        OPERATIONS
                                         ------------ -------------- ----------------
<S>                                        <C>          <C>            <C>
FOR THE THREE MONTHS ENDED
 NOVEMBER 30, 2002
  Net sales ............................                $  911,589     $  489,066
  Patronage dividends ..................                        13             51
  Other revenues .......................                     2,736         24,537
                                                        ----------     ----------
                                                           914,338        513,654
  Cost of goods sold ...................                   860,329        486,113
  Marketing, general and
   administrative ......................   $  1,140         14,185         12,603
  Interest .............................       (298)         4,010          5,388
  Equity loss (income) from
   investments .........................      4,018           (320)          (215)
  Minority interests ...................                     5,135            296
                                                         ----------    ----------
  (Loss) income before
   income taxes ........................   $ (4,860)    $   30,999     $    9,469
                                           ========     ==========     ==========
  Goodwill assets ......................                $    3,667     $      262
                                                        ==========     ==========
  Capital expenditures .................                $   17,959     $   10,322
                                                        ==========     ==========
  Depreciation and amortization ........   $    312     $   14,538     $    5,421
                                           ========     ==========     ==========
  Total identifiable assets at
   November 30, 2002 ...................   $232,942     $1,311,583     $1,035,287
                                           ========     ==========     ==========
FOR THE THREE MONTHS ENDED
 NOVEMBER 30, 2001
  Net sales ............................                $  554,242     $  374,666
  Patronage dividends ..................                       423             61
  Other revenues .......................                     2,619         20,489
                                                        ----------     ----------
                                                           557,284        395,216
  Cost of goods sold ...................                   497,975        374,217
  Marketing, general and
   administrative ......................   $  1,167         15,000         12,452
  Interest .............................       (427)         4,082          3,143
  Equity loss (income) from
   investments .........................      3,302          1,376             (6)
  Minority interests ...................                     2,895            141
                                           --------     ----------     ----------
  (Loss) income before
   income taxes ........................   $ (4,042)    $   35,956     $    5,269
                                           ========     ==========     ==========
  Goodwill assets ......................                $    5,127     $      326
                                                        ==========     ==========
  Capital expenditures .................                $    9,680     $    5,748
                                                        ==========     ==========
  Depreciation and amortization ........   $    312     $   13,860     $    5,373
                                           ========     ==========     ==========
  Total identifiable assets at
   November 30, 2001 ...................   $226,437     $1,144,175     $  713,175
                                           ========     ==========     ==========
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                                         PROCESSED
                                             GRAIN      GRAINS AND                 RECONCILING
                                           MARKETING       FOODS        OTHER        AMOUNTS        TOTAL
                                         ------------- ------------ ------------ -------------- -------------
<S>                                       <C>           <C>           <C>          <C>           <C>
FOR THE THREE MONTHS ENDED
 NOVEMBER 30, 2002
  Net sales ............................  $1,387,278    $ 113,833                  $ (275,138)   $2,626,628
  Patronage dividends ..................          78                  $     24                          166
  Other revenues .......................       6,604          909          303                       35,089
                                          ----------    ---------     --------     ----------    ----------
                                           1,393,960      114,742          327       (275,138)    2,661,883
  Cost of goods sold ...................   1,385,171      106,319                    (275,138)    2,562,794
  Marketing, general and
   administrative ......................       6,071        8,088        1,061                       43,148
  Interest .............................       1,858        2,346         (491)                      12,813
  Equity loss (income) from
   investments .........................        (814)     (10,834)                                   (8,165)
  Minority interests ...................                                                              5,431
                                          ----------    ---------     --------     ----------    ----------
  (Loss) income before
   income taxes ........................  $    1,674    $   8,823     $   (243)    $       --    $   45,862
                                          ==========    =========     ========     ==========    ==========
  Goodwill assets ......................                $  23,605                                $   27,534
                                                        =========                                ==========
  Capital expenditures .................  $      517    $  11,156     $    659                   $   40,613
                                          ==========    =========     ========                   ==========
  Depreciation and amortization ........  $    1,605    $   3,135     $    855                   $   25,866
                                          ==========    =========     ========                   ==========
  Total identifiable assets at
   November 30, 2002 ...................  $  594,278    $ 457,480     $204,118                   $3,835,688
                                          ==========    =========     ========                   ==========
FOR THE THREE MONTHS ENDED
 NOVEMBER 30, 2001
  Net sales ............................  $  981,897    $ 163,049                  $ (201,902)   $1,871,952
  Patronage dividends ..................         179                  $     58                          721
  Other revenues .......................       8,452           25          491                       32,076
                                          ----------    ---------     --------     ----------    ----------
                                             990,528      163,074          549       (201,902)    1,904,749
  Cost of goods sold ...................     981,997      152,077                    (201,902)    1,804,364
  Marketing, general and
   administrative ......................       5,477        7,579        1,223                       42,898
  Interest .............................       1,629        2,596         (208)                      10,815
  Equity loss (income) from
   investments .........................        (989)      (7,625)                                   (3,942)
  Minority interests ...................                                                              3,036
                                          ----------    ---------     --------     ----------    ----------
  (Loss) income before
   income taxes ........................  $    2,414    $   8,447     $   (466)    $       --    $   47,578
                                          ==========    =========     ========     ==========    ==========
  Goodwill assets ......................                $  23,605                                $   29,058
                                                        =========                                ==========
  Capital expenditures .................  $    1,015    $   5,179     $    186                   $   21,808
                                          ==========    =========     ========                   ==========
  Depreciation and amortization ........  $    1,344    $   3,021     $    789                   $   24,699
                                          ==========    =========     ========                   ==========
  Total identifiable assets at
   November 30, 2001 ...................  $  359,103    $ 434,522     $215,019                   $3,092,431
                                          ==========    =========     ========                   ==========
</TABLE>


NOTE 10. COMMITMENTS AND CONTINGENCIES

     The Company expects to incur capital expenditures related to the
Environmental Protection Agency low sulfur fuel regulations required by 2006.
These expenditures are expected to be approximately $387.0 million in total for
the Company's Laurel, Montana and NCRA's McPherson, Kansas refineries over the
next three years, of which $9.5 million has been spent so far at NCRA. It is
expected that approximately 80% of the costs will be incurred at NCRA. The
Company expects to fund the refinery expenditures with a combination of cash,
future earnings and additional borrowings.


                                        8
<PAGE>


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

     Cenex Harvest States Cooperatives (CHS Cooperatives, CHS or the Company) is
one of the nation's leading integrated agricultural companies. As a cooperative,
the Company is owned by farmers, ranchers and their local cooperatives from the
Great Lakes to the Pacific Northwest and from the Canadian border to Texas. CHS
Cooperatives buys commodities from, and provides products and services to
members and other customers. The Company provides a wide variety of products and
services, from initial agricultural inputs such as fuels, farm supplies and crop
nutrients, to agricultural outputs that include grains and oilseeds, grain and
oilseed processing, and food products.

     The Company has five distinct business segments: Agronomy, Energy, Country
Operations, Grain Marketing and Processed Grains and Foods. Summary data for
each of these segments for the three months ended November 30, 2002 and 2001 is
shown in Note 9.

     Many of the Company's businesses are highly seasonal. As a result,
operating income will vary throughout the year, but overall revenues remain
fairly constant, partly because the Company does not consolidate revenues in the
Agronomy segment. Overall, the Company's income is generally lowest during the
second fiscal quarter and highest during the third fiscal quarter. Certain
business segments are subject to varying seasonal fluctuations. For example,
Agronomy and Country Operations segments experience higher volumes and income
during the spring planting season and in the fall, which corresponds to harvest.
The Grain Marketing segment, as well, is somewhat subject to fluctuations in
revenue and earnings based on producer harvests, world grain prices and demand.
The Company's Energy segment generally experiences higher revenues and
profitability in certain operating areas, such as refined products, in the
summer when gasoline and diesel usage is highest. Other energy products, such as
propane, typically experience higher revenues and profitability during the
winter heating and crop drying seasons.

     While the Company's sales and operating earnings are derived from
businesses and operations which are wholly-owned and majority-owned, a portion
of business operations are conducted through companies in which the Company
holds ownership interests of 50% or less and does not control the operations.
The Company accounts for these investments primarily using the equity method of
accounting, wherein CHS Cooperatives records as equity income from investments
its proportionate share of income or loss reported by the entity, without
consolidating the revenues and expenses of the entity in the Company's
consolidated statements of operations. These investments principally include the
Company's 25% ownership in Agriliance, LLC (Agriliance), the 50% ownership in
TEMCO, LLC, the 50% ownership in United Harvest, LLC, the 24% ownership in
Horizon Milling, LLC (Horizon) and the 50% ownership in Ventura Foods, LLC
(Ventura).


RESULTS OF OPERATIONS

COMPARISON OF THE THREE MONTHS ENDED NOVEMBER 30, 2002 AND 2001

     NET INCOME. Consolidated net income for the three months ended November 30,
2002 was $40.4 million compared to $41.4 million for the three months ended
November 30, 2001, which represents a $1.0 million (2%) decrease. Although net
income slightly decreased in total, the net income from the various business
segments had changed. Reduced income in the Energy segment was partially offset
by increased income in the Country Operations segment compared to the three
months ended November 30, 2001.

     NET SALES. Consolidated net sales of $2.6 billion for the three months
ended November 30, 2002 increased $754.7 million (40%) compared to the three
months ended November 30, 2001.

     Energy net sales of $887.6 million increased $347.3 million (64%) during
the three months ended November 30, 2002 compared to the three months ended
November 30, 2001. Sales for the three months ended November 30, 2002 and 2001
were $911.6 million and $554.2 million, respectively. The Company eliminated all
intracompany sales from the Energy segment to the Country Operations segment of
$24.0 million and $13.9 million for the three months ended November 30, 2002 and
2001, respectively. The increase was primarily a result of increased refined
fuels volumes of 66% and an average sales price


                                        9
<PAGE>


increase of $0.08 per gallon compared to the three months ended November 30,
2001. In addition, propane sales volumes increased 75%, which was partially
offset by an average sales price decrease of $0.03 per gallon compared to the
three months ended November 30, 2001. Refined fuels and propane volume increases
were primarily a result of the acquisition of the wholesale energy business of
Farmland Industries, Inc. (Farmland), as well as all interest in Country Energy,
LLC a joint venture formerly with Farmland at a purchase price of $39.2 million.
In addition, there was increased demand for propane due to a strong crop drying
season.

     Country Operations farm supply sales of $154.5 million increased by $22.2
million (17%) during the three months ended November 30, 2002 compared to the
three months ended November 30, 2001. The increase is primarily due to increased
volumes from an acquisition and volume and price increases for feed and agronomy
products.

     Company-wide grain and oilseed net sales of $1.5 billion increased $434.4
million (42%) during the three months ended November 30, 2002 compared to the
three months ended November 30, 2001. Sales for the three months ended November
30, 2002 were $1,387.2 million and $334.5 million from Grain Marketing and
Country Operations segments, respectively. Sales for the three months ended
November 30, 2001 were $981.9 million and $242.3 million from Grain Marketing
and Country Operations segments, respectively. The Company eliminated all
intracompany sales from the Country Operations segment to the Grain Marketing
segment, of $251.1 million and $188.0 million, for the three months ended
November 30, 2002 and 2001, respectively. The net increase in sales was
primarily due to an increase of $1.98 (64%) per bushel in the average sales
price of all grain and oilseed marketed by the Company, which was partially
offset by a decrease in grain volume of 13% compared to the three months ended
November 30, 2001.

     Processed Grains and Foods net sales of $113.8 million decreased $49.2
million (30%) during the three months ended November 30, 2002 compared to the
three months ended November 30, 2001. The net decrease in sales is primarily due
to the formation of Horizon, a wheat flour milling and processing joint venture
that was formed in January 2002. After that date, the Company has accounted for
operating results of Horizon under the equity method of accounting. The Company
has a 24% interest in Horizon, and Cargill, Incorporated (Cargill) has a 76%
interest. The Company is leasing its five mills and related equipment to Horizon
under an operating lease.

     PATRONAGE DIVIDENDS. Patronage dividends received of $0.2 million decreased
$0.6 million (77%) during the three months ended November 30, 2002 compared to
the three months ended November 30, 2001.

     OTHER REVENUES. Other revenues of $35.1 million increased $3.0 million (9%)
during the three months ended November 30, 2002 compared to the three months
ended November 30, 2001. The most significant changes were due to increased
service revenues within the Country Operations segment compared to the three
months ended November 30, 2001.

     COST OF GOODS SOLD. Cost of goods sold of $2.6 billion increased $758.4
million (42%) during the three months ended November 30, 2002, compared to the
three months ended November 30, 2001. The cost of all grains and oilseed
procured by the Company through its Grain Marketing and Country Operations
segments increased $424.2 million (43%) compared to the three months ended
November 30, 2001 primarily due to a $1.95 (64%) average cost per bushel
increase, which was partially offset by a 13% decrease in volume. The Energy
segment cost of goods sold increased by $362.4 million (73%) during the three
months ended November 30, 2002 compared to the three months ended November 30,
2001. The volumes of refined fuels increased by 66%, primarily the result of
acquisitions, and the average cost increased by $0.11 per gallon compared to the
three months ended November 30, 2001. Propane volumes increased by 75%, which
was partially offset by an average cost decrease of $0.03 per gallon compared to
the three months ended November 30, 2001. These volume increases were primarily
the result of acquisitions and increased propane demand due to a strong crop
drying season. Country Operations segment farm supply cost of goods sold
increased by $16.8 million (15%) during the three months ended November 30, 2002
compared to the three months ended November 30, 2001 primarily due to an
acquisition and volume and cost increases on feed and agronomy products. These
increases were partially offset by decreased cost of goods sold in the Processed
Grains and Foods segment of


                                       10
<PAGE>


$45.8 million (30%) compared to the three months ended November 30, 2001,
primarily due to the formation of Horizon, as previously discussed.

     MARKETING, GENERAL AND ADMINISTRATIVE. Marketing, general and
administrative expenses of $43.1 million for the three months ended November 30,
2002 increased by $0.3 million (1%) compared to the three months ended November
30, 2001. Although marketing, general and administrative expenses were
essentially unchanged in total, expenses attributable to the Company's various
business segments changed. Marketing, general and administrative in the Energy
segment increased due to the wholesale energy acquisition and Processed Grains
and Foods segment decreased due to the formation of Horizon as previously
discussed.

     INTEREST. Interest expense of $12.8 million for the three months ended
November 30, 2002 increased by $2.0 million (18%) compared to the three months
ended November 30, 2001. The average level of short-term borrowings increased
$249.0 million to finance working capital needs, primarily due to increases in
inventories in the Grain Marketing, Country Operations and Energy segments,
related to higher grain prices and the purchase of Farmland's wholesale energy
business, discussed previously. The average short-term interest rate decreased
0.7% during the three months ended November 30, 2002 compared to the three
months ended November 30, 2001. Long-term debt borrowings increased due to an
additional $175.0 million of private placement debt which was issued in October
2002.

     EQUITY INCOME FROM INVESTMENTS. Equity income from investments of $8.2
million for the three months ended November 30, 2002 increased by $4.2 million
(107%) compared to the three months ended November 30, 2001. The increase was
primarily attributable to increased earnings from Ventura, a Processed Grains
and Foods segment investment. In addition, the Energy segment recorded losses
from the Country Energy investment in the prior fiscal year.

     MINORITY INTERESTS. Minority interests of $5.4 million for the three months
ended November 30, 2002 increased by $2.4 million (79%) compared to the three
months ended November 30, 2001. The change in minority interests was primarily a
result of more profitable operations within the Company's majority-owned
subsidiaries during the three months ended November 30, 2002 compared to the
three months ended November 30, 2001. Substantially all minority interests
relate to National Cooperative Refinery Association (NCRA), an approximately
74.5% owned subsidiary.

     INCOME TAXES. Income tax expense of $5.5 million for the three months ended
November 30, 2002 decreased $0.7 million (12%) compared to the three months
ended November 30, 2001, resulting in effective tax rates of a 12.0% and 13.1%,
respectively. The federal and state statutory rate applied to nonpatronage
business activity was 38.9% for the three months ended November 30, 2002 and
2001. The income taxes and effective tax rate vary each period based upon
profitability and nonpatronage business activity during each of the comparable
periods.


LIQUIDITY AND CAPITAL RESOURCES


CASH FLOWS FROM OPERATIONS

     Operating activities of the Company provided net cash of $2.1 million
during the three months ended November 30, 2002. Net income of $40.4 million and
net non-cash expenses of $23.8 million were partially offset by increased
working capital requirements of $62.1 million. The increase in working capital
requirements is primarily due to higher commodity prices and increased grain
inventory balances.

     Operating activities of the Company provided net cash of $23.7 million
during the three months ended November 30, 2001. Net income of $41.4 million and
net non-cash expenses of $35.5 million were partially offset by increased
working capital requirements of $53.2 million.


CASH FLOWS FROM INVESTING ACTIVITIES

     For the three months ended November 30, 2002 and 2001, the net cash flows
used in the Company's investing activities totaled $31.9 million and $38.9
million, respectively.

     The acquisition of property, plant and equipment comprised the primary use
of cash totaling $40.6 million and $21.8 million for the three months ended
November 30, 2002 and 2001, respectively. For the year ended August 31, 2003 the
Company expects to spend approximately $216.8 million for the


                                       11
<PAGE>


acquisition of property, plant and equipment, which includes $57.0 million of
expenditures for the construction of an oilseed processing facility in Fairmont,
Minnesota. Total expenditures related to the construction of the facility are
projected to be approximately $90.0 million, of which $32.2 million was used for
construction through November 30, 2002. Capital expenditures primarily related
to the Environmental Protection Agency low sulfur fuel regulations required by
2006, are expected to be approximately $387.0 million in total for the Company's
Laurel, Montana and NCRA's McPherson, Kansas refineries over the next three
years, of which $9.5 million has been spent so far at NCRA. It is expected that
approximately 80% of the costs will be incurred at NCRA. The Company expects to
fund the refinery expenditures with a combination of cash, future earnings and
additional borrowings.

     Investments made during the three months ended November 30, 2002 and 2001
totaled $1.4 million and $6.1 million, respectively.

     Acquisitions of intangibles were $0.4 million and $27.5 million for the
three months ended November 30, 2002 and 2001, respectively. During the three
months ended November 30, 2001, the acquisitions of intangibles were primarily
related to the purchase of Farmland's interest in its wholesale energy business,
as previously discussed, and represents trademarks, tradenames and non-compete
agreements.

     During the three months ended November 30, 2002 the changes in notes
receivable resulted in a decrease in cash flows of $11.2 million primarily from
related party notes receivables at NCRA from its minority owners, Growmark, Inc.
and MFA Oil Company. During the three months ended November 30, 2001 the changes
in notes receivable resulted in a decrease of $2.2 million.

     Distributions to minority owners for the three months ended November 30,
2002 and 2001 were $0.5 million and $4.0 million, respectively, and were
primarily related to NCRA.

     Partially offsetting cash outlays in investing activities were proceeds
from the disposition of property, plant and equipment of $4.7 million and $6.1
million for the three months ended November 30, 2002 and 2001, respectively.
Also partially offsetting cash usages were distributions received from joint
ventures and investments totaling $17.0 million and $15.4 million for the three
months ended November 30, 2002 and 2001, respectively.


CASH FLOWS FROM FINANCING ACTIVITIES

     The Company finances its working capital needs through short-term lines of
credit with a syndication of banks. In May 2002, the Company renewed its 364-day
credit facility of $550.0 million committed. In addition to these lines of
credit, the Company has a 364-day credit facility dedicated to NCRA, with a
syndication of banks in the amount of $30.0 million committed. On November 30,
2002, August 31, 2002 and November 30, 2001, the Company had total short-term
indebtedness outstanding on these various facilities and other short-term notes
payable totaling $246.1 million, $332.5 million and $110.8 million,
respectively. The increase in 2002 is primarily due to increases in inventories
in the Grain Marketing, Country Operations and Energy segments, related to
higher grain prices and the purchase of Farmland's wholesale energy business,
discussed previously. In October 2002, $175.0 million received from private
placement proceeds was used to pay down the Company's 364-day credit facility.

     In June 1998, the Company established a five-year revolving credit facility
with a syndication of banks, with $200.0 million committed. The Company had
outstanding balances on this facility of $75.0 million on November 30, 2002,
August 31, 2002 and November 30, 2001, respectively.

     The Company has financed its long-term capital needs, primarily for the
acquisition of property, plant and equipment, with long-term agreements through
the banks for cooperatives. In June 1998, the Company established a long-term
credit agreement through the cooperative banks. This facility committed $200.0
million of long-term borrowing capacity to the Company, with repayments through
fiscal year 2009. The amount outstanding on this credit facility was $142.7
million, $144.3 million and $149.2 million on November 30, 2002, August 31, 2002
and November 30, 2001, respectively. Repayments of $1.6 million were made on
this facility during each of the three months ended November 30, 2002 and 2001.

     Also in June 1998, the Company issued a private placement with several
insurance companies for long-term debt in the amount of $225.0 million.
Repayments will be made in equal annual installments of $37.5 million each in
the years 2008 through 2013.


                                       12
<PAGE>


     In January 2001, the Company entered into a note purchase and private shelf
agreement with Prudential Insurance Company. The long-term note in the amount of
$25.0 million will be repaid in equal annual installments of approximately $3.6
million, in the years 2005 through 2011. A subsequent note for $55.0 million was
issued in March 2001, related to the private shelf facility. The $55.0 million
note will be repaid in equal annual installments of approximately $7.9 million,
in the years 2005 through 2011.

     In October 2002, the Company entered into a private placement with several
insurance companies for long-term debt in the amount of $175.0 million which was
layered into two series. The first series of $115.0 million has an interest rate
of 4.96% and will be repaid in equal semi-annual installments of approximately
$8.8 million during the years 2007 through 2013. The second series of $60.0
million has an interest rate of 5.60% and will be repaid in equal semi-annual
installments of approximately $4.6 million during fiscal years 2012 through
2018.

     The Company, through NCRA, had revolving term loans outstanding of $17.3
million, $18.0 million and $20.3 million for the periods ended November 30,
2002, August 31, 2002 and November 30, 2001, respectively. Repayments of $0.8
million were made during each of the three months ended November 30, 2002 and
2001.

     On November 30, 2002, the Company had total long-term debt outstanding of
$743.2 million, of which $251.4 million was bank financing, $480.0 million was
private placement proceeds and $11.8 million was industrial development revenue
bonds and other notes and contracts payable. The aggregate amount of long-term
debt payable presented in Management's Discussion and Analysis in the Company's
Annual Report on Form 10-K for the year ended August 31, 2002 has not materially
changed during the three months ended November 30, 2002 other than for the
$175.0 million of private placement debt discussed previously, of which
repayments will not start until 2007. The Company is in compliance with all debt
covenants and restrictions as of November 30, 2002.

     During the three months ended November 30, 2002 and 2001, the Company
borrowed on a long-term basis $175.0 million and $30.0 million, respectively,
and during the same periods repaid long-term debt of $3.9 million and $5.8
million, respectively.

     In accordance with the bylaws and by action of the Board of Directors,
annual net earnings from patronage sources are distributed to consenting patrons
following the close of each fiscal year. Effective September 1, 2000, patronage
refunds are calculated based on earnings for financial statement purposes rather
than based on amounts reportable for federal income tax purposes as had been the
Company's practice prior to this date. This change was authorized through a
bylaw amendment at the Company's annual meeting on December 1, 2000. The
patronage earnings from the fiscal year ended August 31, 2002 are expected to be
distributed during the second quarter of fiscal year 2003. The cash portion of
this distribution, deemed by the Board of Directors to be 30%, is expected to be
approximately $26.2 million and is classified as a current liability on the
November 30, 2002 and August 31, 2002 consolidated balance sheets.

     The current equity redemption policy, as authorized by the Board of
Directors, allows for the redemption of capital equity certificates held by
inactive direct members and patrons and active direct members and patrons at age
72 or death that were of age 61 or older on June 1, 1998. For active direct
members and patrons who were of age 60 or younger on June 1, 1998, and member
cooperatives, equities older than 10 years will be redeemed annually based on a
prorata formula where the numerator is dollars available for such purpose as
determined by the Board of Directors, and the denominator is the sum of the
patronage certificates older than 10 years held by such eligible members and
patrons. Total redemptions related to the year ended August 31, 2002, to be
distributed in fiscal year 2003, are expected to be approximately $30.3 million,
of which $2.4 million was redeemed during the three months ended November 30,
2002. During the three months ended November 30, 2001 the Company redeemed $1.8
million of equity.

     As of November 30, 2002 the Company had $9.5 million (9,454,874 shares) of
8% Preferred Stock outstanding, and expenses related to the issuance of the
shares were $3.5 million. Sales of the preferred shares have been suspended, as
the Company is in the process of registering a new offering as noted below.


                                       13
<PAGE>


     The Board of Directors authorized the sale and issuance of up to 2,875,000
shares of 8% Cumulative Redeemable Preferred Stock at a price of $25.00 per
share. The Company filed a registration statement on Form S-2 on December 17,
2002 with the Securities and Exchange Commission registering the preferred
shares, however, the registration statement is not yet effective.


OFF BALANCE SHEET FINANCING ARRANGEMENTS


LEASE COMMITMENTS:

     The Company's lease commitments presented in Management's Discussion and
Analysis in the Company's Annual Report on Form 10-K for the year ended August
31, 2002 have not materially changed during the three months ended November 30,
2002.


GUARANTEES:

     The Company is a guarantor for lines of credit for related companies
totaling up to $86.2 million, of which $39.0 million was outstanding as of
November 30, 2002. The Company's bank covenants allow maximum guarantees of
$100.0 million. All outstanding loans with respective creditors are current as
of November 30, 2002.


DEBT:

     There is no material off balance sheet debt.


CRITICAL ACCOUNTING POLICIES

     The Company's Critical Accounting Policies are presented in the Company's
Annual Report on Form 10-K for the year ended August 31, 2002.


EFFECT OF INFLATION AND FOREIGN CURRENCY TRANSACTIONS

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


RECENT ACCOUNTING PRONOUNCEMENTS

     The Financial Accounting Standards Board (FASB) issued SFAS No. 143,
"Accounting for Asset Retirement Obligations" which addresses financial
accounting and reporting for obligations associated with the retirement of
tangible long-lived assets and the associated asset retirement costs. SFAS No.
143 is effective for financial statements issued for fiscal years beginning
after June 15, 2002. The Company is in the process of finalizing its analysis of
adopting this standard. The Company's Energy segment operates oil refineries and
related pipelines for which the Company would be subject to Asset Retirement
Obligations (ARO) if such assets were to be dismantled. The Company, however,
expects to operate its refineries and related pipelines indefinitely. Since the
time period to dismantle these assets is indeterminate, a corresponding ARO is
not currently estimable and therefore has not been recorded. The Company
continues to assess whether any other ARO's exist related to its remaining
operations, however, based on available information to date, no other ARO's have
been identified. As such, the Company believes that the effects of adopting this
standard do not have a material effect on the Company.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     For the period ended November 30, 2002 the Company did not experience any
adverse changes in market risk exposures that materially affect the quantitative
and qualitative disclosures presented in the Company's Annual Report on Form
10-K for the year ended August 31, 2002.


ITEM 4. CONTROLS AND PROCEDURES

     The Company's Chief Executive Officer and Chief Financial Officer have
concluded, based on their evaluation within 90 days of the filing date of this
report, that the Company's disclosure controls and procedures are adequately
designed to ensure that information required to be disclosed by the Company


                                       14
<PAGE>


in the reports that it files or submits under the Securities and Exchange Act of
1934, as amended, is recorded, processed, summarized and reported, within the
time periods specified in applicable rules and forms. There have not been any
significant changes in the Company's internal controls or in other factors that
could significantly affect those controls, subsequent to the date of such
evaluation, including any corrective actions taken with regard to significant
deficiencies and material weaknesses.


                          PART II. OTHER INFORMATION


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

     At the Company's Annual Meeting held on December 5-6, 2002, the following
directors were re-elected to the Board of Directors: Bruce Anderson, Curt
Eischens, Robert Grabarski, Jerry Hasnedl, Glen Keppy and Richard Owen. The
following director was newly elected to the Board of Directors, replacing Steven
Burnet: David Bielenberg. The following directors' terms of office continued
after the meeting: Robert Bass, Dennis Carlson, Robert Elliott, James Kile,
Randy Knecht, Leonard Larsen, Duane Stenzel, Michael Toelle, Merlin Van
Walleghen and Elroy Webster.

     At the same Annual Meeting, Members adopted a resolution amending Articles
II and III of the Company's Bylaws to eliminate producer-members from the vote
calculation and to instead base the vote calculation on sales and equity,
beginning with votes occurring in 2003. A copy of the amended Bylaws is attached
as Exhibit 3.2.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits


EXHIBIT     DESCRIPTION
- -------     -----------
  3.1       Articles of Incorporation of the Company, as amended

  3.2       Bylaws of the Company, as amended

 99.1       Cautionary Statement

 99.2       Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
            Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 99.3       Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
            Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K

    None.


                                       15
<PAGE>


                                   SIGNATURES

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



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





              DATE                 SIGNATURE
              ----                 ---------

         January 9, 2003           /s/ JOHN SCHMITZ
   --------------------------      -------------------------------------
            (Date)                 John Schmitz
                                   Executive Vice President and
                                   Chief Financial Officer


                                       16
<PAGE>


                            SECTION 302 CERTIFICATION

I, John D. Johnson, certify that:

   1. I have reviewed this quarterly report on Form 10-Q of Cenex Harvest States
      Cooperatives;

   2. Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report.

   3. Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report;

   4. The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
      have:

         a. designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

         b. evaluated the effectiveness of the registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

         c. presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on
            our evaluation as of the Evaluation Date;

   5. The registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing the
      equivalent function):

         a. all significant deficiencies in the design or operation of internal
            controls which could adversely affect the registrant's ability to
            record, process, summarize and report financial data and have
            identified for the registrant's auditors any material weaknesses in
            internal controls; and

         b. any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

   6. The registrant's other certifying officers and I have indicated in this
      quarterly report whether there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.

      Date: January 9, 2003

                                        /s/ JOHN D. JOHNSON
                                        -------------------------------------
                                        John D. Johnson
                                        President and Chief Executive Officer


                                       17
<PAGE>


                            SECTION 302 CERTIFICATION

I, John Schmitz, certify that:

   1. I have reviewed this quarterly report on Form 10-Q of Cenex Harvest States
      Cooperatives;

   2. Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report.

   3. Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report;

   4. The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
      have:

         a. designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

         b. evaluated the effectiveness of the registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

         c. presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on
            our evaluation as of the Evaluation Date;

   5. The registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing the
      equivalent function):

         a. all significant deficiencies in the design or operation of internal
            controls which could adversely affect the registrant's ability to
            record, process, summarize and report financial data and have
            identified for the registrant's auditors any material weaknesses in
            internal controls; and

         b. any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

   6. The registrant's other certifying officers and I have indicated in this
      quarterly report whether there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.

      Date: January 9, 2003

                                        /s/ JOHN SCHMITZ
                                        -------------------------------------
                                        John Schmitz
                                        Executive Vice President and
                                        Chief Financial Officer


                                       18

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>3
<FILENAME>cenex026059_ex3-1.txt
<DESCRIPTION>ARTICLES OF INCORPORATION AND AMENDMENTS
<TEXT>
                            ARTICLES OF INCORPORATION
                                       OF
                        CENEX HARVEST STATES COOPERATIVES

                                   ARTICLE I.
                      NAME AND PRINCIPAL PLACE OF BUSINESS

         SECTION 1. The name of this cooperative corporation shall be Cenex
Harvest States Cooperatives.

         SECTION 2. The principal place of business for this cooperative shall
be in the City of Inver Grove Heights, County of Dakota, State of Minnesota. The
registered office address of this cooperative shall be 5500 Cenex Drive, Inver
Grove Heights, Minnesota 55077.


                                   ARTICLE II.
                               PURPOSES AND POWERS

         SECTION 1. This cooperative is organized for the following purposes:

                  (a) to receive, handle, store, warehouse, manufacture,
process, market, purchase, sell and otherwise deal in the agricultural products
of its members, nonmember patrons and others, including without limitation the
processing and exporting of grain and other agricultural products;

                  (b) to manufacture, buy, sell, market, store, warehouse,
acquire, transport, distribute, process, produce, drill, mine, refine, and
otherwise deal in and procure for its members, nonmember patrons and others,
petroleum products, fuel, oil, grease, automotive parts and accessories,
supplies, services, minerals, feed, seed, fertilizer, machinery, equipment,
supplies, and other goods, products, and merchandise, primarily for use upon
farms or by farmers, or used or useful in the business of farming, recognizing
that they may also be incidentally useful to other patrons; and

                  (c) to engage in any activity connected with or related to any
such purposes, and to engage in any other lawful purpose.

To this end, the business and activities of this cooperative shall be conducted
on a cooperative basis, as provided in the Bylaws of this cooperative.

         SECTION 2. In addition to other powers, this cooperative may perform
every act and thing necessary, proper, incidental or convenient to the conduct
of this cooperative's business or the accomplishment of the purposes of this
cooperative, and this cooperative shall have all powers, privileges and rights
conferred upon this cooperative by the laws of the State of


<PAGE>


Minnesota under which it was organized and acts amendatory thereof or
supplemental thereto, and by the laws of the United States of America. Without
limiting the foregoing, this cooperative shall have the power:

                  (a) To borrow money from and to loan money to its members,
nonmember patrons and others; to guarantee or stand as surety on loans made to
its members, nonmember patrons and others by lenders; to issue bonds, deeds of
trust, debentures, notes, and other obligations, and to secure the same by
pledge, mortgage, or trust deed on any property of this cooperative; to draw,
make, accept, endorse, guarantee, execute, and issue promissory notes, bills of
exchange, drafts, warrants, warehouse receipts, certificates and other
obligations, and negotiable or transferable instruments for any purpose deemed
necessary to further the objects for which this cooperative is formed;

                  (b) To acquire, purchase, hold, lease, encumber, sell,
exchange, and convey such real estate, buildings, and personal property as the
business of this cooperative may require;

                  (c) To purchase, acquire, own, mortgage, pledge, sell, assign,
transfer or otherwise dispose of, equity or debt securities created by any other
corporation or other legal entity wherever organized, with all the rights,
powers and privileges of ownership thereof;

                  (d) To borrow money, to incur obligations and to assume
obligations of any other person, individual, corporation or other legal entity,
in any amount; and to make contracts of hire;

                  (e) To issue equity and debt securities, whether certificated
or uncertificated, as further provided in Article IV hereof and in the Bylaws of
this cooperative;

                  (f) To join with other cooperatives, corporations,
partnerships, associations or other entities to form district, state, or
national marketing, manufacturing, purchasing and service organizations, and
other organizations engaged in the general purposes for which this cooperative
is formed, and to purchase, acquire, and hold the capital stock or other equity
interest and the notes, bonds and other obligations of such organizations;

                  (g) To have one or more offices, and to conduct any or all of
its operations and business, and promote its purposes within and without the
state of Minnesota without restriction as to places or amounts; and

                  (h) To carry on any other business in connection with the
foregoing and to engage in any of said activities on its own account or as agent
for others, or alone or in association with others; and to employ agents,
consultants and nominees to perform any or all of the powers herein enumerated.

The powers, privileges and rights specified herein shall, except where otherwise
expressed, be in no way limited or restricted by reference to or inference from
the terms of any other provision of these Articles of Incorporation. The
enumeration of powers, privileges and rights herein shall not


                                       2
<PAGE>


be held to limit or restrict in any manner the general powers, privileges and
rights conferred upon this cooperative by the laws of the State of Minnesota.

         SECTION 3. This cooperative shall not deal in the products, supplies
and services with or for nonmembers in an amount greater in value than the total
amount of such business transacted by it with or for members. All business
transacted by this cooperative for or on behalf of the United States or any
agency or instrumentality thereof shall be disregarded in determining the volume
of member and nonmember business transacted by this cooperative.


                                  ARTICLE III.
                                    DURATION

         This cooperative shall have perpetual existence.


                                   ARTICLE IV.
                  MEMBERSHIP AND AUTHORIZED CAPITAL INSTRUMENTS

         SECTION 1. This cooperative is organized without capital stock on a
membership basis.

         SECTION 2. Membership in this cooperative shall be restricted to
associations of producers of agricultural products which are organized and
operating so as to adhere to the provisions of the Agricultural Marketing Act,
12 U.S.C. ss. 1141j(a), as amended, and the Capper-Volstead Act, 7 U.S.C. ss.ss.
291-292, as amended, and to certain producers of agricultural products, which or
who in either case meet the conditions of membership as provided in this Article
IV and the Bylaws of this cooperative. For purposes of this Article IV,
"producers of agricultural products" shall mean persons (including individuals
and joint ventures, corporations, partnerships, limited liability companies,
limited liability partnerships, unincorporated associations or other legal
entities owned or controlled by individual farmers, ranchers or their family
groups) that are engaged in the production of one or more agricultural products,
including tenants of land used for the production of such products and lessors
of such land that receive as rent therefor any part of the product of such land.

The Board of Directors of this cooperative may establish a minimum amount of
business (as a percentage of purchases, in dollar volume, or otherwise) that
cooperative associations must transact with or through this cooperative to be
eligible for membership in this cooperative, and also may adopt such additional
conditions, qualifications, methods of acceptance, duties, rights and privileges
of membership in this cooperative as it may from time to time deem advisable.
The Board of Directors of this cooperative may refuse membership or provide
conditional membership to an applicant in its sole discretion. A membership in
this cooperative is transferable only with the consent and approval of the Board
of Directors.

Producers of agricultural products who transact business with the CSM locations
of this cooperative (a.k.a. "Cenex Supply and Marketing division" locations)
shall have no voting rights


                                       3
<PAGE>


as a result of such transaction but may be eligible to conduct business with
this cooperative at such locations on a patronage basis, as provided in Section
5 of this Article IV.

         SECTION 3. This cooperative shall have three (3) classes of members,
which are hereby designated as the "Cooperative Association Member" class, the
"Defined Member" class, and the "Individual Member" class, as more particularly
described in the Bylaws of this cooperative. This cooperative shall have such
additional classes of members, with such designations, and such relative rights,
preferences, privileges and limitations, as provided in the Bylaws of this
cooperative.

         SECTION 4. Voting rights in this cooperative arise solely by virtue of
membership in this cooperative, and only members of this cooperative shall have
voting power in this cooperative. Each member shall have a minimum of one (1)
vote in the affairs of the cooperative, and may otherwise be entitled to
additional votes as further authorized in the Bylaws. This cooperative is a
cooperative described in Section 308A.641 of Minnesota Statutes.

         SECTION 5. Associations of producers of agricultural products and
producers of agricultural products described in the first paragraph of Section 2
of this Article IV who (i) patronize this cooperative under conditions
established by the Board of Directors of this cooperative or as provided in the
Bylaws of this cooperative but (ii) who are otherwise not eligible to be members
of this cooperative may nevertheless conduct business with this cooperative on a
patronage basis as a nonmember patron, as more particularly provided in the
Bylaws of this cooperative. Such nonmember patrons are not members of this
cooperative and are not entitled to voting rights or other privileges incident
to membership in this cooperative.

         SECTION 6. In addition to and not by way of limitation of the powers
granted to the Board of Directors of this cooperative by the laws of the State
of Minnesota or elsewhere in these Articles or the Bylaws of this cooperative,
the Board of Directors shall have the following authority and powers, which may
be exercised from time to time at its sole discretion:

                  (a) The Board of Directors by resolution may establish and
organize separate defined business units of this cooperative ("Defined Business
Unit") with respect to the operations of this cooperative, on such terms and
conditions and having such rights, preferences, privileges and limitations as
the Board of Directors deems appropriate, as may be further provided in the
Bylaws of this cooperative. The Board of Directors may sell, liquidate, dissolve
or wind up any Defined Business Unit, in which event the assets of such Defined
Business Unit shall be used first to redeem the Equity Participation Units (as
defined below) and Preferred Capital Certificates (as defined in the Bylaws of
this cooperative) of the Defined Business Unit on a pro rata basis;

                  (b) The Board of Directors by resolution may establish and
issue one or more than one class or series of equity participation units
("Equity Participation Units") in connection with each Defined Business Unit,
may set forth the designation of classes or series of Equity Participation
Units, and may fix the relative rights, preferences, privileges and limitations
of each class or series of Equity Participation Units, as may be further
provided in the Bylaws of this


                                       4
<PAGE>


cooperative. Equity Participation Units shall not entitle the holder to voting
rights and may be issued to and held only by Defined Members of this
cooperative. Equity Participation Units may only be sold or transferred with the
approval of the Board of Directors of this cooperative; and

                  (c) The Board of Directors by resolution may establish and
issue to any person (whether member, nonmember patron, or other person) one or
more than one class or series of debt and/or equity instruments, may set forth
the designation of classes or series of such debt and/or equity instruments, and
may fix the relative rights, preferences, privileges and limitations of each
class or series of debt and/or equity instruments, including, without
limitation, one or more than one class or series of PREFERRED EQUITY
instruments. Dividends may be paid on the equity capital of this cooperative
which is evidenced by an equity instrument established pursuant to this Section
6(c); provided that dividends on such equity capital may not exceed eight
percent (8%) per annum. Debt or equity instruments established pursuant to this
Section 6(c) shall not entitle the holder to voting rights. Unless otherwise
expressly authorized by the Board of Directors, debt or equity instruments
established and issued pursuant to this Section 6(c) may only be sold or
transferred with the approval of the Board of Directors of this cooperative.


                                   ARTICLE V.
                               NET INCOME AND LOSS

         The net income of this cooperative in excess of dividends on equity
capital and additions to reserves shall be distributed to members and nonmember
patrons annually or more often on the basis of patronage and the records of this
cooperative may show the interest of members and equity holders in the reserves.
Net income may be accounted for and distributed on the basis of allocation units
that may be functional, divisional, departmental, geographic, or otherwise. Net
income may be distributed in cash, allocated patronage equities (including
without limitation Patrons' Equities), revolving fund certificates, securities
of this cooperative, other securities, or any combination thereof. Any such
allocated equity shall be redeemable only at the option of the Board of
Directors. The net loss of an allocation unit or allocation units may be offset
against the net income of other allocation units to the extent permitted by
Minnesota Statutes Section 308A.705, Subdivision 1. The net income or net loss
of this cooperative or any allocation unit may be determined by including the
cooperative's proportionate share of the net income or loss of other entities in
which the cooperative owns an equity interest. The foregoing provisions of this
Article V shall be implemented as more particularly provided in the Bylaws of
this cooperative.


                                   ARTICLE VI.
                                   FIRST LIEN

         This cooperative shall have a first lien on all certificates of equity,
patronage capital and other equity interests standing on its books (including
any earned but not allocated capital equity to be issued to members as patronage
refunds), for all indebtedness of the respective holders or owners thereof to
this cooperative. This cooperative shall also have the right, exercisable at the


                                       5
<PAGE>


option of the Board of Directors, to set off such indebtedness against the face
amount of such equity interests; provided, however, that nothing contained
herein shall give the holder of such equity interests any right to have such set
off made.


                                  ARTICLE VII.
                     CERTAIN CORPORATE ACTIONS; DISSOLUTION

         SECTION 1. A merger, consolidation, liquidation or dissolution
involving this cooperative, or the sale of all or substantially all of the
assets and property of this cooperative, may be authorized by the members in
accordance with the Minnesota Cooperative Law, Minnesota Statutes Chapter 308A,
upon the approval of two-thirds (2/3) of the votes cast in person or by mail
vote at an annual or special meeting of the members called for such purpose;
provided, however, in the event the Board of Directors of this cooperative
declares, by resolution adopted by a majority of the Board of Directors present
and voting, that the action involves or is related to a hostile takeover, then
the action may be adopted only upon the approval of eighty percent (80%) of the
total voting power of the members of this cooperative, whether or not present
and voting on the action. Notwithstanding Article X of these Articles of
Incorporation, this Article VII may be amended only upon the approval of eighty
percent (80%) of the total voting power of the members of this cooperative,
whether or not present and voting on the amendment.

         SECTION 2. In the event of any dissolution, liquidation or winding up
of this cooperative, whether voluntary or involuntary, all debts and liabilities
of this cooperative shall be paid first according to their respective
priorities. As more particularly provided in the Bylaws, the remaining assets
shall then be paid to the holders of equity capital to the extent of their
interests therein and any excess shall be paid to the patrons of this
cooperative on the basis of their past patronage. The Bylaws may provide more
particularly for the allocation among the members and nonmember patrons of this
cooperative of the consideration received in any merger or consolidation to
which this cooperative is a party.


                                  ARTICLE VIII.
                               BOARD OF DIRECTORS

         SECTION 1. The business and affairs of this cooperative shall be
managed by a Board of Directors of not less than seventeen (17) directors, as
further provided in the Bylaws of this cooperative. Directors shall be elected
by the members at the annual meeting of the members of this cooperative in such
manner and for such terms as the Bylaws of this cooperative may prescribe.

         SECTION 2. The names and addresses of the directors of the transition
Board of Directors of this cooperative, who shall serve for such terms and in
such manner as the Bylaws of this cooperative shall prescribe, are as follows:


                                       6
<PAGE>


Bruce Anderson                              Bob Bass
13500 - 42nd Street NE                      S 2276 Highway K
Glenburn, North Dakota  58740-9564          Reedsburg, Wisconsin  53959

Steven Burnet                               Steve Carney
94699 Monkland Lane                         P.O. Box 1122
Moro, Oregon  97039-9705                    Scobey, Montana 59263-1122

Curt Eischens                               Robert Elliott
RR 1, Box 59                                324 Hillcrest
Minneota, Minnesota 56264                   Alliance, Nebraska  69301

Edward Ellison                              Sheldon Haaland
RR 1, Box 46                                RR 2, Box 55
Elbow Lake, Minnesota 56531-9740            Hanley Falls, Minnesota  56245-973

Fred Harris                                 Jerry Hasnedl
1004 Powell Street                          Route 1, Box 39
Grandview, Washington 98930                 St. Hilaire, Minnesota  56754

Edward Hereford                             Douglas Johnson
1902 Cashup Flat Road                       HC 89, Box 5240
Thornton, Washington  99176-9710            Sidney, Montana  59270

James Kile                                  Gerald Kuster
P.O. Box 97                                 RR 1, Box 46
St. John, Washington 99171                  Reynolds, North Dakota  58275-9742

Leonard Larsen                              Tyrone Moos
5128 11th Avenue North                      HCR 1, Box 1
Granville, North Dakota  58741-9595         Philip, South Dakota  57567-9601  1

Gaylord Olson                               Duane Risan
RR 1                                        RR 1, Box 4
Buxton, North Dakota  58218                 Parshall, North Dakota  58770-9703

Denis Schilmoeller                          Duane Stenzel
4758 - 450th Street                         RR 2, Box 173
Granville, Iowa 51022                       Wells, Minnestoa  56097

Michael Toelle                              Richard Traphagen
RR 1, Box 190                               39555 124th Street
Browns Valley, Minnesota 56219              Columbia, South Dakota  57433


                                       7
<PAGE>


Russell Twedt                               Merlin Van Walleghen
PO Box 296                                  24106 408th Avenue
Rudyard, Montana 59540-0296                 Letcher, South Dakota  57359-6021

Elroy Webster                               Arnold Weisenbeck
Route 2, Box 123                            6602 Highway 25
Nicollet, Minnesota 56074                   Durand, Wisconsin  54736

William Zarak
3711 124th Avenue Southwest
South Heart, North Dakota 58655-9767


                                  ARTICLE IX.
                        LIMITATION OF DIRECTOR LIABILITY

         No director of this cooperative shall be personally liable to this
cooperative or its members for monetary damages for breach of fiduciary duty as
a director, except for liability:

                   (a) for a breach of the director's duty of loyalty to this
cooperative or its members;

                   (b) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law;

                   (c) for a transaction from which the director derived an
improper personal benefit; or

                   (d) for an act or omission occurring prior to the date when
the provisions of this Article (or predecessor thereto) became effective.

It is the intention of the members of this cooperative to eliminate or limit the
personal liability of the directors of this cooperative to the greatest extent
permitted under Minnesota law. If amendments to the Minnesota Statutes are
passed after the effective date of this Article which authorize cooperatives to
act to further limit or eliminate the personal liability of directors, then the
liability of the directors of this cooperative shall be limited or eliminated to
the greatest extent permitted by the Minnesota Statutes, as so amended. Any
repeal or modification of this Article by the members of this cooperative shall
not adversely affect any right of or any protection available to a director of
this cooperative which is in existence at the time of such repeal or
modification.


                                       8
<PAGE>


                                   ARTICLE X.
                                    AMENDMENT

         These Articles of Incorporation may be amended in accordance with the
Minnesota Cooperative Law, Minnesota Statutes Chapter 308A, upon the approval of
a majority of the votes cast in person or by mail vote at an annual or special
meeting of the members called for such purpose; provided, however, in the event
the Board of Directors of this cooperative declares, by resolution adopted by a
majority of the Board of Directors present and voting, that the amendment
involves or is related to a hostile takeover, then the amendment may be adopted
only upon the approval of eighty percent (80%) of the total voting power of the
members of this cooperative, whether or not present and voting on the amendment.





                                       9
<PAGE>


                          ARTICLES OF AMENDMENT TO THE
                            ARTICLES OF INCORPORATION
                                       OF
                        CENEX HARVEST STATES COOPERATIVES

         John Schmitz and Nanci L. Lilja, Executive Vice President and Assistant
Secretary, respectively, of Cenex Harvest States Cooperatives, a cooperative
association existing under Section 308A of Minnesota Statutes, as amended,
hereby certify that:

         On September 7, 2000 a majority of the Board of Directors of Cenex
Harvest States Cooperatives adopted resolutions stating the full texts of
proposed amendments to Article IV, Section 6(c) and Article VIII of the Articles
of Incorporation of this Association.

         On November 1, 2000, notices were mailed to all members of this
Association containing an exact copy of the resolutions to be voted upon at the
Annual Meeting of Members, and designating the time and place of that meeting to
be held on November 30 and December 1, 2000 in Minneapolis, Minnesota.

         At that Annual Meeting of Members, on December 1, 2000, a quorum being
present, a majority of the members adopted resolutions amending Article IV,
Section 6(c) and Article VIII of the Articles of Incorporation of this
Association to read as follows:

                            ARTICLE IV, SECTION 6(C)

                  "(c) The Board of Directors by resolution may establish and
         issue to any person (whether member, nonmember patron, or other person)
         one or more than one class or series of debt and/or equity instruments,
         may set forth the designation of classes or series of such debt and/or
         equity instruments, and may fix the relative rights, preferences,
         privileges and limitations of each class or series of debt and/or
         equity instruments, including, without limitation, one or more than one
         class or series of PREFERRED EQUITY instruments. Dividends may be paid
         on the equity capital of this cooperative which is evidenced by an
         equity instrument established pursuant to this Section 6(c); provided
         that dividends on such equity capital may not exceed eight percent (8%)
         per annum. Dividends may be cumulative. Debt or equity instruments
         established pursuant to this Section 6(c) shall not entitle the holder
         to voting rights. Unless otherwise expressly authorized by the Board of
         Directors, debt or equity instruments established and issued pursuant
         to this Section 6(c) may only be sold or transferred with the approval
         of the Board of Directors of this cooperative."


<PAGE>


                                  ARTICLE VIII

                  "The business and affairs of this cooperative shall be managed
         by a Board of Directors of not less than seventeen (17) directors, as
         further provided in the Bylaws of this cooperative. Directors shall be
         elected by the members at the annual meeting of the members of this
         cooperative in such manner and for such terms as the Bylaws of this
         cooperative may prescribe."


Date:    December 20, 2000


                                               CENEX HARVEST STATES COOPERATIVES



                                               By:  /s/ John Schmitz
                                                    ----------------------------

                                                    John Schmitz
                                                    Executive Vice President


                                               By:  /s/ Nanci L. Lilja
                                                    ----------------------------
                                                    Nanci L. Lilja
                                                    Assistant Secretary


STATE OF MINNESOTA )
                   ) ss.
COUNTY OF DAKOTA   )


         The foregoing was acknowledged before me this 20th day of December,
2000 by John Schmitz and Nanci L. Lilja, the Executive Vice President and
Assistant Secretary, respectively, of Cenex Harvest States Cooperatives, a
cooperative association under the laws of the State of Minnesota, on behalf of
the association.



                                                    /S/ Esther I. Longseth
                                                    ----------------------------
                                                    Notary Public

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>4
<FILENAME>cenex_ex3-2.htm
<DESCRIPTION>BYLAWS
<TEXT>
<HTML>
<HEAD>
<TITLE>Cenex Harvest States - Exhibit 13</TITLE>
</HEAD>
<BODY>

<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=RIGHT><font size=2>EXHIBIT 3.2</font></H1>

<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>BYLAWS</font></H1>

<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>OF</font></H1>

<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>CENEX HARVEST STATES COOPERATIVES</font></H1>

<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>(Effective December 7, 2002)</font></H1>

<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>ARTICLE I.<br>
<U>Membership</U></font></H1>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 1 &#151;
<U>Qualifications</U>.</B> Producers of agricultural products and associations
of producers of agricultural products who are eligible under Article IV, Section
2 of the Articles of Incorporation of this cooperative and who patronize this
cooperative under conditions established by the Board of Directors of this
cooperative or as elsewhere provided in these Bylaws may, upon approval or
pursuant to the authorization of the Board of Directors, become members of this
cooperative. Each transaction between this cooperative and each member shall be
subject to and shall include as a part of its terms each provision of the
Articles of Incorporation of this cooperative and these Bylaws, whether or not
the same be expressly referred to in said transaction.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 2 &#151; <U>Classes of
Members</U>.</B> In accordance with the Articles of Incorporation, there shall
be three classes of members of this cooperative, which are hereby designated as
the &#147;Cooperative Association&#148; class, &#147;Individual Member&#148;
class and the &#147;Defined Member&#148; class. Membership in a particular class
of members shall be determined as follows:</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <B><U>Cooperative Association Members</U>.</B> All members which are cooperative associations shall
belong to and be part of the Cooperative Association class of members and shall become known and be designated as
&#147;Cooperative Association Members.&#148;</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <B><U>Individual Members</U>.</B> All members who are individuals shall belong to and be part of
the Individual Member class of members, and shall become known and be designated as &#147;Individual Members;&#148; and</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <B><U>Defined Members</U>.</B> All members who are holders of Equity Participation Units (as
described in the Articles of Incorporation of this cooperative) shall belong to and be part of the Defined Member
class of members, and shall become known and be designated as &#147;Defined Members.&#148;</font></p>


<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 3 &#151; <U>Defined Members and Defined Business Units</U>.</B></font></p>


<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <B><U>Defined Business
Units</U>.</B> Each Defined Member holding Equity Participation Units in a
Defined Business Unit (as such unit is established in the Articles of
Incorporation) shall be eligible to receive patronage distributions from the
Defined Business Unit as a separate allocation unit.</font></p>

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<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <B><U>Delivery Rights and
Obligations</U>.</B> The delivery rights and obligations of each Defined Member
shall be as specified in the member marketing agreement between such Defined
Member and this cooperative. Each such member marketing agreement shall at all
times be subject to modification by this cooperative upon written notice to the
Defined Member in question, provided that such modification is first approved by
Defined Members holding a majority of the voting power of the Defined Business
Unit in question who are present and voting at a meeting of Defined Members
holding Equity Participation Units in such Defined Business Unit, where the
notice of such meeting contains a statement of the proposed modification.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <B><U>Defined Member
Boards</U>.</B> Each Defined Business Unit shall be represented by a Defined
Member Board. The initial members of each Defined Member Board shall be selected
by the Board of Directors of this cooperative. Subsequently, the members of the
Defined Business Unit in question shall be entitled to elect, on a one Defined
Member/one vote basis, the members of the Defined Member Board. Each Defined
Member Board shall be made up of at least five (5) but not more than ten (10)
individuals. Each member of a Defined Member Board must be (i) either a Defined
Member or a representative of a Defined Member, and (ii) in good standing as a
Defined Member and in full compliance with delivery obligations in and to such
member&#146;s Defined Business Unit; provided, however, that no employee of this
cooperative may serve as a member of any Defined Member Board. Each Defined
Member Board shall be headed by a Chairperson selected by and from the Board of
Directors of this cooperative. Each Defined Member Board shall meet at least
quarterly (one of which meetings may be its annual meeting), and shall be
charged with reflecting Defined Member concerns and providing a direct
communication mechanism to the Board of Directors of this cooperative.
Individuals serving on a Defined Member Board shall serve for staggered terms of
three (3) years and until their successors are elected and have qualified.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 4 &#151; <U>Termination
of Membership</U>.</B> If the Board of Directors determines that a member has
become ineligible for membership in this cooperative, such member shall have no
rights or privileges on account of such membership in the management of the
affairs of this cooperative, and the membership of such member may be terminated
by the Board of Directors. Membership may, at the discretion of the Board of
Directors, be terminated whenever the Board of Directors by resolution finds
that a member has:</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) intentionally or repeatedly violated any provision of the Articles of Incorporation, Bylaws or Board policies of this cooperative; or</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) failed to patronize this cooperative for a period of twelve (12) consecutive months; or</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) breached any contract with this cooperative; or</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) willfully obstructed any lawful purpose or activity of this cooperative; or</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">2</FONT></P>
<HR SIZE="1" COLOR=BLACK NOSHADE>





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<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) remained indebted to this cooperative for ninety (90) days after such indebtedness becomes payable; or</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) died or legally dissolved;</font></p>



<!-- MARKER FORMAT-SHEET="Para Flush In 0" -->
<p><font size=2>provided, however, that termination of any member&#146;s
membership as a result of any of the circumstances listed in paragraphs (a)
through (f) above shall not be deemed to revoke such member&#146;s consent
contained in Article VIII hereof but rather such member may only revoke such
consent in writing. Upon termination of membership said member shall thereafter
have no voting rights in this cooperative. A terminated member&#146;s patronage
credits shall be revolved or retired in the same manner as the patronage credits
of members. No action taken hereunder shall impair the obligations or
liabilities of either party under any contract with the cooperative which may be
terminated only as provided therein.</font></p>

<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>ARTICLE II.<br>
<U>Meetings of Members</U></font></H1>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 1 &#151; <U>Annual and
Special Meetings</U>.</B> The annual meeting of the members of this cooperative
shall be held at a time and place fixed by the Board of Directors. Special
meetings of the members of this cooperative may be called by the Board of
Directors or upon the written petition of twenty percent (20%) of the members.
The special members&#146; meeting shall be held at the time and place specified
in the notice of the meeting, and the notice shall also state the purpose of the
special members&#146; meeting. No business shall be considered at the special
members&#146; meeting except as mentioned in the notice of the meeting.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 2 &#151; <U>Notice of
Meetings</U>.</B> Notice of the annual meeting of the members of this
cooperative shall be published or mailed as prescribed by Minnesota Statutes
Section 308A.611, Subdivision 5. Notice of a special meeting of the members of
this cooperative shall be published or mailed as prescribed by Minnesota
Statutes Section 308A.615, Subdivision 2. The notice of meetings must be
published at least two weeks before the date of the meeting or mailed at least
15 days before the date of the meeting. The notice shall state the date, time,
and place of the meeting, and in the case of a special meeting, the purposes for
which the meeting is called. The Secretary shall execute a certificate which
contains a copy of the notice, shows the date of mailing or publication (as the
case may be), and states the notice was mailed or published (as the case may be)
as prescribed by these Bylaws. The certificate shall be made a part of the
meeting. The failure of any member to receive notice shall not invalidate any
action which may be taken by the members at a meeting.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 3 &#151; <U>Voting
Power</U>.</B> The voting power of the members of this cooperative shall be
exercised as follows:</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
<B><U>Cooperative Association Members</U>.</B> Each Cooperative Association Member
shall be entitled to the number of permitted votes designated by the Board of Directors
of this cooperative, which shall be determined based on the following formula:</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">3</FONT></P>
<HR SIZE="1" COLOR=BLACK NOSHADE>





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<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
One (1) vote for each $10,000,  or major fraction thereof, of the average annual business
transacted with this  cooperative and with CENEX, Inc. (combined sales to and purchases
from) during  the three years ending on the last day of this cooperative&#146;s fiscal
year  last ended prior to the meeting; plus  </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
One (1) vote for each $1,000,  or major fraction thereof, of equity issued by this
cooperative as a patronage  refund and standing on the books of this cooperative in the
name of such  Cooperative Association Member. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush In 0" -->
<p><font size=2>For purposes of Section 3(a)(i), the dollar value of commodities delivered by a Defined Member to a Cooperative Association Member for handling
by and on behalf of this cooperative and the Defined Member shall be included in
the calculation for determining the number of permitted votes of the Cooperative
Association Member. For purposes of Section 3(a)(ii), the face amount of any
Equity Participation Units issued to and held by a Cooperative Association
Member shall be included in the determination of the amount of equity in this
cooperative held by such Cooperative Association Member. In determining the
number of permitted votes of a Cooperative Association Member, the Board of
Directors of this cooperative shall give due consideration to the membership
eligibility criteria set forth in these Bylaws and the Articles of Incorporation
of this cooperative, and shall have the authority to suspend or adjust voting
power to reflect such criteria, including without limitation the authority to
establish reasonable procedures to address special circumstances, for example,
procedures to annualize the average annual business of Cooperative Association
Members having less than three full years of business included in the averaging
period and procedures to equitably measure the business transacted by
Cooperative Association Members that have acquired or merged with other entities
that did business with this cooperative or with CENEX, Inc. within the averaging
period. The Board of Directors of this cooperative also may require such
supporting information from Cooperative Association Members as it deems
necessary or appropriate to determine the number of permitted votes of the
Cooperative Association Members hereunder.</font></p>

<!-- MARKER FORMAT-SHEET="Para Flush In 0" -->
<p><font size=2>Each Cooperative Association Member shall be represented at members&#146; meetings of this cooperative by elected or appointed delegates,
which delegates shall exercise the voting rights of such Cooperative Association
Member at such meetings as hereinafter provided.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <B><U>Individual Members and
Defined Members</U>.</B> Each Individual Member and each Defined Member shall
have one (1) vote; provided, however, that, except as such Individual Member or
such Defined Member shall cast a vote individually in person at an annual or
special meeting (as hereinafter provided), or by mail when a mail ballot has
been provided for, and except for votes of Defined Members for elections to
Defined Member Boards, such Individual Member or Defined Member may be grouped
with other Individual Members and Defined Members in local units (hereinafter
referred to as &#147;Patrons&#146; Associations&#148;) as may be established
from time to time by the Board of Directors of this cooperative. An Individual
Member or a Defined Member grouped in a Patrons&#146; Association may, however,
elect to exercise such Individual Member&#146;s or Defined Member&#146;s vote
individually in which case such Individual Member shall have one (1) vote only
after obtaining a certificate on a form provided by this cooperative and signed
by the manager of the line elevator, feed mill or other facility patronized</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">4</FONT></P>
<HR SIZE="1" COLOR=BLACK NOSHADE>





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<!-- MARKER PAGE="sheet: 2; page: 2" -->


<!-- MARKER FORMAT-SHEET="Para Flush In 0" -->
<p><font size=2>by such Individual Member, certifying that such Individual Member is a member of
this cooperative. A Defined Member who intends to exercise such Defined
Member&#146;s vote individually hereunder shall be entitled to do so after
giving notice of such intent to this cooperative on a form provided by this
cooperative. Such certificate or notice (as the case may be) shall be sent to
this cooperative by such member or manager no less than ten (10) days or more
before the annual or special meeting concerned, provided that in the discretion
of the Credentials Committee, any certificates or notices (as the case may be)
sent thereafter may also be honored.</font></p>

<!-- MARKER FORMAT-SHEET="Para Flush In 0" -->
<p><font size=2>If an Individual Member or a Defined Member elects to cast their
vote individually, such Member&#146;s business transacted with and equity held
by such Member in this Company shall be excluded from determining the number of
votes held by such Member&#146;s Patrons&#146; Association pursuant to Sections
3(c)(i) and 3(c)(ii) below.</font></p>

<!-- MARKER FORMAT-SHEET="Para Flush In 0" -->
<p><font size=2>Each Defined Member shall have one (1) vote for the election of
Defined Member Boards, which shall be cast individually in person at an annual
or special meeting (as hereinafter provided), or by mail when a mail ballot has
been provided for.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <B><U>Patrons&#146;
Associations</U>.</B> The delegates representing Individual Members and Defined
Members (as provided herein) grouped in each Patrons&#146; Association shall be
entitled (in the aggregate) to the number of permitted votes designated by the
Board of Directors of this cooperative, which shall be determined based on the
following formula:</font></p>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
One (1) vote for each $10,000,  or major fraction thereof, of the average annual business
transacted with this  cooperative (combined sales to and purchases from) by the
Individual Members and  Defined Members grouped in such Patrons&#146; Associations,
during the three  years ending on the last day of this cooperative&#146;s fiscal year
last ended  prior to the meeting; plus  </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
One (1) vote for each $1,000,  or major fraction thereof, of equity issued by this
cooperative as a patronage  refund and standing on the books of this cooperative in the
name of the  Individual Members and Defined Members grouped in such Patrons&#146; Associations,
calculated on an aggregate basis. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush In 0" -->
<p><font size=2>For purposes of Section 3(c)(ii), the face amount of any Equity
Participation Units issued to and held by an Individual Member or a Defined
Member shall be included in the determination of the amount of equity held by
such members. In determining the number of permitted votes of a Patron
Association, the Board of Directors of this cooperative shall have the authority
to establish reasonable procedures to address special circumstances. For
example, procedures to annualize the average annual business of Individual
Members and Defined Members having less than three full years of business
included in the averaging period and procedures to equitably measure the
business transacted by Individual Members and Defined Members that patronized
entities that were acquired or merged with this cooperative within the averaging
period. The Board of Directors of this cooperative also may require such
supporting information from or relating to the Individual Members and Defined
Members grouped in Patrons&#146; Associations as it</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">5</FONT></P>
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<!-- MARKER FORMAT-SHEET="Para Flush In 0" -->
<p><font size=2>deems necessary or
appropriate to determine the number of permitted votes of the Patrons&#146;
Associations hereunder.</font></p>

<!-- MARKER FORMAT-SHEET="Para Flush In 0" -->
<p><font size=2>The Individual Members and Defined Members grouped in each
Patrons&#146; Association shall be represented at members&#146; meetings of this
cooperative by elected delegates, which delegates shall exercise the voting
rights of the Individual Members and Defined Members grouped in such
Patrons&#146; Association at such meetings as hereinafter provided. Such
delegates and their alternates shall be elected on a one member/one vote basis
by the Individual Members and the Defined Members grouped in the Patrons&#146;
Association, at an annual meeting of such Patrons&#146; Association held
following reasonable notice, and pursuant to such other procedures as the Board
of Directors of this cooperative may establish from time to time. In no instance
shall managers or other employees of this cooperative appoint such delegates or
alternates. Such delegates shall exercise the same powers at such members&#146;
meetings as the delegates of Cooperative Association Members may exercise.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 4 &#151;</B>
<B><U>Manner of Voting</U>.</B> At annual and special meetings of members of
this cooperative, the designated number of permitted votes of members as
hereinabove provided shall be cast in the following manner:</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Individual Member and
each Defined Member who is certified or has provided notice to vote individually
as further provided in these Bylaws shall be entitled to cast such Member&#146;s
own vote in person.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Cooperative Association
Member and the Individual Members and Defined Members grouped in each
Patrons&#146; Association shall cast its designated number of permitted votes
through duly selected delegates (or their duly selected alternates). The maximum
number of delegates that may represent a Cooperative Association Member or the
Individual Members and Defined Members grouped in a Patrons&#146; Association at
members&#146; meetings, and the maximum number of votes that each delegate may
carry at such meetings, shall be as authorized by the Board of Directors.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) There shall be no mail voting
except in cases where, in the notice of the meeting, the Board of Directors of
this cooperative shall have submitted a specific issue or issues for a mail
vote. In such case, a mail vote cast by a Cooperative Association Member shall
be binding upon the delegates representing such Cooperative Association Member
at the meeting (if any) on the issue or issues so submitted. The voting power of
a Cooperative Association Member may not be split between mail voting and voting
in person by delegates of the Cooperative Association Member upon an issue or
issues submitted for mail vote. No combination of mail voting and voting in
person by delegates of the same Patrons&#146; Association upon an issue or
issues submitted for mail vote shall be permitted. An attempt by a Cooperative
Association Member or delegates of a Patrons&#146; Association to do such
splitting or combining shall be treated as having the effect of not voting on
the issue or issues so submitted. Delegates of Cooperative Association Members
and Patrons&#146; Associations which have not cast a vote by mail upon the issue
or issues submitted for mail vote shall cast the vote or votes of the respective
members they are representing upon said issue or issues in the manner prescribed
by the</font></p>

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<p><font size=2>chairman of said meeting. Nothing in this section shall, however, prevent
an annual or special meeting of this cooperative from considering and acting
upon issues in addition to those submitted for mail vote, to the extent
permitted by law; and such issues shall be voted upon by delegates (and
alternates) in the manner hereinabove provided for other than mail votes.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The mail vote of a Cooperative
Association Member shall be cast as determined by the Board of Directors of the
Cooperative Association Member and the voting power of such mail vote may not be
split between yes and no votes, unless expressly authorized by the Board of
Directors of this cooperative in the notice of the meeting which provides for
the mail vote. The mail ballot used by a Cooperative Association Member to cast
its vote shall contain the certificate of the secretary or the president of the
Cooperative Association Member that the vote shown thereon is so cast by the
direction of said member&#146;s Board of Directors and stating such supporting
information as may be prescribed by the Board of Directors of this cooperative.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The mail vote cast by each
Patrons&#146; Association shall be determined by the delegate or delegates last
certified by the Patrons&#146; Association to this cooperative as provided in
these Bylaws. The mail ballot used by the delegate or delegates of a
Patrons&#146; Association to cast its mail vote shall contain the certificate of
the delegate or delegates that the vote shown thereon is so cast, and stating
such supporting information as may be prescribed by the Board of Directors of
this cooperative.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The mail vote cast by each
Individual Member or Defined Member of this cooperative shall be on such form of
ballot as may be prescribed by the Board of Directors of this cooperative, and
shall include (i) in the case of Individual Members, the certificate that such
member is a member of this cooperative; and (ii) in the case of a Defined
Member, the notice of intent to vote individually, in either case as provided
for in Section 3(b) of this Article II.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) There shall be no voting by proxy or under power of attorney at any annual or special meeting of this cooperative.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 5 &#151; <U>Quorum and Registration</U>.</B></font></p>


<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A quorum necessary to the
transaction of business at any annual or special meeting of this cooperative
shall be at least ten percent (10%) of the total number of members in this
cooperative represented in person by delegates or by mail votes when the members
do not exceed five hundred (500) in number. If the members of this cooperative
exceed five hundred (500) in number, fifty (50) members of this cooperative
represented in person by delegates (or alternates) or by mail votes shall
constitute a quorum. In determining a quorum at any meeting, on a question
submitted to a vote by mail, as hereinabove provided, members represented in
person by delegates (or alternates) or represented by mail vote shall be
counted. The fact of the attendance of a sufficient number of members to
constitute a quorum shall be established by a registration of the members of
this cooperative present at such meeting, which registration shall be verified
by the Chairman and Secretary of this cooperative and shall be reported in the
minutes of the meeting.</font></p>


<P ALIGN="CENTER"><FONT SIZE="2">7</FONT></P>
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<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Registration of Individual
Members and Defined Members and of delegates (or alternates) of Cooperative
Association Members and Patrons&#146; Associations shall close at such hour on
the day for which an annual or special meeting is called (or in case it is
called for a series of days, at such hour on the first day thereof) as the Board
of Directors of this cooperative shall determine and specify in the Notice of
Meeting, or at such later time to which the close of registration may be
extended by majority vote of those registered before said initial time for
closing of registration. Persons otherwise eligible to vote, either as
Individual Members, Defined Members or as delegates or alternates, but not
registered as in attendance at or before said time (original or as extended),
shall have no right to vote in any of the affairs of the meeting (including, but
not limited to, election of Directors).</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each Cooperative Association
Member and Patrons&#146; Association shall certify its delegates and alternates
to this cooperative, in the manner prescribed by the Board of Directors of this
cooperative. The delegates (and alternates) so certified, and found by this
cooperative to be eligible to be seated at the meeting or meetings of this
cooperative, shall represent their Cooperative Association Members or
Patrons&#146; Associations, as the case may be, to the extent and in the manner
provided in this Article. In matters of which advance notice has been given,
such delegates and alternates shall endeavor to inform themselves as to the
views of the membership of the Cooperative Association Member or Patrons&#146;
Association which they represent.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) No individual shall serve as a
delegate for more than one member of this cooperative. Delegates and alternates
representing Patrons&#146; Associations must be an Individual Member or Defined
Member grouped with such Patrons&#146; Association. The Board of Directors may
establish such additional eligibility criteria, procedures, standards and
structure with respect to the delegate system of this cooperative as it from
time to time deems advisable. No employee of this cooperative shall serve as a
delegate or alternate at any meeting of this cooperative; if any such person
shall be certified as a delegate or alternate of a member, such person shall
nevertheless not be seated as such.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Duly selected delegates and
alternates certified in the manner described above shall serve in such capacity
in accordance with these Bylaws until such delegate&#146;s (or alternate&#146;s)
successor is selected and qualified, but in no event shall such certificate of
selection be valid for more than two years; provided, further, that the election
or appointment of any delegate or alternate may be revoked by the Cooperative
Association Member that a delegate or alternate represents (effective as of the
date this cooperative receives notice of such revocation) or, in the case of
delegates or alternates representing Patrons&#146; Associations, the election
shall terminate in the event the delegate or alternate ceases to be an
Individual Member or Defined Member of this cooperative.</font></p>

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<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) A cooperative association
which conducts business with this cooperative on a patronage basis as a
nonmember patron in the manner prescribed by these Bylaws may have a
representative present at a meeting of the members of this cooperative only as
authorized by the</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">8</FONT></P>
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<p><font size=2>Board of Directors of this cooperative. A representative so
authorized shall have no voting rights and shall only be recognized to speak at
the discretion of the Chairman of the meeting.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Nothing herein shall prevent
Individual Members or Defined Members of this cooperative or of Cooperative
Association Members, who are not delegates to the annual meetings or special
meetings of this cooperative from serving as chairperson of a regional meeting
or as chairperson or member of a committee.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Each member of the Board of
Directors of this cooperative shall have the right to speak on any subject
during annual or special meetings of this cooperative.</font></p>

<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>ARTICLE III.<br>
<U>Directors</U></font></H1>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 1 &#151; <U>Board of
Directors</U>.</B> The business and affairs of this cooperative shall be
governed by the Board of Directors of this cooperative, which shall consist of
seventeen (17) directors.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 2 &#151; <U>Director Qualifications</U>.</B> The qualifications for the office of director shall be as follows:</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At the time of the election, the individual must be less than the age of 68.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The individual must be a member of this cooperative or a member of a Cooperative Association Member.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The individual must reside in the Region from which he or she is to be elected.</font></p>


<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The individual must be an
active farmer or rancher. For purposes of this section, &#147;active farmer or
rancher&#148; means an individual whose primary occupation is that of a farmer
or rancher.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The definition of &#147;farmer
or rancher&#148; shall not include anyone who is a full-time employee of this
cooperative, or of a Cooperative Association Member.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The individual must currently
be serving or shall have served at least one full term as a director of a
Cooperative Association Member of this cooperative.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The qualifications set forth
in this Section 2 shall become effective immediately upon the adoption of these
Bylaws, except that the qualifications in (f) above shall not apply to any
individual serving as a director of this cooperative on the date of said
adoption.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 3 &#151; <U>Election of Directors</U>.</B></font></p>

<P ALIGN="CENTER"><FONT SIZE="2">9</FONT></P>
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<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At each annual meeting of the
members of this Association, directors shall be elected to fill vacancies
created by expired terms. The term of office of such directors shall be three
(3) years and until their respective successors are elected and qualified.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The nomination and election of
directors of this cooperative shall be by Region. The territory served by this
cooperative shall be divided into the following Regions, with the Board of
Directors, composed of the following number of directors from each Region:</font></p>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Region
Number 1</U></B> &#151; which shall include the State of Minnesota, and  shall be represented by
five (5) persons who must be residents of Region Number  1;  </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Region
Number 2</U></B> &#151; which shall include the States of Montana and  Wyoming, and shall be
represented by one (1) person who must be a resident of  Region Number 2; </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><B>Region
Number 3</B></U> &#151; which shall include the State of North Dakota,  and shall be represented
by (3) persons who must be residents of Region Number  3; </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Region
Number 4</U></B> &#151; which shall include the State of South Dakota,  and shall be represented
by two (2) persons who must be residents of Region  Number 4; </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Region
Number 5</U></B> &#151; which shall include the States of Wisconsin,  Michigan and Illinois, and
shall be represented by two (2) persons who must be  residents of Region Number 5; </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Region
Number 6</U></B> &#151; which shall include the States of Alaska,  Arizona, California, Idaho,
Oregon, Washington and Utah, and shall be  represented by two (2) persons who must be
residents of Region Number 6; </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Region
Number 7</U></B> &#151; which shall include the States of Iowa and  Missouri, and shall be
represented by one (1) person who must be a resident of  Region Number 7; and </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Region
Number 8</U></B> &#151; which shall include the States of Colorado,  Nebraska, Kansas, Oklahoma
and Texas, and shall be represented by one (1) person  who must be a resident of Region
Number 8. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) From time to time, the Board
of Directors shall review member representation. Future redistricting plans
shall be designed to maintain equitable representation. Any redistricting plan
shall be determined by using a weighted formula based on sales/purchases and
equity by Region. All future redistricting plans shall be subject to member
approval at either a special or annual meeting of the members of this
cooperative.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) With respect to elections at
each annual meeting of the members of this cooperative, Individual Members,
Defined Members, and delegates from each Region who are registered in accordance
with these Bylaws shall meet separately by Region for the purpose of</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">10</FONT></P>
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<!-- MARKER FORMAT-SHEET="Para Flush In 0" -->
<p><font size=2>nominating
and electing the directors of this cooperative from such Region. At each such
regional meeting, nominations for the election of directors shall be made by the
members or delegates of this cooperative and may be made by balloting,
nominating committee, petition of members or from the floor; provided that
nominations from the floor shall be requested in addition to nominations made by
petition or nominating committee. Before each annual meeting of the members of
this cooperative, the Board of Directors may appoint a nominating committee to
supervise the nominating procedure for election of directors, which procedure
shall be prescribed by the Board of Directors.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) When nominations have been
closed, the Individual Members, Defined Members and delegates at each regional
meeting shall vote on each of the nominees, and the director or directors from
such Region shall be elected by a majority of the votes cast at such regional
meeting. The Board of Directors shall have the power and authority to adopt a
policy and procedure for assigning to an existing Region those members who are
not residents of any Region established in Section 3(b) above. Such policy and
procedure may be amended from time to time at the discretion of the Board of
Directors. Each such regional election shall be binding upon the annual meeting
and upon this cooperative, without any ratification or right of rescission or
veto by Individual Members or Defined Members or delegates, or any combination
thereof, of other Regions. A temporary Chairman of each such regional meeting
shall be selected by the Chairman of this cooperative, to serve until a Chairman
of such regional meeting is elected by the Individual Members, Defined Members
and delegates at such regional meeting. Election of directors shall be by
balloting when there are two or more nominees for a position to be filled, or
when there are more nominees than there are positions to be filled.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 4 &#151;
<U>Vacancies</U>.</B> Each vacancy occurring on the Board of Directors may be
filled by the remaining directors until the next annual meeting of the members
when the members shall elect a director to serve for the unexpired term,
provided that vacancies on the Board created by any amendment of the Articles of
Incorporation or Bylaws shall first be filled at the annual meeting of the
members next following the adoption of such amendment unless otherwise provided
in the amendment.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 5 &#151;
<U>Meetings</U>.</B> The Board of Directors shall meet regularly at such times
and places as the Board may determine. Special meetings may be called by the
Chairman or any three directors. All meetings shall be held on such notice as
the Board may prescribe provided that any business may be transacted at any
meeting without specification of such business in the notice of such meeting.
Directors may participate in any such meeting by means of a conference telephone
conversation or other comparable method of communication by which all persons
participating in the meeting can hear and communicate with each other; and for
purposes of taking any action at the meeting, any such directors shall be deemed
present in person at the meeting.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 6 &#151; <U>Quorum and
Voting</U>.</B> A quorum shall consist of a majority of the directors. A
majority vote of the directors present shall decide all questions except where a
greater vote is required by the Articles of Incorporation, by these Bylaws or by
law.</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">11</FONT></P>
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<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 7 &#151; <U>Action
Without Meeting</U>.</B> Any action required or permitted to be taken at a
meeting of the Board of Directors may be taken without a meeting if all
directors consent thereto in writing and the writing or writings are held with
the minutes or proceedings of the Board of Directors.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 8 &#151;
<U>Borrowings</U>.</B> The Board of Directors shall have power to authorize and
approve the borrowing of money and the pledging and mortgaging of any or all of
the assets of this cooperative as security for the sums so borrowed.</font></p>

<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>ARTICLE IV.<br>
<U>Duties of Directors</U></font></H1>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 1 &#151; <U>General
Powers</U>.</B> The business and affairs of this cooperative shall be governed
by the Board of Directors of this cooperative. The Board of Directors shall
exercise all of the powers of this cooperative except such as are by law, the
Articles of Incorporation, or these Bylaws conferred upon or reserved to the
members. The Board of Directors shall adopt such policies, rules, regulations,
and actions not inconsistent with law, the Articles of Incorporation, or these
Bylaws, as it may deem advisable. The Board of Directors may establish one or
more than one committee having such powers and authority as are delegated to it
by the Board of Directors.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 2 &#151; <U>Bonds and
Insurance</U>.</B> The Board of Directors may require the officers, agents, or
employees charged by this cooperative with responsibility for the custody of any
of its funds or property to give adequate bonds. Such bonds, unless cash
security is given, shall be furnished by a responsible bonding company and
approved by the Board of Directors and the cost thereof shall be paid by this
cooperative. The Board of Directors shall provide for the adequate insurance of
the property of the cooperative, or property which may be in the possession of
this cooperative, or stored by it, and not otherwise adequately insured, and in
addition adequate insurance covering liability for accidents to all employees
and the public.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 3 &#151; <U>Accounting
System and Audit</U>.</B> The Board of Directors shall install and maintain an
adequate system of accounts and records. At least once in each year the books
and accounts of this cooperative shall be audited and a review of such audit
shall be published annually, and a report of such audit shall in addition be
made at the next annual meeting of the members.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 4 &#151;
<U>Depository</U>.</B> The Board of Directors shall have power to select one or
more banks to act as depositories of the funds of this cooperative, and to
determine the manner of receiving, depositing, and disbursing the funds of this
cooperative, the form of checks, and the person or persons by whom they shall be
signed, with the power to change such banks and the person or persons signing
such checks and the form thereof at will.</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">12</FONT></P>
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<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>ARTICLE V.<br>
<U>Officers</U></font></H1>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 1 &#151; <U>Election of
Officers</U>.</B> Promptly following each annual meeting of the members, the
Board of Directors shall elect from its membership a Chairman, one or more Vice
Chairmen, a Secretary, a Treasurer, and such other officers as it shall deem
necessary. The Board of Directors shall also elect a Chief Executive Officer,
who need not be a director of this cooperative. Upon the recommendation of the
Chief Executive Officer, the Board of Directors may elect a President and
General Manager, a Chief Financial Officer, one or more Vice Presidents (with
such designations as recommended by the Chief Executive Officer), Assistant
Secretaries and Assistant Treasurers, and such additional officers with such
authority and duties as may be prescribed by the Board of Directors upon the
recommendation of the Chief Executive Officer, none of whom need be a director
of this cooperative. Other than the office of Chairman and Vice Chairman, one
person may hold one or more of the offices provided for above, if eligible to
hold each such office. If any vacancy shall occur among the offices of Chairman,
Vice Chairmen, Secretary or Treasurer, it shall be filled by the Board of
Directors at its next regular meeting following the vacancy.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 2 &#151;
<U>Chairman</U>.</B> The Chairman shall preside at all meetings of the members
and the Board of Directors. Except where the signature of the Chief Executive
Officer is required, the Chairman shall possess the same power as the Chief
Executive Officer to sign all certificates, contracts and other instruments of
this cooperative which may be authorized by the Board of Directors.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 3 &#151; <U>Vice
Chairmen</U>.</B> In the absence or disability of the Chairman, the Vice
Chairmen, in the order designated by the Board of Directors, shall perform the
duties and exercise the powers of the Chairman. Each Vice Chairman shall have
such other duties as are assigned to such Vice Chairman from time to time by the
Board of Directors.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 4 &#151; <U>Chief
Executive Officer</U>.</B> The Chief Executive Officer shall be the chief
executive officer of this cooperative, shall have general supervision of the
affairs of this cooperative, shall sign or countersign all certificates,
contracts or other instruments of this cooperative as authorized by the Board of
Directors, shall make reports to the Board of Directors and members, shall
recommend the officers of this cooperative to the Board of Directors for
election (except the offices of Chairman, Vice Chairmen, Secretary or
Treasurer), and shall perform such other duties as are incident to the Chief
Executive Officer&#146;s office or are properly required by the Board of
Directors. In the event the office of President and General Manager is not
filled, the Chief Executive Officer shall also serve as the President of this
cooperative and may exercise the authority of the office of Chief Executive
Officer in either or both capacities.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 5 &#151; <U>President
and General Manager</U>.</B> The President and General Manager shall report to
the Chief Executive Officer of this cooperative, and shall perform such duties
as the Board of Directors may prescribe upon the recommendation of the Chief
Executive Officer. In the absence or disability of the Chief Executive Officer,
the President and General Manager shall perform the duties and exercise the
powers of the Chief Executive Officer.</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">13</FONT></P>
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<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 6 &#151; <U>Vice
Presidents</U>.</B> In the absence or disability of the President and General
Manager, the Vice Presidents, in the order designated by the Board of Directors,
shall perform the duties and exercise the powers of the President. Each Vice
President shall have such other duties as are assigned to such Vice President
from time to time by the Chief Executive Officer or the President and General
Manager.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 7 &#151;
<U>Secretary</U>.</B> The Secretary shall keep complete minutes of each meeting
of the members and of the Board of Directors, and shall sign with Chairman or
the Chief Executive Officer all notes, conveyances and encumbrances of real
estate, capital securities and instruments requiring the corporate seal;
provided that the Secretary, in writing, may authorize any other officer or
employee to execute or sign the Secretary&#146;s name to any or all such
instruments. The Secretary shall keep a record of all business of this
cooperative, prepare and submit to the annual meeting of the members a report of
the previous fiscal year&#146;s business, and give all notice as required by
law. The Secretary shall perform such other duties as may be required by the
Board of Directors. The Board of Directors may delegate, or authorize the
Secretary to delegate, to any other officer or employee, under the supervision
of the Secretary, all or any of the duties enumerated in this section.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 8 &#151;
<U>Treasurer</U>.</B> The Treasurer shall supervise the safekeeping of all funds
and property of this cooperative, supervise the books and records of all
financial transactions of this cooperative, and perform such other duties as may
be required by the Board of Directors. The Board of Directors may delegate, or
authorize the Treasurer to delegate, to any other officer or employee, under the
supervision of the Treasurer, all or any of the duties enumerated in this
section.</font></p>

<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>ARTICLE VI.<br>
<U>Indemnification and Insurance</U></font></H1>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 1 &#151;
<U>Indemnification</U>.</B> This cooperative shall indemnify each person who is
or was a director, officer, manager, employee, or agent of this cooperative, and
any person serving at the request of this cooperative as a director, officer,
manager, employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise, against expenses, including attorneys&#146; fees,
judgments, fines, and amounts paid in settlement actually and reasonably
incurred to the fullest extent to which such directors, officers, managers,
employees or agents of an cooperative may be indemnified under the law of the
State of Minnesota or any amendments thereto or substitutions therefor.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 2 &#151;
<U>Insurance</U>.</B> This cooperative shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, manager,
employee, or agent of this cooperative, or is or was serving at the request of
this cooperative as a director, officer, manager, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against any
liability asserted against that person and incurred by that person in any such
capacity.</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">14</FONT></P>
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<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>ARTICLE VII.<br>
<U>Method of Operation &#151; Patronage Refunds</U></font></H1>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 1 &#151; <U>Cooperative
Operation</U>.</B> This cooperative shall be operated upon the cooperative basis
in carrying out its business within the scope of the powers and purposes defined
in the Articles of Incorporation. Accordingly, the net income of this
cooperative in excess of amounts credited by the Board of Directors to Capital
Reserves and amounts of dividends, if any, paid with respect to equity capital
shall be accounted for and distributed annually on the basis of allocation units
as provided in this Article VII. In determining the net income or net loss of
this cooperative or its allocation units, there shall be taken into account this
cooperative&#146;s share of the net income or net loss of any unincorporated
entity in which it owns an equity interest, patronage dividends distributed by
other cooperatives of which it is a patron and, to the extent determined by the
Board of Directors, its share of the undistributed net income or net loss of any
corporation in which it owns an equity interest.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each transaction between this
cooperative and each member shall be subject to and shall include as a part of
its terms each provision of the Articles of Incorporation and Bylaws of this
cooperative, whether or not the same be expressly referred to in said
transaction. Each member for whom this cooperative markets or procures goods or
services shall be entitled to the net income arising out of said transaction as
provided in this Article VII unless such member and this cooperative have
expressly agreed to conduct said business on a nonpatronage basis. No nonmember
for whom this cooperative markets or procures goods or services shall be
entitled to the net income arising out of said transactions as provided in this
Article VII unless this cooperative agrees to conduct said business on a
patronage basis.</font></p>

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<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 2 &#151; <U>Patrons;
Patronage Business; Nonpatronage Business</U>.</B> As used in this Article VII,
the following definitions shall apply:</font></p>


<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The term &#147;patron&#148; shall refer to any member or nonmember with respect to business conducted with this cooperative on a patronage basis in accordance with Section 1 of this Article VII.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The term &#147;patronage business&#148; shall refer to business done by this cooperative with or for patrons.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The term &#147;nonpatronage business&#148; shall refer to business done by this cooperative that does not constitute &#147;patronage business.&#148;</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 3</B> &#151;
<B><U>Establishment of Allocation Units</U>.</B> Allocation units shall be
established by the Board of Directors on a reasonable and equitable basis and
they may be functional, divisional, departmental, geographic, or otherwise;
provided, that each Defined Business Unit shall be accounted for as a separate
allocation unit. The Board of Directors shall adopt such reasonable and
equitable accounting procedures as will, in the Board&#146;s judgment, equitably
allocate among such allocation units this cooperative&#146;s income, gains,
expenses and</font></p>


<P ALIGN="CENTER"><FONT SIZE="2">15</FONT></P>
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<p><font size=2>losses and, to the extent provided in Section 1 of this Article
VII, patronage dividends received by this cooperative and its share of income,
gain, loss and deduction of other entities in which it owns an interest.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 4 &#151;
<U>Determination of the Patronage Income or Loss of an Allocation Unit</U>.</B>
The net income or net loss of an allocation unit from patronage business for
each fiscal year shall be the sum of (1) the gross revenues directly
attributable to goods or services marketed or procured for patrons of such
allocation unit, plus (2) an equitably apportioned share of other items of
income or gain attributable to this cooperative&#146;s patronage business, less
(3) all expenses and costs of goods or services directly attributable to goods
or services marketed or procured for patrons of such allocation unit, less (4)
an equitably apportioned share of all other expenses or losses attributable to
this cooperative&#146;s patronage business, dividends on equity capital and
distributable net income from patronage business that is credited to the Capital
Reserve pursuant to Section 8(c) of this Article VII. The foregoing amounts
shall be determined using the accounting methods and principles used by the
cooperative in preparation of its annual audited financial statements; provided,
however, that the Board of Directors may prospectively adopt a reasonable
alternative method. Expenses and cost of goods or services shall include without
limitation such amounts of depreciation, cost depletion and amortization as may
be appropriate, any unit retentions provided in Section 10 of this Article VII,
amounts incurred for the promotion and encouragement of cooperative
organization, and taxes other than federal income taxes. Such net income or net
loss shall be subject to adjustment as provided in Sections 6 and 9(b) of this
Article VII relating to losses.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 5 &#151; <U>Allocation
of Patronage Income Within Allocation Units</U>.</B> The net income of an
allocation unit from patronage business for each fiscal year, less any amounts
thereof that are otherwise allocated in dissolution pursuant to Article IX,
shall be allocated among the patrons of such allocation unit in the ratio that
the quantity or value of the business done with or for each such patron bears to
the quantity or value of the business done with or for all patrons of such
allocation unit. The Board of Directors shall reasonably and equitably determine
whether allocations within any allocation unit shall be made on the basis of
quantity or value.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 6 &#151; <U>Treatment of Patronage Losses of an Allocation Unit</U>.</B></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<B><U>Methods for Handling Patronage Losses</U>.</B> If an allocation unit incurs a net loss in any fiscal year from patronage business, this cooperative may take one or more of the following actions:</font></p>


<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
Offset all or part of such net  loss against the net income of other allocation units for
such fiscal year to  the extent allowed by law; provided, however, that the net income or
net loss of  a Defined Business Unit shall not be offset by the net loss of nor netted
against the net income of other allocation units; </FONT>
</TD>
</TR>
</TABLE>
<BR>

<P ALIGN="CENTER"><FONT SIZE="2">16</FONT></P>
<HR SIZE="1" COLOR=BLACK NOSHADE>





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<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
Establish accounts payable by patrons of the allocation unit that incurs the net loss
that may be satisfied out of any future amounts that may become payable by this
cooperative to each such patron; </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
Carry all or part of the  loss forward to be charged against future net income of the
allocation unit that  incurs the loss; </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Offset all or part of such net loss against the Capital Reserve;</FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)
Cancel outstanding  Patrons&#146; Equities; provided, however, that the net loss of a
Defined  Business Unit shall not be applied in cancellation of Patrons&#146; Equities of
patrons of other allocation units and net losses of other allocation units may  not be
applied in cancellation of Patrons&#146; Equities of patrons of Defined  Business Units; </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <B><U>Allocation of Net Loss
Among Patrons of Loss Unit</U>.</B> Any cancellation of equities and/or
establishment of accounts payable pursuant to this Section 6 shall be made among
the patrons of an allocation unit in a manner consistent with the allocation of
net income of such allocation unit.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <B><U>Restoration of Net Loss
out of Future Net Income</U>.</B> The future net income of an allocation unit
that incurs a net loss may be reduced by part or all of such net loss that was
offset against the Capital Reserve, Patrons&#146; Equities of patrons of another
allocation unit or against the net income of another allocation unit and may be
used to restore the Capital Reserve, restore such Patrons&#146; Equities or to
increase the future net income of such other allocation unit; provided that
reasonable notice of the intent to do so is given to the patrons of the loss
unit.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <B><U>Board
Discretion</U>.</B> The provisions of this Section 6 shall be implemented by the
Board of Directors, having due consideration for all of the circumstances which
caused the net loss, in a manner that it determines is both equitable and in the
overall best interest of this cooperative.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <B><U>No Assessments against Members or Nonmember Patrons</U>.</B> There shall be no right of assessment against members or nonmember patrons for the purpose of restoring impairments to capital caused by net losses.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 7 &#151; <U>Distribution of Net Income</U>.</B></font></p>


<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <B><U>Patronage
Refunds</U>.</B> The net income allocated to a patron pursuant to Sections 5 and
9 of this Article VII shall be distributed annually or more often to such patron
as a patronage refund; provided, however, that no distribution need be made
where the amount otherwise to be distributed to a patron is less than a de
minimus amount that may be established from time to time by the Board of
Directors.</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">17</FONT></P>
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<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <B><U>Form of Patronage
Refunds</U>.</B> Patronage refunds shall be distributed in cash, allocated
patronage equities, revolving fund certificates, securities of this cooperative,
other securities, or any combination thereof designated by the Board of
Directors (all such patronage refunds referred to collectively herein as
&#147;Patrons&#146; Equities), including, without limitation, the following
instruments:</font></p>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
<B><U>Capital Equity Certificates</U></B>, in one or more than one class or series, in such
designations or denominations, and with such relative rights, preferences,  privileges
and limitations as may be fixed by the Board of Directors, and  bearing no interest,
dividend or other annual payment. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>(ii)
Certificates of Indebtedness</U></B> in one or more than one class or series, in such
designations or denominations, and with such relative rights, preferences,  privileges
and limitations as may be fixed by the Board of Directors, and  bearing such maturity and
rate of interest, if any, as may be fixed by the Board  of Directors. Such certificates
shall be callable for payment in cash or other  assets at such times as may be determined
by the Board of Directors. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>(iii)
Non-Patronage Earnings Certificates</U></B>, in one or more than one class or series, in such
designations or denominations, and with such relative rights, preferences,  privileges
and limitations as may be fixed by the Board of Directors, with no  maturity date, and
bearing no interest, dividend or other annual payment.  Non-Patronage Earnings
Certificates may be distributed only to members and to  nonmember patrons as part of the
allocation and distribution of nonpatronage  income. Such certificates shall be callable
for payment in cash or other assets  at such times as may be determined by the Board of
Directors. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>(iv)
Preferred Capital Certificates</U></B> in one or more than one class or series, in such
designations or denominations, and with such relative rights, preferences,  privileges
and limitations as may be fixed by the Board of Directors. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <B><U>Written Notices of
Allocation</U>.</B> The noncash portion of a patronage refund distribution that
is attributable to patronage business shall constitute a written notice of
allocation as defined in 26 U.S.C. Section 1388 which shall be designated by the
Board of Directors as a qualified written notice of allocation, as a nonqualifed
written notice of allocation or any combination thereof as provided in said
section.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <B><U>No Voting Rights</U>.
</B>Patrons&#146; Equities shall not entitle the holders thereof to any voting
or other rights to participate in the affairs of this cooperative (which rights
are reserved solely for the members of this cooperative), provided that
Patrons&#146; Equities held by members of this cooperative shall be a factor in
determining the voting power of such members as more particularly provided in
these Bylaws.</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">18</FONT></P>
<HR SIZE="1" COLOR=BLACK NOSHADE>





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<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <B><U>Transfer Restriction</U>.</B> Patrons' Equities may only be transferred with the consent and approval of the Board of Directors, and by such instrument of transfer as may be required or approved by this cooperative.</font></p>


<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <B><U>Board Authority to Allow
Conversion</U>.</B> The Board of Directors of this cooperative also shall have
the authority to allow conversion of Patrons&#146; Equities into Equity
Participation Units, Preferred Equities or such other debt and/or equity
instruments of this cooperative on such terms as shall be established by the
Board of Directors.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <B><U>Revolvement
Discretionary</U>. </B>No person shall have any right whatsoever to require the
retirement or redemption of any Patrons&#146; Equities except in accordance with
their term, or of any allocated capital reserve. Such redemption or retirement
is solely within the discretion and on such terms as determined from time to
time by the Board of Directors of this cooperative.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 8 &#151; <U>Capital
Reserve</U>.</B> The Board of Directors shall cause to be created a Capital
Reserve and, except as otherwise provided in Section 9 of this Article VII,
shall annually add to the Capital Reserve the sum of the following amounts:</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The annual net income of this cooperative attributable to nonpatronage business;</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Annual net income from patrons
who are unidentified or to whom the amount otherwise to be distributed is less
than the de minimus amount provided in Section 7(a) of this Article VII; and</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) An amount not to exceed 10% of
the distributable net income from patronage business. The discretion to credit
patronage income to a Capital Reserve shall be reduced or eliminated with
respect to the net income of any period following the adoption of a Board
resolution that irrevocably provides for such reduction or elimination with
respect to such period.</font></p>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<p><font size=2>Federal income taxes shall be charged to the Capital Reserve.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 9 &#151; <U>Allocation and Distribution of Nonpatronage Income and Loss</U>.</B></font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <B><U>Nonpatronage
Income</U>.</B> The Board of Directors shall have the discretion to allocate to
allocation units amounts that are otherwise to be added to the Capital Reserve
pursuant to Section 8(a) of this Article VII. Such allocation may be made on the
basis of any reasonable and equitable method. Amounts so allocated to allocation
units shall be further allocated among the patrons thereof on a patronage basis
using such method as the Board of Directors determines to be reasonable and
equitable. Amounts so allocated shall be distributed to patrons thereof in the
form of cash, property, Non-Patronage Earnings Certificates, or any combination
thereof designated by the Board of Directors. The Board of Directors may
determine whether and to what extent nonmember patrons may share in such
distributions.</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">19</FONT></P>
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<!-- MARKER PAGE="sheet: 2; page: 2" -->


<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <B><U>Nonpatronage
Loss</U>.</B> If the cooperative incurs a net loss on its nonpatronage business
or if a net loss is incurred with respect to the nonpatronage business of an
allocation unit, such net loss generally shall be chargeable against Capital
Reserve unless and to the extent the Board of Directors, having due
consideration for the circumstances giving rise to such net loss, determines
that it is reasonable and equitable to allocate all or part of such a net loss
among allocation units generally or to a specific allocation unit or units. Any
such loss allocated to an allocation unit shall reduce such unit&#146;s net
income from patronage business to the extent thereof and the excess, if any,
shall be treated generally in accordance with Section 6(a)(ii), (iii) and (v) of
this Article VII. Notwithstanding the foregoing, a net loss incurred by a
Defined Business Unit with respect to nonpatronage business conducted by such
unit shall be borne entirely by such unit and no other net loss incurred on
nonpatronage business shall be allocated to a Defined Business Unit.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 10 &#151; <U>Defined
Business Unit Retentions</U>.</B> This cooperative may require from time to
time, investment in its capital in addition to the investments from retained
patronage and Equity Participation Units. These investments shall be direct
capital investments from a retain on a per unit basis for the products received
by the cooperative from its Defined Members, and the same may be determined on
either a Qualified or a Nonqualified basis as defined in Subchapter T of the
United States Internal Revenue Code. The per unit retention, if required, shall
be made on products delivered, in the same amount per unit and shall not become
a part of the net annual income available for patronage.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each member, by continuing to be
such, agrees to invest in the capital of this cooperative. Such investment shall
be accounted for separately in a unit retention account set up on the books of
the cooperative. All such amounts, from the moment of receipt by this
cooperative, are received and retained with the understanding that they are
furnished by members as capital. This cooperative is obligated to account to
each member in such manner that the amount of per unit retains furnished by each
member is annually credited to an appropriate record to the per unit retains
capital account of each member. Within a reasonable time after the close of its
fiscal year, this cooperative shall notify each member of the amount of capital
retains and credit it to the member&#146;s account by reflection upon this
cooperative&#146;s books.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the Board of Directors
determines in its sole discretion that this cooperative has sufficient working
capital in the applicable Defined Business Unit, unit retains may be called for
payment at the lesser of their stated or book value. Unit retains may be paid,
redeemed, or revolved in whole or in part at a time and manner determined by the
Board of Directors.</font></p>

<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>ARTICLE VIII.<br>
<U>Consent</U></font></H1>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 1 &#151;
<U>Consent</U>.</B> Each individual or entity that hereafter applies for and is
accepted to membership in this cooperative and each member of this cooperative
as of the effective date of this bylaw who continues as a member after such date
shall, by such act alone,</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">20</FONT></P>
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<!-- MARKER FORMAT-SHEET="Para Flush In 0" -->
<p><font size=2>consent that the amount of any distributions with
respect to its patronage which are made in written notices of allocation (as
defined in 26 U.S.C. &sect;1388), and which are received by the member from this
cooperative, will be taken into account by the member at their stated dollar
amounts in the manner provided in 26 U.S.C. &sect;1385(a) in the taxable year in
which such written notices of allocation are received by the member.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 2 &#151; <U>Consent
Notification to Members and Prospective Members</U>.</B> Written notification of
the adoption of this Bylaw, a statement of its significance and a copy of the
provision shall be given separately to each member and prospective member before
becoming a member of this cooperative.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 3 &#151; <U>Consent of
Nonmember Patrons</U>.</B> If this cooperative obligates itself to do business
with a nonmember on a patronage basis, such nonmember must either: (a) agree in
writing, prior to any transaction to be conducted on a patronage basis, that the
amount of any distributions with respect to patronage which are made in written
notices of allocation (as defined in 26 U.S.C. &sect;1388), and which are
received by the nonmember patron from this cooperative, will be taken into
account by the nonmember patron at their stated dollar amounts in the manner
provided in 26 U.S.C. &sect;1385(a) in the taxable year in which such written
notices of allocation are received by the nonmember patron and further, that any
revocation of such agreement will terminate this cooperative&#146;s obligation
to distribute patronage with respect to transactions with such nonmember that
occur after the close of this cooperative&#146;s fiscal year in which the
revocation is received; or (b) consent to take the stated dollar amount of any
written notice of allocation into account in the manner provided in 26 U.S.C.
&sect;1385 by endorsing and cashing a qualified check as defined in and within
the time provided in 26 U.S.C. &sect;1388(c)(2)(C); provided that failure to so
consent shall cause the written notice of allocation that accompanies said check
to be canceled with no further action on the part of this cooperative.</font></p>

<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>ARTICLE IX.<br>
<U>Merger or Consolidation; Dissolution</U></font></H1>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 1 &#151; <U>Merger or
Consolidation</U>.</B> If the terms of a merger or consolidation of which this
cooperative is a party do not provide the members and nonmember patrons of this
cooperative with an economic interest in the surviving entity that is
substantially similar to the economic interest possessed by such members and
nonmember patrons in this cooperative immediately before such merger or
consolidation, the value of the consideration received shall be divided among
them in the same manner as a comparable amount of net liquidation proceeds would
distributed pursuant to Section 2 of this Article IX. This shall not be
construed to prevent issuance of differing forms of consideration to different
groups of members and nonmember patrons to the extent allowed by law.</font></p>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Section 2 &#151;
<U>Liquidation, Dissolution and Winding-Up</U>.</B> Subject to the Articles of
Incorporation, in the event of any liquidation, dissolution or winding up of the
affairs of this cooperative, whether voluntary or involuntary, equity capital
shall be distributed to the holders thereof as follows: first to payment of the
face amount (par value) of all Preferred Equities whose priority was so
established upon the issuance of such Preferred Equities, second to</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">21</FONT></P>
<HR SIZE="1" COLOR=BLACK NOSHADE>





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 2; page: 2" -->


<!-- MARKER FORMAT-SHEET="Para Flush In 0" -->
<p><font size=2>payment of
the face amount (par value) of all Equity Participation Units and all Preferred
Capital Certificates, third to payment of the face amount (par value) of all
Capital Equity Certificates and other outstanding equities (other than
Non-Patronage Earnings Certificates), and fourth to payment of the face amount
(par value) of Non-Patronage Earnings Certificates; provided, however, that
assets held at such time by any Defined Business Unit shall first be used to
redeem the Equity Participation Units and Preferred Capital Certificates of the
Defined Business Unit on a pro rata basis. Any assets remaining after the
foregoing payments have been made shall be allocated among the allocation units
in such manner as the Board of Directors, having taken into consideration the
origin of such amounts, shall determine to be reasonable and equitable. Amounts
so allocated shall be paid to current and former patrons of each such allocation
unit in proportion to their patronage of such unit over such period as may be
determined to be equitable and practicable by the Board of Directors. Such
obligation to distribute shall be construed as a preexisting duty to distribute
any patronage sourced net gain realized in the winding up process to the maximum
extent allowable by law.</font></p>

<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>ARTICLE X.<br>
<U>Seal</U></font></H1>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors may, by
resolution, adopt, alter or abandon the use of a corporate seal.</font></p>

<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><font size=2>ARTICLE XI.<br>
<U>Amendments</U></font></H1>

<!-- MARKER FORMAT-SHEET="Para" -->
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These Bylaws may be amended in accordance
with the Minnesota Cooperative Law, Minnesota Statutes Chapter 308A; upon the
approval of a majority of the votes cast in person or by mail vote at any annual
or special meeting of the members called in accordance with Section 1 of Article
II of these Bylaws; provided, however, in the event the Board of Directors of
this cooperative declares, by resolution adopted by a majority of the Board of
Directors present and voting, that the amendment involves or is related to a
hostile take over, then the amendment may be adopted only upon the approval of
eighty percent (80%) of the total voting power of the members of this
cooperative, whether or not present and/or voting on the amendment; and provided
further that notice of such amendment shall have been given in accordance with
Section 2 of Article II of these Bylaws to the members in or with the notice of
such meeting.</font></p>

<P ALIGN="CENTER"><FONT SIZE="2">22</FONT></P>
<HR SIZE="1" COLOR=BLACK NOSHADE>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>5
<FILENAME>cenex026059_ex99-1.txt
<DESCRIPTION>CAUTIONARY STATEMENT
<TEXT>
                                                                   EXHIBIT 99.1


                              CAUTIONARY STATEMENT

     CENEX HARVEST STATES COOPERATIVES (THE "COMPANY", "WE", "OUR", "US") AND
ITS REPRESENTATIVES AND AGENTS MAY FROM TIME TO TIME MAKE WRITTEN OR ORAL
"FORWARD-LOOKING STATEMENTS" AS DEFINED UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 (THE ACT). WORDS AND PHRASES SUCH AS "WILL LIKELY RESULT,"
"ARE EXPECTED TO," "WILL CONTINUE," "IS ANTICIPATED," "ESTIMATE," "PROJECT" AND
SIMILAR EXPRESSIONS IDENTIFY FORWARD-LOOKING STATEMENTS. THE COMPANY WISHES TO
CAUTION READERS NOT TO PLACE UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENTS,
WHICH SPEAK ONLY AS OF THE DATE MADE.

     THE COMPANY'S FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. THIS CAUTIONARY STATEMENT IS FOR
THE PURPOSE OF QUALIFYING FOR THE "SAFE HARBOR" PROVISIONS OF THE ACT AND IS
INTENDED TO BE A READILY AVAILABLE WRITTEN DOCUMENT THAT CONTAINS FACTORS WHICH
COULD CAUSE RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED IN THE
FORWARD-LOOKING STATEMENTS. THE FOLLOWING MATTERS, AMONG OTHERS, MAY HAVE A
MATERIAL ADVERSE EFFECT ON THE BUSINESS, FINANCIAL CONDITION, LIQUIDITY, RESULTS
OF OPERATIONS OR PROSPECTS, FINANCIAL OR OTHERWISE, OF THE COMPANY. REFERENCE TO
THIS CAUTIONARY STATEMENT IN THE CONTEXT OF A FORWARD-LOOKING STATEMENT SHALL BE
DEEMED TO BE A STATEMENT THAT ANY ONE OR MORE OF THE FOLLOWING FACTORS MAY CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE WHICH MIGHT BE PROJECTED,
FORECASTED, ESTIMATED OR BUDGETED BY THE COMPANY IN THE FORWARD-LOOKING
STATEMENT OR STATEMENTS:

     THE FOLLOWING FACTORS ARE IN ADDITION TO ANY OTHER CAUTIONARY STATEMENTS,
WRITTEN OR ORAL, WHICH MAY BE MADE OR REFERRED TO IN CONNECTION WITH ANY
FORWARD-LOOKING STATEMENT. THE FOREGOING REVIEW OF FACTORS PURSUANT TO THE ACT
SHOULD NOT BE CONSTRUED AS EXHAUSTIVE OR AS AN ADMISSION REGARDING THE ADEQUACY
OF DISCLOSURES MADE BY THE COMPANY PRIOR TO THE EFFECTIVE DATE OF THE ACT.

     THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY REVISE ANY FORWARD-LOOKING
STATEMENTS TO REFLECT FUTURE EVENTS OR CIRCUMSTANCES.

     OUR REVENUES AND OPERATING RESULTS COULD BE ADVERSELY AFFECTED BY CHANGES
IN COMMODITY PRICES. Our revenues and earnings are affected by market prices for
commodities such as crude oil, natural gas, grain, oilseeds, and flour.
Commodity prices generally are affected by a wide range of factors beyond our
control, including the weather, disease, insect damage, drought, the
availability and adequacy of supply, government regulation and policies, and
general political and economic conditions. Increases in market prices for
commodities that we purchase without a corresponding increase in the prices of
our products or our sales volume or a decrease in our other operating expenses
could reduce our revenues and net income. We are also exposed to fluctuating
commodity prices as the result of our inventories of commodities, typically
grain and crude oil, and purchase and sale contracts at fixed or partially fixed
prices. At any time, our inventory levels and unfulfilled fixed or partially
fixed price contract obligations may be substantial.

     OUR OPERATING RESULTS COULD BE ADVERSELY AFFECTED IF OUR MEMBERS WERE TO DO
BUSINESS WITH OTHERS RATHER THAN WITH US. We do not have an exclusive
relationship with our members and our members are not obligated to supply us
with their products or purchase products from us. Our members often have a
variety of distribution outlets and product sources available to them. If our
members were to sell their products to other purchasers or purchase products
from other sellers, our revenues would decline and our results of operations
could be adversely affected.

     WE PARTICIPATE IN HIGHLY COMPETITIVE BUSINESS MARKETS IN WHICH WE MAY NOT
BE ABLE TO CONTINUE TO COMPETE SUCCESSFULLY. We operate in several highly
competitive business segments. Competitive factors include price, service level,
proximity to markets, product quality and marketing. In some of our business
segments, such as Energy, we compete with companies that are larger, better
known and have greater marketing, financial, personnel and other resources. Our
competitors may succeed in developing new or enhanced products that are better
than ours, and may be more successful in marketing and selling their products
than we are with ours. As a result, we may not be able to continue to compete
successfully with our competitors.

     CHANGES IN FEDERAL INCOME TAX LAWS OR IN OUR TAX STATUS COULD INCREASE OUR
TAX LIABILITY AND REDUCE OUR NET INCOME. Current federal income tax laws,
regulations and interpretations regarding the taxation of cooperatives, which
allow us to exclude income generated through business with or for a member
(patronage income) from our taxable income, could be changed. If this occurred,
or if in the future we were not eligible to be taxed as a cooperative, our tax
liability would significantly increase and our net income significantly
decrease.


<PAGE>


     WE INCUR SIGNIFICANT COSTS IN COMPLYING WITH APPLICABLE LAWS AND
REGULATIONS. ANY FAILURE TO MAKE THE CAPITAL INVESTMENTS NECESSARY TO COMPLY
WITH THESE LAWS AND REGULATIONS COULD EXPOSE US TO FINANCIAL LIABILITY. We are
subject to numerous federal, state and local provisions regulating our business
and operations. We incur and expect to incur significant capital and operating
expenses to comply with these laws and regulations, but may be unable to pass on
those expenses to customers without experiencing volume and margin losses. For
example, in the next three years, we anticipate spending approximately $387
million in total at NCRA's McPherson, Kansas refinery and our Laurel, Montana
refinery on upgrading the facilities, largely to comply with regulations
requiring the reduction of sulfur levels in refined petroleum products, of which
$9.5 million has been spent so far at NCRA. It is expected that approximately
80% of the costs will be incurred at the McPherson refinery.

     We establish reserves for the future cost of meeting known compliance
obligations, such as remediation of identified environmental issues. However,
these reserves may prove inadequate to meet our actual liability. Moreover,
amended, new or more stringent requirements, stricter interpretations of
existing requirements or the future discovery of currently unknown compliance
issues may require us to make material expenditures or subject us to liabilities
that we currently do not anticipate.

     Our failure to comply with applicable laws and regulations could subject us
to administrative penalties and injunctive relief, civil remedies including
fines and injunctions, and recalls of our products. We cannot predict what
impact, if any, future laws or regulations may have on our potential business
and operations.

     ENVIRONMENTAL LIABILITIES COULD ADVERSELY AFFECT OUR RESULTS AND FINANCIAL
CONDITION. Many of our current and former facilities have been in operation for
many years and, over that time, we and other operators of those facilities have
generated, used, stored and disposed of substances or wastes that are or might
be considered hazardous under applicable environmental laws, including chemicals
and fuels stored in underground and above-ground tanks. Any past or future
actions in violation of those environmental laws could subject us to
administrative penalties, fines and injunctions. Moreover, future or unknown
past releases of hazardous substances could subject us to private lawsuits
claiming damages and to adverse publicity.

     ACTUAL OR PERCEIVED QUALITY, SAFETY OR HEALTH RISKS ASSOCIATED WITH OUR
PRODUCTS COULD SUBJECT US TO LIABILITY AND DAMAGE OUR BUSINESS AND REPUTATION.
If any of our food products became adulterated or misbranded, we would need to
recall those items and could experience product liability claims if consumers
were injured as a result. A widespread product recall or a significant product
liability judgment could cause our products to be unavailable for a period of
time or a loss of consumer confidence in our products. Even if a product
liability claim is unsuccessful or is not fully pursued, the negative publicity
surrounding any assertion that our products caused illness or injury could
adversely affect our reputation with existing and potential customers and our
corporate and brand image. Moreover, claims or liabilities of this sort might
not be covered by our insurance or by any rights of indemnity or contribution
that we may have against others. In addition, general public perceptions
regarding the quality, safety or health risks associated with particular food
products, such as the concern in some quarters regarding genetically modified
crops, could reduce demand and prices for some of the products associated with
our businesses. To the extent that consumer preferences evolve away from
products that our members or we produce for health or other reasons, such as the
growing demand for organic food products, and we are unable to develop products
that satisfy new consumer preferences, there will be a decreased demand for our
products.

     OUR OPERATIONS ARE SUBJECT TO BUSINESS INTERRUPTIONS AND CASUALTY LOSSES;
WE DO NOT INSURE AGAINST ALL POTENTIAL LOSSES AND COULD BE SERIOUSLY HARMED BY
UNEXPECTED LIABILITIES. Our operations are subject to business interruptions due
to unanticipated events such as explosions, fires, pipeline interruptions,
transportation delays, equipment failures, crude oil or refined product spills,
inclement weather or labor disputes. For example:

   o  Our oil refineries and other facilities are potential targets for
      terrorist attacks that could halt or discontinue production.

   o  Our inability to negotiate acceptable contracts with unionized workers in
      our operations could result in strikes or work stoppages.

   o  The significant inventories that we carry could be damaged or destroyed by
      catastrophic events, extreme weather conditions or contamination.

     We maintain insurance against many, but not all, potential losses or
liabilities arising from these operating hazards, but uninsured losses or
losses above our coverage limits are possible. Uninsured


<PAGE>


losses and liabilities arising from operating hazards could have a material
adverse effect on our financial position or results of operations.

     OUR COOPERATIVE STRUCTURE LIMITS OUR ABILITY TO ACCESS EQUITY CAPITAL. As a
cooperative, we may not sell common equity in our company. In addition, existing
laws and our articles of incorporation and bylaws contain limitations on
dividends of 8% of any preferred stock that we may issue. These limitations
restrict our ability to raise equity capital and may adversely affect our
ability to compete with enterprises that do not face similar restrictions.

     CONSOLIDATION AMONG THE PRODUCERS OF PRODUCTS WE PURCHASE AND CUSTOMERS FOR
PRODUCTS WE SELL COULD ADVERSELY AFFECT OUR REVENUES AND OPERATING RESULTS.
Consolidation has occurred among the producers of products we purchase,
including crude oil and grain. Consolidation could increase the price of these
products and allow suppliers to negotiate pricing and other contract terms that
are less favorable to us. Consolidation also may increase the competition among
consumers of these products to enter into supply relationships with a smaller
number of producers.

     Consolidation among purchasers of our products and in wholesale and retail
distribution channels has resulted in a smaller customer base for our products
and intensified the competition for these customers. For example, ongoing
consolidation among distributors and brokers of food products and food retailers
has altered the buying patterns of these businesses, as they have increasingly
elected to work with product suppliers who can meet their needs nationwide
rather than just regionally or locally. If these distributors, brokers, and
retailers elect not to purchase our products, our sales volumes, revenues, and
profitability could be significantly reduced.

     FLUCTUATIONS IN PRICES FOR CRUDE OIL AND REFINED FUEL PRODUCTS MAY
ADVERSELY AFFECT OUR EARNINGS. Prices for crude oil and for gasoline, diesel
fuel, and other refined petroleum products fluctuate widely. The profitability
of our energy operations depends largely on the margin between the cost of crude
oil that we refine and the selling prices that we obtain for our refined
products. Factors influencing these prices, many of which are beyond our
control, include:

     o levels of worldwide and domestic supplies;

     o capacities of domestic and foreign refineries;

     o the ability of the members of OPEC to agree to and maintain oil price and
       production controls, and the price and level of foreign imports
       generally;

     o political instability or armed conflict in oil-producing regions;

     o the level of consumer demand;

     o the price and availability of alternative fuels;

     o the availability of pipeline capacity; and

     o domestic and foreign governmental regulations and taxes.

     The long-term effects of these and other conditions on the prices of crude
oil and refined petroleum products are uncertain and ever-changing. Accordingly,
we expect our margins on and the profitability of our energy business to
fluctuate, possibly significantly, over time.

     IF OUR CUSTOMERS CHOSE ALTERNATIVES TO OUR REFINED PETROLEUM PRODUCTS OUR
REVENUES AND PROFITS MAY DECLINE. Numerous alternative energy sources currently
are being developed that could serve as alternatives to our gasoline, diesel
fuel and other refined petroleum products. If any of these alternative products
become more economically viable or preferable to our products for environmental
or other reasons, demand for our energy products would decline. Demand for our
gasoline, diesel fuel and other refined petroleum products also could be
adversely affected by increased fuel efficiencies.

     OUR AGRONOMY BUSINESS IS DEPRESSED AND COULD CONTINUE TO UNDERPERFORM IN
THE FUTURE. Demand for agronomy products in general has been adversely affected
in recent years by drought and poor weather conditions, depressed grain prices,
idle acreage and development of insect and disease-resistant crops. These
factors could cause Agriliance, LLC, an agronomy marketing and distribution
venture in which we own a minority interest, to be unable to operate at
profitable margins. In addition, these and other factors, including fluctuations
in the price of natural gas and other raw materials, an increase in recent years
in domestic and foreign production of fertilizer and intense competition within
the industry, in particular from lower-cost foreign producers, have created
particular pressure on producers of fertilizers. As a result, CF Industries,
Inc. a fertilizer manufacturer in which we hold a minority cooperative interest,
has suffered significant losses in recent years as it has incurred increased
prices for raw materials but has been unable to pass those increased costs on to
its customers.


<PAGE>


     TECHNOLOGICAL IMPROVEMENTS IN AGRICULTURE COULD DECREASE THE DEMAND FOR OUR
AGRONOMY PRODUCTS. Improved technological advances in agriculture could decrease
the demand for crop nutrients, and other crop input products and services.
Genetically engineered seeds that resist disease and insects or meet certain
nutritional requirements could affect the demand for crop nutrients and crop
protection products, as well as the demand for fuel to operate application
equipment.

     WE OPERATE SOME OF OUR BUSINESS THROUGH JOINT VENTURES IN WHICH OUR RIGHTS
TO CONTROL BUSINESS DECISIONS ARE LIMITED. Several parts of our business,
including in particular our agronomy business segment and portions of our grain
marketing, wheat milling and foods businesses, are operated through joint
ventures with unaffiliated third parties. Operating a business through a joint
venture means that we have less control over business decisions than we have in
our wholly owned businesses. In particular, we generally cannot act on major
business initiatives in our joint ventures without the consent of the other
party or parties in that venture.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>6
<FILENAME>cenex_ex99-2.htm
<DESCRIPTION>CERTIFICATION OF CEO
<TEXT>
<HTML>
<HEAD>
<TITLE>Cenex Harvest States - Exhibit 99.2</TITLE>
</HEAD>
<BODY>


<H1 ALIGN=RIGHT><FONT SIZE=2>EXHIBIT 99.2</FONT></H1><BR><BR>
<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><FONT SIZE=2>CERTIFICATION PURSUANT TO<BR>
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002<BR>
(18 U.S.C. SECTION 1350)</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush In 0" -->
<P><FONT SIZE=2>In connection with the Quarterly Report of Cenex Harvest States
Cooperatives (the &#147;Company&#148;), on Form 10-Q for the period ended
November 30, 2002 as filed with the Securities and Exchange Commission on
January <I>9</I>, 2003 (the &#147;Report&#148;), I, John D. Johnson, President
and Chief Executive Officer of the Company, certify, pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that to my knowledge: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Hang In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT SIZE=2>(1) </FONT></TD>
<TD WIDTH=90%><FONT SIZE=2>The
Report fully complies with the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of  1934; and</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT SIZE=2>(2)</FONT></TD>
<TD WIDTH=90%><FONT SIZE=2>The
information contained in the Report fairly presents, in all material  respects, the
financial condition and result of operations of the Company. </FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT SIZE=2><U>/s/ John D. Johnson</U><BR>
John D. Johnson<BR>
President and Chief Executive Officer<BR>
January <I>9</I>, 2003</FONT></P>

</BODY>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>7
<FILENAME>cenex_ex99-3.htm
<DESCRIPTION>CERTIFICATION OF CFO
<TEXT>
<HTML>
<HEAD>
<TITLE>Cenex Harvest States - Exhibit 99.3</TITLE>
</HEAD>
<BODY>


<H1 ALIGN=RIGHT><FONT SIZE=2>EXHIBIT 99.3</FONT></H1><BR><BR>
<!-- MARKER FORMAT-SHEET="Head Major" -->
<H1 ALIGN=CENTER><FONT SIZE=2>CERTIFICATION PURSUANT TO<BR>
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002<BR>
(18 U.S.C. SECTION 1350)</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush In 0" -->
<P><FONT SIZE=2>In connection with the Quarterly Report of Cenex Harvest States
Cooperatives (the &#147;Company&#148;), on Form 10-Q for the period ended
November 30, 2002 as filed with the Securities and Exchange Commission on
January <I>9</I>, 2003 (the &#147;Report&#148;), I, John Schmitz, Executive
Vice President and Chief Financial Officer of the Company, certify, pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that to
my knowledge: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Hang In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT SIZE=2>(1) </FONT></TD>
<TD WIDTH=90%><FONT SIZE=2>The
Report fully complies with the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of  1934; and</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang In 1" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT SIZE=2>(2)</FONT></TD>
<TD WIDTH=90%><FONT SIZE=2>The
information contained in the Report fairly presents, in all material  respects, the
financial condition and result of operations of the Company. </FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT SIZE=2><U>/s/ John Schmitz</U><BR>


<!-- MARKER FORMAT-SHEET="Head Minor" -->
John Schmitz<BR>
Executive Vice President and Chief Financial Officer<BR>
January <I>9</I>, 2003</FONT></P>

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</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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