Exhibit 18
Farmland Industries, Inc.
Kansas City, Missouri
Ladies and Gentlemen:
We have been furnished with
a copy of the quarterly report on Form 10-Q of Farmland Industries, Inc. ("the
Company") for the three months ended November 30, 2000, and have read the
Company’s statements contained in Note 7 to the condensed consolidated
financial statements included therein. As stated in Note 7, the Company changed
its method of accounting for certain maintenance costs with respect to its
fertilizer plants from the accrue-in-advance method to the direct expense method. Under the new accounting method, maintenance costs are
recognized as expense as maintenance services are performed. Also, as stated in
Note 7, the Company believes the newly adopted accounting principle is
preferable in the circumstances because prior to the performance of maintenance services, the Company does not have a present unavoidable duty
or responsibility to sacrifice assets in the future nor has there been an
obligating event prior to the maintenance services being performed. In
accordance with your request, we have reviewed and discussed with Company
officials the circumstances and business judgment and planning upon which the
decision to make this change in the method of accounting was based.
We have not audited any
financial statements of Farmland Industries, Inc. as of any date or for any
period subsequent to August 31, 2000, nor have we audited the information set
forth in the aforementioned Note 7 to the condensed consolidated financial
statements; accordingly, we do not express an opinion concerning the factual
information contained therein.
With regard to the
aforementioned accounting change, authoritative criteria have not been
established for evaluating the preferability of one acceptable method of
accounting over another acceptable method. However, for purposes of Farmland
Industries, Inc. compliance with the requirements of the Securities and Exchange
Commission, we are furnishing this letter.
Based on our review and
discussion, with reliance on management’s business judgment and planning,
we concur that the newly adopted method of accounting is preferable in the
Company’s circumstances.
/s/ KPMG
Kansas City, Missouri
January 11, 2001
