ALLIANCE FARMS COOPERATIVE ASSOCIATION, 424B3, 1998-11-24

ALLIANCE FARMS COOPERATIVE ASSOCIATION
424B3, 1998-11-24
AGRICULTURAL PROD-LIVESTOCK & ANIMAL SPECIALTIES

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Filed Pursuant to Rule 424(b)(3)
(File No. 333-25501
PROSPECTUS

ALLIANCE FARMS COOPERATIVE ASSOCIATION

51 Shares of Common Stock
54 Shares of Class B Common Stock
72 Shares of Class C Common Stock

Alliance Farms Cooperative Association, a Colorado
cooperative association ("Alliance" or the "Company"), is
offering up to an aggregate of 51 shares (the "Class A Shares")
of its Common Stock, $.01 par value ("Class A Common"), 54 shares
(the "Class B Shares") of its Class B Common Stock, $.01 par
value ("Class B Common"), and 72 shares (the "Class C Shares" and
together with the Class A Shares and the Class B Shares, the
"Shares") of its Class C Common Stock, $.01 par value ("Class C
Common" and together with the Class A Common and the Class B
Common, the "Common Stock"), exclusively to producers of
agricultural products, associations of such producers, and
federations of such associations, at a price of $80,000 per Class
A Share, $60,000 per Class B Share and $45,000 per Class C Share.
The Shares are being offered on a "best efforts, all-or-none"
basis for (a) 17 Class A Shares (a "Minimum Class A Block"), and
thereafter may continue to be offered on such basis with respect
to successive Minimum Class A Blocks until 51 Class A Shares have
been issued and sold, (b) 18 Class B Shares (a "Minimum Class B
Block"), and thereafter may continue to be offered on such basis
with respect to successive Minimum Class B Blocks until 54 Class
B Shares have been issued and sold, and (c) 24 Class C Shares (a
"Minimum Class C Block" and together with a Minimum Class A Block
and a Minimum Class B Block, a "Minimum Block"), and thereafter
may continue to be offered on such basis with respect to
successive Minimum Class C Blocks until 72 Class C Shares have
been issued and sold. As of the date of this Prospectus, the
Company has consummated the issuance and sale of 17 shares of
Class A Common and 36 shares of Class B Common in this offering.
The consummation of the issuance and sale of each Minimum Class A
Block will be conditioned upon and subject to the Company
obtaining a commitment for at least a $2,720,000 loan, and the
consummation of the issuance and sale of each Minimum Class B
Block and each Minimum Class C Block will be conditioned upon and
subject to the Company obtaining a commitment for at least a
$2,160,000 loan. As of the date of this Prospectus, the Company
has obtained such commitments with respect to at least five
Minimum Blocks of the remaining Shares offered hereby until
December 31, 2001. The offering price per Share has been
arbitrarily determined by the Company based upon the Company's
anticipated equity capital requirements for the development of
one new feeder pig production facility with respect to each
Minimum Class A Block sold and upon the anticipated output of
feeder pigs (i.e., 8- to 9-week old pigs weighing between
approximately 30 and 50 pounds) from each such facility, and
based upon the Company's anticipated equity capital requirements
for the development of one new weaned pig production facility
with respect to each Minimum Class B Block or Minimum Class C
Block sold and upon the anticipated output of weaned pigs (i.e.,
20- to 25-day old pigs weighing at least six pounds) from each
such facility. Each investor must purchase a minimum of one
Class A Share, one Class B Share, or one Class C Share, and in
addition must enter into a Pig Purchase Agreement with the
Company in the form attached to this Prospectus as Exhibit B. No
fractional shares will be issued. There can be no assurance that
any or all of the Shares in this offering will be sold. Pending
the sale of one or more Minimum Blocks, all funds received in
payment of the public offering price for Shares will be deposited
in an interest bearing escrow account with The Bank of New York.
The offering of the Shares will terminate on January 7, 1999 (550
days from the July 7, 1997 commencement of the offering), unless
extended by the Company for a period of up to an additional 180
days. See "Business--Financing" and "Plan of Distribution."

There is no public market for the Class A Common, Class B
Common or Class C Common of the Company, and no public market is
expected to develop as a result of any offering of the Shares.
The Shares offered hereby are subject to the provisions of the
Colorado Cooperative Association Law and the Company's Articles
of Incorporation and Bylaws which restrict the transferability of
the Shares. No assignment or transfer of the Company's Class A
Common, Class B Common or Class C Common will be permitted
without the consent of the Company's Board of Directors, which
consent may not be given unless, the assignee or transferee of
the Class A Common, Class B Common or Class C Common executes and
delivers to the Company a Pig Purchase Agreement with respect to
such class. No dividends will be paid by Alliance on its Common
Stock, although stockholders will be entitled to patronage
distributions based on the quantity or value of business done by
the Company with or for its stockholders. The ability of the
Company to pay patronage distributions in cash, however, is
restricted under the loan agreement with the Company's existing
lender. See "Risk Factors--Distributions and Dividends" and "--
Lack of Liquidity; Absence of Market for Shares," "Patronage
Distribution Policy," "Description of Capital Stock" and
"Restrictions on Sale or Other Transfer of the Shares."

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS", APPEARING ON PAGES 10 THROUGH 18, FOR
INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

UNDERWRITING PROCEEDS
DISCOUNTS TO THE
PRICE TO AND COMPANY
PUBLIC COMMISSIONS/1/ /1//2/

Per Share of Class A Common $80,000 $784.31 $79,215.69
Total Class A Minimum (3) $1,360,000 $40,000 $1,320,000
Total Class A Maximum (3) $4,080,000 $40,000 $4,040,000

Per Share of Class B Common $60,000 $740.74 $59,259.26
Total Class B Minimum (3) $1,080,000 $40,000 $1,040,000
Total Class B Maximum (3) $3,240,000 $40,000 $3,200,000

Per Share of Class C Common $45,000 $555.56 $44,444.44
Total Class C Minimum (3) $1,080,000 $40,000 $1,040,000
Total Class C Maximum (3) $3,240,000 $40,000 $3,200,000
_____________________
(Footnotes on next page)

_________________________

The date of this Prospectus is November 24, 1998.

<PAGE>

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS IN CONNECTION WITH ANY OFFERING MADE HEREBY
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITY OTHER THAN THE SHARES OF CLASS A COMMON, CLASS B
COMMON AND CLASS C COMMON OFFERED HEREBY, NOR DOES IT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREBY SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.

The Company is currently subject to the informational
requirements of the Securities Exchange Act of 1934, as amended
("Exchange Act"), and in accordance therewith the Company files
annual and quarterly reports and other information with the
Securities and Exchange Commission (the "Commission"). See
"Additional Information." The Company intends to furnish to its
stockholders annual reports containing financial statements
audited by an independent certified public accounting firm. In
addition, the Company intends to make available to its
stockholders quarterly reports containing unaudited financial
information for each of the first three quarters of each fiscal
year.

TABLE OF CONTENTS

Page
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . .3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . 10
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . 18
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . 19
Patronage Distribution Policy. . . . . . . . . . . . . . . . . 25
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 26
Selected Financial Data. . . . . . . . . . . . . . . . . . . . 29
Management's Discussion and Analysis of Financial Condition
and Results of Operations. . . . . . . . . . . . . . . . . . 30
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Pig Purchase Agreement . . . . . . . . . . . . . . . . . . . . 50
Management . . .53
Certain Relationships and Related Transactions . . . . . . . . 55
Principal Stockholders . . . . . . . . . . . . . . . . . . . . 59
Description of Capital Stock . . . . . . . . . . . . . . . . . 60
Restrictions on Sale or Other Transfer of the Shares . . . . . 61
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . 63
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . 67
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Additional Information . . . . . . . . . . . . . . . . . . . . 68

Index of Financial Statements. . . . . . . . . . . . . . . . .F-1

Exhibit A -- Form of Subscription Agreement. . . . . . . . . .A-1
Exhibit B -- Form of Pig Purchase Agreement. . . . . . . . . .B-1
_______________________________________

The Company will provide without charge to each person who
receives a Prospectus, upon written or oral request of such
person, a copy of any of the information that has been
incorporated by reference in this Prospectus (not including
exhibits to the information that is incorporated by reference
unless the exhibits are themselves specifically incorporated by
reference). Such a request should be directed to Mr. Wayne N.
Snyder, Chairman of the Board and President of the Company, at
Farmland Industries, Inc., 10150 North Executive Hills Boulevard,
Kansas City, Missouri 64153 (telephone number 816-891-3686),
until the termination of the offering.

Until February 23, 1999 (90 days after the date of this
Prospectus) all dealers that effect transactions in these
securities, whether or not participating in this offering, may be
required to deliver a Prospectus. This is in addition to the
dealer's obligation to deliver a Prospectus when acting as
underwriters and with respect to their unsold allotments or
subscriptions.
_____________________
(Footnotes to table on previous page)

/1/ The Company intends to sell the Shares directly to one or
more purchasers through the efforts of its directors,
officers and employees, if permitted under applicable law,
in which event no Underwriting Discounts and Commissions
will be paid, or through agents designated by the Company.
The Company has entered into agency agreements with I/JL
providing for the payment by Alliance of total lump sum fees
of $80,000 regardless of whether any or all of the Shares
are sold. For purposes of estimating Per Share amounts, it
is assumed that all 51 Class A Shares, 54 Class B Shares and
72 Class C Shares will be sold. For purposes of estimating
the Proceeds to the Company, it is assumed that all Shares
sold will be sold through the Company's agent, I/JL. The
Company has agreed to indemnify I/JL against certain
liabilities, including liabilities under the Securities Act
of 1933. See "Plan of Distribution."
/2/ Before deduction of expenses payable by the Company
estimated at $100,000.
/3/ The Company intends to offer and sell the Shares on a "best
efforts, all-or-none" basis for (a) a Minimum Class A Block
of 17 Class A Shares, and thereafter may continue to offer
Class A Shares on such basis with respect to successive
Minimum Class A Blocks until 51 Class A Shares have been
issued and sold, (b) a Minimum Class B Block of 18 Class B
Shares, and thereafter may continue to offer Class B Shares
on such basis with respect to successive Minimum Class B
Blocks until 54 Class B Shares have been issued and sold,
and (c) a Minimum Class C Block of 24 Class C Shares, and
thereafter may continue to offer Class C Shares on such
basis with respect to successive Minimum Class C Blocks
until 72 Class C Shares have been issued and sold. Pending
the sale of a Minimum Block, all funds received in payment
of the public offering price for the Shares will be
deposited in an interest-bearing escrow account. As of the
date of this Prospectus, the Company has consummated the
issuance and sale of 17 Class A Shares and 36 Class B
Shares. See "Plan of Distribution."

<PAGE>

PROSPECTUS SUMMARY

The following information is qualified in its entirety by
reference to, and should be read in conjunction with, the more
detailed information and financial statements, including the
notes thereto, appearing elsewhere in this Prospectus. All
references to "Alliance" and the "Company" in this Prospectus
include Alliance Farms Cooperative Association and its
predecessor, Yuma Feeder Pig Limited Liability Company ("Yuma
LLC"), unless the context indicates otherwise.

THE COMPANY

The Company is a cooperative association engaged in the
production of feeder pigs for sale to its members who own shares
of Class A Common, and in the production of weaned pigs for sale
to its members who own shares of Class B Common or Class C
Common. The Company was formed as a cooperative association
under the laws of the state of Colorado on May 3, 1994, but did
not engage in any business activity until July, 1994. The
Company's predecessor, Yuma LLC, was formed in October, 1991 and
commenced shipment of feeder pigs in March, 1993. On July 13,
1994 (July 9, 1994 for accounting purposes), the Company acquired
the entire equity ownership rights and interests in Yuma LLC, and
thereupon Yuma LLC was dissolved and liquidated and its assets,
liabilities and feeder pig production operations were assigned to
and assumed by Alliance. As of the date of this Prospectus, the
Company owned and operated five 2,450-sow feeder pig production
facilities located in Yuma County, Colorado (approximately 150
miles east of Denver), two 2,450-sow feeder pig production
facilities located in Wayne County, Illinois (approximately 100
miles east of St. Louis, Missouri), one 2,450-sow weaned pig
production facility in Yuma County, Colorado and one weaned pig
production facility in Wayne County, Illinois. As of the date of
this Prospectus, the Company has commenced preliminary
development activities with respect to a 5,000-sow pig production
facility in Yuma County, Colorado. Financing for the acquisition
of real estate, facilities construction and acquisition of
breeding stock with respect to the existing facilities already
has been obtained and will not be provided by any proceeds from
the sale of the Shares offered hereby, however, the proceeds from
the sale of the first two Minimum Blocks of the remaining Shares
offered hereby will be applied to the Colorado facility presently
under development. See "The Company," "Business" and "Use of
Proceeds."

The principal executive offices of the Company are located
at 503 East 8th Avenue, Yuma, Colorado 80759, and its telephone
number is (970) 848-3231.

RISK FACTORS

The Company and its business, and an investment in the
Shares, will be subject to a high degree of risk, including,
without limitation, the various risks described under "Risk
Factors."

THE OFFERING

Securities Offered 51 shares of the Company's Class A
Common at an offering price of $80,000
per share, 54 shares of the Company's
Class B Common at an offering price of
$60,000 per share, and 72 shares of the
Company's Class C Common at an offering
price of $45,000 per share (of which 17
Class A Shares and 36 Class B Shares
already have been issued and sold as of
the date of this Prospectus). See "Plan
of Distribution" and "Description of
Capital Stock."

Investor Suitability The Shares are being offered exclusively
to producers of agricultural products,
associations of such producers, and
federations of such associations. In
addition, Iowa investors must satisfy
certain net worth and gross income
threshold requirements described herein.
Each investor purchasing one or more
Class A Shares must enter into a Pig
Purchase <PAGE> Agreement, pursuant to which
such investor must purchase his or her
proportionate share of the Company's
feeder pig production, each investor
purchasing one or more Class B Shares
must enter into a Pig Purchase
Agreement, pursuant to which such
investor must purchase his or her
proportionate share of the Company's
weaned pig production made available to
Class B shareholders, and each investor
purchasing one or more Class C Shares
must enter into a Pig Purchase
Agreement, pursuant to which such
investor must purchase his or her
proportionate share of the Company's
weaned pig production made available to
Class C shareholders. See "Plan of
Distribution," "Pig Purchase Agreement."

Subscription and
Payment Payment of the public offering price for
the Common Stock being subscribed for,
together with two copies of (i) an
executed Subscription Agreement, and
(ii) an executed Pig Purchase
Agreement, must be delivered to the
Company or its agent on or before the
termination of the offering. See "Plan
of Distribution--Subscription
Procedure."

Minimum Investment Each investor must make a minimum
investment of one Share of Class A
Common, Class B Common or Class C
Common. See "Plan of Distribution."

Transfer Restrictions The Shares are subject to the provisions
of the Colorado Cooperative Association
Law and the Company's Articles of
Incorporation and Bylaws, which restrict
the transferability of Common Stock.
These restrictions include a requirement
that the Company's Board of Directors
give its consent prior to any transfer
of Common Stock, that the transferee of
Common Stock enter into a Pig Purchase
Agreement with the Company. In
addition, the Company has the right to
purchase a member's Common Stock under
certain circumstances. See
"Restrictions on Sale or Other Transfer
of the Shares."

Closing Conditions The Shares are being offered on a "best
efforts, all-or-none" basis for (a) a
Minimum Class A Block of 17 Class A
Shares, and thereafter may continue to
be offered on such basis with respect to
successive Minimum Class A Blocks until
51 Class A Shares have been issued and
sold, (b) a Minimum Class B Block of 18
Class B Shares, and thereafter may
continue to be offered on such basis
with respect to successive Minimum Class
B Blocks until 54 Class B Shares have
been issued and sold, and (c) a Minimum
Class C Block of 24 Class C Shares, and
thereafter may continue to be offered on
such basis with respect to successive
Minimum Class C Blocks until 72 Class C
Shares have been issued and sold. As of
the date of this Prospectus, the Company
has consummated the issuance and sale of
17 Class A Shares and 36 Class B Shares
in this offering. This offering will
not be consummated unless (a) at least
one Minimum Class A Block of 17 Class A
Shares is issued and sold and the
Company receives a commitment for at
least a $2,720,000 loan with respect to
each such Minimum Class A Block, or (b)
at least one Minimum Class B Block of 18
Class B Shares or one Minimum Class C
Block of 24 Class C Shares is issued and
sold and the Company receives a
commitment for at least a $2,160,000
loan with respect to each such Minimum
Block. As of the date of this
Prospectus, the Company has obtained
such a commitment with respect to at
least five Minimum Blocks of the
remaining Shares offered hereby until
December 31, 2001. Pending the
Company's acceptance of subscriptions
for a Minimum Block, all funds received
in payment of the public offering price
for Shares will be deposited in an
interest-bearing escrow account
established at The Bank of New York. If
Alliance does not issue Shares for which
funds have been deposited in the escrow
account prior to the termination of the
offering, such funds will be refunded to
the prospective investors, together with
any interest earned thereon and without
deduction for expenses. See "Business--
Financing" and "Plan of Distribution."

Termination of
the Offering The offering will terminate on January
7, 1999 (550 days from the July 7, 1997
commencement of the offering), unless
extended by the Company for a period of
up to an additional 180 days. See "Plan
of Distribution--Termination of the
Offering."

<PAGE>

SUMMARY FINANCIAL DATA

The summary historical financial information presented below
reflects the fiscal 1997, 1996 and 1995 operations of Alliance.
Such financial information under the captions "Statement of
Operations Information" and "Balance Sheet Information" as of and
for the fiscal years ended August 31 is derived from the
financial statements of Alliance for the period from September 1,
1994 through August 31, 1997, all of which have been audited by
the Company's independent certified public accountants. The
summary historical financial information as of May 31, 1998 and
for the nine months ended May 31, 1998 and 1997 is derived from
the unaudited financial statements of Alliance. In the opinion
of the Company, such interim financial information includes all
adjustments, consisting only of normal recurring adjustments,
necessary for a fair statement of the results for such interim
periods. In the opinion of management, the financial condition
and results of operations set forth herein cannot be relied upon
as being representative of the continuing prospects for the
Company. The following summary financial information should be
read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the audited
financial statements and related notes thereto and other
information included elsewhere in this Prospectus. See "Selected
Financial Data."

<TABLE>

STATEMENT OF OPERATIONS
INFORMATION:

FISCAL YEAR ENDED AUGUST 31, NINE MONTHS ENDED
MAY 31,
1997 1996 1995 1998 1997

Net sales $13,669,706 $7,037,927 $ 1,554,113 $13,346,482 $9,871,995
Cost of
goods sold 11,222,169 6,422,838 1,836,388 9,587,739 8,239,573
Gross income
(loss) 2,447,537 615,089 (282,275) 3,758,743 1,632,422
Expenses related
to start-up of
new production
facilities 281,025 426,926 754,756 791,861 174,215
Administrative
expenses 424,565 369,787 101,927 751,269 326,170
(Gain) Loss on
sale of breeding
stock (94,123) 226,738 112,797 159,057 76,710
Operating income
(loss) 1,836,070 (408,362) (1,251,755) 2,056,556 1,055,327
Interest
expense (1,321,984) (1,001,329) (289,082) (1,129,039) (919,360)
Other income 144,209 66,604 27,509 298,355 101,111
(1,177,775) (934,725) (261,573) (830,684) (818,249)
Net income
(loss) $ 658,295 $(1,343,087) $(1,513,328) $1,225,872 $ 237,078

OTHER INFORMATION:

Pigs Sold 231,611 148,926 46,858 228,040 169,459

BALANCE SHEET AS OF AUGUST 31, AS OF MAY 31,
INFORMATION: 1997 1996 1995 1998

Working Capital
(Deficit) $ (114,425) $ (257,702) $ 1,238,271 $ ( 7,355)
Total Assets 24,380,406 20,845,613 14,571,940 28,855,236
Shareholders'
Equity 6,496,168 4,606,289 4,627,693 9,754,168

</TABLE>

<PAGE>

USE OF PROCEEDS

Class A Common The net proceeds to the Company from the sale of
the Class A Shares offered hereby, after deducting
expenses payable in connection with this offering,
are estimated to be approximately $1,220,000 if
one Minimum Class A Block is sold and
approximately $3,940,000 if all 51 Class A Shares
offered hereby are sold. The Company intends to
use the net proceeds from the sale of each Minimum
Class A Block, together with approximately
$2,720,000 of debt financing, for the development
or acquisition of one new 2,450-sow feeder pig
production facility (which facility may exist as a
stand-alone unit or as part of a 5,000-sow
production complex) to be situated in or around
Yuma County, Colorado, Wayne County, Illinois or
other locations selected by the Company, including
the purchase of real estate, the construction of
the facility, and the acquisition of breeding
stock, and the demands for working capital during
the initial start-up period for the facility. In
anticipation of the sale of one or more Minimum
Class A Blocks, the Company, from time to time,
may borrow up to $1,360,000 per Minimum Class A
Block from Farmland Industries, Inc. ("Farmland")
to commence the development or acquisition of a
feeder pig production facility. In such event the
net proceeds from the sale of a Minimum Class A
Block will be applied to such facility, including
the repayment of the debt financing, together with
interest thereon, provided by Farmland If all 51
Class A Shares offered hereby are sold, the net
proceeds to the Company, together with
approximately $8,160,000 of debt financing, will
be used for the development or acquisition of
feeder pig production facilities having the
capacity of three 2,450-sow units. The Company
anticipates that the net proceeds of the offering
of each Minimum Class A Block, the approximately
$2,720,000 of debt financing required with respect
to each such Minimum Class A Block, and any
interest earned thereon, will be adequate to
maintain its current and planned operations during
the Company's start-up phase for each new
facility, which is anticipated to be up to 13 to
15 months after completion of the offering of such
Minimum Class A Block. As of the date of this
Prospectus, the Company has obtained a commitment
until December 31, 2001 for the debt financing
required with respect to at least five Minimum
Blocks of the remaining Shares offered hereby.
See "Use of Proceeds," "Business--Financing" and
"Risk Factors."

Class B Common The net proceeds to the Company from the sale of
the Class B Shares offered hereby, after deducting
expenses payable in connection with this offering,
are estimated to be approximately $940,000 if one
Minimum Class B Block is sold and approximately
$3,100,000 if all 54 Class B Shares offered hereby
are sold. The Company intends to use the net
proceeds from the sale of each Minimum Class B
Block, together with approximately $2,160,000 of
debt financing, for the development or acquisition
of one new 2,450-sow weaned pig production
facility (which facility may exist as a stand-
alone unit or as part of a 5,000-sow production
complex) to be situated in or around Yuma County,
Colorado, Wayne County, Illinois or other
locations selected by the Company, including the
purchase of real estate, the construction of the
facility, and the acquisition of breeding stock,
and the demands for working capital during the
initial start-up period for the facility. In
anticipation of the sale of one or more Minimum
Class B Blocks, the Company, from time to time,
may borrow up to $1,080,000 per Minimum Class B
Block from Farmland to commence the development or
acquisition of a weaned pig production facility.
In such event the net proceeds from the sale of a
Minimum Class B Block will be applied to such
facility, including the repayment of the debt
financing, together with interest thereon,
provided by Farmland. If all 54 Class B Shares
offered hereby are sold, the net proceeds to the
Company, together with approximately $6,480,000 of
debt financing, will be used for the development
or acquisition of weaned pig production facilities
having the capacity of three 2,450-sow units. The
Company anticipates that the net proceeds of the
offering of each <PAGE> Minimum Class B Block, the
approximately $2,160,000 of debt financing
required with respect to each such Minimum Class B
Block, and any interest earned thereon, will be
adequate to maintain its planned operations during
the Company's start-up phase for each new
facility, which is anticipated to be up to 11 to
13 months after completion of the offering of such
Minimum Class B Block. As of the date of this
Prospectus, the Company has obtained a commitment
until December 31, 2001 for the debt financing
required with respect to at least five Minimum
Blocks of the remaining Shares offered hereby.
See "Use of Proceeds," "Business--Financing" and
"Risk Factors."

Class C Common The net proceeds to the Company from the sale of
the Class C Shares offered hereby, after deducting
expenses payable in connection with this offering,
are estimated to be approximately $940,000 if one
Minimum Class C Block is sold and approximately
$3,100,000 if all 72 Class C Shares offered hereby
are sold. The Company intends to use the net
proceeds from the sale of each Minimum Class C
Block, together with approximately $2,160,000 of
debt financing, for the development or acquisition
of one new 2,450-sow weaned pig production
facility (which facility may exist as a stand-
alone unit or as part of a 5,000-sow production
complex) to be situated in or around Yuma County,
Colorado, Wayne County, Illinois or other
locations selected by the Company, including the
purchase of real estate, the construction of the
facility, and the acquisition of breeding stock,
and the demands for working capital during the
initial start-up period for the facility. In
anticipation of the sale of one or more Minimum
Class C Blocks, the Company, from time to time,
may borrow up to $1,080,000 per Minimum Class C
Block from Farmland to commence the development or
acquisition of a weaned pig production facility.
In such event the net proceeds from the sale of a
Minimum Class C Block will be applied to such
facility, including the repayment of the debt
financing, together with interest thereon,
provided by Farmland. If all 72 Class C Shares
offered hereby are sold, the net proceeds to the
Company, together with approximately $6,480,000 of
debt financing, will be used for the development
or acquisition of weaned pig production facilities
having the capacity of three 2,450-sow units. The
Company anticipates that the net proceeds of the
offering of each Minimum Class C Block, the
approximately $2,160,000 of debt financing
required with respect to each such Minimum Class C
Block, and any interest earned thereon, will be
adequate to maintain its planned operations during
the Company's start-up phase for each new
facility, which is anticipated to be up to 11 to
13 months after completion of the offering of such
Minimum Class C Block. As of the date of this
Prospectus, the Company has obtained a commitment
until December 31, 2001 for the debt financing
required with respect to at least five Minimum
Blocks of the remaining Shares offered hereby.
See "Use of Proceeds," "Business--Financing" and
"Risk Factors."

PIG PURCHASE AGREEMENT

Each investor purchasing one or more Shares must enter into
a Pig Purchase Agreement, in the form attached hereto as
Exhibit B ("Pig Purchase Agreement"), pursuant to which (a)
investor members owning Class A Shares will be required to
purchase, and the Company will be required to sell, feeder pigs
constituting Qualifying Pigs (as defined in the Agreement) in
lots of no less than 900, and no more than 1,000, pigs per lot,
as determined by the Company, and (b) investor members owning
Class B Shares or Class C Shares will be required to purchase,
and the Company will be required to sell, weaned pigs
constituting Qualifying Pigs (as defined in the Agreement) in
lots of no less than 925, and no more than 1,025, pigs per lot,
as determined by the Company. The Company intends to allocate
its production of weaned pigs from all facilities between those
that are to be sent to nurseries and developed by the Company
into feeder pigs, on the one hand, and those that are to be sold
as weaned pigs, on the other hand, in the same proportion that
the number of the Company's operating feeder pig production
facilities bears to the number of the Company's operating weaned
pig production facilities. Lots of feeder pigs constituting
Qualifying Pigs are to be made available to members of the
Company owning Class A Shares on <PAGE> a rotating schedule determined
and implemented by the Company, with the number of lots made
available to a member and the frequency of availability being
based upon the member's proportionate ownership interest in the
Company's outstanding Class A Common and the actual production of
feeder pigs constituting Qualifying Pigs from the Company's
facilities. Lots of weaned pigs constituting Qualifying Pigs are
to be made available to members of the Company owning Class B
Shares or Class C Shares on a rotating schedule determined and
implemented by the Company, with the number of lots made
available to a member and the frequency of availability being
based upon the member's proportionate ownership interest in the
Company's outstanding Class B Common or Class C Common, as the
case may be, and the Company's actual production of Qualifying
Pigs that are to be sold to members of the Company as weaned
pigs. If the Company is successful in implementing its business
plan and the proposed new production facilities go into operation
on schedule, the initial lots of feeder pigs for new investor
members owning Class A Common are not expected to be available
for up to 13 to 15 months after completion of the offering of a
Minimum Class A Block to such members, and the initial lots of
weaned pigs for new investor members owning Class B Shares or
Class C Shares are not expected to be available for up to 11 to
13 months after completion of the offering of a Minimum Class B
Block or Minimum Class C Block, as the case may be, to such
members. In the event that the production of feeder pigs
exceeds two and seven-tenths (2.7) lots per share of Class A
Common on a prospective rolling 12-month basis, the Company may
sell such excess production to non-members, or retain such excess
production for the Company's own purposes, in lieu of selling
such excess production pursuant to the Pig Purchase Agreements.
In the event that the production of weaned pigs exceeds two and
seven-tenths (2.7) lots per share of Class B Common or two and
one-tenth (2.1) lots per share of Class C Common, as the case may
be, on a prospective rolling 12-month basis, the Company may sell
such excess production to non-members, or retain such excess
production for the Company's own purposes, in lieu of selling
such excess production pursuant to the Pig Purchase Agreements.
The Company intends to cause any such excess production of
weaned pigs to be retained by the Company and developed into
feeder pigs. The purchase price for Qualifying Pigs will be
established pursuant to a formula consisting of the sum of the
following factors: the financing cost per pig, the operating
cost per pig, and a $0 to $4.50 per pig production margin as
determined by the Board of Directors in its discretion (all as
defined in the Agreement). Payment of the estimated purchase
price is due not less than one day prior to the scheduled
shipment date and is subject to adjustment within five days
following delivery for certain variations in the average weight
of the pigs.

A member's Pig Purchase Agreement will remain in effect for
a period of ten years after the date the first delivery of
Qualifying Pigs is made to the member thereunder and thereafter
automatically will be renewed for succeeding one year terms
unless earlier terminated by the member. The Company may
terminate a member's Pig Purchase Agreement if the member fails
to purchase, pay for, and take delivery of any two lots of
Qualifying Pigs when and as made available to the member;
provided, however, that for each ten shares of Common Stock owned
by a member, the number of such failures necessary before the
Company may terminate such member's Agreement is increased by
one. In addition, the member will be responsible for the damages
and expenses incurred by the Company as a result of any such
failure, including (a) the difference between the price payable
by the member for the Qualifying Pigs that the member has failed
to purchase, pay for, and take delivery under the Agreement and
the then current market price for such pigs, (b) $3,000, which
amount is intended to cover the Company's administrative and
other costs and expenses associated with such failure, and (c)
all costs of collection, enforcement, and prosecution of the
Company's rights and remedies. The member may terminate the Pig
Purchase Agreement if the Company materially breaches any
obligation or covenant in the Agreement and such breach is not
cured within 30 days following notice of such breach given by the
member to the Company. Furthermore, if the first delivery of
Qualifying Pigs thereunder is not made within 24 months of the
date of the Pig Purchase Agreement, the member may terminate the
Agreement within three months after the expiration of such 24-
month period. A member's Pig Purchase Agreement automatically
terminates if the member assigns or transfers all shares of Class
A Common, Class B Common or Class C Common, as the case may be,
from which the member's right to purchase lots of Qualifying Pigs
under the Agreement derives. Except as described above, a member
does not have the right to terminate the Pig Purchase Agreement
prior to the expiration of the initial or any extended term
thereof. As alluded to above, a member has the right to
terminate the Pig Purchase Agreement at the expiration of the
initial or any extended term thereof by giving notice to the
Company at least one year prior to the expiration of such initial
or extended term that the member desires to exercise such
termination right. The foregoing termination rights constitute
the member's exclusive rights of termination under the Pig
Purchase Agreement.

As security for the performance of the member's obligations
under the Pig Purchase Agreement and for the Company's option to
purchase a member's Class A Common, Class B Common or Class C
Common, as the case may be, under certain circumstances, a
security interest in all of the member's Class A Common, Class B
Common or Class C Common, as the <PAGE> case may be, will be granted to
the Company and the certificates representing shares of such
Common Stock will be retained by Alliance. A member's failure to
perform his purchase obligation under the Pig Purchase Agreement,
among other occurrences, may result in the Company's foreclosure
on this security interest. No member has the right to demand the
return of or to receive any of the member's capital from the
Company as a result of the termination of the Pig Purchase
Agreement or otherwise and regardless of whether demanded prior
to the expiration of the initial or any extended term of the Pig
Purchase Agreement or at any time after the expiration of any
such term. Moreover, the Company is under no obligation to
redeem or repurchase its Class A Common, Class B Common or Class
C Common, as the case may be, prior to the expiration of the
initial or any extended term of the Pig Purchase Agreement or at
any time after the expiration of any such term. The Shares will
not be readily marketable, and purchasers thereof may not be able
to liquidate their investment in the event of any emergency or
otherwise. See "Risk Factors--Obligation to Purchase Pigs," "--
Right of Alliance to Acquire Shares" and "-- Lack of Liquidity;
Absence of Market for Shares," "Restrictions on Sale or Other
Transfer of the Shares--Cooperative Association Laws and Charter
Documents" and "Pig Purchase Agreement."

<PAGE>

RISK FACTORS

An investment in the Shares involves a high degree of risk.
In addition to general investment risks and other information
contained in this Prospectus, the factors discussed below should
be carefully considered in evaluating the Company and its
business and a possible investment in the Shares.

EARLY STAGE OF DEVELOPMENT

The Company was formed in May, 1994 (with its predecessor,
Yuma LLC, being formed in October, 1991) and is at an early stage
of development. Although the Company has been engaged in the
production of feeder pigs since July 1994 (which process includes
the production of weaned pigs), the Company did not engage at all
in the production of weaned pigs for sale until 1998. The
Company is subject to all of the risks inherent in the
establishment of a new business and the operation of a business
generally, including the need for substantial capital to support
its facilities development efforts, the need to attract and
retain qualified personnel and experienced management, the risks
related to facility location and construction, changes in market
conditions and costs, competition, inflation, production
efficiency, quality control, herd health, environmental and other
governmental laws and regulations, and the other risks described
in this Prospectus. There can be no assurance that the Company
successfully will implement its business plan to develop or
acquire additional feeder pig production facilities and weaned
pig production facilities and realize any significant economies
of scale or that the feeder pigs and weaned pigs, as the case may
be, to be raised at such facilities will be made available to the
Company's stockholders under the Pig Purchase Agreements in
quantities which are sufficient to meet the requirements of such
stockholders and at prices that are less than otherwise could be
obtained from other sources. If the Company is successful in
implementing its business plan and any new pig production
facilities go into operation on schedule, the initial lots of
feeder pigs resulting from the expansion of the Company's feeder
pig production operations are not expected to be available to new
Class A Common investor members for up to 13 to 15 months after
completion of the sale of a Minimum Class A Block to such members
and the initial lots of weaned pigs resulting from the expansion
of the Company's weaned pig production operations are not
expected to be available to new Class B Common investor members
or new Class C Common investor members, as the case may be, for
up to 11 to 13 months after completion of the sale of a Minimum
Block to such members. New investor members will not be entitled
to purchase pigs pursuant to the Pig Purchase Agreements until
such time. See "Business."

BREEDING STOCK

The availability in sufficient numbers of genetically
consistent breeding stock that satisfies the characteristics
required by the Company and that can be obtained on acceptable
terms and prices is critical to the Company's operations. No
assurances can be given that the Company's requirements for
breeding stock will be satisfied on acceptable terms and prices,
if at all. See "Business."

HERD HEALTH

The health of the breeding herd and pigs produced by the
Company can greatly impact, and has greatly impacted, the
profitability of the Company. In the event that the Company's
breeding herd or feeder or weaned pig population contracts a
disease causing diminished breeding stock productivity, or
extreme mortality and morbidity, the Company will face
substantial cost or loss and its operating results will be
adversely affected. In addition, herd health problems will
result in an increase in the price for pigs under the Pig
Purchase Agreements as well as a reduction in the pigs available
for purchase by stockholders under said Agreements. Alliance and
its members have suffered the consequences referred to in this
paragraph as a result of herd health problems. Although it is
anticipated that each of the new facilities to be developed or
acquired, in part, with the proceeds from this offering will be
designed in an attempt to allow for disease separation between
the facilities, large numbers of animals will be raised together
and may be vulnerable to disease. No assurance can be given that
the Company will be able to avoid herd health problems. See
"Business," "Pig Purchase Agreement."

VOLATILE INPUT COSTS

Because the cost of feed and other supplies constitute a
substantial portion of the cost of producing a feeder or weaned
pig, the Company's profitability is extremely sensitive to
changes in the cost of such inputs. These costs are subject to
substantial fluctuations based upon regional and seasonal
availability and demand, including those attributable to crop
conditions, weather and other factors. A substantial increase in
the cost of these inputs, or a substantial decline in the
availability of these inputs, could materially adversely affect
the performance of the Company and result in the price for pigs

<PAGE>

under the Pig Purchase Agreements being higher than otherwise
could be obtained from other sources. In this regard, the
Company's average net sales price for its pigs exceeded the
average industry market price for pigs for the 1995, 1996 and
1997 fiscal years, as well as for the first nine months of fiscal
1998. Moreover, Alliance's operating results are dependent upon
the sale price paid to Alliance for feeder or weaned pigs, which
in turn is or will be determined in part based on the five month
(changed from 12 months effective September 1, 1998 with respect
to feeder pigs) historical rolling average of operating costs
incurred by Alliance in producing feeder pigs and weaned pigs, as
the case may be. In addition, the fixed amount of $4.50 per pig,
with respect to feeder pigs, that was part of the contractual
sales price prior to September 1, 1998 has been changed to $0 to
$4.50 per pig as determined by the Board of Directors in its
discretion effective September 1, 1998. Actual changes in the
sale price of feeder and weaned pigs therefore will lag changes
in the related operating costs and may adversely affect
Alliance's operating results, particularly in the event of sudden
movements, or continual increases, in such operating costs. See
"Business--Purchase of Feed and Other Inputs," "Pig Purchase
Agreement."

ADEQUATE WATER SUPPLY

The Company's operations are dependent upon the availability
of an ample supply of pure water at reasonable cost. Although
the Company has obtained the necessary commercial water well
permits to obtain the water necessary to conduct its current
operations in Colorado, the Company has been advised that it will
be unable to obtain any new commercial well permits in Colorado.
Accordingly, the Company has found it necessary in Colorado to
obtain the water necessary for its operations through the
purchase of more expensive, irrigated land or other real property
already having the necessary commercial well permits. No
assurance can be given that the Company will be able to obtain
the water permits necessary to enable it to expand its operations
in Colorado, Illinois or other locations selected by the Company.
The Company's inability to obtain the necessary water well
permits for the expansion of its operations could have a material
adverse effect on the Company's business. See "Business--
Facilities--Location of Facilities."

OBLIGATION TO PURCHASE PIGS

Each investor purchasing one or more Shares must enter into
a Pig Purchase Agreement, pursuant to which each investor owning
Class A Shares is obligated to purchase his or her proportionate
share of the Company's feeder pig production for an initial term
of ten years and, unless earlier terminated by the member, for
succeeding one year renewal terms, and each investor owning Class
B Shares or Class C Shares, as the case may be, is obligated to
purchase his or her proportionate share of the Company's weaned
pig production that is to be sold to members as weaned pigs for
an initial term of ten years and, unless earlier terminated by
the member, for succeeding one year renewal terms. In each such
case, pigs will be made available to members of the Company on a
rotating schedule determined and implemented by the Company, with
the number of lots made available to a member and the frequency
of availability being based upon the member's proportionate
ownership interest in the Company's outstanding Class A Common,
with respect to feeder pigs, the member's proportionate ownership
interest in the Company's outstanding Class B Common or Class C
Common, as the case may be, with respect to weaned pigs, and the
actual production of Qualifying Pigs from the Company's
facilities. No assurance can be given that the availability of
feeder or weaned pigs to members will coincide with the member's
needs or capacity to take delivery.

The purchase price for feeder and weaned pigs will be
established pursuant to a formula consisting of the sum of the
following factors: the financing cost per pig, the operating
cost per pig, and a production margin of $0 to $4.50 per pig
(changed from $4.50 effective September 1, 1998 with respect to
feeder pigs) as determined by the Board of Directors in its
discretion (all as defined in the Pig Purchase Agreement). The
Company believes the effect of such pricing is to shift the risks
of increasing production costs and lower market prices for pigs
from the Company and to the member. No assurance can be given
that the price for feeder and weaned pigs under the Pig Purchase
Agreement will be less than otherwise could be obtained from
other sources. Indeed, for the 1995, 1996 and 1997 fiscal years
and for the first nine months of fiscal 1998, the Company's
average net sales price for its pigs exceeded the average
industry market price. Among other factors, a substantial
increase in operating costs, including the costs of feed and
other supplies and the costs associated with diminished breeding
stock health or productivity, or extreme mortality and morbidity,
could result in a higher price to be paid by members for feeder
and weaned pigs than otherwise could be obtained from other
sources. Moreover, the prevailing market price for feeder and
weaned pigs could decline below the price to be paid for pigs
under the Pig Purchase Agreement. If a member fails to purchase,
pay for, and take delivery of any two lots of pigs when and as
made available to the member, the Company may terminate the
member's Pig Purchase Agreement and foreclose upon the Company's
security interest in the member's Common Stock; provided,
however, that for each ten shares of Common Stock owned by a
member, the number of such permitted failures is increased by
one. In addition, the member will be responsible for the damages
and expenses incurred by the Company as a result of any failure
to purchase, pay for, and take delivery of any lot of Qualifying

<PAGE>

Pigs, including (a) damages equal to the difference between the
price payable by the member for the Qualifying Pigs that member
has failed to purchase, pay for, and take delivery under the
Agreement and the then current market price for feeder or weaned
pigs, as the case may be, (b) $3,000, which amount is intended to
cover the Company's administrative and other costs and expenses
associated with such failure, and (c) all costs of collection,
enforcement, and prosecution of the Company's rights and
remedies.

With certain limited exceptions relating to the Company's
breach of any of its obligations under the Pig Purchase Agreement
or the Company's failure to deliver pigs within 24 months of the
date of such Agreement, a member does not have the right to
terminate such Agreement prior to the expiration of the initial
or any extended term of such Agreement. The member's right to
terminate the Pig Purchase Agreement at the expiration of the
initial or any extended term thereof may be exercised only if the
member gives notice to the Company at least one year prior to the
expiration of such initial or extended term that the member
desires to exercise such termination right. A member has no
other right to terminate the Pig Purchase Agreement. Moreover,
no member has the right to demand the return of or to receive any
of the member's capital from the Company as a result of the
termination of such Agreement or otherwise and regardless of
whether demanded prior to the expiration of the initial or any
extended term of such Agreement or at any time after the
expiration of any such term. The Company is under no obligation
to redeem or repurchase its Common Stock prior to the expiration
of the initial or any extended term of the Pig Purchase Agreement
or at any time after the expiration of any such term. See "Risk
Factors--Right of Alliance to Acquire Shares" and "-- Lack of
Liquidity; Absence of Market for Shares," "Business," "Pig
Purchase Agreement" and "Restrictions on Sale or Other Transfer
of the Shares--Cooperative Association Laws and Charter
Documents."

UNPURCHASED AND EXCESS PIGS

Each investor purchasing one or more Shares must enter into
a Pig Purchase Agreement, pursuant to which each investor owning
Class A Shares agrees to purchase his or her proportionate share
of the Company's feeder pig production and each investor owning
Class B Shares or Class C Shares, as the case may be, agrees to
purchase his or her proportionate share (based on the investor's
proportionate ownership interest in the Company's outstanding
Class B Common or Class C Common, as the case may be) of the
Company's weaned pig production that is to be sold to members of
the Company as weaned pigs. The failure of the Company's
stockholders to purchase their respective share of the Company's
pig production could materially adversely affect the performance
of the Company. In the event that one or more stockholders fail
to purchase their respective share of the Company's pig
production, it will be necessary for the Company to find
alternate purchasers for its unpurchased pigs. In addition, it
also may be necessary to find alternate purchasers to the extent
the Company's production of feeder pigs exceeds two and seven-
tenths (2.7) lots per share of Class A Common on a prospective
rolling 12-month basis, to the extent the Company's production of
weaned pigs for sale to investors owning Class B Common exceeds
two and seven-tenths (2.7) lots per share of Class B Common on a
prospective rolling 12-month basis or to the extent the Company's
production of weaned pigs for sale to investors owing Class C
Common exceeds two and one-tenth (2.1) lots per share of Class C
Common on a prospective rolling 12-month basis. Stockholders
will not be obligated under the Pig Purchase Agreements to
purchase their proportionate share of such excess production.
Although the Company has agreed to provide Farmland the first
opportunity to purchase feeder and weaned pigs that stockholders
have failed to purchase and any excess feeder and weaned pig
production during the five year period ending July 13, 1999, no
assurances can be given that Farmland will exercise its option to
purchase any such excess pigs. In addition, no assurances can be
given that alternate purchasers will be available, or that any
such alternate purchasers will agree to purchase feeder or weaned
pigs upon terms as favorable to the Company as those contained in
the Pig Purchase Agreements. To the extent that unpurchased
feeder or weaned pigs are sold to alternate purchasers at prices
less than would have been obtained under such Agreements, the
price for feeder or weaned pigs to stockholders may increase.
See "Pig Purchase Agreement" and "Certain Relationships and
Related Transactions--Farmland."

LOSSES ASSOCIATED WITH START-UP

The Company was formed recently and has a limited history of
operations. The development of feeder and weaned pig production
facilities entails substantial up front expenditures for the
purchase of real estate, the construction of the facilities, and
the acquisition of breeding stock and for working capital during
the initial start-up period for each new facility. As a result,
the Company anticipates that the development of feeder and weaned
pig production facilities likely will result in Alliance's
continued incurrence of losses. There can be no assurance that
Alliance will become profitable after it ceases facilities
development activities. See "Selected Financial Data" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations."

<PAGE>

NO LOAN COMMITMENT; FUNDING CONDITIONS

With respect to its offering of each Minimum Class A Block
of 17 Class A Shares, the Company anticipates that it will be
required to borrow at least $2,720,000 of term and revolving debt
in order to further its business strategy in developing or
acquiring each additional feeder pig production facility having
the capacity of a 2,450-sow unit. With respect to its offering
of each Minimum Class B Block of 18 Class B Shares and each
Minimum Class C Block of 24 Class C Shares, the Company
anticipates that it will be required to borrow at least
$2,160,000 of term and revolving debt in order to further its
business strategy in developing or acquiring each weaned pig
production facility having the capacity of a 2,450-sow unit.
Assuming the sale by the Company of all 51 Class A Shares offered
hereby, the Company intends to borrow an aggregate of at least
$8,160,000, which in combination with the net proceeds of the
offering of such Class A Shares, is anticipated to be sufficient
to enable it to construct or acquire feeder pig production
facilities having the capacity of three 2,450-sow units, acquire
breeding stock, and pay start-up and operating expenses in order
to further develop and expand its feeder pig production business.
Assuming the sale by the Company of all 54 Class B Shares offered
hereby, the Company intends to borrow an aggregate of at least
$6,480,000, which in combination with the net proceeds of the
offering of such Class B Shares, is anticipated to be sufficient
to enable it to construct or acquire weaned pig production
facilities having the capacity of three 2,450-sow units, acquire
breeding stock, and pay start-up and operating expenses in order
to develop its weaned pig production business. Assuming the sale
by the Company of all 72 Class C Shares offered hereby, the
Company intends to borrow an aggregate of at least $6,480,000,
which in combination with the net proceeds of the offering of
such Class C Shares, is anticipated to be sufficient to enable it
to construct or acquire weaned pig production facilities having
the capacity of three 2,450-sow units, acquire breeding stock,
and pay start-up and operating expenses in order to develop its
weaned pig production business. As of the date of this
Prospectus, the Company has obtained from its current lender,
CoBank, ACB ("CoBank"), a commitment until December 31, 2001 for
the loans required for the development or acquisition of at least
five additional 2,450-sow feeder or weaned pig units. No
assurances can be given that the Company will be able to obtain
an extension of such commitment after that date on favorable
terms, if at all, or that the Company will be able to obtain
additional loan commitments.

The actual advance of funds under the CoBank commitment or
any other loan commitment that reasonably could be made available
to the Company is or will be subject to the satisfaction of
certain conditions precedent. In addition, any such commitment
may be withdrawn or terminated by the prospective lender under
certain circumstances. There is no assurance that the funding
conditions precedent will be satisfied and that the loan funds
will be made available to the Company when needed, that the debt
service requirements of such loan will not result in the price
for feeder or weaned pigs under the Pig Purchase Agreements being
higher than otherwise could be obtained from other sources, that
alternative sources of financing will be available on acceptable
terms, or that the aggregate borrowing needs of the Company will
not exceed the anticipated borrowing needs described above. In
the event that the CoBank commitment for a pig production loan or
any extension of such commitment is withdrawn or terminated, and
the Company is unable to obtain an acceptable loan commitment
from another lender prior to or concurrently with the
consummation of the offering of any Minimum Block of Shares, all
subscriptions for each such Minimum Block of Shares will be
rejected and any amount received by the Company in payment of the
subscription price will be returned to the prospective investors,
together with any interest earned thereon and without deduction
for expenses. See "Business--Financing," "Plan of Distribution--
Subscription Procedure," "-- Escrow of Proceeds" and "--
Termination of the Offering," "Use of Proceeds" and
"Capitalization."

SUBSTANTIAL INDEBTEDNESS

The Company is highly leveraged and will continue to be so
after its anticipated borrowing of term and revolving debt in
connection with the issuance and sale by the Company of all or
part of the Shares offered hereby. The degree to which the
Company is and will be leveraged could have an adverse impact on
the Company, including (i) increased vulnerability to adverse
general economic and market conditions, (ii) impaired ability to
obtain additional financing for future working capital, capital
expenditures, general corporate or other purposes, and (iii)
dedication of a significant portion of cash provided by operating
activities to the payment of debt obligations and thereby
reducing funds available for operations or distribution. The
Company's ability to make required debt service payments in the
future will be dependent upon the Company's operating results,
which are subject to financial, economic and other factors
affecting the Company, many of which are beyond its control.
Moreover, such operating results will be dependent upon the sale
price paid to the Company for feeder pigs and weaned pigs, which
in turn is determined in part based on the five month (changed
from 12 months effective September 1, 1998 with respect to feeder
pigs) historical rolling average of operating costs incurred by
the Company in producing such pigs. Actual changes in the sale
price of feeder and weaned pigs therefore will lag changes in the
related operating costs and may affect the Company's ability to
timely make required debt service payments. No <PAGE> assurance can be
given that the Company will be able to make required debt service
payments. No person has agreed to guarantee the obligation of
the Company to make timely debt service payments. See
"Capitalization," "Business--Financing," "Pig Purchase
Agreement."

ASSETS SECURING DEBT; CREDIT AGREEMENT RESTRICTIONS

The Company entered into various loan agreements and other
documentation with the Company's existing lender, CoBank.
Pursuant to such loan documentation , the Company has been, and
anticipates that it will be, required to grant liens on
substantially all of its properties and assets to CoBank and to
comply with various affirmative and negative covenants, including
but not limited to (i) maintenance of minimum levels of working
capital, (ii) restrictions on the incurrence of additional
indebtedness, (iii) restrictions on certain liens, mergers, sales
of assets, investments, guaranties, loans, advances and business
activities unrelated to existing operations, and
(iv) restrictions on the declaration and payment of dividends or
patronage distributions. There can be no assurance that Alliance
will be able to achieve and maintain compliance with the
prescribed covenants of such loan documentation. Alliance has
successfully sought and received consents, waivers and amendments
to its loan documentation on various occasions. If further
consents, waivers or amendments are requested by Alliance, there
can be no assurance that Alliance's lender will again grant such
requests. The failure to obtain any such consents, waivers or
amendments would reduce Alliance's flexibility to respond to
adverse industry conditions and could have a material adverse
effect on Alliance's results of operations, financial condition
and business. If an event of default occurs under the Company's
loan documentation, the lender will have the right to foreclose
upon collateral pledged by the Company. In addition, the terms
of the Company's financing with CoBank might adversely affect the
ability of the Company to obtain additional financing for any
future expansion efforts, including the development of feeder or
weaned pig production facilities. No person has agreed to
guarantee the obligation of the Company to make timely debt
service payments. See "Business--Financing."

FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FUNDING; AND
WORKING CAPITAL DEFICIT

The Company anticipates that the net proceeds of the
offering of each Minimum Class A Block of 17 Class A Shares, the
$2,720,000 of debt financing required with respect to each such
Minimum Class A Block, and any interest earned thereon, will be
adequate to maintain its current and planned operations during
the Company's start-up phase for each new feeder pig production
facility, which is anticipated to be up to 13 to 15 months after
completion of the offering of such Minimum Class A Block. The
Company anticipates that the net proceeds of the offering of each
Minimum Class B Block of 18 Class B Shares or each Minimum Class
C Block of 24 Class C Shares, the $2,160,000 of debt financing
required with respect to each such Minimum Block, and any
interest earned thereon, will be adequate to maintain its planned
operations during the Company's start-up phase for each new
weaned pig production facility, which is anticipated to be up to
11 to 13 months after completion of the offering of such Minimum
Block. As of the date of this Prospectus, the Company has
obtained a commitment until December 31, 2001 for the debt
financing required with respect to at least five Minimum Blocks.
No assurance can be given that circumstances and events will not
occur that would consume capital resources available for each new
feeder or weaned pig production facility before such time and
thereby require additional financing to be raised. The Company
is and will be subject to the risks normally associated with debt
financing, including the risk that the Company's cash flow will
be insufficient to meet required payments of principal and
interest and the risk that indebtedness will not be able to be
refinanced or that the terms of such refinancing will not be as
favorable as the terms of the original indebtedness and thereby
increasing the cost to stockholders of feeder or weaned pigs made
available under the Pig Purchase Agreements. As of May 31, 1998,
Alliance had a working capital deficit of $7,355. The Company
anticipates that it will be required to raise additional capital
in order to further expand its operations beyond the expansion
contemplated in connection with the offering of Shares made
hereby. Such capital may be raised through additional private or
public financings, as well as collaborative relationships,
borrowings and other available sources. If the Company needs to
raise additional funds, there can be no assurance that additional
or sufficient financing will be available, or, if available, that
it will be available on acceptable terms. If additional funds
are raised by issuing equity securities of the Company, dilution
to then existing stockholders may result. If adequate funds are
not available, the Company may be required to significantly
curtail a portion of its planned operations. See "Business."

COMPETITION

Many of the Company's existing or potential competitors may
have substantially greater financial, technical and personnel
resources than the Company. There can be no assurance that the
Company's competitors will not be more successful than the
Company in developing and improving pork production technologies
and raising consistent high quality <PAGE> feeder and weaned pigs that
are more economical to raise than any which may be developed or
raised by the Company. Moreover, as additional competitors
commence operations, the supply of feeder or weaned pigs may
exceed demand and result in a downward pressure on the prevailing
market prices for such pigs. Under the Pig Purchase Agreements
each member will be obligated to purchase his proportionate share
(based on the member's proportionate ownership interest in the
Company's outstanding Class A Common, Class B Common or Class C
Common, as the case may be) of the Company's feeder or weaned pig
production based in large part on Alliance's cost of production.
Accordingly, if the Company is not successful in developing and
improving pork production technologies relative to its
competitors or if the prevailing market prices for feeder or
weaned pigs decline below those applicable under such Agreements,
each member may be obligated to purchase his proportionate share
of the Company's feeder or weaned pig production at a price
higher than could be available from other sources. IN THIS
REGARD, THE COMPANY'S AVERAGE NET SALES PRICE FOR ITS PIGS
EXCEEDED THE AVERAGE INDUSTRY MARKET PRICE FOR PIGS FOR THE 1995,
1996 AND 1997 FISCAL YEARS, AS WELL AS FOR THE FIRST NINE MONTHS
OF FISCAL 1998. The Company's ability to achieve or maintain
cost competitive feeder or weaned pig production operations on an
ongoing basis may depend on its ability to raise additional
capital, which may not then be available on acceptable terms, if
at all. See "Business--Business Environment" and "--
Competition" and "Pig Purchase Agreement."

ANTI-CORPORATE FARMING SENTIMENT

The development of large corporate farming operations and
concentration of hog production in larger-scale facilities, such
as those of the Company, has increased dramatically over the last
decade. This development has engendered opposition from
residents of Colorado, Illinois and other states in which the
Company conducts, or may conduct, its business operations. Such
opposition may reflect various concerns, including concerns about
pollution and effluent emissions, excessive water use, offensive
odor, humane treatment of animals and the perceived threat to
small farmers and the family farm. To the extent that public
opposition is expressed with respect to large corporate farming
operations such as those of the Company, national, state or local
laws restricting their operations may be and have been enacted in
response, legal proceedings may be instituted to obtain monetary
awards, injunctive orders or other legal or equitable remedies,
potential employees may be dissuaded from accepting a position
with such corporate farming operators, property owners may be
reluctant to sell parcels to such corporate farming operators, or
other consequences may result that could have a material adverse
effect on the Company and its business. No assurances can be
given that public opposition will not result in the occurrence of
any one or more of such adverse consequences. See "Business--
Business Environment" and "--Water Disposal and Environmental
Matters."

EXPANSION

Within up to 13 to 15 months after the completion of the
offering of each Minimum Class A Block of 17 Class A Shares, the
Company anticipates that it will be able to put a new feeder pig
production facility into operation as a result of such offering
and that the initial lots of feeder pigs produced from such
facility would be available to investor members, and within up to
11 to 13 months after the completion of the offering of each
Minimum Class B Block of 18 Class B Shares or each Minimum Class
C Block of 24 Class C Shares, as the case may be, the Company
anticipates that it will be able to put a new weaned pig
production facility into operation as a result of such offering
and that the initial lots of weaned pigs produced from such
facility would be available to investor members. There can be no
assurance that the Company or its contractors will be able to
achieve this goal. The development and successful operation of
each new facility depends on various factors, including the
availability of suitable sites, regulatory compliance, the
ability to meet construction schedules, the capabilities of the
Company's contractors, the ability to maintain facility
construction costs within original estimates, the ability of the
Company to manage its anticipated expansion generally and to hire
and train qualified personnel, and general economic and business
conditions. Many of the foregoing factors are not within the
control of the Company or its contractors, and therefore no
assurance can be given that the Company's expansion objectives
and goals will be successfully implemented. See "Business."

CONTROL BY CURRENT STOCKHOLDERS; DISPARATE VOTING RIGHTS;
POTENTIAL CONFLICTS OF INTEREST

As of the date of this Prospectus, Farmland, Yuma Farmers
Milling and Mercantile Cooperative Company ("Yuma Cooperative"),
Corn Plus II, L.C. and Welkco, L.L.C. collectively own 74 shares
of the Company's Class A Common and 22 shares of the Company's
Class B Common Stock, which for such stockholders will constitute
approximately 32.6%, 7.0%, 5.8% and 10.5%, respectively, of the
combined voting power of the shares of Common Stock outstanding
immediately after completion of the offering of one Minimum Class
A Block of 17 Class A Shares, approximately 29.6%, 6.3%, 5.3% and
9.5%, respectively, of the combined voting power of the shares of
Common Stock outstanding immediately after completion <PAGE> of the
offering of all 34 remaining Class A Shares offered hereby,
approximately 32.4%, 6.9%, 5.8% and 10.4%, respectively, of the
combined voting power of the shares of Common Stock outstanding
immediately after completion of the offering of one Minimum Class
B Block of 18 Class B Shares (constituting all of the remaining
Class B Shares offered hereby), approximately 32.4%, 6.9%, 5.8%
and 10.4%, respectively, of the combined voting power of the
shares of Common Stock outstanding immediately after completion
of the offering of one Minimum Class C Block of 24 Class C
Shares, approximately 26.8, 5.7%, 4.8% and 8.6%, respectively, of
the combined voting power of the shares of Common Stock
outstanding immediately after completion of the offering of all
72 Class C Shares offered hereby, and approximately 21.5%, 4.6%,
3.8% and 6.9%, respectively, of the combined voting power of the
shares of Common Stock outstanding immediately after completion
of the offering of all 124 remaining Shares offered hereby (in
each case, assuming that such stockholders do not purchase any
Shares in the offering). Although no one cooperative association
stockholder is permitted to vote shares of Common Stock
representing 25% or more of the shares outstanding during any
period in which the Company has borrowed money from a lender
subject to regulations of the Farm Credit Administration
regarding loan policies and operations (such as the Company's
current lender), the above-named stockholders could continue to
exercise a significant degree of influence or control over the
Company with respect to the election of directors and other
matters if they, or several of them, agree to vote together on
such matters. See "Principal Stockholders" and "Description of
Capital Stock."

On all matters submitted to a vote of the Company's
stockholders, holders of Class A Common and holders of Class B
Common each are entitled to one vote per share while holders of
Class C Common are entitled to three-fourths of one vote per
share. See "Description of Capital Stock."

The Company has contracted with Farmland and Yuma
Cooperative for the provision of certain requirements of the
Company, including the supply of feed and other inputs, breeding
stock, and administrative services. The Company's agreements
with Farmland and Yuma Cooperative may be modified in the future
and the Company may enter into additional agreements or
transactions with Farmland and Yuma Cooperative. Farmland,
through its various business divisions, subsidiaries and
affiliates, is engaged in the production of livestock elsewhere,
in the sale of the above described supplies and services to other
parties, and in the slaughter and processing of hogs. Farmland
may have conflicting interests in the provision of such services
to the Company in light of its other business activities.
Similarly, Yuma Cooperative also may have conflicting interests
in the provision of goods and services to the Company. See
"Certain Relationships and Related Transactions."

ATTRACTION AND RETENTION OF EMPLOYEES

The Company is dependent on members of its management and
facilities operations personnel, the loss of whose services might
adversely affect the achievement and success of its planned
expansion activities. In addition, attracting and retaining
qualified facilities operations personnel will be important to
the Company's success. The inability to acquire and retain the
services of such management and facilities operations personnel
could have a material adverse effect on the Company's operations
and significantly impact its prospects for success. Although the
Company has contracted with Farmland and others to provide
certain managerial, administrative and other services, Alliance
can give no assurance that it will be able to attract and retain
the personnel it needs on acceptable terms. See "Business--
Employees," "Management" and "Certain Relationships and Related
Transactions."

DISTRIBUTIONS AND DIVIDENDS

No dividends will be paid by Alliance on its Common Stock.
ALTHOUGH IN THE PAST THE COMPANY HAS AUTHORIZED THE PAYMENT OF
CASH REBATES TO ITS MEMBERS WITH RESPECT TO FEEDER PIGS SOLD BY
THE COMPANY TO SUCH MEMBERS, THE COMPANY DOES NOT INTEND TO
AUTHORIZE ANY FUTURE REBATE PAYMENTS. Investors who anticipate
the need for an immediate return on their investment should
refrain from purchasing the Shares. The Company, however,
intends to make annual patronage distributions of its net margins
(as hereinafter defined), if any, to its members on the basis of
the quantity or value of business done by the Company with or for
the member-patrons. Such patronage distributions may be paid in
cash, written notices of allocation, whether qualified or non-
qualified, or a combination thereof, as determined by the
Company's Board of Directors in its sole discretion. The Company
has entered into various loan agreements and other documentation
with its existing lender which restrict the Company's ability to
pay patronage distributions in cash. See "Patronage Distribution
Policy" and "Business--Financing."

<PAGE>

TAXABLE INCOME WITHOUT SUFFICIENT CASH DISTRIBUTIONS TO PAY THE
TAX

The Company is required annually to distribute its patronage
sourced income to its stockholder-patrons on the basis of the
quantity or value of business done with or for its stockholder-
patrons. Subject to restrictions imposed by the Company's
lender, the Company anticipates that it will distribute its
patronage distributions through a combination of cash and
qualified written notices of allocation. In such case, the
recipient stockholder-patron will have to report in its taxable
income the cash and the face amount of the qualified written
notices of allocation. The Company's Board of Directors will
determine each year the portion of the patronage distribution
which is to be paid in cash or qualified written notice of
allocation, although the Company anticipates that at least twenty
percent of the patronage distribution will be paid in cash.
Accordingly, a stockholder may have to pay income taxes on the
patronage distributions in an amount that exceeds (possibly by a
substantial amount) the cash distributions which may be made by
the Company to the stockholder. See "Patronage Distribution
Policy" and "Business--Federal Income Taxation."

ARBITRARY DETERMINATION OF OFFERING PRICE; DILUTION

The public offering price for the Shares has been determined
arbitrarily by the Company and is not based on any recognized
criteria of value. Among the factors considered in making such
determination are the amount of the anticipated debt borrowings,
together with the net proceeds from the sale of the Shares,
required to develop or acquire each additional feeder pig
production facility or weaned pig production facility, as the
case may be, which factor takes into account the anticipated
development or acquisition costs for new facilities, the
applicable debt-to-equity ratio or minimum equity amount that the
Company anticipated would be required by its lender, and the
anticipated interest and debt service requirements associated
with such borrowings. The public offering price for the Class A
Shares, Class B Shares and Class C Shares, respectively, may not
necessarily reflect any relationship to the Company's assets,
historical losses, book value or other criteria of value. It is
anticipated that purchasers of shares of Common Stock in this
offering will experience immediate and substantial dilution in
net tangible book value. See "Plan of Distribution--Offering
Price."

GOVERNMENT REGULATION

The Company is subject to various federal, state and local
government regulations, including those restricting certain types
of investor-owned livestock production operations and those
concerning the environment, occupational safety and health, and
zoning. While the Company attempts to monitor all aspects of its
regulatory compliance responsibilities, there can be no assurance
that it will satisfy all applicable governmental regulations or
obtain all required approvals. Failure to comply with applicable
regulations can, among other things, result in fines, suspensions
of regulatory approvals, operating restrictions, and criminal
prosecution. Changes in or additions to applicable regulations
also could adversely affect the Company and its business. IN
THIS REGARD, IN NOVEMBER 1998 COLORADO VOTERS ADOPTED AMENDMENTS
TO THE COLORADO REVISED STATUTES CONCERNING THE REGULATION OF
HOUSED COMMERCIAL SWINE FEEDING OPERATIONS WHICH MAY HAVE
MATERIAL AND ADVERSE CONSEQUENCES TO THE COMPANY AND ITS
BUSINESS. See "Business--Government Regulation" and "--Waste
Disposal and Environmental Matters."

RIGHT OF ALLIANCE TO ACQUIRE SHARES

Upon the occurrence of certain events, the Company has the
option, but not the obligation, to purchase an investor's Shares
(a) by tendering to the investor (i) the lesser of (A) the price
paid to the Company for such investor's Shares and (B) the book
value of such Shares and capital credits associated therewith,
less (ii) any indebtedness due the Company from the investor, or
(b) by tendering to the investor a nonvoting certificate of
participation representing the investor's interest at the time of
such tender in a face amount equal to the amount specified in
clause (a) above. The occurrences giving rise to such option and
to a termination of the investor's membership in the Company
include the following events: (a) the investor's termination of a
Pig Purchase Agreement without having executed and delivered a
replacement for such Agreement or the investor's failure to be a
party to such Agreement, and (b) the Company's Board of Directors
by resolution finds that the investor has (i) intentionally or
repeatedly violated any provision of the Company's Articles of
Incorporation or Bylaws, (ii) breached a Pig Purchase Agreement
or materially breached any other contract with Company, (iii)
remained indebted to the Company for 90 days after such
indebtedness first becomes payable, or (iv) willfully obstructed
any lawful purpose or activity of the Company. The provisions
giving the Company the right to purchase an investor's Common
Stock will make it more difficult to effect a change in control
of the Company. See "Risk Factors--Obligation to Purchase Pigs"
and "-- Lack of Liquidity; Absence of Market for Shares," "Pig
Purchase Agreement" and "Restrictions on Sale and Other Transfer
of the Shares--Cooperative Association Laws and Charter
Documents."

<PAGE>

LACK OF LIQUIDITY; ABSENCE OF MARKET FOR SHARES

Potential investors in the Shares should be fully aware of
the long-term nature of their investment and of their related
obligation to purchase feeder or weaned pigs under the Pig
Purchase Agreement. No public market presently exists for the
Common Stock of the Company and no public market is expected to
develop for the existing Common Stock of the Company or the
Shares as a result of the offering contemplated hereby.
Transfers of Common Stock are subject to significant restrictions
and limitations set forth in the Colorado Cooperative Association
Law and the Company's Articles of Incorporation and Bylaws,
including a requirement that the Company's Board of Directors
give its consent prior to any transfer of Shares, and that the
transferee of Common Stock enter into a Pig Purchase Agreement
with the Company. In addition, the Company has the right to
purchase a member's Common Stock under certain circumstances at a
price that may be less than could otherwise be obtained from
other potential purchasers. The certificates representing the
Shares will bear one or more legends describing or referencing
certain applicable restrictions on transfer. In order to
subscribe for Shares, (a) each investor in Class A Common must
enter into a Pig Purchase Agreement pursuant to which such
investor is obligated to purchase his or her proportionate share
of the Company's feeder pig production for an initial term of ten
years and, unless earlier terminated by the member, for
succeeding one year renewal terms, and (b) each investor in Class
B Common or Class C Common, as the case may be, must enter into a
Pig Agreement pursuant to which such investor is obligated to
purchase his or her proportionate share (based on the investor's
proportionate ownership interest in the Company's outstanding
Class B Common or Class C Common, as the case may be) of the
Company's weaned pig production that is to be sold to members of
the Company as weaned pigs for an initial term of ten years and,
unless earlier terminated by the member, for succeeding one year
renewal terms. With certain limited exceptions relating to the
Company's breach of any of its obligations under the Pig Purchase
Agreement, or the Company's failure to deliver feeder or weaned
pigs within 24 months of the date of such Agreement, a member
does not have the right to terminate such Agreement prior to the
expiration of the initial or any extended term of the Agreement.
The member's right to terminate the Pig Purchase Agreement at the
expiration of the initial or any extended term thereof may be
exercised only if the member gives notice to the Company at least
one year prior to the expiration of such initial or extended term
that the member desires to exercise such termination right. A
member has no other right to terminate the Pig Purchase
Agreement. Moreover, no member has the right to demand the
return of or to receive any of the member's capital from the
Company as a result of the termination of such Agreement or
otherwise and regardless of whether demanded prior to the
expiration of the initial or any extended term of such Agreement
or at any time after the expiration of any such term. The
Company is under no obligation to redeem or repurchase its Common
Stock prior to the expiration of the initial or any extended term
of the Pig Purchase Agreement, or at any time after the
expiration of any such term. For these and other reasons, the
Shares will not be readily marketable, and purchasers thereof
must bear the economic risk of investment for an indefinite
period and may not be able to liquidate their investment in the
event of any emergency or otherwise. See "Restrictions on Sale
or Other Transfer of the Shares" and "Description of Capital
Stock."

YEAR 2000

The Company has made an assessment of its key financial,
informational and operational systems. Management does not
anticipate that the Company will encounter significant
operational issues or difficulties related to the Year 2000.
Furthermore, the financial impact of making systems changes is
not expected to be material to the Company's financial position,
results of operations or cash flows, although no assurances can
be given in this regard. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Year
2000."

ADDITIONAL FACTORS

Additional risk and uncertainties that may affect future
results of operations, financial condition or business of
Alliance include, but are not limited to: the effect of economic
and industry conditions on prices for Alliance's feeder and
weaned pigs and its cost structure; the ability to keep pace with
technological change timely and cost-effectively and to provide
better service and remain competitive; adverse publicity, news
coverage by the media, or negative reports by industry analysts
regarding Alliance or its feeder or weaned pigs which may have
the effect of reducing the reputation and goodwill of Alliance;
and the ability to attract and retain capital for growth and
operations on competitive terms.

THE COMPANY

The Company is a cooperative association engaged in the
production of feeder pigs for sale to its members who own shares
of Class A Common, and in the production of weaned pigs for sale
to its members who own shares of Class B Common or Class C
Common. As of the date of this Prospectus, the Company owned and
operated five 2,450-sow feeder <PAGE> pig production facilities located
in Yuma County, Colorado (approximately 150 miles east of
Denver), two 2,450-sow feeder pig production facilities located
in Wayne County, Illinois (approximately 100 miles east of
St. Louis, Missouri), and was in the process of developing one
2,450-sow weaned pig production facility in Yuma County, Colorado
and one weaned pig production facility in Wayne County, Illinois.
As of the date of this Prospectus, the Company has commenced
preliminary development activities with respect to a 5,000-sow
pig production facility in Yuma County, Colorado. Financing for
the acquisition of real estate, facilities construction and
acquisition of breeding stock with respect to the existing
facilities already has been obtained and will not be provided by
any proceeds from the sale of the Shares offered hereby, however,
the proceeds from the sale of the first two Minimum Blocks of
the remaining Shares offered hereby will be applied to the
Colorado facility presently under development. See "Use of
Proceeds" and "Business." The Company's business strategy is to
produce feeder and weaned pigs for sale to its members at
competitive prices by utilizing modern facilities, management
practices designed to maximize productivity and high quality
genetically consistent breeding stock.

The Company was formed as a cooperative association under
the laws of the state of Colorado on May 3, 1994, but did not
engage in any business activity until July, 1994. The Company's
predecessor, Yuma LLC, was formed in October, 1991 and commenced
shipment of feeder pigs in March, 1993. On July 13, 1994 (July
9, 1994 for accounting purposes), the Company acquired the entire
equity ownership rights and interests in Yuma LLC from Farmland
and Yuma Cooperative, and thereupon Yuma LLC was dissolved and
liquidated and its assets, liabilities and feeder pig production
operations were assigned to and assumed by Alliance.

The Company's principal executive offices are located at 503
East 8th Avenue, Yuma, Colorado 80759, and its telephone number
is (970) 848-3231. Unless the context otherwise requires, the
terms "Alliance" and the "Company," as used in this Prospectus,
refer to Alliance Farms Cooperative Association and its
predecessor, Yuma LLC.

USE OF PROCEEDS

CLASS A SHARES

The net proceeds to the Company from the sale of the Class A
Shares offered hereby, after deducting expenses payable in
connection with this offering, are estimated to be approximately
$1,220,000 if one Minimum Class A Block of 17 Class A Shares is
sold and approximately $3,940,000 if all 51 Class A Shares
offered hereby are sold. The Company intends to use the net
proceeds from the sale of each Minimum Class A Block, together
with approximately $2,720,000 of debt financing required with
respect to each such Minimum Class A Block, for the development
or acquisition of one new 2,450-sow feeder pig production
facility (which facility may exist as a stand-alone unit or as
part of a 5,000-sow production complex) to be situated in or
around Yuma County, Colorado, Wayne County, Illinois or other
locations selected by the Company, including the purchase of real
estate, the construction of the facility, and the acquisition of
breeding stock, and the demands for working capital during the
initial start-up period for the facility. In anticipation of the
sale of one or more Minimum Class A Blocks, the Company, from
time to time, may borrow up to $1,360,000 per Minimum Class A
Block from Farmland to commence the development or acquisition of
a feeder pig production facility. In such event the net proceeds
from the sale of a Minimum Class A Block will be applied to such
facility, including the repayment of the debt financing, together
with interest thereon, provided by Farmland. If all 51 Class A
Shares offered hereby are sold, the net proceeds to the Company,
together with approximately $8,160,000 of debt financing, will be
used for the development or acquisition of feeder pig production
facilities having the capacity of three 2,450-sow units. Each
new feeder pig production facility may be developed in tandem
with, or as a part of, one or more other facilities. As of the
date of this Prospectus, the Company has obtained a commitment
until December 31, 2001, for the debt financing required with
respect to at least five Minimum Blocks of the remaining Shares
offered hereby.

The allocation of the offering proceeds from the sale of the
Class A Shares offered hereby and debt financing among the uses
set forth below represents the Company's present intention on the
basis of circumstances at the date of this Prospectus.
Unforeseen changes in circumstances may result in the
reallocation of such proceeds and debt financing among the uses
mentioned below or to other presently unexpected uses. Pending
use of the net proceeds from the sale of the Class A Shares
offered hereby for the purposes set forth herein, such proceeds
will be invested in short-term certificates of deposit or other
interest bearing instruments. The following summary of use of
proceeds does not include any interest income earned on the
investment of the net proceeds from this offering, which income
would be added to the Company's working capital as it is earned.

<PAGE>

MINIMUM ENTIRE
OFFERING OFFERING
(17 SHARES) (51 SHARES)*

SOURCE OF FUNDS:
Gross Proceeds of Offering $1,360,000 $ 4,080,000
Less Offering Costs /1/ 140,000 140,000
Net Proceeds of Offering 1,220,000 3,940,000
Debt Financing /2/ 2,720,000 8,160,000
Total Funds Available $3,940,000 $12,120,000

USE OF FUNDS /3/:
Real Estate and
Facilities Construction/4/ $2,750,000 $ 8,600,000
Breeding Stock /5/ 625,000 1,875,000
Project Development Costs and
Working Capital /6/ 565,000 1,625,000
Total Facilities
Development Costs $3,940,000 $12,100,000

/1/ Offering costs consist of offering agent commissions and
expenses, legal and accounting fees, filing fees, printing
costs and other miscellaneous expenses.

/2/ The Company anticipates that in connection with the
development or acquisition of each new 2,450-sow feeder pig
production facility (which may be developed in tandem with,
or as a part of, one or more other facilities), it will
require at least $2,720,000 in addition to the net proceeds
from this offering. Accordingly, the consummation of the
issuance and sale of each Minimum Class A Block of 17 Class
A Shares will be conditioned upon and subject to the Company
obtaining a commitment for at least $2,720,000 of debt
financing. As of the date of this Prospectus, the Company
has obtained a commitment with respect to at least five
Minimum Blocks of the remaining Shares offered hereby until
December 31, 2001. No assurances can be given that an
extension of such commitment after such date will be
obtained on favorable terms, if at all. See "Business--Financing."

/3/ The allocation of the offering proceeds from the sale of the
Class A Shares offered hereby and debt financing among the
uses specified in the table is based upon the assumption
that the Company would develop a new feeder pig production
facility as opposed to acquiring an existing feeder pig
production facility. In the event that the Company becomes
aware of an existing pig production facility that is
available for purchase, the Company may determine to acquire
the existing facility rather than develop a new one if the
Board of Directors determines that such action would be in
the best interests of the Company and its members. No
assurances can be given that any existing facilities will be
available for purchase by the Company or that the Company
will acquire any such facility. As of the date of this
Prospectus, the Company has no plans to proceed with the
acquisition of an existing facility.

/4/ The Company has budgeted approximately $2,750,000 for
completion of the physical facilities for each new 2,450-sow
feeder pig production facility (which may be developed in
tandem with, or as a part of, one or more other facilities).
The Company borrowed $2,160,000 with respect to its 5,000-
sow Colorado facility presently under development under a
non-revolving term loan obtained from Farmland, and
anticipates that the net proceeds from the sale of the first
two Minimum Blocks of the remaining Shares offered hereby
will be used to repay the outstanding balance of any such
loan. See "Use of Proceeds--Farmland Loan." As presently
proposed, the construction of each new feeder pig facility,
including breeding, gestation, farrowing, nursery and
attendant office buildings and related equipment, is
estimated to cost approximately $2,250,000, plus the cost of
the land and land improvements. This estimate is based on
estimates of construction costs furnished to the Company in
connection with the construction of its existing facilities
and of its facilities under development. The Company has
estimated the cost of the land and land improvements
required for each 2,450-sow facility to be approximately
$500,000 based on its anticipated land requirements and the
actual cost of the Company's recent land purchases.
Included in the Company's budget respecting the issuance and
sale of all 51 Class A Shares offered hereby is
approximately $350,000 for the construction of ancillary
production buildings or residential facilities for use by
facilities operations personnel if sufficient housing is
unavailable. Sites for the one or more facilities to be
developed with the proceeds of this offering have not been
selected by the Company. No assurances can be given that
the actual <PAGE> costs for the acquisition of the necessary land
and the construction of the facilities will not exceed the
Company's estimates.

/5/ The Company has budgeted approximately $625,000 for the
acquisition of the breeding stock required for each new
2,450-sow facility (which may be developed in tandem with,
or as a part of, one or more other facilities) based on the
Company's recent acquisition costs for other breeding stock
and the Company's estimated cost of developing its own
breeding stock from its breeding stock multiplier herd. The
actual cost of acquiring the necessary breeding stock may
exceed the Company's estimates.

/6/ If the Company is successful in implementing its business
plan and each new feeder pig production facility is
developed on schedule, the initial lots of feeder pigs
produced from such facility are not expected to be available
to Class A Common investor members for up to 13 to 15 months
following completion of the offering. The amounts shown
represent costs and expenses expected to be incurred and
expended by the Company during construction of the facility
and the 45- to 60-day breeding stock acclimation period and
prior to shipment of the initial lots of feeder pigs. These
amounts include working capital for the payment of salaries,
feed and veterinary costs, utilities, insurance, overhead
and administration, interest requirements on any facilities
development financing that the Company may incur (although
no assurances can be given that it will obtain such
financing) with respect to each new facility (including
interest requirements on the $2,160,000 Farmland non-
revolving term loan referred to in note (4) above), taxes,
and accounting and legal fees, among others. Amounts
allocated to working capital may be used for any of the
purposes set forth above, as needed, or for any other use
that management for the Company determines to be in the best
interests of the Company.

CLASS B SHARES

The net proceeds to the Company from the sale of the Class B
Shares offered hereby, after deducting expenses payable in
connection with this offering, are estimated to be approximately
$940,000 if one Minimum Class B Block of 18 Class B Shares is
sold and approximately $3,100,000 if all 54 Class B Shares
offered hereby are sold. The Company intends to use the net
proceeds from the sale of each Minimum Class B Block, together
with approximately $2,160,000 of debt financing required with
respect to each such Minimum Class B Block, for the development
or acquisition of one new 2,450-sow weaned pig production
facility (which facility may exist as a stand-alone unit or as
part of a 5,000-sow production complex) to be situated in or
around Yuma County, Colorado, Wayne County, Illinois or other
locations selected by the Company, including the purchase of real
estate, the construction of the facility, and the acquisition of
breeding stock, and the demands for working capital during the
initial start-up period for the facility. In anticipation of the
sale of one or more Minimum Class B Blocks, the Company, from
time to time, may borrow up to $1,080,000 per Minimum Class B
Block from Farmland to commence the development or acquisition of
a weaned pig production facility. In such event the net proceeds
from the sale of a Minimum Class B Block will be applied to such
facility, including the repayment of the debt financing, together
with interest thereon, provided by Farmland. If all 54 Class B
Shares offered hereby are sold, the net proceeds to the Company,
together with approximately $6,480,000 of debt financing, will be
used for the development or acquisition of weaned pig production
facilities having the capacity of three 2,450-sow units. Each
new weaned pig production facility may be developed in tandem
with, or as a part of, one or more other facilities. As of the
date of this Prospectus, the Company has obtained a commitment
until December 31, 2001 for the debt financing required with
respect to at least five Minimum Blocks of the remaining Shares
offered hereby.

The allocation of the offering proceeds from the sale of the
Class B Shares offered hereby and debt financing among the uses
set forth below represents the Company's present intention on the
basis of circumstances at the date of this Prospectus.
Unforeseen changes in circumstances may result in the
reallocation of such proceeds and debt financing among the uses
mentioned below or to other presently unexpected uses. Pending
use of the net proceeds from the sale of the Class B Shares
offered hereby for the purposes set forth herein, such proceeds
will be invested in short-term certificates of deposit or other
interest bearing instruments. The following summary of use of
proceeds does not include any interest income earned on the
investment of the net proceeds from this offering, which income
would be added to the Company's working capital as it is earned.

<PAGE>

Minimum Entire
Offering Offering
(18 Shares) (54 Shares)*

SOURCE OF FUNDS:
Gross Proceeds of Offering $1,080,000 $3,240,000
Less Offering Costs /1/ 140,000 140,000
Net Proceeds of Offering 940,000 3,100,000
Debt Financing /2/ 2,160,000 6,480,000
Total Funds Available $3,100,000 $9,580,000

USE OF FUNDS /3/:
Real Estate and
Facilities Construction/4/ $2,115,000 $6,625,000
Breeding Stock /5/ 625,000 1,875,000
Project Development Costs
and Working Capital/6/ 360,000 1,080,000
Total Facilities
Development Costs $3,100,000 $9,580,000

/1/ Offering costs consist of offering agent commissions and
expenses, legal and accounting fees, filing fees, printing
costs and other miscellaneous expenses.

/2/ The Company anticipates that in connection with the
development or acquisition of each new 2,450-sow weaned pig
production facility (which may be developed in tandem with,
or as a part of, one or more other facilities), it will
require at least $2,160,000 in addition to the net proceeds
from this offering. Accordingly, the consummation of the
issuance and sale of each Minimum Class B Block of 18 Class
B Shares will be conditioned upon and subject to the Company
obtaining a commitment for at least $2,160,000 of debt
financing. As of the date of this Prospectus, the Company
has obtained a commitment with respect to at least five
Minimum Blocks of the remaining Shares offered hereby until
December 31, 2001. No assurances can be given that an
extension of such commitment after such date will be
obtained on favorable terms, if at all. See "Business--Financing."

/3/ The allocation of the offering proceeds from the sale of the
Class B Shares offered hereby and debt financing among the
uses specified in the table is based upon the assumption
that the Company would develop a new weaned pig production
facility as opposed to acquiring an existing weaned pig
production facility. In the event that the Company becomes
aware of an existing pig production facility that is
available for purchase, the Company may determine to acquire
the existing facility rather than develop a new one if the
Board of Directors determines that such action would be in
the best interests of the Company and its members. No
assurances can be given that any existing facilities will be
available for purchase by the Company or that the Company
will acquire any such facility. As of the date of this
Prospectus, the Company has no plans to proceed with the
acquisition of an existing facility.

/4/ The Company has budgeted approximately $2,115,000 for
completion of the physical facilities for each new 2,450-sow
weaned pig production facility (which may be developed in
tandem with, or as a part of, one or more other facilities).
The Company borrowed $2,160,000 with respect to its 5,000-
sow Colorado facility presently under development under a
non-revolving term loan obtained from Farmland, and
anticipates that the net proceeds from the sale of the first
two Minimum Blocks of the remaining Shares offered hereby
will be used to repay the outstanding balance of any such
loan. See "Use of Proceeds--Farmland Loan." As presently
proposed, the construction of each new weaned pig facility,
including breeding, gestation, farrowing and attendant
office buildings and related equipment, is estimated to cost
approximately $1,819,000, plus the cost of the land and land
improvements. This estimate is based on estimates of
construction costs furnished to the Company in connection
with the construction of its existing facilities and of its
facilities under development. The Company has estimated the
cost of the land and land improvements required for each
2,450-sow facility to be approximately $296,000 based on its
anticipated land requirements and the actual cost of the
Company's recent land purchases. Included in the Company's
budget respecting the issuance and sale of all 54 Class B
Shares offered hereby is approximately $280,000 for the
construction of ancillary production buildings or
residential facilities for use by facilities operations
personnel if sufficient housing is unavailable. Sites for
the one or more facilities to be developed with the proceeds
of this offering have not been selected by the Company. No
assurances can be given that the actual <PAGE> costs for the
acquisition of the necessary land and the construction of
the facilities will not exceed the Company's estimates.

/6/ If the Company is successful in implementing its business
plan and each new weaned pig production facility is
developed on schedule, the initial lots of weaned pigs
produced from such facility are not expected to be available
to Class B Common investor members for up to 11 to 13 months
following completion of the offering. The amounts shown
represent costs and expenses expected to be incurred and
expended by the Company during construction of the facility
and the 45- to 60-day breeding stock acclimation period and
prior to shipment of the initial lots of weaned pigs. These
amounts include working capital for the payment of salaries,
feed and veterinary costs, utilities, insurance, overhead
and administration, interest requirements on any facilities
development financing that the Company may incur (although
no assurances can be given that it will obtain such
financing) with respect to each new facility (including
interest requirements on the $2,160,000 Farmland non-
revolving term loan referred to in note (4) above), taxes,
and accounting and legal fees, among others. Amounts
allocated to working capital may be used for any of the
purposes set forth above, as needed, or for any other use
that management for the Company determines to be in the best
interests of the Company.

CLASS C SHARES

The net proceeds to the Company from the sale of the Class C
Shares offered hereby, after deducting expenses payable in
connection with this offering, are estimated to be approximately
$940,000 if one Minimum Class C Block of 24 Class C Shares is
sold and approximately $3,100,000 if all 72 Class C Shares
offered hereby are sold. The Company intends to use the net
proceeds from the sale of each Minimum Class C Block, together
with approximately $2,160,000 of debt financing required with
respect to each such Minimum Class C Block, for the development
or acquisition of one new 2,450-sow weaned pig production
facility (which facility may exist as a stand-alone unit or as
part of a 5,000-sow production complex) to be situated in or
around Yuma County, Colorado, Wayne County, Illinois or other
locations selected by the Company, including the purchase of real
estate, the construction of the facility, and the acquisition of
breeding stock, and the demands for working capital during the
initial start-up period for the facility. If all 72 Class C
Shares offered hereby are sold, the net proceeds to the Company,
together with approximately $6,480,000 of debt financing, will be
used for the development or acquisition of weaned pig production
facilities having the capacity of three 2,450-sow units. Each
new weaned pig production facility may be developed in tandem
with, or as a part of, one or more other facilities. As of the
date of this Prospectus, the Company has obtained a commitment
until December 31, 2001 for the debt financing required with
respect to at least five Minimum Blocks of the remaining Shares
offered hereby.

The allocation of the offering proceeds from the sale of the
Class C Shares offered hereby and debt financing among the uses
set forth below represents the Company's present intention on the
basis of circumstances at the date of this Prospectus.
Unforeseen changes in circumstances may result in the
reallocation of such proceeds and debt financing among the uses
mentioned below or to other presently unexpected uses. Pending
use of the net proceeds from the sale of the Class C Shares
offered hereby for the purposes set forth herein, such proceeds
will be invested in short-term certificates of deposit or other
interest bearing instruments. The following summary of use of
proceeds does not include any interest income earned on the
investment of the net proceeds from this offering, which income
would be added to the Company's working capital as it is earned.

<PAGE>

Minimum Entire
Offering Offering
(24 Shares) (72 Shares)*

SOURCE OF FUNDS:
Gross Proceeds of
Offering $1,080,000 $3,240,000
Less Offering Costs /1/ 140,000 140,000
Net Proceeds of Offering 940,000 3,100,000
Debt Financing /2/ 2,160,000 6,480,000
Total Funds Available $3,100,000 $9,580,000

USE OF FUNDS /3/:
Real Estate and
Facilities Construction/4/ $2,115,000 $6,625,000
Breeding Stock /5/ 625,000 1,875,000
Project Development Costs
and Working Capital /6/ 360,000 1,080,000
Total Facilities Development
Costs $3,100,000 $9,580,000

/1/ Offering costs consist of offering agent commissions and
expenses, legal and accounting fees, filing fees, printing
costs and other miscellaneous expenses.

/2/ The Company anticipates that in connection with the
development or acquisition of each new 2,450-sow weaned pig
production facility (which may be developed in tandem with,
or as a part of, one or more other facilities), it will
require at least $2,160,000 in addition to the net proceeds
from this offering. Accordingly, the consummation of the
issuance and sale of each Minimum Class C Block of 24 Class
C Shares will be conditioned upon and subject to the Company
obtaining a commitment for at least $2,160,000 of debt
financing. As of the date of this Prospectus, the Company
has obtained a commitment with respect to at least five
Minimum Blocks of the remaining Shares offered hereby until
December 31, 2001. No assurances can be given that an
extension of such commitment after such date will be
obtained on favorable terms, if at all. See "Business--Financing."

/3/ The allocation of the offering proceeds from the sale of the
Class C Shares offered hereby and debt financing among the
uses specified in the table is based upon the assumption
that the Company would develop a new weaned pig production
facility as opposed to acquiring an existing weaned pig
production facility. In the event that the Company becomes
aware of an existing pig production facility that is
available for purchase, the Company may determine to acquire
the existing facility rather than develop a new one if the
Board of Directors determines that such action would be in
the best interests of the Company and its members. No
assurances can be given that any existing facilities will be
available for purchase by the Company or that the Company
will acquire any such facility. As of the date of this
Prospectus, the Company has no plans to proceed with the
acquisition of an existing facility.

/4/ The Company has budgeted approximately $2,115,000 for
completion of the physical facilities for each new 2,450-sow
weaned pig production facility (which may be developed in
tandem with, or as a part of, one or more other facilities).
The Company borrowed $2,160,000 with respect to its 5,000-
sow Colorado facility presently under development under a
non-revolving term loan obtained from Farmland, and
anticipates that the net proceeds from the sale of the first
two Minimum Blocks of the remaining Shares offered hereby
will be used to repay the outstanding balance of any such
loan. See "Use of Proceeds--Farmland Loan." As presently
proposed, the construction of each new weaned pig facility,
including breeding, gestation, farrowing and attendant
office buildings and related equipment, is estimated to cost
approximately $1,819,000, plus the cost of the land and land
improvements. This estimate is based on estimates of
construction costs furnished to the Company in connection
with the construction of its existing facilities and of its
facilities under development. The Company has estimated the
cost of the land and land improvements required for each
2,450-sow facility to be approximately $296,000 based on its
anticipated land requirements and the actual cost of the
Company's recent land purchases. Included in the Company's
budget respecting the issuance and sale of all 72 Class C
Shares offered hereby is approximately $280,000 for the
construction of ancillary production buildings or
residential facilities for use by facilities operations
personnel if sufficient housing is unavailable. Sites for
the one or more facilities to be developed with the proceeds
of this offering have not been selected by the Company. No
assurances can be given that the actual <PAGE> costs for the
acquisition of the necessary land and the construction of
the facilities will not exceed the Company's estimates.

/6/ If the Company is successful in implementing its business
plan and each new weaned pig production facility is
developed on schedule, the initial lots of weaned pigs
produced from such facility are not expected to be available
to Class C Common investor members for up to 11 to 13 months
following completion of the offering. The amounts shown
represent costs and expenses expected to be incurred and
expended by the Company during construction of the facility
and the 45- to 60-day breeding stock acclimation period and
prior to shipment of the initial lots of weaned pigs. These
amounts include working capital for the payment of salaries,
feed and veterinary costs, utilities, insurance, overhead
and administration, interest requirements on any facilities
development financing that the Company may incur (although
no assurances can be given that it will obtain such
financing) with respect to each new facility (including
interest requirements on the $2,160,000 Farmland non-
revolving term loan referred to in note (4) above), taxes,
and accounting and legal fees, among others. Amounts
allocated to working capital may be used for any of the
purposes set forth above, as needed, or for any other use
that management for the Company determines to be in the best
interests of the Company.

FARMLAND LOAN

The Company borrowed $2,160,000 with respect to its 5,000-
sow Colorado facility presently under development under a non-
revolving term loan obtained from Farmland, and anticipates that
the net proceeds from the sale of the first two Minimum Blocks of
the remaining Shares offered hereby will be used to repay the
outstanding balance of any such loan. The Farmland loan provides
for amortization over a ten-year period, at a variable rate equal
to CoBank's then national variable rate plus 1.25%. As of the
date of this Prospectus, interest accrued on the outstanding
principal balance of the Farmland loan at a rate of 9.75% per
annum (calculated by adding 125 basis points to CoBank's national
variable rate of 8.5% in effect as of such date). The payment
schedule for the Farmland loan requires the Company to make
interest-only payments for the life of the loan, with a payment
of one-half of the outstanding loan balance to be made upon the
Company's issuance and sale of each of its first two Minimum
Blocks of the remaining Shares offered hereby. The Farmland loan
is to be repaid in full upon the earlier of (i) the Company's
issuance and sale of the first two Minimum Blocks of the
remaining Shares offered hereby, and (ii) the expiration of ten
years. Funds advanced to Alliance pursuant to the Farmland loan,
as well as any future advances are being applied to construction
costs and other working capital purposes.

PATRONAGE DISTRIBUTION POLICY

No dividends have been, or will be, paid by Alliance on its
Common Stock. The Company intends to distribute, however, at
least annually, all of its net margins, if any, as patronage
distributions to its stockholders on the basis of the quantity or
value of business done by the Company with or for each
stockholder with respect to pigs sold pursuant to the Pig
Purchase Agreements or the Swine Production Services Agreement.
The Company's "net margins" for this purpose generally are equal
to the Company's net income under generally accepted accounting
principles (taxable income prior to September 1, 1997)
attributable to patronage sourced business done with or for the
Company's members (determined before reduction for patronage
distributions paid by the Company). In this regard, the Company
will compute its net income separately for each group of members
(including successors and permitted assigns) whose shares of the
Company's Common Stock originally were issued in connection with
the Company's acquisition or development of one or more feeder or
weaned pig production units financed in part thereby. A
stockholder's share of the Company's net margins will be payable
to him or her after the close of each fiscal year. The Company's
Board of Directors has the right to pay the patronage
distribution in qualified written notices of allocation, non-
qualified written notices of allocation, cash or any combination
thereof. The written notices of allocation will be issued in the
form of Alliance capital credits. The extent of the cash portion
of the patronage distributions will be determined annually and
will depend upon the Company's financial condition, results of
operation, capital commitments and other factors deemed relevant
by the Board of Directors. The Company has entered into various
loan agreements and other documentation with its existing lender
which restrict the Company's ability to pay patronage
distributions in cash. See "Business--Financing" and "-- Federal
Income Taxation." The Company's Board of <PAGE> Directors authorized,
with the consent and approval of CoBank, the payment of a
$670,167 rebate to its members with respect to feeder pigs sold
to such members by Alliance during the fiscal year ended August
31, 1996. The Company does not intend to make any future rebate
payments to its members.

CAPITALIZATION

The following tables set forth the capitalization of the
Company as of May 31, 1998, as adjusted to give effect to the
full advancement of the remaining $3,564,000 of funds then
available under the Company's existing credit facility, to the
full advancement of $4,320,000 of funds to become available under
the company's existing credit facility upon CoBank's acceptance
of certain documents, and to the full advancement of funds under
the $2,160,000 non-revolving term loan obtained from Farmland for
Alliance's development of its 5,000-sow pig production facility
in Yuma County, Colorado, and as further adjusted to give effect
to the sale of the minimum of 17 Class A Shares, 18 Class B
Shares and 24 Class C Shares, respectively, the maximum of the
remaining 34 Class A Shares, 18 Class B Shares and 72 Class C
Shares, respectively, offered hereby, and all 124 remaining
Shares offered hereby, the repayment of one-half of the non-
revolving term loan obtained from Farmland for Alliance's
development of its 5,000-sow pig production facility in Yuma
County, Colorado with respect to the sale of the minimum of 17
Class A Shares, 18 Class B Shares or 24 Class C Shares, and the
Company's anticipated borrowing of at least $2,720,000 of debt
financing with respect to the sale of the minimum of 17 Class A
Shares and of at least $5,440,000 of debt financing with respect
to the sale of the maximum 34 remaining Class A Shares offered
hereby, the Company's anticipated borrowing of at least
$2,160,000 of debt financing with respect to the sale of the
minimum of 18 Class B Shares and of at least $2,160,000 of debt
financing with respect to the sale of the maximum 18 remaining
Class B Shares offered hereby, and the Company's anticipated
borrowing of at least $2,160,000 of debt financing with respect
to the sale of the minimum of 24 Class C Shares and of at least
$6,480,000 of debt financing with respect to the sale of the
maximum 72 Class C Shares offered hereby. As of the date of this
Prospectus, the Company has obtained a commitment until
December 31, 2001 for the debt financing required with respect to
at least five Minimum Blocks of the remaining Shares offered
hereby. These tables should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the financial statements and related
notes thereto and other information included elsewhere in this
Prospectus.

<PAGE>

<TABLE>

<CAPTION>
AS OF MAY 31, 1998
AS FURTHER ADJUSTED FOR THE OFFERING/2/
MINIMUM

AS ADJUSTED
ACTUAL FOR BANK DEBT CLASS A CLASS B CLASS C

<S> <C> <C> <C> <C> <C>
Debt/1/ $16,845,361 $26,889,361 $26,369,361 $25,809,361 $25,809,361

Stockholders'
equity:
Class A Common stock,
$.01 par value; 5,000
shares authorized (119
shares issued; 119
shares issued, as
adjusted; and 136
shares issued, as
further adjusted
(minimum) 1 1 1 1 1

Class B Common stock,
$.01 par value;
2,500 shares authorized
(36 shares issued;
36 shares issued, as
adjusted; and 54 shares
issued, as further
adjusted (minimum) 0 0 0 1 0

Class C Common stock,
$.01 par value; 2,500
shares authorized (zero
shares issued; zero
shares issued, as
adjusted; and 24 shares
issued, as further
adjusted (minimum) 0 0 0 0 0

Additional paid-in
capital 10,751,325 10,751,325 12,111,325 11,831,324 11,831,325
Deficit (997,197) (997,197) (997,197) (997,197) (997,197)
Total stockholders'
equity 9,754,129 9,754,129 11,114,129 10,834,129 10,834,129
Total
capitalization $26,599,490 $36,643,490 $37,483,490 $36,643,490 $36,643,490

___________________________
/1/ On March 18, 1998, the Company entered into various loan agreements with CoBank related to a secured
credit facility which provides for up to $26,846,700 of non-revolving term debt, $7,660,000 of
revolving term credit and $18,400,00 of construction financing. The unused portion of the credit
facility expires September 30, 2011 with respect to the revolving term credit, December 31, 2001 with
respect to the non-revolving term debt and September 30, 2001 with respect to the construction
financing. The Company borrowed $760,000 from Farmland in August 1996 in order to purchase certain
real property in Yuma County, Colorado. As of May 31, 1998, the outstanding balance of loans made by
CoBank under the credit facility was $16,345,603, and the outstanding balance of the Farmland loan was
$499,758. In May, 1998, the Company obtained a $2,160,000 non-revolving term loan from Farmland for
Alliance's development of its 5,000-sow pig production facility in Yuma County, Colorado. Amounts
shown in the As Adjusted column assume that all funds available from the CoBank credit facility and
the Farmland loans have been advanced, and amounts shown in the As Further Adjusted columns assume
that all funds from the anticipated borrowing of non-revolving term debt and revolving term credit in
connection with this offering have been advanced and that $1,080,000 of the 5,000-sow pig production
facility loan from Farmland has been repaid.

/2/ Net of offering costs.

</TABLE>

<PAGE>

<TABLE>
AS OF MAY 31, 1998

AS FURTHER ADJUSTED FOR THE OFFERING/2/
MINIMUM
<CAPTION>
AS ADJUSTED ALL THREE
ACTUAL FOR BANK DEBT CLASS A CLASS B CLASS C CLASSES

<S> <C> <C> <C> <C> <C> <C>
Debt/1/ $16,845,361 $26,889,361 $25,849,361 $25,809,361 $26,889,361 $34,489,361

Stockholders'
equity:

Class A Common
stock, $.01
par value;
5,000 shares
authorized
(119 shares
issued; 119
shares issued,
as adjusted;
and 153
shares issued,
as further
adjusted
(maximum) 1 1 2 1 1 2

Class B Common
stock, $.01
par value; 2,500
shares authorized
(36 shares issued;
36 shares issued,
as adjusted; and
54 shares issued,
as further adjusted
(maximum) 0 0 0 1 0 1

Class C Common stock,
$.01 par value;
2,500 shares
authorized (zero
shares issued;
zero shares issued,
as adjusted; and
72 shares issued,
as further adjusted
(maximum) 0 0 0 0 1 1

Additional paid-in
capital 10,751,325 10,751,325 13,471,324 11,831,324 13,991,324 17,791,322
Deficit (979,197) (997,197) (997,197) (997,197) (997,197) (997,197)
Total stockholders'
equity 9,754,129 9,754,129 12,474,129 10,834,129 12,994,129 16,794,129
Total
capitalization $26,599,490 $36,643,490 $ 38,323,490 $36,643,490 $39,883,490 $51,283,490

___________________________
/1/ On March 18, 1998, the Company entered into various loan agreements with CoBank related to a secured
credit facility which provides for up to $26,846,700 of non-revolving term debt, $7,660,000 of
revolving term credit and $18,400,00 of construction financing. The unused portion of the credit
facility expires September 30, 2011 with respect to the revolving term credit, December 31, 2001 with
respect to the non-revolving term debt and September 30, 2001 with respect to the construction
financing. The Company borrowed $760,000 from Farmland in August 1996 in order to purchase certain
real property in Yuma County, Colorado. As of May 31, 1998, the outstanding balance of loans made by
CoBank under the credit facility was $16,345,603, and the outstanding balance of the Farmland loan was
$499,758. In May, 1998, the Company obtained a $2,160,000 non-revolving term loan from Farmland for
Alliance's development of its 5,000-sow pig production facility in Yuma County, Colorado. Amounts
shown in the As Adjusted column assume that all funds available from the CoBank credit facility and
the Farmland loans have been advanced, and amounts shown in the As Further Adjusted columns assume
that all funds from the anticipated borrowing of non-revolving term debt and revolving term credit in
connection with this offering have been advanced and that the 5,000-sow pig production facility loan
from Farmland has been repaid in full.

/2/ Net of offering costs.

</TABLE>

<PAGE>

SELECTED FINANCIAL DATA

The selected historical financial information presented
below reflects the fiscal 1997, 1996 and 1995 operations of
Alliance. Such financial information under the captions
"Statement of Operations Information" and "Balance Sheet
Information" as of and for the fiscal years ended August 31 is
derived from the financial statements of Alliance for the period
from September 1, 1994 through August 31, 1997, all of which have
been audited by KPMG Peat Marwick LLP, independent certified
public accountants. The summary historical financial information
as of May 31, 1998, and for the nine months ended May 31, 1998
and 1997 is derived from the unaudited financial statements of
Alliance. In the opinion of the Company, such interim financial
information includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair statement of the
results for such interim periods. In the opinion of management,
the financial condition and results of operations set forth
herein cannot be relied upon as being representative of the
continuing prospects for the Company. The following selected
financial information should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the audited financial statements and
related notes thereto and other information included elsewhere in
this Prospectus.

<TABLE>

STATEMENT OF OPERATIONS
INFORMATION:

FISCAL YEAR ENDED AUGUST 31, NINE MONTHS ENDED MAY 31,

1997 1996 1995 1998 1997

<S> <C> <C> <C> <C> <C>
Net sales $13,669,706 $7,037,927 $ 1,554,113 $13,346,482 $9,871,995
Cost of
goods sold 11,222,169 6,422,838 1,836,388 9,587,739 8,239,573
Gross income
(loss) 2,447,537 615,089 (282,275) 3,758,743 1,632,422
Expenses
related to
start-up of
new production
facilities 281,025 426,926 754,756 791,861 174,215
Administrative
expenses 424,565 369,787 101,927 751,269 326,170
(Gain) Loss
on sale of
breeding stock (94,123) 226,738 112,797 159,057 76,710
Operating income
(loss) 1,836,070 (408,362) (1,251,755) 2,056,556 1,055,327
Interest
expense (1,321,984) (1,001,329) (289,082) (1,129,039) (919,360)
Other income 144,209 66,604 27,509 298,355 101,111
(1,177,775) (934,725) (261,573) (830,684) (818,249)
Net income
(loss) $ 658,295 $(1,343,087) $(1,513,328) $1,225,872 $ 237,078

OTHER INFORMATION:

Pigs Sold 231,611 148,926 46,858 228,040 169,459

BALANCE SHEET AS OF AUGUST 31, AS OF MAY 31,
INFORMATION: 1997 1996 1995 1998

Working Capital
(Deficit) $ (114,425) $ (257,702) $ 1,238,271 $ (7,355)
Total Assets 24,380,406 20,845,613 14,571,940 28,855,236
Shareholders'
Equity 6,496,168 4,606,289 4,627,693 9,754,129

</TABLE>
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

GENERAL

The Company commenced operations in July, 1994, following
its acquisition of the entire equity ownership rights and
interest in Yuma LLC, a Colorado limited liability company in
which Farmland and Yuma Cooperative owned 71.5% and 28.5%,
respectively, of the outstanding equity interests. Subsequent to
the Company's acquisition of Yuma LLC, Yuma LLC was dissolved and
liquidated and Alliance received all assets and liabilities of
Yuma LLC and continued the feeder pig production operations of
Yuma LLC as described herein.

THREE MONTHS ENDED MAY 31, 1998 AND 1997

Shipments of feeder pigs were higher for the three months
ended May 31, 1998 than in the prior year's period. Alliance
shipped 78,065 feeder pigs for the quarter ended May 31, 1998
compared to 56,659 feeder pigs shipped for the quarter ended May
31, 1997 for an increase of 38%. Net sales for the quarter ended
May 31, 1998 increased to $4,375,672 from $3,351,997 for the
prior year period, an increase of $1,023,675 or 31%. The selling
price per pig is determined pursuant to the formula established
under Alliance's Pig Purchase Agreements with its members. The
selling price is based on Alliance's operating costs (which were
based on a twelve month rolling average), debt service and an
additional $4.50 per pig. The above increase in volume and sales
dollars is partially a result of having seven units in production
for the quarter ended May 31, 1998 as compared to six units in
production for the quarter ended May 31, 1997, in addition to
improved productivity during the quarter ended May 31, 1998. The
per pig sales price was lower during the three months ended May
31, 1998 compared to the three months ended May 31, 1997 due to
higher pig production partially offset by higher expenses.
Average net sales price was $56.05 and $59.16 during the quarters
ended May 31, 1998 and 1997, respectively.

Alliance earned gross margins of $1,019,963 and $661,473 for
the three month periods ended May 31, 1998 and 1997,
respectively. This improvement in gross margin is primarily due
to the nature of the contractual pricing arrangements applicable
to Alliance's sale of feeder pigs to its members. As previously
described, the selling price is based on, among other things,
Alliance's operating costs on a twelve month historical rolling
average. For the third quarter of fiscal 1998, Alliance's net
sales price exceeded then current production costs by $13.07 per
pig sold. For the third quarter of fiscal 1997, the net sales
price exceeded then current production costs by $11.67 per pig
sold.

Sales to Farmland for the three month periods ended May 31,
1998 and 1997 were $2,293,777 and $2,111,550 respectively. The
average net sales price per head was $56.05 and $59.16 and the
average industry market price per head was $35.14 and $64.99
during 1998 and 1997, respectively.

Alliance recorded $342,814 of start-up costs relating to the
operation of its two newest production facilities under
construction during the three months ended May 31, 1998. Start-
up costs for the three month period ended May 31 1998 were
comprised of utilities, feed, labor and other general expenses
prior to the operation of the new feeder pig production
facilities.

Administrative expenses were $424,610 for the three months
ended May 31, 1998 compared to $111,174 for the prior year
period. This increase reflects the increased operations and
includes higher administrative, payroll and professional fees,
related primarily to additional facilities being in operation.

Loss on sale of breeding stock was $103,518 for the three
months ended May 31, 1998 as compared to a gain of $4,310 for the
prior year period. This change is attributable to an accelerated
cull rate during the third quarter of fiscal 1998 compared to the
third quarter of fiscal 1997.

Interest expense of $412,924 for the three months ended May
31, 1998 as compared to $238,776 for the prior year period, was
incurred in financing the development of seven existing and two
new pig production facilities. This increase is primarily due to
the increase in the outstanding loan balance. As of May 31,
1998, Alliance had borrowed $16,345,603 from CoBank for
construction and start up costs and $499,758 from Farmland for
the purchase of land which is intended to be used for future
expansion.

<PAGE>

Alliance incurred a net loss of $17,709 for the three months
ended May 31, 1998 compared to a net gain of $232,611 for the
prior year period. The net loss for the third quarter of fiscal
1998 was due to losses incurred related to the two pig production
facilities under construction. These losses were significantly
offset by the rolling average cost that the per pig sales prices
are based on exceeding then current costs per pig by $4.16 per
pig shipped, caused primarily by an improvement in productivity.
The net gain for the third quarter of fiscal 1997 was
attributable to improved gross margins resulting from the per pig
sales price exceeding current operating costs. In addition to
operating risks and uncertainties associated with any business,
Alliance's ability to generate net income is limited by any
start-up expenses that are incurred with respect to facilities
development and by the selling price formula for feeder pigs that
contains a $4.50 production margin.

NINE MONTHS ENDED MAY 31, 1998 AND 1997

Shipments of feeder pigs were higher for the nine months
ended May 31, 1998 than in the prior year's period. Alliance
shipped 228,040 feeder pigs for the nine months ended May 31,
1998 compared to 169,459 feeder pigs shipped for the nine months
ended May 31, 1997 for an increase of 35%. Net sales for the
nine months ended May 31, 1998 increased to $13,346,482 from
$9,871,995 for the prior year period, an increase of $3,474,487,
or 35%. The selling price per pig is determined pursuant to the
formula established under Alliance's Pig Purchase Agreement with
its members. The selling price is based on Alliance's operating
costs (which were based on a twelve month rolling average), debt
service and an additional $4.50 per pig. The above increase in
volume and sales dollars is partially a result of having six
units in production for nineteen weeks and seven units in
production for twenty weeks of the first nine months of fiscal
1998 as compared to five units in production for nine weeks and
six units in production for thirty weeks of the first nine months
of fiscal 1997, in addition to improved productivity for the
first nine months of fiscal 1998 as compared to the first nine
months of fiscal 1997. The per pig sales price was slightly
higher during the first nine months of fiscal 1998 compared to
the first nine months of fiscal 1997 partially because the pigs
shipped weighed more and partially because the twelve months of
costs used to compute the per pig prices was slightly higher and
the twelve months of productivity used to compute the per pig
prices was lower for the first nine months of fiscal 1998 than
the first nine months of fiscal 1997. Average net sales price
was $58.53 and $58.26 during the nine months ended May 31, 1998
and 1997, respectively.

Alliance earned a gross margin of $3,758,743 and $1,632,422
for the first nine months of fiscal 1998 and fiscal 1997,
respectively. This improvement in gross margin is primarily due
to the nature of the contractual pricing arrangements applicable
to Alliance's sale of feeder pigs to its members. As previously
described, the selling price is based on, among other things,
Alliance's operating costs on a twelve month historical rolling
average. For the first nine months of fiscal 1998, Alliance's net
sales price exceeded then current production costs by $16.48 per
pig sold. For the first nine months of fiscal 1997, the net
sales price exceeded then current production costs by $9.64 per
pig sold.

Sales to Farmland for the first nine months of fiscal 1998
and 1997 were $8,009,564 and $6,072,633, respectively. The
average net sales price per head was $58.53 and $58.26 and the
average industry market price per head was $39.48 and $57.65
during 1998 and 1997, respectively.

Alliance recorded $791,861 of start-up costs relating to the
operation of it's two newest production facilities under
construction during the first nine months of fiscal 1998 and
$174,215 of start-up costs relating to the two facilities under
construction during the first nine months of fiscal 1997. Start-
up costs for the first nine months of fiscal 1998 and 1997 were
comprised of utilities, feed, labor and other general expenses
prior to the operation of the new feeder pig production
facilities.

Administrative expenses were $751,269 for the nine months
ended May 31, 1998 compared to $326,170 for the prior year
period. This increase reflects the increased operations and
includes higher administrative, payroll and professional fees,
related primarily to additional facilities being in operation.

Loss on sale of breeding stock was $159,057 for the nine
months ended May 31, 1998 as compared to $76,710 for the prior
year period. This is attributable to an accelerated cull rate
during the third quarter of fiscal 1998, partially offset with
the existence of more mature facilities culling animals during
the first nine months of fiscal 1998 as compared to more newly
developed facilities culling animals during the first nine months
of fiscal 1997.

Interest expense of $1,129,039 for the nine months ended May
31, 1998 as compared to $919,360 for the prior year period, was
incurred in financing the development of four existing and two
new pig production facilities. This increase is primarily due to
the increase in the outstanding loan balance, partially offset by
the capitalization of $38,606 of interest <PAGE> in the first nine
months of fiscal 1998 compared to $8,241 in the first nine months
of fiscal 1997. As of May 31, 1998, Alliance had borrowed
$16,345,603 from CoBank for construction and start up costs and
$499,758 from Farmland for the purchase of land which is intended
to be used for future expansion.

Alliance earned net income of $1,225,872 for the nine months
ended May 31, 1998 compared to $237,078 for the prior year
period. The net income for the first nine months of fiscal 1998
was attributable to the rolling average cost that the per pig
sales prices are based on exceeding then current costs per pig by
$8.84 per pig shipped, caused primarily by an improvement in
productivity. This net income was partially offset due to losses
incurred in the third quarter of fiscal 1998 related to the
construction of the two new pig production facilities. The net
income for the first nine months of fiscal 1997 was partially
attributable to an improvement in productivity at the beginning
of the fiscal year which decreased throughout the first half of
fiscal 1997 due to herd health issues, and increased again during
the third quarter of fiscal 1997.

FISCAL YEARS ENDED AUGUST 31, 1997 AND 1996.

Shipments of feeder pigs were higher for the fiscal year
ended August 31, 1997 than in the prior year. Alliance shipped
231,598 feeder pigs during fiscal 1997 compared to 148,926 feeder
pigs shipped during fiscal 1996, an increase of approximately
56%. Net sales for the fiscal year ended August 31, 1997
increased to $13,669,706 from $7,037,927 for the prior year, an
increase of $6,631,779 or approximately 94%. This increase in
volume and sales dollars is primarily due to six units operating
for the fiscal year ended August 31, 1997 versus four units for
the fiscal year ended August 31, 1996.

Alliance's sales for the fiscal year ended August 31, 1996
have been reduced by the accrual of a rebate of $670,167 that
was paid to its members with respect to feeder pigs sold to such
members by Alliance during such fiscal year. See "Patronage
Distribution Policy." Alliance incurred positive gross margins
of $2,447,537 and $615,089 for fiscal 1997 and 1996,
respectively. This improvement in gross margin is primarily due
to the nature of the contractual pricing arrangements applicable
to the Company's sale of feeder pigs to its members. The selling
price for Alliance's feeder pigs is based on, among other things,
the 12-month rolling average of operating costs per pig. For the
fiscal year ended August 31, 1997, the Company's operating costs
at the time pigs were sold (the then current operating costs)
were lower than the historical rolling average of operating costs
by $1.39 per head sold. For the fiscal year ended August 31,
1996, the Company's then current operating costs exceeded the
historical rolling average of operating costs by $0.09 per head
sold.

Sales to Farmland (including sales to Farmland of Yuma
Cooperative's share of feeder pigs produced by the Company) for
fiscal 1997 and 1996 were $7,924,763 and $5,035,160,
respectively. The average net sales price per head was $59.02
and $48.12 ($52.62 prior to giving effect to a $4.50 per pig
rebate) and the average industry market price per head was $56.84
and $41.15 during 1997 and 1996, respectively.

Alliance recorded start-up costs of $281,025 and $426,926
relating to the operation of new production facilities during the
fiscal years ended August 31, 1997 and 1996, respectively. All
of the costs for the fiscal year ended August 31, 1997 and all of
the costs for the fiscal year ended August 31, 1996 were
comprised of utilities, feed, labor and other general expenses
prior to the operation of the new feeder pig production
facilities.

Gain on sale of breeding stock was $94,123 for the fiscal
year ended August 31, 1997 as compared to a loss of $226,738 for
the prior year period. This increase is attributable to an
unusually strong market for hogs and the culling by Alliance of a
larger percentage of its herd, which consists of a higher quality
of animal. In connection with the ongoing repopulation of the
Company's Colorado facilities, Alliance is culling all of its
DeKalb breeding stock and replacing it with P.I.C. genetics.

Administrative expenses were $424,565 for the fiscal year
ended 1997 compared to $369,787 for the prior year period. This
increase reflects the increased operations and includes higher
administrative, payroll and professional fees.

Interest expense of $1,321,984 for fiscal 1997 compared to
$1,001,329 for fiscal 1996 was incurred in financing the
development of the six existing and one new feeder pig
facilities. The increase reflects an increase in outstanding
borrowings in 1997.

Alliance earned net income of $658,295 for the fiscal year
ended August 31, 1997 compared to a net loss of $1,343,087 for
the prior year period. The fiscal 1997 net income was
attributable to improved gross margins resulting from the per pig
sales price exceeding operating costs, caused in part by improved
productivity as well as lower corn prices from <PAGE> fiscal 1996. The
fiscal 1996 loss was attributable to $426,926 of start-up
expenses related to the development of two feeder pig production
facilities and a loss of $226,738 on the sale of breeding stock.
The remaining amount of the 1996 net loss was primarily
attributable to then current costs exceeding the rolling average
cost that per pig prices were based on, caused in part by high
death loss due to herd health issues, as well as rising corn
prices. In addition, the Company's operating costs at the time
pigs were sold during part of fiscal 1997 and all of fiscal 1996
exceeded the historical rolling average of operating costs from
which the selling price for pigs was based. The selling price
for Alliance's feeder pigs is based on the 12-month rolling
average of operating costs per pig, the debt service financing
cost per pig, and a $4.50 per pig production margin. During all
of fiscal 1996, however, the Company accrued a $670,167 rebate
that was intended to provide each member with a $4.50 payment per
pig sold to such member during fiscal 1996; thereby effectively
eliminating the production margin. There was no accrual of a
rebate during fiscal 1997. In addition operating risks and
uncertainties associated with any business, the Company's ability
to generate net income is limited by: any start-up expenses that
are incurred with respect to facilities development and the
Company's selling price formula for feeder pigs that contains a
$4.50 production margin.

FISCAL YEARS ENDED AUGUST 31, 1996 AND 1995.

Shipments of feeder pigs were higher for the fiscal year
ended August 31, 1996 than in the prior year's period. Alliance
shipped 148,926 feeder pigs during fiscal 1996 compared to 46,858
feeder pigs shipped during fiscal 1995, an increase of
approximately 218%. Net sales for the fiscal year ended August
31, 1996 increased to $7,037,927 from $1,554,113 for the prior
year, an increase of $5,438,814 or approximately 350%. This
increase in volume and sales dollars is primarily due to four
units operating for the fiscal year ended August 31, 1996 versus
one unit for the fiscal year ended August 31, 1995 and the change
in Alliance's contract price, effective July 13, 1995, to include
$4.50 per pig in addition to the financing cost and operating
cost on which the price was previously based.

Alliance's sales for the fiscal year ended August 31, 1996
have been reduced by the accrual of a rebate of $670,167 that is
intended to be paid to its members with respect to feeder pigs
sold to such members by Alliance during such fiscal year. See
"Patronage Distribution Policy." Alliance incurred a positive
gross margin of $615,089 and a negative gross margin of $282,275
for fiscal 1996 and 1995, respectively. This improvement in
gross margin is primarily due to the nature of the contractual
pricing arrangements applicable to the Company's sale of feeder
pigs to its members. The selling price for Alliance's feeder
pigs is based on, among other things, the 12-month rolling
average of operating costs per pig. For the fiscal year ended
August 31, 1996, the Company's operating costs at the time pigs
were sold (the then current operating costs) exceeded the
historical rolling average of operating costs by $0.09 per head
sold. For the fiscal year ended August 31, 1995, the Company's
then current operating costs exceeded the historical rolling
average of operating costs by $6.37 per head sold. The
substantial difference between fiscal 1995's then current
operating costs and historical rolling average operating costs is
principally due to Alliance's culling of a greater portion of its
herd than is customary in order to accommodate their replacement
with multiplier unit animals, in addition to the resulting
decline in production.

Sales to Farmland (including sales to Farmland of Yuma
Cooperative's share of feeder pigs produced by the Company) for
fiscal 1996 and 1995 were $5,035,160 and $1,467,069,
respectively. The average net sales price per head was $48.12
and $33.16 and the average industry market price per head was
$41.15 and $32.17 during 1996 and 1995, respectively.

Alliance recorded start-up costs of $426,926 and $754,756
relating to the operation of new production facilities during the
fiscal years ended August 31, 1996 and 1995, respectively, and
conversion of the existing unit to a multiplier unit during the
fiscal year ended August 31, 1995. All costs for the fiscal year
ended August 31, 1996 and $647,751 of the costs for the fiscal
year ended August 31, 1995 were comprised of utilities, feed,
labor and other general expenses prior to the operation of the
new feeder pig production facilities, and $107,005 of the costs
for the fiscal year period ended August 31, 1995 were
attributable to the conversion of the existing 2,450-sow feeder
pig unit from a commercial sow unit to a multiplier sow unit.

Loss on sale of breeding stock was $226,738 for the fiscal
year ended August 31, 1996 as compared to $112,797 for the prior
year period. This increase is attributable to the existence of
newly developed facilities in fiscal 1995, from which culling of
animals was not necessary until near the end of that fiscal year,
as compared to more mature facilities in fiscal 1996, from which
culling of animals occurred throughout that fiscal year.

Administrative expenses were $369,787 for the fiscal year
ended 1996 compared to $101,927 for the prior year period. This
increase reflects the increased operations and includes higher
administrative, payroll and professional fees.

<PAGE>

Interest expense of $1,001,329 for fiscal 1996 compared to
$289,082 for fiscal 1995 was incurred in financing the
development of the four existing and two new feeder pig
production facilities.

Alliance incurred a net loss of $1,343,087 for the fiscal
year ended August 31, 1996 compared to a net loss of $1,513,328
for the prior year period. The fiscal 1996 loss was attributable
to $426,926 of start-up expenses related to the development of
two feeder pig production facilities and a loss of $226,738 on
the sale of breeding stock. The remaining amount of the net loss
is primarily attributable to current costs exceeding the rolling
average cost that per pig prices are based on, caused in part by
high death loss due to herd health issues, as well as rising corn
prices. The fiscal 1995 loss was attributable to $754,756 of
start-up expenses related to facilities development and a loss of
$112,797 on the sale of breeding stock. In addition, the
Company's operating costs at the time pigs were sold during both
fiscal 1996 and 1995 exceeded the historical rolling average of
operating costs from which the selling price for pigs was based.
During all of fiscal 1996, the selling price for Alliance's
feeder pigs was based on the 12-month rolling average of
operating costs per pig, the debt service financing cost per pig,
and a $4.50 per pig production margin. The Company accrued a
$670,167 rebate, however, that is intended to provide each member
with a $4.50 payment per pig sold to such member during fiscal
1996; thereby effectively eliminating the production margin. The
$4.50 per pig production margin was not added to the price of
feeder pigs sold during fiscal 1995 until after July 13, 1995.
In addition operating risks and uncertainties associated with any
business, the Company's ability to generate net income is limited
by any start-up expenses that are incurred with respect to
facilities development, by the Company's selling price formula
for feeder pigs that contains a $4.50 production margin, and by
the possible return of all or a portion of such rebate to the
Company's members.

LIQUIDITY AND CAPITAL RESOURCES

At May 31, 1998, the Company reported a working capital
deficit of $7,355 and total assets of $28,855,236. The Company
issued 17 shares of Class A Common in August 1997 for net
proceeds of $1,231,584. Alliance used these funds, in
combination with $2,110,000 of borrowings through May 31, 1998
for the repayment of a $1,360,000 loan made by Farmland, and for
the development, population, and start-up of its second feeder
pig facility in Wayne County, Illinois. Alliance issued 36
shares of Class B Common in November 1997 for net proceeds of
$2,032,087. Alliance used these funds to repay the balance owed
Farmland pursuant to another $1,360,000 loan agreement, and for
the development, population, and start-up of one weaned pig
facility in Yuma County, Colorado and one in Wayne County,
Illinois.

As of the date of this Prospectus, the Company has 119
shares of Class A Common issued and outstanding, 36 shares of
Class B Common issued and outstanding, no issued and outstanding
shares of Class C Common, and is offering an additional 34 Class
A Shares, 18 Class B Shares and 72 Class C Shares to qualified
prospective investors. At May 31, 1998, Alliance had $3,564,000
immediately available under its credit facility with CoBank,
consisting of $2,316,000 of term loans and $1,248,000 of
revolving term credit. An additional $4,320,000 is to become
available following CoBank's acceptance of certain documents, as
specified in the loan agreement. The availability of non-
revolving term debt and revolving term credit under the CoBank
credit facility is subject to specified equity investment levels
in the Company being satisfied. As of May 31, 1998, Alliance has
borrowed $499,758 from Farmland to purchase land for future
expansion. See "Business--Financing." In the opinion of
management, these arrangements for debt capital are adequate for
Alliance's present operating and capital plans.

As of May 31, 1998, Alliance has borrowed $499,758 from
Farmland to purchase land for future expansion. During the nine
month period ended May 31, 1998, Alliance had capital
expenditures of $2,349,630 for construction of its first weaned
pig production facility in Yuma County, Colorado and $1,735,736
for its first weaned pig production facility in Wayne County,
Illinois. The remaining capital expenditures were for
replacement breeding stock and building construction for the
first seven production facilities.

Major uses of cash during the nine months ended May 31, 1998
include $7,305,367 for capital expenditures on new and existing
facilities, $309,782 decrease in revolving term credit, $970,400
of principal payments on long term debt, and $116,666 paid to
Farmland pursuant to a $760,000 loan agreement. Major sources of
cash include $2,032,087 of proceeds, net of offering costs, from
the issuance of capital stock, $2,658,785 of proceeds from the
issuance of long term debt and $3,319,809 in cash provided by
operating activities.

On March 18, 1998, Alliance entered into a new $34,506,700
secured credit facility with CoBank to provide financing for the
debt portion of the construction of up to six 2,450-sow weaned
and/or feeder pig production facilities, <PAGE> related support
facilities and initial breeding stock associated with each unit
and to restate and modify the terms and conditions of the
existing loan agreements, including the commitments for financing
the debt portion of the two 2,450-sow weaned pig production
facilities then under construction, along with these units
related support facilities, initial breeding stock and
capitalized start-up costs. This agreement provides for
$26,846,700 of term loans and $7,660,000 of revolving term
credit. The availability of non-revolving term debt and
revolving term credit under the CoBank credit facility is subject
to specified equity investment levels in the Company being
satisfied. There is no assurance that additional shares of
common stock will be sold and the specified equity investment
levels satisfied. Under this new credit facility, proceeds from
the construction loan are used for construction of facilities and
are advanced by CoBank as construction costs are incurred by
Alliance. Proceeds from the term loans and revolving term credit
are used to repay the construction loan upon completion of a
facility, and for working capital.

The new credit facility provides for the monthly payment of
principal and interest. The existing non-revolving term loans
will change from ten year to eight year terms effective August
31, 1998. Each new tranche of non-revolving term credit will be
repaid with monthly interest payments and with 97 monthly
principal payments of $21,800 for feeder pig facilities and
$17,300 for weaned pig facilities to begin 18 months after the
initial advance on each new construction loan commitment. The
revolving credit facility will mature on August 31, 2010 and will
decrease in 40 equal amounts at the end of each of the Company's
fiscal quarters based on the amount of available commitment at
August 31, 2001.

Alliance is required to comply with various covenants,
including, but not limited to (i) maintaining a total equity to
total assets ratio of not less than 0.25, (ii) maintaining a debt
service coverage ratio of not less than 1.00 (calculated as
average annual cash flow divided by current debt), (iii)
restrictions on the occurrence of additional indebtedness. As of
May 31, 1998, Alliance was in compliance with all covenants.
Alliance may be required to make equity investments in CoBank in
an amount not to exceed 1% of the average five-year principal
loan balance until Alliance meets CoBank's target level of equity
investment, which is currently 11.5% of the average five-year
principal loan balance. As of May 31, 1998, substantially all
assets of Alliance were pledged to CoBank.

INCOME TAXES

The Company operates as a cooperative that is not exempt
from federal income taxes and, therefore, is subject to taxes on
all income not paid or allocated to members. Deferred income
taxes have not been provided because all sales since inception
have been to members and all future sales are anticipated to be
to members.

Alliance incurred patronage-sourced losses through August
31, 1996 which were not allocated to members. These patronage-
sourced losses are therefore available to offset future
patronage-sourced income. During the year ended August 31, 1997,
a portion of patronage-sourced losses were used to offset 1997
patronage-sourced income. At August 31, 1997, approximately
$3,594,000 of patronage-sourced losses were available to offset
future patronage-sourced income. These losses expire in 2009
through 2011.

INFLATION

Inflation is believed to have a relatively minor impact on
the operations of the Company. While certain costs, such as
salaries, are affected by inflation, the Company believes that
the factors which most affect its results of operations are the
cost of feed and other inputs and the productivity of the
breeding stock herd which are each influenced by a variety of
factors. Further, the Company will sell its feeder and weaned
pig production under terms which cause the sales price of pigs to
be adjusted for changes in the cost of production per unit,
including increases in costs caused by inflation. The precise
impact of inflation on the Company's costs is not readily
ascertainable.

RECENT ACCOUNTING PRONOUNCEMENT

In June 1997, the Financial Accounting Standards Board
("FASB") issued SFAS No. 130, Reporting Comprehensive Income.
This statement establishes standards for reporting and display of
items that may affect shareholder equity but are not components
of reported net income. The Company is required to adopt SFAS
No. 130 in the first quarter of fiscal 1999. It is not expected
that this pronouncement will have a significant effect on the
Company's financial reporting.

In June 1997, the FASB also issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related
Information". This statement supersedes and expands on the
segment disclosure requirements of SFAS No. 14. The <PAGE> statement
requires certain financial disclosures about business segments.
The definition of business segments has been changed from an
industry definition to that of a management definition. The
Company will adopt the provisions of SFAS No. 131 effective
August 31, 1999. It is not expected that the statement will have
a significant effect on the Company's financial reporting.

In February 1998, the FASB issued SFAS No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits".
This statement amends SFAS Nos. 87, 88, and 106. The statement
standardizes and expands the disclosure requirements of the prior
pronouncements in order to facilitate enhanced financial
analysis. The Company will adopt the provisions of SFAS No. 132
effective August 31, 1999. It is not expected that the statement
will have a significant effect on the Company's financial
reporting.

In 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement,
which is effective for all fiscal quarters beginning after June
15, 1999, will have no impact on Alliance's reported financial
position, results of operations or cash flows.

YEAR 2000

The Company has completed an assessment of the changes
needed to make its financial system, operational system and
equipment year 2000 compliant. A plan has been developed to
implement such changes. Researching, selecting and purchasing a
software application that will meet the financial and reporting
needs of the Company and that is year 2000 compliant are expected
to be completed by late 1998. Installation, testing and training
are anticipated to occur in early 1999. The cost of replacement
software is anticipated to be approximately $20,000. Currently,
the Company is reviewing the non-information technology related
systems. At this time, no equipment that is date sensitive has
been identified. The time frame and cost associated with
becoming year 2000 compliant is based on management's best
estimates, although no assurances can be given in this regard.
The Company intends to evaluate its reliance on third parties to
determine and minimize the extent to which its operations may be
dependent on such third parties to remediate year 2000 issues in
their systems. In addition, as systems are tested the Company
intends to develop a contingency backup plan for systems which
exhibit possible year 2000 problems.

BUSINESS

GENERAL

The Company is a cooperative association engaged in the
production of feeder pigs for sale to its members who own shares
of Class A Common, and in the production of weaned pigs for sale
to its members who own shares of Class B Common or Class C
Common. The Company was formed as a cooperative association
under the laws of the state of Colorado on May 3, 1994, but did
not engage in any business activity until July, 1994. The
Company's predecessor, Yuma LLC, was formed in October, 1991 and
commenced shipment of feeder pigs in March, 1993. On July 13,
1994 (July 9, 1994 for accounting purposes), the Company acquired
the entire equity ownership rights and interests in Yuma LLC from
Farmland and Yuma Cooperative, and thereupon Yuma LLC was
dissolved and liquidated and its assets, liabilities and feeder
pig production operations were assigned to and assumed by
Alliance. As of the date of this Prospectus, the Company owned
and operated five 2,450-sow feeder pig production facilities
located in Yuma County, Colorado (approximately 150 miles east of
Denver), two 2,450-sow feeder pig production facilities located
in Wayne County, Illinois (approximately 100 miles east of
St. Louis, Missouri), one 2,450-sow weaned pig production
facility in Yuma County, Colorado and one weaned pig production
facility in Wayne County, Illinois. As of the date of this
Prospectus, the Company has commenced preliminary development
activities with respect to a 5,000-sow pig production facility in
Yuma County, Colorado. See "Business--Expansion" and "Business--
Facilities."

The Company's business strategy is to produce feeder and
weaned pigs for sale to its members at competitive prices by
utilizing modern facilities, management practices designed to
maximize productivity and high quality genetically consistent
breeding stock. The Company intends to expand its existing
feeder pig production operations by using the net proceeds from
the sale of additional shares of its Class A Common, together
with debt financing, to develop or acquire and thereafter operate
additional feeder pig production facilities, and to expand its
weaned pig production operations by using the net proceeds from
the sale of shares of its Class B Common or Class C Common,
together with debt financing, to develop or acquire and
thereafter operate weaned pig production facilities. In this
regard, the Company intends to use the net proceeds from the sale
of each block of 17 shares of Class A Common, together with debt
financing, to develop or acquire <PAGE> one feeder pig production
facility having the capacity of a 2,450-sow unit, to use the net
proceeds from the sale of each block of 18 shares of Class B
Common, together with debt financing, to develop or acquire one
weaned pig production facility having the capacity of a 2,450-sow
unit, and to use the net proceeds from the sale of each block of
24 shares of Class C Common, together with debt financing, to
develop or acquire one weaned pig production facility having the
capacity of a 2,450-sow unit. Accordingly, the net proceeds from
the sale of the 51 Class A Shares offered hereby, together with
debt financing, are intended to be used to develop and operate up
to three such feeder pig production facilities, the net proceeds
from the sale of the 54 Class B Shares offered hereby, together
with debt financing, are intended to be used to develop and
operate up to three such weaned pig production facilities, and
the net proceeds from the sale of the 72 Class C Shares offered
hereby, together with debt financing, are intended to be used to
develop and operate up to three such weaned pig production
facilities. As of the date of this Prospectus, the Company has
commenced preliminary development activities with respect to a
5,000-sow pig production facility in Yuma County, Colorado.
Financing for the acquisition of real estate, facilities
construction and acquisition of breeding stock with respect to
the existing facilities already has been obtained and will not be
provided by any proceeds from the sale of the Shares offered
hereby, however, the proceeds from the sale of the first two
Minimum Blocks of the remaining Shares offered hereby will be
applied to the Colorado facility presently under development.
See "Description of Business--Financing."

Operation of the Company's facilities is the responsibility
of the management staff of the Company. The Company has
contracted with Farmland to provide certain administrative
services to the Company, including accounting, production record
keeping, feed and other input purchasing, employee training, and
breeding stock replacement logistics. See "Business--Employees,"
"Management" and "Certain Relationships and Related
Transactions."

The Company has entered into contractual arrangements with
certain of its members, including Farmland and Yuma Cooperative.
Pursuant to the Swine Production Services Agreement between the
Company and Farmland, Farmland has agreed to provide certain
administrative, advisory and consulting services to the Company.
Pursuant to the Feed Purchase Agreement between the Company and
Yuma Cooperative, Yuma Cooperative has agreed to provide Alliance
with feed-grains and feed additives for the production of feed at
Yuma Cooperative's contract rates. Farmland and Yuma
Cooperative, as members, have contracted to purchase a share of
the pigs to be produced by the Company under the same terms
required of the Company's other members. Finally, the Company
has agreed to provide Farmland the first opportunity to purchase
any feeder and weaned pigs produced by the Company in excess of
the Company's supply commitments to other members or that other
members have failed to purchase during the term of the Swine
Production Services Agreement (and in no event less than the
five-year period ending July 13, 1999). The Company intends to
cause any such excess production of weaned pigs, however, to be
retained by the Company for development into feeder pigs. See
"Certain Relationships and Related Transactions" and "Pig
Purchase Agreement."

Hog production is subject to substantial risks. Success is
dependent upon obtaining high levels of breeding stock
productivity, controlling the cost and efficiency of purchased
feed and other inputs while minimizing herd exposure to disease
or other factors which can adversely impact the operation. See
"Risk Factors."

BUSINESS ENVIRONMENT

The pork industry has undergone substantial change in recent
years, with respect to the production and processing of hogs.
The Company believes that current economics of the industry favor
large, well-capitalized hog producers, which use consistent,
high-quality breeding stock and employ management practices
designed to maximize productivity. As a result, hog production
has become increasingly differentiated between large-scale
farrowing operations producing feeder and weaned pigs and less
capital intensive smaller-scale hog finishing operations.

Concentration of Production. The last decade saw a dramatic
increase in the concentration of hog production in larger scale
facilities and a corresponding decline in the number of farms
producing hogs. Based on data available from the U.S. Department
of Agriculture, the number of farms producing hogs in the United
States has declined, while the percentage of the nation's total
hog inventory held on farms having more than a 500 head
inventory, as well as the average number of hogs per farm, has
increased.

The Company believes there are several causes for the
increasing concentration of hog production into the hands of
larger producers. Large, specialized hog producers may be able
to produce hogs for lower cost than smaller scale independent
farmers through economies of scale and the use of improved
genetics, nutrition, and management practices, many of which are
more easily implemented in modern, large-scale facilities. Since
this cost advantage would seem to be <PAGE> more readily available to
those making a substantial investment in facilities, efficient
hog production has become a capital-intensive industry. The
Company believes that in the wake of the "agricultural crisis" of
the mid-1980's, capital for hog production has become more
difficult to obtain and has presented an increasingly large
barrier to entry. Additionally, packers generally pay premiums
to producers both for the supply of a large volume of hogs and
for providing hogs of superior carcass merit with respect to the
yield, leanness and consistency. Larger operations populated
with genetically consistent stock bred for high productivity and
carcass quality therefore may be able to obtain a premium on the
sale of their hogs that may not be available to smaller
producers.

Production Differentiation. In addition to the increasing
concentration of hog production in larger scale facilities, hog
production increasingly has become differentiated between feeder
pig production operations (which includes operations relating to
the production of weaned pigs) and pig finishing operations. The
Company believes that this is partly the result of three-site
management practices which dictate the separation of production
into three stages: breeding through farrowing; nursery; and
finishing; with each phase of production being conducted in
separate locations to minimize the risk of transmission of
disease. In producing feeder pigs, the Company engages in the
first two of these stages of production, while the Company's
production of weaned pigs will involve only the first of these
stages of production.

Production of feeder and weaned pigs -- which is less
dependent upon variable feed cost and more dependent upon herd
health, facilities and breeding stock investment -- is
increasingly being conducted in specialized facilities.
Finishing of hogs to market weight, the economics of which are
principally driven by feed cost, is increasingly handled by
producers engaged exclusively in the finishing of hogs, with many
of those producers finishing hogs under contract to the producer
of the feeder pig. The Company believes that this increasing
specialization is attributable to the capital intensive nature of
farrowing operations and the complexity of management.

BREEDING STOCK

Fully populated, each of the Company's feeder and weaned pig
production facilities that is either in existence, under
development or proposed (which facilities may be developed in
tandem with, or as a part of, one or more other facilities) is
anticipated to be stocked with approximately 2,450 sows. The
Company intends to maintain an adequate population of female-line
stock in its multiplier units to produce commercial gilts for use
by the Company in any future facilities development or to replace
the commercial herd as it is culled or lost to death. Barrows
and any excess gilts from the multiplier units will be sold by
the Company as feeder or weaned pigs.

The Company's feeder and weaned pigs have been and will
continue to be produced from genetically consistent breeding
stock. The Company currently utilizes breeding stock from Pig
Improvement Company ("P.I.C."), after discontinuing the use of
breeding stock obtained from DeKalb Swine Breeders and
repopulating its Colorado facilities. As further improvements in
genetics are recognized, the characteristics of the Company's
breeding stock may change. The Company intends to continually
evaluate the cost and characteristics of breeding stock developed
by other producers, and, in the Company's discretion, to populate
all or a portion of its facilities with such breeding stock.

The Company continually culls a portion of its breeding herd
and replaces these animals with new breeding stock in order to
maintain the productivity of its breeding herd. The selection of
animals to be culled is based on subjective determinations as to
the animal's productivity, which generally declines as the
animals mature. The Company believes that it is positioned to
generate all or substantially all of its breeding stock
replacements through its breeding stock multiplier herd. The
Company believes that its multiplier units are and will be able
to produce virtually all of the replacement gilts and initial
breeding stock populations required by the Company for the
foreseeable future. The Company believes that its internal
production of replacement gilts will result in the cost of its
breeding stock replacements being lower than could be obtained
from outside sources and will preserve the Company's control over
its entire operation. No assurance can be given that the Company
will be successful in producing any portion of its required
breeding stock replacements or that the cost for such
replacements will be lower than could be obtained from outside
sources.

With respect to each facility under development or proposed,
the Company intends to place breeding stock in the facility over
a five month period beginning with the completion of the
facility's breeding building. It is anticipated that
approximately 800 head of breeding stock will be delivered to the
facility in the first month followed by deliveries of 400 to 450
head over the remaining four months until the facility is fully
stocked. Following an initial resting period of 45 to 60 days in
order to acclimate and monitor each group of breeding stock,
breeding will be commenced.

<PAGE>

Alliance implemented an artificial insemination ("AI")
program in its Colorado and Illinois operations and plans to use
AI in any future facilities. Although no assurances can be
given, Alliance believes that the use of AI will allow more rapid
improvements in carcass quality and assist in maintaining higher
health status of the herds.

Alliance engaged in the depopulation of its operational
feeder pig production facilities located in Yuma County, Colorado
in order to repopulate these units with P.I.C. females. Sourcing
for this repopulation was from Alliance's Illinois facility. The
P.I.C. females were finished into breeding sows on the facilities
of independent Colorado producers. In this regard, Alliance
contracted with Farmland for the use of facilities as to which
Farmland had acquired rights from the owners of such facilities.
See "Certain Relationships and Related Transactions--Farmland."
Although no assurances can be given, management believes that the
repopulation eventually will improve both productivity and health
of the sow units and may result in improved production results in
both nursery and finishing pig performance. Repopulation began
in August 1997 with P.I.C. feeder pigs first being made available
in March 1998. The repopulation project was completed in October
1998.

PURCHASE OF FEED AND OTHER INPUTS

Farmland has agreed to assist the Company in arranging for
the provision of the Company's requirements for feed and other
inputs, including animal health products, pursuant to the Swine
Production Services Agreement between the Company and Farmland.
The Company intends to continue to purchase a portion of these
products from Yuma Cooperative upon the prices and terms set
forth in the Feed Purchase Agreement between the Company and Yuma
Cooperative. Farmland establishes the specifications of all
supplies purchased, as well as the specifications for the
purchase and delivery of all feed requirements, in coordination
with the Company. See "Certain Relationships and Related
Transactions."

The Company's Feed Purchase Agreement with Yuma Cooperative
provides for the Company's purchase of feed manufactured by Yuma
Cooperative on a delivered cost basis to be determined based upon
a fixed charge for the grinding, mixing, and delivery of feed
($12.00 per ton as of the date of this Prospectus), in addition
to the actual delivered cost of the feed ingredients. Feed
rations which are pelleted are subject to a surcharge ($6.00 per
ton as of the date of this Prospectus). The fixed charge was
reduced from $13.00 to $12.00 per ton on September 1, 1998, and
both the fixed charge and the surcharge will remained fixed
through the expiration of the Feed Purchase Agreement on August
31, 1999. Corn provided by Yuma Cooperative for use in feed
generally is sold to the Company at delivered cost plus, in the
absence of available Company grain storage facilities, a $.10 per
bushel handling fee. The Company has the right under the Feed
Purchase Agreement, in its sole discretion, to purchase and
provide its own corn for feed manufacturing. Corn and soybean
meal may be substituted from time to time with other ingredients
meeting equivalent nutritional requirements based upon temporal
price differentials. See "Risk Factors," "Business--Sale of
Animals" and "Certain Relationships and Related Transactions."

The Company believes that feed costs presently account for
approximately 35% to 40% of the cost of producing a feeder pig
and approximately 20% and 25% of the cost of producing a weaned
pig. The principal components of swine feed are corn and soybean
meal, which are commodities subject to substantial fluctuations
in cost due to changing market conditions, seasonality, and
regional variations. While the Company intends to recover
changes in feed costs by making corresponding adjustments in the
selling prices for its feeder and weaned pigs, the actual changes
in the sales price of feeder and weaned pigs will lag changes in
feed cost because the Company determines the cost of feeder and
weaned pigs on a five month (twelve months prior to September 1,
1998 with respect to feeder pigs) historical rolling average
basis. This pricing method may adversely impact the Company's
operations in the event of sudden movements, or continual
increases, in the cost of feed or other inputs. See "Certain
Relationships and Related Transactions," "Business--Sale of
Animals" and "Pig Purchase Agreement."

SALE OF ANIMALS

The Company intends to sell its feeder and weaned pigs to
its members. Accordingly, the Company has contracted with its
members (and intends to contract with any new members) for the
sale of the feeder and weaned pigs produced at the Company's
facilities. Pig Purchase Agreements (a form of which is attached
hereto as Exhibit B) are to be executed by investors as a
condition to a subscription for Shares. Members in the Company
are and will be required to purchase, and the Company is and will
be required to sell, lots of feeder pigs produced by the Company
in amounts proportionate to the respective member's pro rata
share of the Company's Class A Common, but in no event greater
than two and seven-tenths (2.7) lots per share of Class A Common
on a prospective rolling 12-month basis. Presently, each share
of Class A Common held in the Company will entitle the respective
member to contract to purchase one delivery allotment per 119-
allotment block made available under the Pig Purchase Agreements
to the members owning Class A Common. Similarly, members <PAGE> in the
Company will be required to purchase, and the Company will be
required to sell, lots of weaned pigs produced by the Company
that are to be sold to members in amounts proportionate to the
respective member's pro rata share of the Company's Class B
Common or Class C Common, as the case may be, but in no event
greater than two and seven-tenths (2.7) lots per share of Class B
Common on a prospective rolling 12-month basis and in no event
greater than two and one-tenth (2.1) lots per share of Class C
Common on a prospective rolling 12-month basis. Presently, each
share of Class B Common held in the Company will entitle the
respective member to contract to purchase one delivery allotment
per 36-allotment block made available under the Pig Purchase
Agreements to the members owning Class B Common. The Company
intends to allocate its production of weaned pigs from all
facilities between those that are to be sent to nurseries and
developed by the Company into feeder pigs, on the one hand, and
those that are to be sold as weaned pigs, on the other hand, in
the same proportion that the number of the Company's operating
feeder pig production facilities bears to the number of the
Company's operating weaned pig production facilities. The lots
of feeder and weaned pigs purchased by the respective member from
time to time will not necessarily be produced from the same
feeder or weaned pig production facility. In the event that the
Company issues additional shares of Common Stock for the
construction of additional feeder or weaned pig production
facilities, the number of participants in the allotment of feeder
or weaned pigs, as the case may be, will be increased, although
such increase is not anticipated to materially change an
investor's right to receive his anticipated allotment of pigs.
Casualty to the Company's facilities, diminished breeding stock
productivity or extreme mortality or morbidity, among other
adverse circumstances, could reduce the number of feeder or
weaned pigs available for purchase by members and increase the
price of pigs under the Pig Purchase Agreements. See "Risk
Factors."

If the Company is successful in implementing its business
plan and any new feeder and weaned pig production facilities are
developed on schedule, the initial lots of feeder pigs resulting
from the development and expansion of the Company's feeder pig
production operations are not expected to be available to new
investor members for up to 13 to 15 months after completion of
the sale of a Minimum Class A Block of Class A Shares to such
members and the initial lots of weaned pigs resulting from the
development of the Company's weaned pig production operations are
not expected to be available to new investor members for up to 11
to 13 months after completion of the sale to such members of a
Minimum Class B Block of Class B Shares or a Minimum Class C
Block of Class C Shares, as the case may be. New investor
members will not be entitled to purchase pigs from the Company
until such time. Members in the Company are required to contract
for the purchase of Qualifying Pigs (as that term is defined in
the Pig Purchase Agreement) from the facilities. Each such
contract, or Pig Purchase Agreement, constitutes an irrevocable
ten-year commitment. Each lot of pigs purchased by a member
pursuant to any such Agreement will be priced based upon the
following factors (all as defined in such Agreement): the
financing cost per pig, the operating cost per pig, and a $0 to
$4.50 per pig production margin (changed from $4.50 effective
September 1, 1998 with respect to feeder pigs) as determined by
the Board of Directors in its discretion. In the event that a
member fails at least twice to perform his purchase obligation
under such Agreement, such member will be in default, which
default may result in the relinquishment of his purchase rights
under such Agreement. For each ten shares of Common Stock owned
by a member, the number of such failures that will result in a
default is increased by one. A member's failure to perform his
purchase obligation, among other circumstances, also may result
in the Company's foreclosure on its security interest granted in
the member's Common Stock. In addition, the member will be
responsible for the damages and expenses incurred by the Company
as a result of any failure to purchase, pay for, and take
delivery of any lot of Qualifying Pigs under the Pig Purchase
Agreement, including (a) damages equal to the difference between
the price payable by the member for the Qualifying Pigs that
member has failed to purchase, pay for, and take delivery under
the Agreement and the then current market price for feeder or
weaned pigs, as the case may be, (b) $3,000, which amount is
intended to cover the Company's administrative and other costs
and expenses associated with such failure, and (c) all costs of
collection, enforcement, and prosecution of the Company's rights
and remedies. If the Company produces feeder pigs in excess of
two and seven-tenths (2.7) lots per share of Class A Common on a
prospective rolling 12-month basis or produces weaned pigs in
excess of two and seven-tenths (2.7) lots per share of Class B
Common or two and one-tenth (2.1) lots per share of Class C
Common on a prospective rolling 12-month basis, the Company may
sell such excess production to non-members, or retain such excess
production for the Company's own purposes, in lieu of selling
such excess production pursuant to the Pig Purchase Agreements.
The Company has agreed in its Swine Production Services Agreement
with Farmland to provide Farmland the first opportunity to
purchase any such excess production and any feeder or weaned pigs
that members have failed to purchase during the term of said
Agreement (and in no event less than the five-year period ending
July 13, 1999). The Company intends to cause any such excess
production of weaned pigs, however, to be retained by the Company
for development into feeder pigs. See "Pig Purchase Agreement,"
"Certain Relationships and Related Transactions," "Restrictions
on Sale or Other Transfer of the Shares--Cooperative Association
Laws and Charter Documents" and "Plan of Distribution."

<PAGE>

As of the date of this Prospectus, the Company has reached
an agreement with the Company's existing lender and Farmland
concerning the provision by such lender and Farmland of 100% debt
financing for the development of a 5,000-sow pig production
facility in Yuma County, Colorado. See "Business--Financing."
In connection with obtaining this financing, Farmland has
contracted to purchase, until the first to occur of the
expiration of ten years and the date on which Farmland is repaid
on its loan, the marginal increase in Alliance's production of
weaned pigs (approximately 97 lots of weaned pigs on a
prospective rolling 12-month basis) resulting from the
development of the facility constructed using the proceeds of
such financing. Farmland's purchase of such weaned pigs would be
under substantially the same terms required of the Company's
members pursuant to the Pig Purchase Agreements, except that the
purchase price for pigs does not include the production margin.
See "Pig Purchase Agreements."

COMPETITION

The feeder and weaned pig production business is competitive
and fragmented among family-owned and investor-owned farms and
large-scale agribusiness pig production operations. Feeder and
weaned pigs are available at sale barn auction, markets such as
Farmland's Pig Finder electronic pig auction market, and under
contract from producers. Competition is based upon price,
product consistency and quality, ability to deliver the required
quantities and ability to meet delivery schedules. Although
there are a great number of operations that compete with the
Company, as discussed elsewhere in this Prospectus the Company
has contracted with its members (and intends to contract with any
new members) for the sale of feeder and weaned pigs produced at
the Company's facilities. If the Company produces pigs in excess
of its supply commitments to members, however, the Company may
sell such excess production to non-members. The Company believes
that its most important competitive strengths are its ability to
provide competitive pricing and the quality and consistency of
the pigs produced by it. See "Business Environment" and "Pig
Purchase Agreement."

EXPANSION

Expansion is an important element of the Company's business
plan. The Company's present intent is to construct or acquire
additional 2,450-sow feeder pig production facilities (which
facilities may exist as stand-alone units or as part of 5,000-sow
production complexes) and additional 2,450-sow weaned pig
production facilities (which facilities may exist as stand-alone
units or as part of 5,000-sow production complexes). The ability
of the Company to construct or acquire each such feeder pig
production facility is subject to it obtaining at least
$3,940,000 of net financing proceeds, and the ability of the
Company to construct or acquire each such weaned pig production
facility is subject to it obtaining at least $3,100,000 of net
financing proceeds.

The Company believes that substantial economies of scale
will be realized in the event that the Company is able to expand
beyond its existing feeder pig and weaned pig production
facilities. These additional economies are expected to include
savings and enhancements in the production of breeding stock,
economies in the production of feed, and enhancement of
management and labor productivity. The Company intends to pursue
expansion of its operations as financial, managerial and other
resources become available. No assurance can be given as to when
or if such resources will become available to Alliance so as to
allow it to proceed with such expansion.

Hog production operations require the availability of ample
pure water at reasonable cost. Although the Company has obtained
access to water necessary for it to conduct its current
operations in Colorado and Illinois, the Company has been advised
that it will be unable to obtain any new commercial well permits
in Colorado. Accordingly, the Company has found it necessary in
Colorado to obtain the water necessary for its operations through
the purchase of more expensive, irrigated land or other real
property already having the necessary commercial well permits.
No assurance can be given that the Company will be able to obtain
the water permits necessary to enable it to expand its operations
in Colorado, Illinois or other locations selected by the Company.
See "Risk Factors--Adequate Water Supply."

FINANCING

The ability of the Company to implement its business
strategy and (a) construct or acquire additional feeder pig
production facilities having the capacity of 2,450-sow units is
subject to it obtaining at least $3,940,000 of net financing
proceeds with respect to each such facility, and (b) construct or
acquire new weaned pig production facilities having the capacity
of a 2,450-sow unit is subject to it obtaining at least
$3,100,000 of net financing proceeds with respect to each such
facility. In this regard, the Company is engaged in the offering
of the Shares. In addition to the proceeds to be received from
the possible issuance and sale of one or more Minimum Blocks, the
Company would be required to obtain additional funds <PAGE> through
secured debt financing. The Company anticipates that (a) with
respect to each Minimum Class A Block of 17 Class A Shares issued
by the Company at the offering price set forth on the cover page
of this Prospectus, the Company would be required to borrow
approximately $2,720,000 of debt financing in order to construct
one new feeder pig production facility having the capacity of a
2,450-sow unit, to purchase breeding stock, and to provide
working capital for operations, (b) with respect to each Minimum
Class B Block of 18 Class B Shares issued by the Company at the
offering price set forth on the cover page of this Prospectus,
the Company would be required to borrow approximately $2,160,000
of debt financing in order to construct or acquire one new weaned
pig production facility having the capacity of a 2,450-sow unit,
to purchase breeding stock, and to provide working capital for
operations, and (c) with respect to each Minimum Class C Block of
24 Class C Shares issued by the Company at the offering price set
forth on the cover page of this Prospectus, the Company would be
required to borrow approximately $2,160,000 of debt financing in
order to construct or acquire one new weaned pig production
facility having the capacity of a 2,450-sow unit, to purchase
breeding stock, and to provide working capital for operations.
The amount of this proposed financing has been determined based
upon the anticipated capital expansion and business operations
needs of the Company and the anticipated net proceeds from the
issuance of the Shares. See "Risk Factors," "Use of Proceeds"
and "Plan of Distribution."

On March 18, 1998, the Company entered into various loan
agreements with CoBank related to a secured credit facility which
provides for up to $26,846,700 of non-revolving term debt,
$7,660,000 of revolving term credit and $18,400,00 of
construction financing. Proceeds from the term debt were used
for refinancing the then existing non-revolving term debt, and
will be used to finance the construction or acquisition of
additional pig production facilities. Proceeds from the
revolving term credit were used for refinancing the existing
revolving term credit, and will be used to provide working
capital. Proceeds from the construction loan may be used for the
construction or acquisition of pig production facilities and are
advanced by CoBank as construction costs are incurred by
Alliance. The actual advance of funds under this credit facility
is subject to the satisfaction of certain conditions precedent
and may be withdrawn or terminated by CoBank under certain
circumstances. No assurances can be given that the funding
conditions precedent will be satisfied and that the Company will
be able to obtain sufficient financing when needed, or that
alternative sources of financing will be available on acceptable
terms. In addition, the unused portion of the credit facility
expires August 31, 2001 with respect to the revolving term
credit, with the amount outstanding on such date being due and
payable by September 30, 2011, and the unused portion of the
credit facility expires December 31, 2001 with respect to the
non-revolving term debt and September 30, 2001 with respect to
the construction financing.

The availability of non-revolving term debt, revolving term
credit and construction debt under the CoBank credit facility is
subject to specified equity investment levels in the Company
being satisfied. As of May 31, 1998, $3,564,000 was immediately
available to Alliance under its credit facility. The
availability of $14,270,000 of unused term loans, $4,130,000 of
revolving term credit and $14,080,000 of construction loans under
the CoBank credit facility is restricted and may be made
available to the Company to the extent that: (a) with regard to a
feeder pig production facility having the capacity of a 2,450-sow
unit (i) an additional equity investment of $1,360,000 (e.g., 17
shares of Class A Common Stock sold for at least $80,000 each) is
made in the Company; or (ii) the Company secures a $1,360,000
subordinated non-revolving term loan from Farmland (representing
an amount equal to an equity investment) (a "Feeder Equity
Loan"), or (b) with regard to a weaned pig production facility
having the capacity of a 2,450 sow unit (i) an additional equity
investment of $1,080,000 (e.g., 18 shares of Class B Common Stock
sold for at least $60,000 each or 24 shares Class C Common Stock
sold for at least $45,000 each) is made in the Company; or (ii)
the Company secures a $1,080,000 subordinated non-revolving term
loan from Farmland (representing an amount equal to an equity
investment) (a "Weaned Equity Loan"). With respect to each
additional equity investment or Feeder Equity Loan of $1,360,000
obtained by the Company for the construction of a feeder pig
unit, the Company is entitled to obtain advances under the credit
facility of $2,720,000 ($2,110,000 of term loans and $610,000 of
revolving term credit), up to an aggregate of $5,440,000. With
respect to each additional equity investment or Weaned Equity
Loan of $1,080,000 obtained by the Company for the construction
of a weaned pig unit, the Company is entitled to obtain advances
under the credit facility of $2,160,000 ($1,675,000 of term
loans and $485,000 of revolving term credit) up to an aggregate
of $8,640,000.

Prior to any advance being made by CoBank under the credit
facility, certain conditions precedent must be addressed to
CoBank's satisfaction, including but not limited to (i) provision
of a survey of the Company's realty upon which the construction
will take place, including any effluent and water easements
servicing the realty, (ii) provision of environmental audits
respecting the Company's realty, (iii) obtaining performance
bonds and lien payment bonds and builder's risk casualty
insurance respecting such construction, (iv) obtaining a chain of
title and title insurance respecting the Company's realty, (v)
provision of evidence that CoBank has a perfected first priority
lien on all security for the Company's obligations, (vi)
submission of a construction budget and schedule, along with the
plans and specifications for <PAGE> the proposed facility, and (vi) an
appraisal of the proposed facility to be constructed based upon
the plans and specifications. As of May 31, 1998, the
outstanding balance of loans made by CoBank under this credit
facility was $16,345,603.

It is anticipated that the Feeder Equity Loans and Weaned
Equity Loans would be provided on terms substantially identical
to those applicable to the facilities expansion loans previously
made by Farmland to Alliance. See "Certain Relationships and
Related Transactions--Farmland--Real Estate Loans." In this
regard, such loans would provide for amortization over a ten-year
period, at a variable rate equal to CoBank's then national
variable rate plus 1.25%. The payment schedule for a Feeder
Equity Loan would require the Company to make interest-only
payments for the life of the loan, with a final balloon payment
of the outstanding loan balance to be made upon the earlier of
(i) the Company's issuance and sale of a Minimum Block of 17
Shares of Class A Common Stock , or (ii) the expiration of ten
years. The payment schedule for a Weaned Equity Loan would
require the Company to make interest-only payments for the life
of the loan, with a final balloon payment of the outstanding loan
balance to be made upon the earlier of (i) the Company's issuance
and sale of a Minimum Block of 18 Shares of Class B Common Stock
or 24 Shares of Class C Common Stock, or (ii) the expiration of
ten years. Alliance's obligation to Farmland would be secured
by a mortgage on the facilities constructed with the proceeds of
the loan, which mortgage would be second in priority to that of
CoBank. In addition, it is anticipated that Farmland would
contract to purchase all feeder and weaned pigs, as the case may
be, produced at the facility that was constructed using the
proceeds of the Farmland loan until the first to occur of the
expiration of ten years and the date on which Farmland is repaid.
See "Business--Sale of Animals." As a result of the larger
portion of indebtedness associated with this financing
alternative (and the higher debt service related thereto) as
compared with the debt and equity alternative discussed above,
the net proceeds from the issuance of Shares that would be
required must be correspondingly greater in order to provide for
the balloon payment of principal and required installments of
interest under each Feeder Equity Loan and Weaned Equity Loan.
The CoBank credit facility limits the number of outstanding
equity loans, including Feeder Equity Loans and Weaned Equity
Loans, at any one time, to eight. No assurances can be given
that Farmland will now, or in the future, make an Equity Loan,
either Feeder or Weaned, on acceptable terms or terms that are
comparable to those described herein.

In connection with the Company's acquisition of certain real
property in Yuma County, Colorado, the Company borrowed $760,000
from Farmland. This loan is evidenced by a promissory note
providing for amortization over a ten-year period, at a variable
rate of interest equal to CoBank's prime rate. The payment
schedule for this loan requires the Company to make interest-only
payments for the life of the loan, with a final balloon payment
of all principal to be made upon the expiration of the ten-year
term in September 30, 2005. See "Business--Facilities" and
"Certain Relationships and Related Transactions--Farmland--Real
Estate Loans."

The CoBank credit facility provides for the monthly payment
of principal and interest. Principal payments pursuant to the
loan terms with respect to the existing non-revolving term debt
are to be made in equal monthly installments of $128,600,
commencing April 20, 1998 and continuing thereafter until and
including August 20, 1998, and thereafter in equal monthly
installments of $151,000, with the remaining unpaid balance being
due and payable on that date which is ninety-nine months after
the final advance under the non-revolving term loan. Principal
payments pursuant to the loan terms with respect to each
$2,110,000 of new non-revolving term loans are to be made in
monthly installments of $21,800 each, beginning on the 20th day
of the eighteenth month following the date of the initial advance
of such $2,110,000 loan. Pursuant to the loan terms, with
respect to each $2,720,000 of new construction loans, payment of
the entire outstanding principal balance is to be made on that
date that is sixteen (16) months after the date of the initial
advance for construction of the proposed facility. According to
the loan terms, the revolving loan commitment will be reduced in
40 equal payments commencing on August 31, 2001, such that after
the fortieth reduction, the revolving loan commitment will be
zero. To the extent that the outstanding principal balance under
the revolving loan exceeds the revolving loan commitment, the
Company will be required to immediately make a principal payment
in a amount sufficient to reduce the outstanding principal
balance under the revolving loan to an amount not exceeding the
revolving loan commitment. Interest accrues on the outstanding
principal balance of the loan at a rate equal to either (i) a
variable rate equal to CoBank's then national variable rate plus
a base rate margin of 1.25% for non-revolving term loans, 1.25%
for revolving loans or 2.25% for construction loans, or (ii)
CoBank's then quoted rates for fixed rate loans, as may be
elected from time to time by the Company, and is payable monthly
in arrears by the 20th day of the following month. During the
period in which principal under the loan is outstanding, portions
of such principal may bear interest at such variable rate while
other portions may bear interest at such fixed rate. As of May
31, 1998, interest accrued on the outstanding principal balance
on the respective loans at a rate of 9.75% per annum for non-
revolving term loans, 9.75% per annum for revolving term loans
and 10.75% per annum for construction loans. The interest rates
applicable to the loan are subject to reduction at specified
times upon the Company's satisfaction of certain conditions
relating to the Company's equity level and debt service coverage
ratio. As of May 31, 1998, no reductions in the Company's
interest rate had been made. The Company is permitted to prepay
the loan at any time without penalty, except that in the <PAGE> event
that fixed rate balances are prepaid, the Company is required to
pay CoBank a surcharge in an amount equal to CoBank's funding
losses with respect thereto.

In obtaining the secured credit facility, and for each year
in which the credit facility is effective, the Company is
required to pay a commitment fee equal to 0.5% on the outstanding
revolving loan commitment and 0.25% on the unadvanced amount of
the construction loan commitment. In addition, the Company will
be required to pay a activation fee equal to 1% on the amount
withdrawn under the construction loan, along with a $6,000 fee
with respect to the origination of each $2,110,000 of new
non-revolving term loans. During the course of the loan, the
Company may be required to make additional equity investments at
a rate not to exceed 1% of the average five-year principal loan
balance (which additional equity investments may be satisfied out
of CoBank's non-cash patronage distributions) until the Company
meets CoBank's target level of equity investment, which currently
is 11.5% of the Company's average five-year principal loan
balance. In addition, the Company was required to grant a first
perfected lien and security interest on all of its properties and
assets to CoBank and to assign to CoBank all of the Company's
rights in and to existing and future Pig Purchase Agreements.
The Company is required to comply with various affirmative and
negative covenants, including but not limited to (i) maintenance
of at least a 0.25 ratio of total equity to total assets for the
period ending August 31, 1998, and thereafter 0.35 ratio of total
equity to total assets, (ii) maintenance of a debt service
coverage ratio (calculated by dividing average annual cash flow
by the current debt) of not less than one, (iii) provision of
monthly financial statements and audited annual financial
statements to CoBank, (iv) restrictions on the incurrence of
additional indebtedness, (v) restrictions on certain liens,
mergers, sales of assets, investments, guaranties, loans,
advances and business activities unrelated to existing
operations, and (vi) restrictions on the declaration and payment
of the cash portion of patronage distributions and other
distributions or allocations of the Company's earnings, surplus
or assets. The Company was in compliance with each of these
covenants as of May 31, 1998.

FACILITIES

Facilities in Existence or Under Development. As of the
date of this Prospectus, the Company conducted operations from
its five existing 2,450-sow feeder pig production facilities
located in Yuma County, Colorado (approximately 150 miles east of
Denver), its two 2,450-sow feeder pig production facilities in
Wayne County, Illinois, its one 2,450-sow weaned pig production
facility in Yuma County, Colorado and its one weaned pig facility
in Wayne County, Illinois. In addition, the Company has
commenced preliminary development activities with respect to a
5,000-sow pig production facility in Yuma County, Colorado. The
original Yuma County, Colorado feeder pig production facility was
constructed in a configuration different than that employed with
respect to the Company's other facilities and is anticipated to
be different than that employed for future pig production
facilities. The original facility consists of six separate
buildings, including two breeding buildings, two gestation
buildings, and two farrowing buildings, all of which are situated
together on an approximately 160 acre site with a separately
accessed nursery building, while each of the Company's other
facilities consist of a three-building sow breeding, gestation
and farrowing complex situated together, with a separately
accessed nursery building. Management believes that the
condition of its facilities presently is adequate for the
Company's business, and that its facilities are adequately
covered by insurance. Each of the existing facilities, including
land and buildings, was constructed for between $2,243,000 and
$2,495,000, and has been or will be pledged as security for the
Company's loan from CoBank under the terms of a deed of
trust/mortgage.

Between September and December 1995, the Company purchased
approximately 1,000 acres of real property in Yuma County,
Colorado, upon which the Company has developed one feeder pig
production facility and holds the remaining acreage for the
development of additional production facilities (the "Additional
Colorado Property"). The acquisition cost of this Additional
Colorado Property was approximately $760,000. The Company
obtained funding for the purchase of the Additional Colorado
Property from the proceeds of a loan obtained from Farmland. In
conjunction with this loan, the Company delivered to Farmland a
promissory note evidencing the debt providing for the
amortization of the loan over a ten-year period, at a variable
rate equal to CoBank's prime rate. As of May 31, 1998, CoBank's
prime rate was 8.5%. The payment schedule of the promissory note
requires that the Company make interest-only payments for the
life of the loan, with a final balloon payment of the principal
at the expiration of the ten-year term. To secure the
obligations of the promissory note, the Company has executed a
deed of trust in favor of Farmland covering all of the Additional
Colorado Property, which deed of trust is second in priority to
that of CoBank with respect to the production facility
constructed thereon. See "Certain Relationships and Related
Transactions--Farmland--Real Estate Loans."

As of the date of this Prospectus, the Company has acquired
approximately 475 acres of real property in Wayne County,
Illinois, including a 90 acre tract acquired pursuant to the
exercise of the option referred to below. The Company has
developed two feeder pig production facilities and one weaned pig
production facility on this property.

<PAGE>

In November 1996, the Company entered into a contract
pursuant to which the Company has been granted the option to
purchase approximately 500 acres of real property in Wayne
County, Illinois (the "Option Property"). Under the terms of
this option contract, if the Company failed to fully exercise the
option as to the entire Option Property prior to November 1,
1998, the Company would be responsible for a $150,000 liquidated
damages payment to the owner of the Option Property. The
Company's responsibility for this liquidated damages payment was
secured by a stand-by letter of credit issued by CoBank. Until
the expiration of this letter of credit, the revolving term
credit available to the Company was reduced by $150,000. In
November 1998, the option to purchase the Option Property expired
and the Company became obligated to make the $150,000 liquidated
damages payment.

The Company maintains offices at 503 East 8th Avenue in
Yuma, Colorado. Farmland and the Company share equally the cost
for this office space.

Proposed Facilities. In connection with the offering of the
51 Class A Shares hereby, the Company intends to construct or
acquire feeder pig production facilities having the capacity of
three 2,450-sow units in or around Yuma County, Colorado, Wayne
County, Illinois, or other locations selected by the Company (one
2,450-sow facility with respect to each 17 Class A Shares sold in
this offering). The Company intends to construct or acquire
weaned pig production facilities having the capacity of six
2,450-sow units in or around Yuma County, Colorado, Wayne County,
Illinois, or other locations selected by the Company (one 2,450-
sow facility with respect to each 18 Class B Shares or each 24
Class C Shares sold in this offering) in connection with the
offering of the 54 Class B Shares and 72 Class C Shares hereby.
As of the date of this Prospectus, the Company has consummated
the issuance and sale of 17 Class A Shares and 34 Class B Shares
in this offering. The Company has commenced preliminary
development activities with respect to a 5,000-sow pig production
facility located in Yuma County, Colorado in anticipation of
obtaining the necessary financing. As of the date of this
Prospectus CoBank and Farmland have agreed to the provision of
full debt financing consisting of $4,320,000 under the Company's
credit facility with CoBank and $2,160,000 of subordinated non-
revolving term debt from Farmland. Upon the Company's issuance
and sale of two Minimum Blocks of Shares, the net proceeds of
such issuance and sale will be applied to the repayment of the
Farmland $2,160,000 subordinated non-revolving term debt. The
Company intends to develop feeder pig production facilities and
weaned pig production facilities in the future as financial,
managerial and other resources become available. No assurance
can be given that such resources will become available to
Alliance so as to allow it to proceed with the development of
additional facilities. See "Business--Expansion" and "--
Financing" and "Certain Relationships and Related Transactions--
Farmland--Real Estate Loans."

It is anticipated that each of the feeder pig production
facilities to be developed, in part, with the proceeds from this
offering, will consist of a three-building sow breeding,
gestation, and farrowing complex situated together on a site,
with nursery buildings being separate from the rest of the
complex to allow for disease separation between the facilities.
The weaned pig production facilities to be developed, in part,
with the proceeds from this offering will consist of a three-
building sow breeding, gestation, and farrowing complex situated
together on a site. As presently proposed, the construction of
each new feeder pig production facility having the capacity of a
2,450-sow unit is anticipated to cost approximately $2,750,000,
including the cost of land and land improvements, and the
construction of each new weaned pig production facility having
the capacity of a 2,450-sow unit is anticipated to cost
approximately $2,115,000, including the cost of land and land
improvements. The Company has estimated the cost of land and
land improvements to be approximately $500,000 per feeder pig
production facility and approximately $296,000 per weaned pig
production facility. No assurance can be given that the actual
development costs for the new facilities will not exceed the
Company's estimates. See "Use of Proceeds." It is anticipated
that construction of the proposed facilities will be handled by
contractors on a "turn-key" basis and will be phased-in over
time, beginning with construction of the breeding buildings,
followed by construction of the gestation, farrowing, and nursery
buildings as production of the breeding herd progresses. The
Company anticipates that it will stagger the construction of the
proposed new facilities, with the construction of no more than
one facility being initiated in each month following completion
of an offering. The development of each feeder pig production
facility is anticipated to require up to 13 to 15 months after
completion of the offering of a Minimum Class A Block of Shares
and each weaned pig production facility is anticipated to require
up to 11 to 13 months after completion of the offering of a
Minimum Class B Block of Shares or a Minimum Class C Block of
Shares, as the case may be.

As capital funds are available and the economic benefit is
determinable, the Company intends to consider the construction of
certain additional facilities, including a truck wash facility in
close proximity to the production units, an off-site boar stud
facility for semen collection, handling, and laboratory equipment
used in artificial insemination, a dead animal disposal center,
bulk storage for the holding of feed grain inventories, and feed
manufacturing equipment. Additionally, depending upon the
characteristics of each site purchased, the Company may be
required to construct single-family housing <PAGE> for its management
employees. No determination has been made at this time as to the
necessity of any such construction, and the Company presently has
no firm plan to develop any of such additional facilities.

Location of Proposed Facilities. The Company intends to
locate the proposed new feeder pig production facilities and
weaned pig production facilities in or around Yuma County,
Colorado, Wayne County, Illinois or other locations selected by
the Company. The Company has not, as of the date of this
Prospectus, identified specific sites for the location of the
facilities. In selecting a site for the Company's facilities,
the Company considers a variety of factors, including those
referred to below.

As a threshold matter, the Company's facilities must be
located in a state such as Colorado and Illinois, among others,
in which the applicable laws do not prohibit ownership of a hog
production facility by a corporation, including cooperative
associations such as the Company. Although state laws may
contain restrictions relating to zoning, water management, and
environmental regulations, particularly with respect to feeder
and weaned pig production operations, the Company must not be
prohibited from constructing or operating its facilities. With
respect to climatic conditions, temperatures may be cold in the
winter so long as they are believed by the Company to be
adequately temperate and low in humidity to accommodate the
existing and planned operations. Hog production operations
require the availability of ample pure water at reasonable cost.
Although the Company has obtained access to water necessary for
it to conduct its current operations in Colorado, the Company has
been advised that it will be unable to obtain any new commercial
well permits in Colorado. Accordingly, the Company has found it
necessary in Colorado to obtain the water necessary for its
operations through the purchase of more expensive, irrigated land
or other real property already having the necessary commercial
well permits. No assurance can be given that the Company will be
able to obtain the water permits necessary to enable it to expand
its operations in Colorado, Illinois or other locations selected
by the Company. Hog production operations also must have access
to feed at reasonable cost. The cost of feed is a function of
the local availability of high-quality feed grain and soybeans
and the capacity to process these ingredients, all relative to
the local demand for these inputs. Alliance believes that ample
production of corn and ingredient processing facilities exist
within the Yuma County, Colorado and Wayne County, Illinois
regions and adequate transportation is available to haul in
feed-grains to the facilities. However, soybean meal must be
hauled into Yuma County. Productivity of the Company's
operations largely will be dependent upon its ability to keep the
operations free from diseases. The Company believes that the
location of feeder and weaned pig production facilities in a
region that does not contain a relatively large population of
other hogs is desirable in helping to minimize the risk of
disease-related problems.

WASTE DISPOSAL AND ENVIRONMENTAL MATTERS

General. Several environmental requirements potentially are
applicable to feeder and weaned pig production operations such as
those conducted or proposed to be conducted by the Company.
Generally, these requirements take the form of federal statutory
and regulatory requirements that are, in some cases, reflected in
similar state requirements. In other instances, state or local
requirements may exist separately and without federal precedent.

The principal environmental regulations with which the
Company must comply are related to the handling and disposal of
waste water generated at the Company's facilities. The federal
Clean Water Act generally prohibits the discharge of pollutants
into the waters of the United States. The Environmental
Protection Agency ("EPA") has further issued regulations that
prohibit the discharge of waste water from animal feedlot
operations into the waters of the United States, except under
certain circumstances when excessive rainfall runoff added to
existing process waste water exceeds the design capacity of the
waste water handling and treatment facilities. These regulations
therefore generally require that waste water handling and
treatment facilities for "animal feedlots" (which term is defined
broadly enough to cover the Company's operations) be of a non-
discharge nature.

To comply with these federal requirements, animal feedlot
operators, such as the Company, must either obtain a permit from
the EPA for its operations, or, in the case of a state which has
been granted authority by EPA to carry out a Clean Water Act
program, application must be made to the state. The State of
Colorado and the State of Illinois each has been granted such
authority by the EPA. The Colorado and Illinois regulations
generally adopt the format of the EPA provisions for animal
feedlots, and generally require concentrated animal feeding
operations to be operated as no-discharge facilities. These
regulations require that the Company design, construct, and
operate waste water control structures capable of retaining and
processing all waste water and storm runoff which enter the
facility, with the exception of water generated from rainfall in
excess of certain prescribed parameters. Moreover, these
regulations authorize the state agency to require the removal of
accumulated manure and process waste water as necessary to
prevent the overflow of the containment and processing <PAGE> structure.
The Company uses lagoon containment and processing systems at its
production facilities to comply with these regulations.

Land application of manure and process waste water also is
regulated by Colorado and Illinois regulations. Generally, these
regulations authorize the state agency to require that manure and
process waste water not be distributed on lands in a manner that
affects the quality of waters, impairs existing beneficial uses,
or exceeds estimated soil infiltration rates, and shall not be
applied when the land is frozen, saturated or during rainfall.
Sprinkler irrigation equipment must include a back flow
prevention device. Land application rates are established on a
case-by-case basis after taking into account the nature and type
of manure or process waste water and the characteristics of the
area to which it is to be applied.

Each feeder or weaned pig production facility is or will be
designed to enable the removal of animal waste by means of
emptying shallow pits located under the slatted floors of each
facility. Animal waste falls through the slatted floor into the
pit which is filled with water. Periodically, each pit is
drained and refilled. Waste water drained from a pit is moved
into a lagoon system for treatment. All lagoons must be of a
size adequate to accommodate the anticipated volume of waste
water to be generated together with storm water runoff. Further,
each lagoon must be lined with a material that prevents or
inhibits the seepage of waste water into the ground water below.

Cost of design and construction of waste water treatment
systems vary by facility based upon the characteristics of each
individual site. The Company has estimated that the cost of
construction of lagoons and the attendant pumps and piping
required to handle the waste water generated at each feeder or
weaned pig production facility will range from approximately
$100,000 to $135,000. Ongoing expenditures to handle waste water
consist principally of expenditures for utilities and
maintenance. Such ongoing expenditures do not constitute a
significant operating cost to the Company.

Colorado Regulation of Commercial Swine Operations. In the
November 1998 general election, Colorado voters adopted
amendments to the Colorado Revised Statutes concerning the
regulation of housed commercial swine feeding operations, which
amendments may have material and adverse consequences to the
Company and its business. These amendments mandate certain water
and air quality control measures that must be implemented by
commercial swine feeding operations housing at least 800,000
pounds of swine or which are deemed commercial under local law.
Commercial swine feeding operations are defined broadly to
include operations in which swine are fed in buildings for at
least 45 days in any 12-month period, and include two or more
operations under common ownership that are located on land
overlying the same groundwater aquifer (or are otherwise adjacent
to one another). Although regulations implementing the
amendments have not yet been promulgated, the amendments
potentially are applicable to the Company's Colorado operations.

In general, the amendments to the Colorado Revised Statutes
(i) condition the operation, construction or expansion of a
housed commercial swine feeding operation on receipt of an
individual discharge permit from the Colorado department of
public health and environment, (ii) direct the Colorado water
quality control commission to adopt rules regarding the
construction, operation and management of, and waste disposal by,
such operations, (iii) provide that such rules shall require that
land application of waste from such operations must not exceed
the nutritional requirements of the plants on that land and must
minimize runoff and seepage of such waste, (iv) provide that such
rules shall require that such operations not be permitted to
degrade the physical attributes or value of Colorado trust lands,
make immediate reports of spills or contamination to state and
county health departments, and monitor land-applied waste from
such operations and provide periodic reports to the state health
department, (v) authorize fees on such operations (of up to $0.20
per animal) to offset direct and indirect costs of the program,
(vi) authorize local governments to impose more restrictive
requirements, (vii) require that such operations employ
technology to minimize odor emissions, (viii) require operations
to cover waste impoundments that do not use air or oxygen in
their waste treatment method, and to recover, incinerate or
manage odorous gases from such operations, (ix) establish minimum
one mile distances between new land waste application sites or
impoundments and occupied dwellings, schools and municipal
boundaries, and (x) provide for enforcement of these provisions
by the state or any person who may be adversely affected. The
amendments provide that the implementing regulations are to be
promulgated by March 31, 1999, and that housed commercial swine
feeding operations must be in compliance with these regulations
by July 1, 1999.

Although the Company has begun to evaluate the impact that
the amendments may have on it, the Company presently is unable to
estimate the costs that reasonably could be expected to be
incurred by it in complying with the amendments and any related
regulations that may be promulgated. The Company believes,
however, that if the amendments are applicable to it they may
have a material impact on the Company and its business.

<PAGE>

EMPLOYEES

Operating management of each of the Company's existing and
future facilities will be the responsibility of each respective
production facility's General Manager. The General Manager will
have overall responsibility for the operation of the facility.
Additional department managers likely will oversee the
breeding/gestation, farrowing, and nursery departments. It is
anticipated that each facility under development or proposed will
employ eleven persons in breeding through farrowing operations,
including management and laborers.

Pursuant to the Swine Production Services Agreement between
the Company and Farmland, Farmland has agreed to assist in
providing certain administrative services to the Company,
including the coordination of the Company's training of personnel
to be employed by the Company and the selection of employees.
See "Certain Relationships and Related Transactions--Farmland--
Swine Production Consulting and Services Agreement."

As of May 31, 1998, the Company employed 136 persons, of
whom 135 were full-time employees and one was a part-time
employee. Of the Company's full-time employees, 13 employees are
assigned to perform various facilities operation services for Pig
Producers I, L.P. ("Pig Producers"), a limited partnership in
which Farmland holds a 12.5% interest. Pig Producers is engaged
in the production of feeder pigs from a 2,450-sow feeder pig
production facility located in Yuma County, Colorado. The
Company is reimbursed by Pig Producers for all wages, benefits
and other costs attributable to the Alliance employees performing
services for Pig Producers. See "Certain Relationships and
Related Transactions--Farmland." The Company is not a party to
any collective bargaining agreement and considers its
relationship with employees to be satisfactory.

FEDERAL INCOME TAXATION

The following is a general discussion of certain Federal
income tax provisions applicable to Alliance and the Federal
income tax consequences of the ownership of Shares of Alliance by
an investor. It is impractical to comment on all aspects of
Federal, state and local laws which may affect the tax
consequences of an investment in the Shares. The following
discussion is merely a summary of some of the federal income tax
principles applicable to Alliance and the investors, and does not
purport to be a complete analysis or listing of all potential tax
consequences or risks inherent in purchasing or owning Common
Stock in Alliance. Each prospective investor should consult his
or her own tax advisor.

The following discussion of federal income tax matters is
based upon the Internal Revenue Code of 1986, as amended to date
(the "Code"), the regulations promulgated or proposed thereunder,
the position of the Service set forth in its published revenue
rulings, revenue procedures and other announcements and court
decisions as in effect on the date of this Prospectus. No
assurance can be given that future legislative or administrative
actions or court decisions will not result in changes in the law
which would result in significant modification to the following
discussion. Any such legislative or administrative action or
decision may or may not be retroactively applied with respect to
transactions completed prior to the effective date of such
action.

Taxation of a Taxable Cooperative. Alliance has been formed
as a cooperative association under Colorado law and intends to
operate as a cooperative for Federal income tax purposes. A
taxable cooperative is subject to Federal income tax on its
Federal taxable income and generally computes its taxable income
the same as any other C corporation. However, a taxable
cooperative is allowed to deduct in computing its taxable income
amounts distributed to its members or patrons as patronage
dividends. Due to the ability of a cooperative to deduct
patronage dividends with respect to its patronage sourced
earnings, the income earned by a cooperative with respect to
business done with or for the cooperative's member-patrons is
subject to a single-level of Federal income taxation, at the
level of the member-patrons. However, a taxable cooperative may
not distribute non-patronage sourced earnings to its member-
patrons as patronage dividends. Accordingly, the cooperative
must report such non-patronage sourced income in its taxable
income and is subject to Federal income taxation on such income.

As mentioned above, a cooperative may deduct amounts paid to
its member-patrons as patronage dividends. In order to qualify
as a patronage dividend, the amount paid to each member-patron by
the cooperative must be (1) on the basis of the quantity or value
of business done with or for the member; (2) pursuant to a pre-
existing legal obligation; and (3) determined with reference to
the net earnings from the business done with or for its member-
patrons. A cooperative may pay patronage dividends in cash, a
written notice of allocation or a combination thereof. The
written notice of allocation either may be a qualified written
notice or a nonqualified written notice. A qualified written
notice of allocation is a written <PAGE> notice of allocation which (1)
the distributee has consented to take into income at the stated
dollar amount and has received at least twenty percent of the
dividend in cash or (2) the distributee may redeem for cash at
its stated value for a period of at least ninety days following
the notice. The Company's Bylaws provide that Alliance
stockholders have consented to take qualified written notices of
allocation into income at the stated amount as a result of
acquiring Alliance Common Stock. A nonqualified written notice
of allocation is a written notice of allocation that fails to
satisfy the above described requirements for a qualified written
notice of allocation

A patronage dividend paid with a qualified written notice of
allocation or cash is deductible by the cooperative for the year
with respect to which the patronage dividend is paid and is
taxable to the member-patron in the year the patronage dividend
is received. Since a cooperative may pay up to eighty percent of
a patronage dividend in a qualified written notice of allocation,
a member-patron may have insufficient cash distributed to the
member-patron to pay the income tax incurred by the patron as a
result of the receipt of the patronage dividend. A nonqualified
written notice of allocation is deductible by the cooperative and
taxable to the member-patron when such notice is redeemed by the
cooperative for cash.

As described above, a cooperative may only distribute as
patronage dividends the portion of its income which qualifies as
patronage sourced income. Alliance will operate as a supply
cooperative, which produces and sells pigs to its member-patrons.
The income Alliance realizes on its sale of the pigs to its
member-patrons should be treated as patronage sourced income.
Alliance is obligated under the Bylaws to distribute such income
to its member-patrons as patronage dividends based the quantity
or value of business done with or for its member-patrons.

If Alliance realizes income from business which is not done
with or for member-patrons, such as income from the sale of pigs
to a person who is not an Alliance stockholder, such income will
not be patronage sourced income and Alliance will not be able to
distribute and deduct such amount to its member-patrons as a
patronage dividend. In such case, Alliance will have to include
such income in the computation of its Federal taxable income. If
Alliance distributes such non-patronage sourced earnings to its
stockholders, such distribution likely will be treated as a
taxable dividend to its stockholders.

Taxation of Alliance Stockholder. Alliance is obligated to
distribute its patronage sourced earnings to its member-patrons
as patronage dividends. The member-patrons will be required to
include such patronage dividends in their taxable income although
the time at which such amount is includible is dependent on how
the patronage dividend is distributed. Alliance may pay the
patronage dividend in cash, a qualified written notice of
allocation or a non-qualified written notice of allocation, or
any combination thereof. A member must include in its income a
patronage dividend paid in cash or a qualified written notice of
allocation in the year such dividend is received. A member must
include in its income a patronage dividend paid by a non-
qualified written notice of allocation in the year in which such
notice, or portion thereof, is redeemed by the cooperative for
cash. If Alliance realizes income from non-patronage sources and
distributes such income to its stockholders, the stockholders
likely will have to report such income as dividend income. In
connection with the debt financing for which the Company
anticipates it will obtain commitments prior to or concurrently
with the consummation of the offering of each Minimum Block of
Shares, the Company may be required to enter into a credit
agreement which restricts the Company's ability to pay patronage
distributions in cash. The loan agreement with the Company's
existing lender contains such a restriction. See "Patronage
Distribution Policy" and "Business--Financing."

The portion of any patronage distributions paid in qualified
written notices of allocations will be made through the issuance
of capital credits. If Alliance redeems the capital credits
which were issued, the redeeming member will recognize capital
gain or loss in an amount equal to the difference between the
redemption proceeds received and the member's basis in the
redeemed capital credits. Since a member's basis in a capital
credit received as a patronage dividend is equal to the face
amount of the capital credit, a member generally will not
recognize any gain or loss on the redemption of a capital credit.

In the event of a sale of Alliance Common Stock by a member,
the gain or loss realized by the selling member for federal
income tax purposes will generally be characterized as capital
gain or loss provided that the Common Stock was held as a capital
asset. The amount of the gain or loss will be equal to the
difference between the adjusted tax basis of his equity sold and
the amount realized on such sale.

THE FOREGOING DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR
CAREFUL TAX PLANNING, PARTICULARLY BECAUSE THE TAX CONSEQUENCES
OF AN INVESTMENT IN ALLIANCE ARE COMPLEX AND NOT THE SAME FOR ALL
TAX PURPOSES. PROSPECTIVE INVESTORS ARE STRONGLY URGED TO
CONSULT THEIR OWN TAX ADVISORS.

<PAGE>

GOVERNMENT REGULATION

The Company is subject to various federal, state and local
government regulations, including those restricting certain types
of investor-owned livestock production and those concerning the
environment, occupational safety and health and zoning. In
addition, its employment practices are governed by minimum wage,
overtime and other working condition regulations. The Company
has not experienced significant difficulty in complying with
applicable regulations and compliance generally has not had an
adverse effect on the Company's business. THE NOVEMBER 1998
ADOPTION OF AMENDMENTS TO THE COLORADO REVISED STATUTES
CONCERNING THE REGULATION OF HOUSED COMMERCIAL SWINE FEEDING
OPERATIONS, HOWEVER, MAY HAVE MATERIAL AND ADVERSE CONSEQUENCES
TO THE COMPANY AND ITS BUSINESS. See "Business--Waste Disposal
and Environmental Matters."

LEGAL PROCEEDINGS

There are no material pending legal proceedings to which the
Company is a party or to which any of its property is subject.

PIG PURCHASE AGREEMENT

GENERAL

The rights and obligations of the parties with respect to
the sale of feeder pigs and weaned pigs by the Company to its
members will be governed by the Pig Purchase Agreements, in the
form attached hereto as Exhibit B. Prospective investors should
carefully examine the Pig Purchase Agreement. Although the
following summary describes the material provisions of the Pig
Purchase Agreement, it does not purport to be a complete
statement of all provisions of the Pig Purchase Agreement and in
no way modifies or amends the Pig Purchase Agreement.

PURCHASE

The Company intends to sell feeder pigs and weaned pigs that
meet particular minimum weight, health, nutrition and genetic
quality standards to members of the Company who have entered into
a Pig Purchase Agreement with the Company. Feeder pigs and
weaned pigs that meet such standards, as set forth in the Pig
Purchase Agreement, are referred to as "Qualifying Pigs."
Pursuant to the terms of the Pig Purchase Agreement, (a) a member
of the Company owning Class A Shares is required to purchase, and
the Company is required to sell, feeder pigs constituting
Qualifying Pigs in lots of no less than 900, and no more than
1,000, pigs per lot, as determined by the Company, and (b) a
member of the Company owning Class B Shares or Class C Shares is
required to purchase, and the Company is required to sell, weaned
pigs constituting Qualifying Pigs in lots of no less than 925,
and no more than 1,025, pigs per lot, as determined by the
Company. Lots of feeder pigs constituting Qualifying Pigs are to
be made available to members of the Company owning Class A Shares
on a rotating schedule determined and implemented by the Company,
with the number of lots made available to a member and the
frequency of availability being based upon the member's
proportionate ownership interest in the Company's outstanding
Class A Common and the actual production of feeder pigs
constituting Qualifying Pigs from the Company's facilities. Lots
of weaned pigs constituting Qualifying Pigs are to be made
available to members of the Company owning Class B Shares or
Class C Shares on a rotating schedule determined and implemented
by the Company, with the number of lots made available to a
member and the frequency of availability being based upon the
member's proportionate ownership interest in the Company's
outstanding Class B Common or Class C Common, as the case may be,
and the Company's actual production of Qualifying Pigs that are
to be sold to members of the Company as weaned pigs. The Company
intends to allocate its production of weaned pigs from all
facilities between those that are to be sent to nurseries and
developed by the Company into feeder pigs, on the one hand, and
those that are to be sold as weaned pigs, on the other hand, in
the same proportion that the number of the Company's operating
feeder pig production facilities bears to the number of the
Company's operating weaned pig production facilities. If the
Company is successful in implementing its business plan and the
proposed new production facilities go into operation on schedule,
the initial lots of feeder pigs for new investor members owning
Class A Common are not expected to be available for up to 13 to
15 months after completion of the offering of a Minimum Class A
Block to such members, and the initial lots of weaned pigs for
new investor members owning Class B Shares or Class C Shares are
not expected to be available for up to 11 to 13 months after
completion of the offering of a Minimum Class B Block or Minimum
Class C Block, as the case may be, to such members. New
investor members will not be entitled to purchase pigs from the
Company until such time. In the event that the production of
feeder pigs exceeds two and seven-tenths (2.7) lots per share of
Class A Common on a prospective rolling 12-month basis, the
Company may sell such excess production to non-members, or retain
such excess production for the Company's own purposes, in lieu of
selling such excess production pursuant to the Pig Purchase
Agreements. In the event that the production of weaned pigs
exceeds two and seven-tenths (2.7) lots per share of Class B
Common or two and one-tenth (2.1) lots per share of Class C
Common, as the case may be, on a prospective rolling 12-month
basis, the Company may sell such excess <PAGE> production to non-
members, or retain such excess production for the Company's own
purposes, in lieu of selling such excess production pursuant to
the Pig Purchase Agreements. The Company intends to cause any
such excess production of weaned pigs to be retained by the
Company and developed into feeder pigs. Investor members will
not be entitled to purchase any excess production of pigs. The
Company has agreed in its Swine Production Services Agreement
with Farmland to provide Farmland the first opportunity to
purchase excess pigs produced by the Company during the term of
said Agreement (and in no event less than the five year period
ending July 13, 1999). See "Certain Relationships and Related
Transactions--Farmland."

PRICE

The Company intends to sell Qualifying Pigs, subject to
adjustment for weight as described below, pursuant to a pricing
formula consisting of the sum of the following factors: the
financing cost per pig, the operating cost per pig, and a $0 to
$4.50 per pig production margin (changed from $4.50 effective
September 1, 1998 with respect to feeder pigs) as determined by
the Board of Directors in its discretion. The financing cost per
pig applicable to a member is to be determined on a rolling 12-
month prospective basis and will be equal to the quotient
obtained by dividing (i) the sum of the anticipated required
payments of principal and interest (including any scheduled
sinking fund payments) for the ensuing 12-month period with
respect to the debt financing incurred by the Company in
connection with the consummation of the sale of Common Stock to
such member (or his predecessor in interest), which debt
financing (except with respect to certain existing Pig Purchase
Agreements) shall be deemed to be at least $1,970,000 per feeder
pig production facility and $1,600,000 per weaned pig production
facility, by (ii) the total number of feeder pigs or weaned pigs,
as the case may be, constituting Qualifying Pigs anticipated to
be produced and shipped by the Company during such 12-month
period from the one or more pig production facilities developed
through the use of such debt financing and the net proceeds from
the sale of Common Stock to such member (or his predecessor in
interest) (such estimate being based on the total estimated
number of feeder pigs or weaned pigs, as the case may be,
constituting Qualifying Pigs to be produced and shipped by the
Company during such 12-month period from all pig production
facilities of the Company). The operating cost per pig is to be
determined on a rolling five-month (changed from 12-month
effective September 1, 1998 with respect to feeder pigs)
historical basis and will be equal to the quotient obtained by
dividing (i) the sum of (A) all expenses (excluding interest
expense, depreciation and amortization) of the Company, plus (B)
the net cash flow cost of all capital expenditures of the Company
(including any capital sinking fund payments) for production
facility and breeding stock improvements and replacements, in
each case, for the five months (changed from 12-month effective
September 1, 1998 with respect to feeder pigs) preceding the then
present month of shipment, by (ii) the number of Qualifying Pigs
produced and shipped by the Company during such five-month (12-
month) period. At the time the Company notifies a member that a
lot is available for purchase by the member pursuant to the
member's Pig Purchase Agreement, the Company will furnish to the
member an estimate of the total purchase price of all Qualifying
Pigs included in the lot, and the member is required to pay such
estimated total purchase price to the Company not less than one
day prior to the scheduled shipment date. The actual total
purchase price of all Qualifying Pigs included in a lot sold to a
member will be based upon weight at the time of loading and
settlement of any adjustments shall be made within five days
following delivery.

WEIGHT ADJUSTMENT

The purchase price for Qualifying Pigs is subject to
adjustment based upon (a) the extent of any variation in the
average weight of feeder pigs constituting Qualifying Pigs from
45 pounds, and (b) the extent of any variation in the average
weight of weaned pigs constituting Qualifying Pigs from 8 to 12
pounds. To the extent that the average weight of a shipment of
feeder pigs constituting Qualifying Pigs exceeds 45 pounds per
pig, the purchaser will pay an additional $.25 per pound per pig
on the first five pounds by which the average weight exceeds 45
pounds per pig and an additional $.15 (or $.20 under some
existing Agreements) per pound per pig for the average weight
between 50 pounds and 60 pounds. To the extent that the average
weight of feeder pigs constituting Qualifying Pigs is less than
45 pounds per pig, the purchase price will be decreased by $.25
per pound per pig. To the extent that the average weight of a
shipment of weaned pigs constituting Qualifying Pigs exceeds 12
pounds per pig, the purchaser will pay an additional $1.00 per
pound per pig. To the extent that the average weight of a
shipment of weaned pigs constituting Qualifying Pigs is less than
8 pounds per pig, the purchase price will be decreased by $1.00
per pound per pig.

<PAGE>

DELIVERY OF PIGS

The Company will be responsible for obtaining, at the
Company's expense, all health permits necessary to qualify the
pigs for interstate shipment. It is anticipated that all lots of
Qualifying Pigs will be weighed at the Company's expense at a
state-inspected scale near the Company's production facility.
Delivery is to be FOB shipping point, with the members bearing
the risk of loss during transit, and the trucks used to haul
Qualifying Pigs from the Company's production facility must be
thoroughly cleaned and disinfected prior to loading. A member
may inspect the lot of Qualifying Pigs to be purchased by such
member prior to loading. After the delivery of pigs at their
destination, a member will have the right to seek an appropriate
price adjustment for any pig which is found not to be a
Qualifying Pig. Such adjustment will be made following the
Company's inspection of the subject pigs, and will be determined
through mutual agreement of the Company and the member.

TERM AND TERMINATION

A member's Pig Purchase Agreement will be for an initial
term commencing on the date entered into and continuing for a
period of 120 months after the date the first delivery of
Qualifying Pigs is made to the member (or his predecessor in
interest) thereunder, subject to earlier termination upon the
occurrence of certain events. Pig Purchase Agreements will be
extended automatically for succeeding one year terms unless the
member gives to the Company, not less than one year prior to the
expiration of the initial or any extended term, notice that the
member desires to terminate the Pig Purchase Agreement as of the
expiration of such initial or extended term. The Company may
terminate a member's Pig Purchase Agreement if the member fails
to purchase, pay for, and take delivery of any two lots of
Qualifying Pigs when and as made available to the member;
provided, however, that for each ten shares of Common Stock owned
by a member, the number of such failures necessary before the
Company may terminate such member's Agreement is increased by
one. The member may terminate the Pig Purchase Agreement if the
Company materially breaches any obligation or covenant in the
Agreement and such breach is not cured within 30 days following
notice of such breach given by the member to the Company.
Furthermore, if the first delivery of Qualifying Pigs thereunder
is not made within 24 months of the date of the Pig Purchase
Agreement, the member may terminate the Agreement within three
months after the expiration of such 24-month period. If either
party is prevented from performing under the Pig Purchase
Agreement because of reasons beyond its control which make it
commercially impossible to perform, however, then that party is
relieved from such performance so long as it remains commercially
impossible to perform. A member's Pig Purchase Agreement
automatically terminates if the member assigns or transfers all
shares of Common Stock from which the member's right to purchase
lots of Qualifying Pigs under the Agreement derives. Except as
described above, a member does not have the right to terminate
the Pig Purchase Agreement prior to the expiration of the initial
or any extended term thereof. As noted above, the member's right
to terminate the Pig Purchase Agreement at the expiration of the
initial or any extended term thereof may be exercised only if the
member gives notice to the Company at least one year prior to the
expiration of such initial or extended term that the member
desires to exercise such termination right. The foregoing
termination rights constitute the member's exclusive rights of
termination under the Pig Purchase Agreement. No member has the
right to demand the return of or to receive any of the member's
capital from the Company as a result of the termination of the
Pig Purchase Agreement or otherwise and regardless of whether
demanded prior to the expiration of the initial or any extended
term of the Pig Purchase Agreement or at any time after the
expiration of any such term. The Company is under no obligation
to redeem or repurchase its Common Stock prior to the expiration
of the initial or any extended term of the Pig Purchase Agreement
or at any time after the expiration of any such term. See "Risk
Factors--Lack of Liquidity; Absence of Market for Shares,"
"Restrictions on Sale or Other Transfer of the Shares--
Cooperative Association Laws and Charter Documents."

EFFECT OF PURCHASER DEFAULT

If a member fails to purchase, pay for, and take delivery of
any lot of Qualifying Pigs when and as made available to the
member pursuant to the Pig Purchase Agreement, the member is
responsible for the damages and expenses incurred by the Company
as a result of such failure. In particular, the member is liable
for (a) the difference between the price payable by the member
for the Qualifying Pigs that member has failed to purchase, pay
for, and take delivery under the Agreement and the then current
market price for such pigs, (b) $3,000, which amount is intended
to cover the Company's administrative and other costs and
expenses associated with such failure to purchase, pay for, and
take delivery of the Qualifying Pigs, and (c) all costs of
collection, enforcement, and prosecution of the Company's rights
and remedies under the Agreement or otherwise arising. If a
member fails to pay promptly the damages and expenses incurred by
the Company as a result of the member's failure to purchase, pay
for and take delivery of a lot of Qualifying Pigs, such member
will not be permitted to purchase any other lots unless and until
such damages and expenses are paid, and such member also will be
responsible for <PAGE> all damages and expenses accruing to the Company
with respect to lots that such member is not permitted to
purchase as a result thereof. In addition to the member's
responsibility for such damages and expenses, the Company may
pursue other remedies, including the termination of the member's
Pig Purchase Agreement. If the member is prevented from
performing under the Pig Purchase Agreement because of reasons
beyond the member's control which make it commercially impossible
to perform, however, then the member is relieved from such
performance so long as it remains commercially impossible to
perform. See "Pig Purchase Agreement--Term and Termination" and
"-- Grant of Security Interest."

GRANT OF SECURITY INTEREST

Pursuant to the Pig Purchase Agreement, a member grants to
the Company, as security for the performance of all of the
member's obligations under the Pig Purchase Agreement, a security
interest in all of the member's equity interest in the Company.
In this regard, the certificates representing shares of Common
Stock will be retained by Alliance and members will be required
to endorse appropriate stock powers with respect to such
certificates. The Company's security interest in the member's
shares of Common Stock is to be senior to all others, except for
any permissible pledge or other security interest granted in such
shares by the member to any financial institution for purposes of
securing a loan used in financing the member's acquisition of
such shares and as otherwise agreed by the Company in its
discretion. A member's failure to perform his purchase
obligation under the Pig Purchase Agreement, among other
occurrences, may result in the Company's foreclosure on the
security interest in the member's Common Stock. See "Risk
Factors--Obligation to Purchase Pigs" and "-- Right of Alliance
to Acquire Shares" and "Restrictions on Sale or Other Transfer of
the Shares--Cooperative Association Laws and Charter Documents."

WARRANTIES

The Company makes no warranties, express or implied, with
respect to feeder pigs and weaned pigs produced by it, except as
expressly provided in the Pig Purchase Agreement. The Company
specifically disclaims any warranties of merchantability or
fitness for a particular purpose and makes no warranty as to any
specific level of performance with respect to any pigs sold
thereunder.

ARBITRATION

Any controversy arising out or relating to a Pig Purchase
Agreement or any breach thereof (other than certain controversies
that include, but are not limited to, controversies arising out
of a member's failure to purchase, pay for, and take delivery of
any lot of Qualifying Pigs and the Company's exercise of any
rights or remedies related thereto) is required to be submitted
to binding arbitration under the Pig Purchase Agreement.
Arbitration hearings are to take place in Denver, Colorado, or at
such other location as the Company and such member may agree,
with judgment upon the award rendered by the arbitrator being
entered in any court having jurisdiction.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The names of the current directors and executive officers of
the Company, their ages and present positions and offices with
the Company are as follows:

Name Age Position and Offices Held

Wayne N. Snyder 54 Chairman of the Board, President
and Director

Doug Brown 40 Treasurer, Secretary and Director

Merl A. Daniel 53 Director

Loren Keppy 37 Director

Larry Welsh 45 Director

<PAGE>

Set forth below is a description of the business experience
of each director and executive officer of the Company.

Wayne N. Snyder has served as Chairman of the Board,
President and Director of the Company since its formation in May
1994, and has served as General Manager of Yuma LLC, the
Company's predecessor, from October 1991 to July 1994. Mr.
Snyder has served as Vice President of Livestock Production for
Farmland since July 1997 and as a Director of Livestock
Production for Farmland from 1989 to June 1997. In his present
capacity, he is responsible for all activities of Farmland's
livestock production department. His professional career
includes over 20 years of experience with Farmland in a variety
of positions, including Regional Manager and Vice President--Sales.

Doug Brown has served as Treasurer and as a Director of the
Company since its formation in May 1994, and as Secretary of the
Company since October 1994. He served as a manager of Yuma LLC
from October 1991 to July 1994. Mr. Brown has served as the Vice
President and General Manager of Yuma Cooperative since 1990.
Prior to that time, Mr. Brown served as the general manager of
the Douglas Farmers Cooperative in Douglas, Oklahoma for four
years.

Merl A. Daniel has served as a Director of the Company since
March 1995. Mr. Daniel has been employed by Farmland since 1968,
and has served in his present capacity of Vice President and
Controller for Farmland since July 1992. From October 1990 to
July 1992, he served as Farmland's Director MIS, Operations and
Technical Support, in which capacity he managed Farmland's
computer operations. Prior to October 1990, Mr. Daniel served
Farmland in a variety of other capacities.

Loren Keppy has served as a Director of the Company since
June 1996. Mr. Keppy has been self-employed as a farmer since
1984. In this regard, he currently operates a 5,000 head per
year hog finishing operation near Durant, Iowa, in addition to
farming 470 acres of crops. Mr. Keppy received a Bachelor of
Science degree in Industrial Technology from the University of
Northern Iowa, and is a member of the River Valley Coop.

Larry Welsh has served as a Director of the Company since
November 1997. Mr. Welsh has engaged in farming since 1976
through family partnerships with 1,100 acres of crops. Mr. Welsh
serves as President of Welkco, L.L.C., a family-owned hog
enterprise capable of finishing 50,000 market hogs per year as a
member of Effingham Equity Cooperative. He has a Bachelor of
Science degree in Mechanical Technology and Business
Administration from Indiana State University.

Officers are elected annually by the Board of Directors and
serve until their respective successors are duly elected and
qualified. The Company's Board of Directors currently consists
of five directors: Messrs. Snyder, Brown, Daniel, Keppy and
Welsh. The members of the Board of Directors are elected for one
year terms expiring at the annual meeting of stockholders or
until their respective successors are duly elected and qualified,
unless sooner removed or disqualified. The Company's Articles of
Incorporation and Bylaws provide that at least a majority of the
directors constituting the Board of Directors shall be, and less
than a majority of the directors need not be, members or duly
authorized representatives of members of the Company.

LIMITATION ON LIABILITY AND INDEMNIFICATION OF DIRECTORS AND
OFFICERS

The Company's Articles of Incorporation provides, in effect,
that a director of the Company, in his capacity as such, will not
be personally liable to the Company or its members or
stockholders for monetary damages for violations of a director's
fiduciary duty. In accordance with the Colorado Cooperative
Association Law, however, the Articles of Incorporation do not
eliminate or limit the liability of a director for breaching his
duty of loyalty, acting or failing to act in good faith, engaging
in intentional misconduct or knowingly violating a law, or
obtaining an improper personal benefit. Although the Articles of
Incorporation preclude monetary damage awards occasioned by a
breach of a director's fiduciary duty, it does not relieve a
director of his fiduciary duties and does not prevent a
stockholder from seeking equitable remedies, including an
injunction prohibiting a proposed action or transaction, or from
seeking recision of a transaction.

The Company's Articles of Incorporation permit the Company
to indemnify its directors, officers, employees and agents, or
any person who serves at the request of the Company as a
director, officer, partner, trustee, employee, fiduciary or agent
of another corporation or other person or of an employee benefit
plan, to the fullest extent permitted by Colorado law. The
Company's Bylaws require the Company to indemnify any person
against all liabilities and expenses actually and reasonably
incurred by such person in connection with any proceeding by
reason of the fact that such person is or was serving as a
director or officer of the Company or, while a director or
officer of the Company, is or was serving at the Company's

<PAGE>

request as a director, officer, partner, trustee, employee,
fiduciary or agent of another corporation or other person or of
an employee benefit plan; provided that such person acted in good
faith and in a manner such person reasonably believed, in the
case of conduct in an official capacity, to be in the Company's
best interests and, in all other cases, to be not opposed to the
Company's best interests, and, with respect to any criminal
action or proceeding, that such person had no reasonable cause to
believe such person's conduct was unlawful; and provided,
further, that the Company shall not indemnify any person for any
liabilities or expenses incurred by such person in connection
with a proceeding by or in the right of the Company in which such
person shall have been adjudged to be liable to the Company or in
connection with any other proceeding in which such person shall
have been adjudged to have derived an improper personal benefit.
The indemnification provided by the Company's Articles of
Incorporation and Bylaws is not exclusive of any other rights to
which those seeking indemnification may be otherwise entitled.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.

DIRECTOR COMPENSATION

Although the Company's Bylaws provide that directors may be
compensated for their services, no compensation has been awarded
to, earned by or paid to members of the Company's Board of
Directors for service to the Company as such. Each director may
be reimbursed for such director's reasonable out-of-pocket
expenses incurred in the performance of service to the Company as
a director if authorized by the Board of Directors.

EXECUTIVE COMPENSATION

No compensation has been awarded, earned by or paid to Wayne
N. Snyder, the chief executive officer of the Company, by the
Company for services rendered to the Company as such during the
period from the Company's organization on May 3, 1994 through
August 31, 1997. Mr. Snyder is employed by Farmland, which has
agreed to provide certain administrative, advisory and consulting
services to the Company under the terms of a Swine Production
Services Agreement. No executive officer of the Company at
August 31, 1997 was awarded, earned or was paid compensation in
excess of $100,000 for services rendered to the Company as such
during the fiscal year ended August 31, 1997. See "Management--
Directors and Executive Officers" and "Certain Relationships and
Related Transactions."

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

GENERAL

As of the date of this Prospectus, Farmland and Yuma
Cooperative own approximately 36.1% and 7.7%, respectively, of
the outstanding Common Stock of the Company. In connection with
the formation of the Company as a Colorado cooperative
association on May 3, 1994, one share of the Company's Class A
Common was issued to Farmland for the purchase price of $100. On
July 13, 1994, the Company acquired the entire equity ownership
rights and interests in Yuma LLC, a Colorado limited liability
corporation in which Farmland and Yuma Cooperative owned
approximately 71.5% and 28.5%, respectively, of the outstanding
equity interests. In exchange for their respective equity
interests in Yuma LLC, Farmland and Yuma Cooperative were issued
30 shares and 12 shares, respectively, of the Company's Class A
Common. Yuma LLC thereupon was dissolved and liquidated and its
assets and liabilities were assigned to and assumed by Alliance.
As of the date of this Prospectus, the Company has consummated
its issuance and sale to Farmland of additional shares of
Alliance capital stock. The Company has entered into various
contractual arrangements with both Farmland and Yuma Cooperative
for the provision of specific goods and services. All future
transactions between the Company and its officers, directors,
employees and affiliates, including Farmland and Yuma
Cooperative, will be on terms no less favorable to the Company
than can be obtained from unaffiliated parties. All such
transactions will be subject to the approval of a majority of the
independent outside members of the Board of Directors who do not
have an interest in the transactions. See "Principal
Stockholders."

FARMLAND

Farmland is a Kansas cooperative association engaged in
regional farm supply and marketing operations, including the
processing and marketing of pork and beef. Farmland's livestock
production department is directly engaged in the production of
feeder pigs and finished hogs through contractual arrangements
with independent producers, the ownership <PAGE> of pig production
operations in joint venture with both agricultural cooperatives
and independent producers, as well as other activities including
the operation of feeder pig brokerage services. Wayne N. Snyder
and Merl Daniel each are employed by Farmland and presently serve
as directors or executive officers of the Company.

Farmland, through its various business divisions and
interests, is engaged in providing to competitors of the Company
certain goods and services, including the supply of feed and
other inputs, breeding stock and administrative services, among
others, which are comparable to those being provided by Farmland
to the Company. Moreover, Farmland also is directly engaged in
the production of hogs through the direct ownership of animals
and facilities, through contractual arrangements with other
producers, and through joint venture arrangements established
with other parties. Because of Farmland's various activities,
there may arise conflicts of interest between Farmland and the
Company. The Company anticipates that Farmland may continue to
engage and invest in activities and businesses other than those
of Alliance. Thus, Farmland may have conflicts of interest in
allocating its resources and management time, services and
functions among the Company and such other activities.
Similarly, with respect to the employees of Farmland serving as
officers or directors of the Company, Farmland's other business
interests may result in competition for their time, services and
functions.

Swine Production Consulting and Services Agreement. The
Company has entered into various contractual arrangements with
Farmland for the provision of specific goods and services. Under
the terms of a Swine Production Services Agreement with the
Company, Farmland, acting as independent contractor, has agreed
to provide certain administrative, advisory and consulting
services to the Company, including the following: performing
various ministerial services, including data entry of
transactions for accounting purposes and computer generation of
financial and operational reports and checks; compilation of the
production records with respect to each feeder and weaned pig
production facility; logistical backup and coordination,
including facilitating the acquisition, servicing, transportation
and sale of genetic stock, breeding stock, feeder pigs and weaned
pigs; facilitating the purchase of inputs for the Company;
assistance in sourcing feed ingredients, animal health products
and veterinarian services; assistance in arranging financing;
assistance in selection of suitable sites for the Company's
facilities; assistance in obtaining appropriate permits for the
construction and operation of facilities for the Company;
assistance in the recruitment, selection and training of general
managers for the Company; and advice and consultation with
respect to management practices, feed formulations and other
aspects of the Company.

Farmland has agreed to assist the Company in acquiring the
necessary management and labor to adequately staff and operate
the Company's pig production facilities. The Company will cause
the new pig production facilities to be constructed, provide
initial and replacement breeding stock purchased from Farmland or
other sources which, under normal circumstances, will be
sufficient to keep the facilities in full production and provide
adequate record keeping to allow Farmland to provide the
accounting and reporting functions required of it under the Swine
Production Services Agreement. Finally, the Company will grant
Farmland reasonable access to the facilities, in accordance with
good bio-security practices, to allow Farmland to provide its
required services. Farmland will be paid one dollar ($1.00) for
each feeder or weaned pig sold by the Company as partial
compensation for Farmland's duties under the agreement. Such
amount is subject to adjustment annually commensurate with, and
based upon, changes in the Consumer Price Index. For the years
ended August 31, 1997 and 1996, the Company paid Farmland a total
of $250,967 and $151,905, respectively, for its provision of
administrative, advisory and consulting services pursuant to the
Swine Production Services Agreement. Farmland also may provide a
significant portion of the feed ingredients, nutritional
supplements and animal health supplies required by the Company at
Farmland's customary rates. For the years ended August 31, 1997
and 1996, the Company purchased $638,730 and $303,963,
respectively, of feed ingredients, nutritional supplements and
animal health supplies from Farmland.

Farmland will purchase from the Company gilts produced by
the Company for purposes of finishing for use as breeding stock
by the Company, subject to available finishing capacity of
Farmland. Upon completion of such finishing, Farmland will
resell to the Company any such gilts that survive finishing by
Farmland. The purchase price to be paid by Farmland to the
Company for gilts will be based on the purchase price specified
in the Pig Purchase Agreement between Farmland and the Company
or, if no such agreement is then in effect, the purchase price
specified in the most recent effective Pig Purchase Agreement
between Farmland and the Company. The purchase price to be paid
by the Company to Farmland for finished gilts will be based upon
the prevailing market price of hogs at the time of purchase, plus
any royalty fees payable by Farmland and a handling fee of $10.00
per gilt. For the years ended August 31, 1997 and 1996, the
Company purchased finished gilts from Farmland at an aggregate
price of $2,367,524 and $872,979, respectively. In the event
that the Company does not purchase any such finished gilts,
Farmland may either market such gilts for slaughter or retain
such gilts for use as breeding stock. Farmland has agreed to pay
a $10.00 per head fee to the Company for any such finished gilts
that are retained by Farmland for use as breeding stock. For
the years ended August 31, 1997 and 1996, Farmland paid $123,620
and $31,590, respectively, of such fees to the Company.

<PAGE>

It is anticipated that Farmland may provide hybrid gilts
from additional multiplier facilities to meet a portion of the
Company's initial stocking and ongoing requirements for breeding
stock with respect to each pig production facility in existence,
under development or proposed. The actual number of replacement
gilts purchased from Farmland will be affected by the Company's
requirements and the availability of animals from Farmland's
facilities. The purchase price of replacement hybrid breeding
stock is to be based upon the prevailing market price of breeding
stock at the time of purchase.

In the Swine Production Services Agreement, the Company has
granted Farmland an option during the term of the Agreement (and
in no event less than the five-year period ending July 13, 1999)
to purchase (a) excess feeder pigs and weaned pigs produced by
the Company at the price per pig equal to the average price per
pig paid by stockholders under Pig Purchase Agreements for the
then immediately preceding month, and (b) feeder pigs and weaned
pigs that a stockholder has failed to purchase under such
stockholder's Pig Purchase Agreement at the price per pig
determined pursuant to such Agreement. The Company also has
granted Farmland an option to purchase any shares of Common Stock
reacquired by the Company.

Pig Purchase Agreements. As a member of the Company,
Farmland has contracted with the Company to purchase a share of
the feeder and weaned pigs to be produced by the Company under
the same terms required of the Company's other members.
Commencing on August 11, 1995, the date the Company first
produced and shipped feeder pigs pursuant to the Pig Purchase
Agreements with the Company's existing members (other than
Farmland and Yuma Cooperative), the price paid by Farmland for
pigs has been under terms comparable to those applicable to the
Company's other members. For the years ended August 31, 1997 and
1996, Farmland purchased feeder pigs from the Company (including
Yuma Cooperative's share of feeder pigs produced by the Company)
at an aggregate price of $7,924,763 and $5,035,160, respectively.
Finally, the Company has agreed to provide Farmland the first
opportunity to purchase any feeder and weaned pigs produced by
the Company in excess of the Company's supply commitments to
other members or that other members have failed to purchase
during the term of the Swine Production Services Agreement (and
in no event less than the five-year period ending July 13, 1999).
The Company intends to cause any such excess production of weaned
pigs, however, to be retained by the Company for development into
feeder pigs. See "Pig Purchase Agreement" and "Certain
Relationships and Related Transactions--Yuma Cooperative--Pig
Purchase Agreement."

Real Estate Loans. Between September and December 1995, the
Company purchased approximately 1,000 acres of real property in
Yuma County, Colorado, upon which the Company has developed one
production facility and holds the remaining acreage for the
development of additional production facilities (the "Additional
Colorado Property"). The acquisition cost of this Additional
Colorado Property was approximately $760,000. The Company
obtained funding for the purchase of the Additional Colorado
Property from the proceeds of a loan obtained from Farmland. In
conjunction with this loan, the Company delivered to Farmland a
promissory note evidencing the debt providing for the
amortization of the loan over a ten-year period, at a variable
rate equal to CoBank's prime rate. As of August 31, 1997,
CoBank's prime rate was 8.50%. The payment schedule of the
promissory note requires that the Company make interest-only
payments for the life of the loan, with a final balloon payment
of the principal at the expiration of the ten-year term. To
secure the obligations of the promissory note, the Company has
agreed to execute a deed of trust in favor of Farmland covering
all of the Additional Colorado Property, which deed of trust is
second in priority to that of CoBank with respect to the
production facility constructed thereon. See "Business--Facilities."

In November 1996, the Company exercised its rights under an
option contract to acquire an approximately 90 acre tract of real
property in Wayne County, Illinois, including 45 acres (the "45
Acre Tract") on which the Company has commenced development
activities with respect to a second Illinois sow production
facility. The Company obtained funding for the purchase of the
45 Acre Tract, and subsequent development of a feeder pig
facility, from the proceeds of a $1,360,000 loan provided by
Farmland. In conjunction with this loan, the Company delivered
to Farmland a promissory note evidencing the debt providing for
amortization over a ten-year period, at a variable rate equal to
CoBank's then national variable rate plus 1.25%. This loan was
repaid by the Company in full in August 1997, and the promissory
note has been cancelled. In November 1997, the Company obtained
a second $1,360,000 from Farmland to provide for additional
facilities expansion. In conjunction with this loan, the Company
delivered to Farmland a promissory note evidencing the debt
providing for amortization over a ten-year period, at a variable
rate equal to CoBank's then national variable rate plus 1.25%.
This loan was repaid by the Company in full in November 1997, and
the promissory note has been cancelled. In May 1998, the Company
obtained a $2,160,000 loan from Farmland to provide for the
development of a 5,000-sow pig production facility in Yuma
County, Colorado. In conjunction with this loan, the Company
delivered to Farmland a promissory note evidencing the debt
providing for amortization over a ten-year period, at a variable
rate equal to CoBank's then national <PAGE> variable rate plus 1.25%.
The payment schedule for the Farmland loan requires the Company
to make interest-only payments for the life of the loan, with a
balloon payment of one-half of the principal and interest to be
made upon the Company's issuance and sale of a Minimum Block of
Shares. The remaining principal and interest is payable upon the
Company's issuance and sale of a second Minimum Block of Shares.
To the extent that there remains any unpaid amount owed under
this loan as of the May 1, 2008 maturity date, the entire loan is
then payable in full. See "Business--Facilities."

Pig Producers I, L.P. Farmland holds a 12.5% interest in
Pig Producers I, L.P. ("Pig Producers"), a limited partnership
engaged in the production of feeder pigs from a 2,450-sow feeder
pig production facility located in Yuma County, Colorado. The
Company has assigned approximately 13 of its employees to perform
various facilities operation services for Pig Producers. Pig
Producers reimburses the Company for all wages, benefits and
other costs attributable to these Alliance employees. From time
to time, the Company and Pig Producers also engage in various
commercial transactions related to the sale of genetic stock,
breeding stock, feed ingredients and animal health supplies.

Colorado Repopulation. In connection with the repopulation
of the Company's feeder pig production facilities located in Yuma
County, Colorado, the Company arranged for the finishing of new
breeding sows on facilities of independent producers. In this
regard, Alliance has contracted with Farmland for the use of
facilities as to which Farmland has acquired rights from the
owners of such facilities. During the approximately 14 months
that Alliance used such facilities, Alliance had approximately
9,240 pig spaces available to it. Alliance was obligated to pay
the facilities owner a monthly fee equal to $31.50 per pig space
divided by 12. In addition, Farmland was entitled to a monthly
fee from Alliance equal to $1.00 per pig space divided by 12.
See "Business--Breeding Stock."

YUMA COOPERATIVE

Yuma Cooperative is a Colorado cooperative association
engaged in farm supply and grain marketing activities. Doug
Brown is Vice President and General Manager of Yuma Cooperative
and serves as a director and executive officer of the Company.

Yuma Cooperative is engaged in providing to competitors of
the Company and other users certain goods and services, including
the supply of feed and animal health products, which are
comparable to those provided by Yuma Cooperative to the Company.
Because of its other business activities, conflicts of interest
may arise between Yuma Cooperative and the Company. With respect
to the employees of Yuma Cooperative serving as officers or
directors of the Company, Yuma Cooperative's other business
interests may result in competition for their time, services and
functions.

Feed Purchase Agreement. The Company has entered into a Feed
Purchase Agreement with Yuma Cooperative respecting the supply of
manufactured feed and animal health products. In this capacity,
Yuma Cooperative has agreed to purchase feed-grains and feed
additives for the production of feed which, together with animal
health products, will be sold to the Company. In exchange for
providing these goods and services, Yuma Cooperative is entitled
to compensation based upon a fixed charge for the grinding,
mixing, and delivery of feed ($12.00 per ton as of the date of
this Prospectus), in addition to the actual delivered cost of the
feed ingredients. Feed rations which are pelleted are subject
to a surcharge ($6.00 per ton as of the date of this Prospectus).
The fixed charge was reduced from $13.00 to $12.00 per ton on
September 1, 1998, and both the fixed charge and the surcharge
will remained fixed through the expiration of the Feed Purchase
Agreement on August 31, 1999. Corn provided by Yuma Cooperative
for use in feed generally is sold to the Company at delivered
cost plus, in the absence of available Company grain storage
facilities, a $.10 per bushel handling fee. The Company has the
right under the Feed Purchase Agreement, in its sole discretion,
to purchase and provide its own corn for feed manufacturing. For
the years ended August 31, 1997 and 1996, the Company purchased
$4,338,732 and $3,423,773, respectively, of feed from Yuma
Cooperative. See "Business--Purchase of Feed and Other Inputs."

Pig Purchase Agreement. As a member of the Company, Yuma
Cooperative has contracted with the Company to purchase a share
of the feeder pigs to be produced by the Company under the same
terms required of the Company's other members. Commencing on
August 11, 1995, the date the Company first produced and shipped
feeder pigs pursuant to the Pig Purchase Agreements with the
Company's existing members (other than Farmland and Yuma
Cooperative), the price paid by Yuma Cooperative for feeder pigs
has been under terms comparable to those applicable to the
Company's other members. For the years ended August 31, 1997 and
1996, Yuma Cooperative's share of feeder pigs produced by the
Company was purchased from the Company by Farmland. See "Pig
Purchase Agreement" and "Certain Relationships and Related
Transactions--Farmland--Pig Purchase Agreements."

<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information as of the
date of this Prospectus regarding the beneficial ownership of
Class A Common and Class B Common by each person known to the
Board of Directors to own beneficially 5% or more of Alliance
capital stock, by each director and executive officer of the
Company owning any shares of the Company's capital stock and by
all directors and executive officers of the Company as a group.
As of that date, no shares of Alliance Class C Common were
outstanding. All information with respect to beneficial
ownership has been furnished by the respective stockholders.

NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNER(1) STOCK OUTSTANDING

CLASS A CLASS B CLASS A CLASS B ALL
COMMON COMMON COMMON COMMON CLASSES

Farmland Industries,
Inc. /2/
3315 North Oak
Trafficway
Kansas City,
MO 64116 52 4 43.7% 11.1% 36.1%

Yuma Farmers
Milling and
Mercantile
Cooperative
Company/3/
101 South
Detroit
Yuma, CO 80759 12 -- 10.1% -- 7.7%

Corn Plus II, L.C./3/
212 North Agora Street
Marathon, IA 50565 10 -- 8.4% -- 6.5%

Larry Welsh/Welkco,
L.L.C. /3//4/
21101 East 1950 Road
Marshall, IL 62441 -- 18 -- 50.0% 11.6%

Loren Keppy
21641 First Avenue
Durant, IA 52747 1 -- 0.8% -- 0.6%

All directors and
executive officers
as a group 1 18 0.8% 50.0% 12.3%

_________________
/1/ Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission which generally attribute beneficial
ownership of securities to persons who possess sole or shared voting
power and/or investment power with respect to those securities. Unless
otherwise indicated, the persons or entities identified in this table
have sole voting and investment power with respect to all shares shown
as beneficially owned by them. Percentage ownership calculations are
based on 119 shares of Class A Common outstanding and 36 shares of Class
B Common outstanding.

/2/ The voting and disposition of the shares of Class A Common and Class B
Common held by Farmland are subject to the discretion of the board of
Directors of Farmland. Pursuant to the Company's Articles of
Incorporation, Farmland is prohibited from voting shares of Common Stock
representing 25% or more of the shares outstanding during any period in
which the Company has borrowed money from a lender subject to
regulations of the Farm Credit Administration regarding loan policies
and operations (such as the Company's current lender). As of the date
of this Prospectus, the Company had borrowed funds from such a lender.
See "Business--Financing" and "Description of Capital Stock."

/3/ The voting and disposition of the shares of Class A Common and Class B
Common held by these beneficial owners are subject to the discretion of
the Board of Directors (manager in the case of Corn Plus II, L.C.) of
the applicable beneficial owner.

/4/ Includes 18 shares of Class B Common held by Welkco, L.L.C. Mr. Welsh
is President and one of the two largest members of Welkco, L.L.C., and
therefore may be deemed to be the indirect beneficial owner of such
shares.

<PAGE>

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of
5,000 shares of (Class A) common stock, $.01 par value per share,
2,500 shares of Class B common stock, $.01 par value per share,
and 2,500 shares of Class C common stock, $.01 par value per
share. As of the date of this Prospectus, there were 119 shares
of Class A Common outstanding, which were held of record by 23
stockholders; 36 shares of Class B Common outstanding, which were
held of record by eight stockholders; and no shares of Class C
Common outstanding. Only producers of agricultural products,
associations of such producers, and federations of such
associations who have executed and delivered to the Company a Pig
Purchase Agreement may own Common Stock. Only stockholders of
the Company may be members of the Company. Except as otherwise
specifically described under this "Description of Capital Stock"
caption, the powers, preferences and rights of the Class A
Common, Class B Common and Class C Common are in all respects
identical. To the extent permitted by applicable law, the Board
of Directors of the Association is authorized to provide by
resolution for the issuance of shares of stock of any class or of
any series of any class at any time and to determine, prior to
the issuance of any shares of stock of that class or series, the
designations, preferences, limitations and relative rights, if
any, thereof.

Except as described in the immediately following sentence,
holders of Class A Common and Class B Common are entitled to one
vote for each share held on all matters submitted to a vote of
stockholders and holders of Class C Common are entitled to three-
fourths of one vote for each share held on all matters submitted
to a vote of stockholders. During any period in which the
Company has borrowed money from a lender subject to regulations
of the Farm Credit Administration regarding loan policies and
operations (such as the Company's current lender), (i) no
cooperative association stockholder is permitted to vote shares
of Common Stock representing 25% or more of the shares then
outstanding with respect to any matter as to which members are
not entitled to vote separately as a group or class and (ii) no
cooperative association stockholder is permitted to vote shares
of Common Stock representing 25% or more of the shares of any
class then outstanding with respect to any matter as to which
members are entitled to vote separately as a group or class. A
majority of the outstanding shares of Common Stock entitled to
vote constitutes a quorum at any stockholder meeting, except that
if any class of capital stock is entitled to vote separately as a
class or group, such a quorum must also be obtained with respect
to such class. The affirmative vote of at least two-thirds of
the shares represented at a meeting at which a quorum is present
is required to amend the Company's Articles of Incorporation, to
approve certain mergers, consolidations or sales of all or
substantially all of the Company's assets and to approve certain
other matters. Holders of the Class A Common, holders of the
Class B Common and holders of the Class C Common must vote
separately as groups or classes with respect to amendments to the
Articles of Incorporation that alter or change the designation,
preferences, limitations or relative rights of their respective
classes of stock so as to affect them adversely and with respect
to such other matters as may require group or class votes under
applicable law. Holders of the Common Stock do not have
cumulative voting rights in the election of directors or
preemptive rights to purchase additional shares of Common Stock,
and have no subscription, redemption or conversion rights.

All outstanding shares of Common Stock are, and when issued
the Shares offered hereby will be, validly issued, fully paid and
nonassessable. Holders of Common Stock are entitled to such
patronage distributions as may be paid in the manner determined
by the Board of Directors out of funds legally available
therefor, subject to certain provisions contained in the loan
agreement with the Company's existing lender which restrict the
ability of Alliance to pay patronage distributions in cash. The
Company intends to distribute, at least annually, all of its net
margins, if any, as patronage distributions to its stockholders
on the basis of the quantity or value of business done by the
Company with or for each stockholder. The Company's "net
margins" for this purpose generally are equal to the Company's
net income under generally accepted accounting principles
(taxable income prior to September 1, 1997) attributable to
patronage sourced business done with or for the Company's members
(determined before reduction for patronage distributions paid by
the Company). In this regard, the Company will compute its net
margins separately for each group of members (including
successors and permitted assigns) whose shares of the Company's
Common Stock originally were issued in connection with the
Company's acquisition or development of one or more feeder or
weaned pig production units financed in part thereby. See
"Patronage Distribution Policy."

Upon liquidation, dissolution or winding-up of the Company,
the assets legally available for distribution to stockholders,
after satisfying the prior distribution rights of creditors of
the Company, are distributable ratably among the holders of
capital credits and Common Stock at that time outstanding in
proportion to the sum of (a) the consideration received by the
Company in exchange for each such share of Common Stock issued to
the holder thereof (or such holder's predecessors in interest),
plus (b) the aggregate amount of principal payments made by such
holder (or such holder's predecessors in interest) pursuant to
such holder's (or such holder's predecessors in interest's) Pig
Purchase Agreement with <PAGE> respect to the debt incurred by the
Company for the construction and working capital needs of the
production facilities constructed with respect to the issuance of
such holder's shares of Common Stock.

The Shares are subject to provisions of the Colorado
Cooperative Association Law and the Company's Articles of
Incorporation and Bylaws which restrict the transferability of
the Common Stock, and include a Bylaw provision that gives the
Company the right to purchase the Common Stock of a stockholder
upon the occurrence of certain events. Such provisions will make
it more difficult to effect a change in control of the Company.
See "Restrictions on Sale or Other Transfer of the Shares." In
addition, the Company's Articles of Incorporation require
approval by the holders of at least two-thirds of a quorum of the
outstanding shares of Common Stock to amend, alter, change or
repeal any provision of the Company's Articles of Incorporation,
to approve any sale, lease, exchange or other disposition of all
or substantially all of the property and assets of the Company,
to approve any merger or consolidation of which the Company is a
party and to which the vote of the members is required by law, or
to approve any dissolution or voluntary termination of the
Company. Such provision could make it more difficult to effect a
change in control of the Company.

The transfer agent for the Common Stock is the Secretary of
the Company.

RESTRICTIONS ON SALE OR OTHER TRANSFER OF THE SHARES

SECURITIES LAWS

Upon completion of this offering (assuming the sale and
issuance of all 51 Class A Shares, all 54 Class B Shares and all
72 Class C Shares offered hereby), there will be 279 shares of
Common Stock outstanding, including 153 shares of Class A Common,
54 shares of Class B Common and 72 shares of Class C Common. Of
these shares, the remaining 34 Class A Shares, 18 Class B Shares
and 72 Class C Shares offered hereby will be freely transferable
without restriction under the Securities Act of 1933, as amended
(the "Act"), unless acquired by an "affiliate" (as that term is
defined under the Act) of the Company, in which case they will be
subject to certain resale limitations under the Act. Of the 119
shares of Class A Common held by existing stockholders of the
Company, 34 shares are freely transferable without restriction
under the Act, and the remaining 85 shares are owned by
"affiliates" of the Company. Of the 36 shares of Class B Common
held by existing stockholders of the Company, 14 shares are
freely transferable without restriction under the Act, and the
remaining 22 shares are owned by "affiliates" of the Company.
The shares owned by "affiliates" of the Company are subject to
restrictions on resale imposed by the Act and must be held
indefinitely unless they are registered under the Act or an
exemption from registration thereunder is then available. The
Company is the only party who may register its Common Stock under
the Act, and it has not agreed to register any shares of Common
Stock under the Act for resale or to comply with any exemption
under the Act for the resale of any such shares.

Section 4(1) of the Act provides an exemption from
registration under the Act for the resale of securities in the
event that the seller of such securities is not then an "issuer",
"dealer" or "underwriter" of the securities proposed to be
resold. Rule 144 was adopted by the Securities and Exchange
Commission as a safe harbor for determining whether a seller
would be considered an "underwriter" for purposes of that
exemption. Sales of "restricted" shares or shares owned by an
"affiliate" cannot be made under Rule 144 unless each of its
requirements are satisfied at the time of such sale. Although
Rule 144 provides a means for reselling restricted shares and
shares owned by affiliates, it is not the exclusive means for
reselling such securities.

In general, Rule 144 currently provides that a person (or
persons whose shares are aggregated) who has beneficially owned
restricted shares for at least one year, including persons who
may be deemed to be affiliates of the Company, would be entitled
to sell within any three-month period a number of shares that
does not exceed the greater of 1% of the then outstanding shares
or the average weekly reported trading volume for the shares
during the four weeks preceding such sale, provided that the
Company has filed certain periodic reports with the Securities
and Exchange Commission (or made publicly available certain
information concerning it) and the sale is made in a "broker's
transaction" or in a transaction directly with a "market-maker,"
as those terms are used in Rule 144, without the solicitation of
buy orders by the broker or such person, and without such person
making any payment to any person other than the broker who
executes the order to sell the shares of Common Stock. A person
(or persons whose shares are aggregated) who is not deemed to
have been an affiliate of the Company at any time during the 90
days preceding a sale by such person, and who has beneficially
owned restricted shares for at least two years, would be entitled
to sell such shares under Rule 144 without regard to the volume
limitations and public information and manner of sale
requirements described above. The term "affiliate" is defined to
mean a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common

<PAGE>

control with, the Company. The Securities and Exchange
Commission ordinarily would presume, without limitation, that an
officer, director or the beneficial owner of five percent or more
of the outstanding voting securities of the Company would fall
within this definition.

Restricted shares properly sold in reliance upon Rule 144
are thereafter freely tradeable without restriction or
registration under the Act, unless thereafter held by an
affiliate of the Company. No person has any right to demand
registration of shares of the Common Stock.

COOPERATIVE ASSOCIATION LAWS AND CHARTER DOCUMENTS

The Colorado Cooperative Association Law and the Company's
Articles of Incorporation provide that the certificates of
membership in the Company (which also represent shares of Common
Stock of the Company) shall not be assignable or transferable
except upon consent of the Board of Directors, and that the
Company shall have the right in its Bylaws to limit the transfer
or assignment of membership and the terms and conditions upon
which transfers or assignments may be allowed. The Company's
Bylaws provide that the equity interests issued by the Company
may not be assigned or transferred, except upon the consent of
the Company's Board of Directors, and that the Company's Board of
Directors may not give such consent unless any such assignee or
transferee of Common Stock executes and delivers to the Company a
Pig Purchase Agreement. Only producers of agricultural products,
associations of such producers, and federations of such
associations may own Common Stock of the Company.

In addition to the foregoing transfer restrictions, the
Company's Bylaws give the Company the right to purchase a
member's Common Stock under certain circumstances, which may
adversely affect transferability. Such right is in addition to
any right the Company may have to foreclose on the security
interest in member's Common Stock pursuant to the Pig Purchase
Agreement. In particular, the Company has the option under its
Bylaws to purchase a member's Shares upon the occurrence of
certain specified events (a) by tendering to the member (i) the
lesser of (A) the price paid to the Company for such investor's
Shares, and (B) the book value of the Shares and capital credits
associated therewith, less (ii) any indebtedness due the Company
from the member, or (b) by tendering to the member a nonvoting
certificate of participation representing the member's interest
at the time of such tender in a face amount equal to the amount
specified in clause (a) above. The occurrences giving rise to
such option include the following events: (a) a member's
termination of a Pig Purchase Agreement without having executed
and delivered a replacement for such Agreement or the member's
failure to be a party to such Agreement, and (b) the Company's
Board of Directors by resolution finds that a member has (i)
intentionally or repeatedly violated any provision of the
Company's Articles of Incorporation or Bylaws, (ii) breached a
Pig Purchase Agreement or materially breached any other contract
with Company, (iii) remained indebted to the Company for 90 days
after such indebtedness first becomes payable, or (iv) willfully
obstructed any lawful purpose or activity of the Company. In the
event the Company exercises either option, the voting stock of
the member shall be canceled, and the member shall thereafter
have no voting rights in the Company. The Company is under no
obligation, however, to redeem or repurchase an investor's Common
Stock at any time. See "Risk Factors--Right of Alliance to
Acquire Shares" and "-- Lack of Liquidity; Absence of Market for
Shares" and "Pig Purchase Agreement."

Finally, a legend in substantially the following form will
be placed on each certificate representing Shares of Common Stock
issued in the offering:

Sale, transfer or hypothecation of the shares
represented by this certificate is restricted by the
provisions of the Colorado cooperative association law
and the Articles of Incorporation and Bylaws of
Alliance Farms Cooperative Association (the "Company"),
a copy of which provisions may be inspected at the
principal offices of the Company, and all provisions of
which are hereby incorporated by reference in this
certificate.

The transfer and other restrictions discussed above could
make it more difficult to effect a change in control of the
Company.

<PAGE>

PLAN OF DISTRIBUTION

GENERAL

The Company intends to sell the Shares through agents
designated by the Company or, if permitted under applicable law,
directly to one or more purchasers through the efforts of its
directors, officers and employees. In this regard, the Company
has retained Interstate/Johnson Lane Corporation ("I/JL") to
serve as its agent in connection with this offering. The Company
has reserved the right to sell the Shares directly to investors
on its own behalf in those jurisdictions where and in such manner
as it is authorized to do so. In the event that the Company
sells Shares directly to investors through the efforts of its
directors, officers and employees, such directors, officers and
employees will not be compensated in connection with such
participation through the payment of commissions or other
remuneration based either directly or indirectly on transactions
in the Shares offered. Any offering of the Shares will be made
exclusively to producers of agricultural products, associations
of such producers, and federations of such associations. No one
has committed to purchase any of the Shares.

Agents participating in the distribution of the Shares may
be deemed to be underwriters within the meaning of the Securities
Act of 1933, and any commissions and other compensation received
by them may be deemed to be underwriting discounts and
commissions under the Act. The Company has entered into an
agency agreement with I/JL providing for the payment by Alliance
of a lump sum fee of $40,000 regardless of whether any or all
Shares offered hereby are sold. The Company has agreed to
reimburse I/JL for its reasonable out-of-pocket expenses in
connection with the offering of the Shares. The net proceeds to
the Company from the sale of the Shares will be the public
offering price of the Shares less any commissions and other
attributable expenses of issuance and distribution.

I/JL may be entitled, under an agency agreement with the
Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act of
1933, and may be entitled to contribution with respect to
payments which I/JL may be required to make in respect thereof.
Agents may engage in transactions with or perform services for
the Company in the ordinary course of business.

INVESTOR SUITABILITY STANDARDS

The Shares may be offered and sold only to producers of
agricultural products, associations of such producers, and
federations of such associations. In addition, if any investor
in the offering is a resident of Iowa, or otherwise is
subscribing for Shares in Iowa, such investor must (i) have a net
worth, or joint net worth with that investor's spouse, in either
case, exclusive of home, furnishings and automobiles ("Adjusted
Net Worth") of at least $65,000 at the time of such investor's
purchase, and an annual gross income of at least $65,000 for each
of the investor's two most recent tax years; or (ii) have
Adjusted Net Worth of at least $250,000 at the time of such
investor's purchase. Each investor will be required to represent
in writing in the Subscription Agreement that the investor is a
producer of agricultural products, an association of such
producers, or a federation of such associations and, if a
resident of Iowa, or otherwise subscribing for Shares in Iowa,
that the investor meets the foregoing suitability standards for
Iowa investors.

MINIMUM BLOCK REQUIREMENT

The Class A Shares will be offered on a "best efforts, all-or-
none" basis for 17 Class A Shares (a "Minimum Class A Block"),
and thereafter may continue to be offered on such basis with
respect to successive Minimum Class A Blocks of Shares until 51
Class A Shares have been issued and sold. The Class B Shares
will be offered on a "best efforts, all-or-none" basis for 18
Class B Shares (a "Minimum Class B Block"), and thereafter may
continue to be offered on such basis with respect to successive
Minimum Class B Blocks of Shares until 54 Class B Shares have
been issued and sold. The Class C Shares will be offered on a
"best efforts, all-or-none" basis for 24 Class C Shares (a
"Minimum Class C Block"), and thereafter may continue to be
offered on such basis with respect to successive Minimum Class C
Blocks of Shares until 72 Class C Shares have been issued and
sold. As of the date of this Prospectus, the Company has
consummated the issuance and sale of 17 shares of Class A Common
and 36 shares of Class B Common in this offering. Any agent of
the Company involved in the offer or sale of the Shares will be
acting on such "best efforts, all-or-none" basis during the
period of such agent's appointment. There can be no assurance
that any or all of the remaining Shares will be sold.

The number of Class A Shares constituting a Minimum Class A
Block has been determined by the Company based on the number of
lots of feeder pigs (900 to 1,000 pigs per lot) that the Company
anticipates can most efficiently be made available to members of
the Company from a single 2,450-sow feeder pig production
facility. Pursuant to the Pig Purchase <PAGE> Agreements to be entered
into by investors at the time a subscription for Class A Shares
is made, each member of the Company owning shares of Class A
Common will be required to purchase feeder pigs in lots of no
less than 900, and no more than 1,000, pigs per lot, as
determined by the Company. Such lots of feeder pigs are to be
made available to such members of the Company on a rotating
schedule determined and implemented by the Company. The number
of lots made available to a member and the frequency of
availability are to be based upon the member's proportionate
equity interest in the Company's Class A Common and the actual
production of feeder pigs constituting Qualifying Pigs from the
Company's facilities. The Company anticipates that the
production of a feeder pig production facility having the
capacity of a 2,450-sow unit will be adequate to provide lots of
between 900 and 1,000 feeder pigs to 17 members (assuming that
each such member owns only one Class A Share) in order of
rotation such that delivery of a lot of between 900 and 1,000
feeder pigs can be made to a member at approximately the time at
which the pigs previously delivered to such member are finished
to market weight and available for shipment to slaughter. There
can be no assurance that the Company will be successful in
meeting this production schedule, or that feeder pigs will be
available for shipment to a member at a time when the member is
able to accommodate their delivery. Accordingly, the Company
believes that a Minimum Class A Block requirement is necessary to
provide for sufficient new members to accommodate the anticipated
output of feeder pigs from a single 2,450-sow feeder pig
production facility. See "Pig Purchase Agreement."

The number of Class B Shares constituting a Minimum Class B
Block has been determined by the Company based on the number of
lots of weaned pigs (925 to 1,025 pigs per lot) that the Company
anticipates can be made available to members of the Company from
a single 2,450-sow weaned pig production facility. Pursuant to
the Pig Purchase Agreements to be entered into by investors at
the time a subscription for Class B Shares is made, each member
of the Company owning shares of Class B Common will be required
to purchase weaned pigs in lots of no less than 925, and no more
than 1,025, pigs per lot, as determined by the Company. Such
lots of weaned pigs are to be made available to such members of
the Company on a rotating schedule determined and implemented by
the Company. The number of lots made available to a member and
the frequency of availability are to be based upon the member's
proportionate equity interest in the Company's Class B Common and
the actual production of weaned pigs constituting Qualifying Pigs
from the Company's facilities. The Company anticipates that the
production of a weaned pig production facility having the
capacity of a 2,450-sow unit will be adequate to provide lots of
between 925 and 1,025 weaned pigs to 18 members (assuming that
each such member owns only one Class B Share) in order of
rotation such that delivery of two and seven-tenths (2.7) lots of
weaned pigs can be made to a member on a rolling 12-month basis.
There can be no assurance that the Company will be successful in
meeting this production schedule, or that weaned pigs will be
available for shipment to a member at a time when the member is
able to accommodate their delivery. Accordingly, the Company
believes that a Minimum Class B Block requirement is necessary to
provide for sufficient new members to accommodate the anticipated
output of weaned pigs from a single 2,450-sow weaned pig
production facility according to the schedule described above.
See "Pig Purchase Agreement."

The number of Class C Shares constituting a Minimum Class C
Block has been determined by the Company based on the number of
lots of weaned pigs (925 to 1,025 pigs per lot) that the Company
anticipates can be made available to members of the Company from
a single 2,450-sow weaned pig production facility. Pursuant to
the Pig Purchase Agreements to be entered into by investors at
the time a subscription for Class C Shares is made, each member
of the Company owning shares of Class C Common will be required
to purchase weaned pigs in lots of no less than 925, and no more
than 1,025, pigs per lot, as determined by the Company. Such
lots of weaned pigs are to be made available to such members of
the Company on a rotating schedule determined and implemented by
the Company. The number of lots made available to a member and
the frequency of availability are to be based upon the member's
proportionate equity interest in the Company's Class C Common and
the actual production of weaned pigs constituting Qualifying Pigs
from the Company's facilities. The Company anticipates that the
production of a weaned pig production facility having the
capacity of a 2,450-sow unit will be adequate to provide lots of
between 925 and 1,025 weaned pigs to 24 members (assuming that
each such member owns only one Class C Share) in order of
rotation such that delivery of two and one-tenth (2.1) lots of
weaned pigs can be made to a member on a rolling 12-month basis.
There can be no assurance that the Company will be successful in
meeting this production schedule, or that weaned pigs will be
available for shipment to a member at a time when the member is
able to accommodate their delivery. Accordingly, the Company
believes that a Minimum Class C Block requirement is necessary to
provide for sufficient new members to accommodate the anticipated
output of weaned pigs from a single 2,450-sow weaned pig
production facility according to the schedule described above.
See "Pig Purchase Agreement."

The minimum investment for each investor is not less than
one Share. In addition, each investor purchasing one or more
Shares must enter into a Pig Purchase Agreement with the Company
in the form attached to this Prospectus as Exhibit B. No
fractional shares will be issued.

<PAGE>

FINANCING COMMITMENT REQUIREMENT

The consummation of the issuance and sale of the Shares will
be conditioned upon and subject to Alliance obtaining a
commitment for at least $2,720,000 of debt financing with respect
to each Minimum Class A Block of Class A Shares and a commitment
for at least $2,160,000 of debt financing with respect to each
Minimum Class B Block of Class B Shares and each Minimum Class C
Block of Class C Shares. As of the date of this Prospectus, the
Company has obtained a commitment from its current lender,
CoBank, until December 31, 2001 with respect to at least five
Minimum Blocks of the remaining Shares offered hereby. No
assurances can be given that an extension of such commitment will
be obtained on favorable terms, if at all. If any loan
commitment is withdrawn or terminated, or the Company is unable
to obtain an acceptable commitment for such a loan from another
lender prior to or concurrently with the termination date of the
offering, all outstanding subscriptions for Shares in a Minimum
Block for which such a commitment is not obtained will be
rejected and any amounts received by the Company in payment of
the public offering price will be returned to subscribers. See
"Business--Financing."

SUBSCRIPTION PROCEDURE

In order for an investor to subscribe for one or more Shares
in a Minimum Block, the following items must be delivered to the
Company or its agent on or before the termination of the offering
(see "Termination of the Offering" below):

(1) two completed and executed copies of a
Subscription Agreement in the form attached to this
Prospectus as Exhibit A;

(2) the subscriber's check, bank draft or wire
transfer (contact Alliance for wire transfer
instructions), payable to the order of "Alliance Farms
Cooperative Association Escrow No. 465450" in an amount
representing the aggregate purchase price of the Shares
being subscribed for; and

(3) two completed and executed copies of a Pig
Purchase Agreement in the form attached to this Prospectus
as Exhibit B.

In addition, if any investor in the offering is a resident of
Iowa, or otherwise is subscribing for Shares in Iowa, such
investor may be required to deliver to the Company a completed
and executed Potential Investor Questionnaire with respect to the
Adjusted Net Worth and gross income thresholds described under "--
Investor Suitability Standards" above.

Pending the Company's acceptance of subscriptions for a
Minimum Class A Block of 17 Class A Shares, a Minimum Class B
Block of 18 Class B Shares or a Minimum Class C Block of 24 Class
C Shares in this offering, all funds received by the Company and
its agents in payment of the public offering price for the Shares
promptly will be deposited in an interest-bearing escrow account
established at The Bank of New York (successor trustee to
NationsBank, N.A.), New York, New York. Payment of the offering
price must be made payable to the order of "Alliance Farms
Cooperative Association Escrow No. 465450," the escrow account
established at such bank. Upon the Company's acceptance of
subscriptions for one or more Minimum Class A Blocks, one or more
Minimum Class B Blocks or one or more Minimum Class C Blocks, as
the case may be, and the satisfaction of certain other
conditions, all funds deposited in the escrow account with
respect to such Shares will be paid to the Company.
Subscriptions for Shares that collectively do not constitute a
Minimum Block of Shares will not be accepted by the Company. In
the event that Alliance does not issue Shares for which funds
have been deposited in the escrow account prior to the
termination of the offering, such funds will be refunded to the
prospective investors, together with any interest earned thereon
and without any deduction being made for expenses. All
subscriptions for Shares submitted by subscribers shall be
irrevocable and shall survive the death or disability of the
subscriber, in the case of an individual, or the dissolution or
bankruptcy of the subscriber, in the case of an entity. There
can be no assurance that any or all of the Shares will be sold.
See "Plan of Distribution--Escrow of Proceeds."

Alliance reserves the right, in its sole and absolute
discretion, to accept or reject any subscription, in whole or in
part, and no subscription shall be binding on Alliance unless and
until accepted by Alliance. Each subscriber will be promptly
notified by Alliance as to whether his or her subscription has
been accepted. If a subscription is accepted, an authorized
officer of Alliance will execute both copies of the Subscription
Agreement and the Pig Purchase Agreement submitted by the
subscriber and return one executed copy of each such agreement.
The Shares of Common Stock shall not be deemed to be owned by an
investor until both copies of the Subscription Agreement and the
Pig Purchase Agreement have been executed by the investor and
countersigned by Alliance and the subscription procedure
described above otherwise has <PAGE> been complied with. Alliance and
its agent will arrange for delivery of the certificates for
shares of Common Stock as promptly as practicable thereafter,
which certificates will, however, be retained by Alliance as
security for the performance by the investor of his obligations
under the Pig Purchase Agreement to purchase his proportionate
share of the Company's pig production. In this regard, investors
will be required to endorse appropriate stock powers with respect
to such certificates. The Company may agree in its discretion,
however, to permit the investor to pledge or grant a security
interest in the investor's shares of Common Stock to any
financial institution for purposes of securing a loan used in
financing the investor's acquisition of such shares. See "Pig
Purchase Agreement."

ESCROW OF PROCEEDS

The Company has entered into an escrow agreement (the
"Escrow Agreement") pursuant to which all funds received by the
Company and its agents in payment of the public offering price
for the Shares promptly will be deposited in an interest-bearing
escrow account with The Bank of New York (successor trustee to
NationsBank, N.A.), New York, New York (the "Escrow Agent"). All
such funds will be held in escrow during the "Escrow Period"
which shall begin with the commencement of the offering and
terminate upon the earlier of (i) the date upon which the Escrow
Agent has disbursed and delivered $4,080,000 in collected funds
with respect to Class A Shares, $3,240,000 with respect to Class
B Shares and $3,240,000 with respect to Class C Shares to the
Company in accordance with the Escrow Agreement, and (ii) the
termination of the offering, whether by lapse of time or the
election of the Company to do so. During the Escrow Period,
subscribers will have no right to a return of their payment. All
escrowed funds may be invested in bank accounts, bank money-
market accounts, short-term certificates of deposit issued by a
bank or short-term securities issued or guaranteed by the U.S.
Government, as specified by the Company.

Funds deposited into escrow may be disbursed to the Company,
in the amount of $1,360,000 with respect to Class A Shares,
$1,080,000 with respect to Class B Shares and $1,080,000 with
respect to Class C Shares (the "Minimum"), or an integral
multiple thereof, upon the satisfaction of the following
conditions: (i) the Escrow Agent has received written
confirmation from the Company that the Company has obtained a
commitment for at least $2,720,000 of debt financing or
borrowings with respect to the disbursement of each Minimum for
Class A Shares and a commitment for at least $2,160,000 of debt
financing or borrowings with respect to the disbursement of each
Minimum for Class B Shares or Class C Shares; (ii) the Escrow
Agent has received an affidavit from the Company and its agents
in the offering identifying the number of Shares subscribed for
and the amount of proceeds deposited into escrow and certifying
that (a) there have been no material omissions or changes in the
financial condition of the Company, or other changes of
circumstances, that would render the amount of proceeds
inadequate to finance the Company's proposed plan of operations,
business or enterprise, and (b) there have been no material
omissions or changes that would render the representations
contained in the registration statement, including the prospectus
constituting a part thereof, to be fraudulent, false or
materially misleading; and (iii) the Escrow Agent has received an
order permitting the requested disbursement of proceeds from the
securities administrators of those states which impose such
condition, if any. The Company shall be entitled to any interest
earned on the funds disbursed to it and remaining after deduction
for fees and reimbursement of costs and expenses due the Escrow
Agent.

Upon the termination of the Escrow Period, any proceeds
remaining in escrow are to be disbursed to the prospective
investor from whom they were received upon the Escrow Agent's
receipt of an order permitting the requested disbursement of
proceeds from the securities administrators of those states which
impose such condition, if any. Such refunded proceeds are to be
disbursed to investors without any deduction, penalty or expense
thereon being made. Interest earned on funds to be returned to
prospective investors shall be paid to such investors as
designated or approved in writing by the Company.

In consideration of its services under the Escrow Agreement,
the Escrow Agent's predecessor has been paid an initial
acceptance fee in an amount equal to $750. The Escrow Agent will
be paid an annual base fee in an amount equal to $750. In
addition, the Company will pay to the Escrow Agent $7 for each
cash transaction processed by the Escrow Agent to reimburse it
for its actual cost in accepting and disbursing funds, and $15
for each investment transaction made with respect to the escrowed
funds. A cash management fee equal to 1/4 of 1% per annum of the
principal amount of the escrowed funds may also be payable
depending upon the investment selected for the escrowed funds.
No fees, reimbursement for costs and expenses, or any moneys
whatsoever shall be paid out of or chargeable to investors' funds
held in escrow by the Escrow Agent.

<PAGE>

OFFERING PRICE

The Shares are being offered at the public offering price
set forth on the cover page of this Prospectus. This public
offering price has been arbitrarily determined by the Company and
is not based on any recognized criteria of value. Among the
factors considered in making such determination are the amount of
the anticipated debt borrowings, together with the net proceeds
from the sale of the Shares, required to develop each additional
feeder or weaned pig production facility, which factor takes into
account the anticipated development costs for new facilities, the
applicable debt-to-equity ratio or minimum equity amount that the
Company anticipates will be required by potential lenders, and
the anticipated interest and debt service requirements associated
with such borrowings. The Company also considered the interest
requirements on up to $1,360,000 of feeder pig facilities
development financing that the Company anticipates it may incur
with respect to each new feeder pig production facility. See
"Business--Financing." To a much lesser extent the Company also
considered the prevailing market conditions for feeder pigs and
weaned pigs, the financial prospects and anticipated business
potential of the Company, the history of and prospects for the
industry in which the Company competes, the state of the
Company's development and other similar factors. The public
offering price may not necessarily reflect any relationship to
the Company's assets, historical losses, book value or other
financial statement criteria of value.

ABSENCE OF PUBLIC MARKET

There is no public market for the Common Stock of the
Company, and no public market for the Common Stock is expected to
develop as a result of the offering of the Shares. Transfers of
the Shares will be subject to significant restrictions and
limitations set forth in the Colorado Cooperative Association Law
and the Company's Articles of Incorporation and Bylaws. The
certificates representing the Shares will bear one or more
legends describing or referencing certain applicable restrictions
on transfer. For these and other reasons, the Shares will not be
readily marketable, and purchasers thereof must bear the economic
risk of investment for an indefinite period and may not be able
to liquidate their investment in the event of any emergency or
otherwise. See "Restrictions on Sale or Other Transfer of the
Shares" and "Description of Capital Stock."

The Company does not intend to apply for listing of the
Shares on a national securities exchange.

TERMINATION OF THE OFFERING

The offering of the remaining 34 Class A Shares, 18 Class B
Shares and 72 Class C Shares offered hereby will terminate on
January 7, 1999 (550 days from the July 7, 1997 commencement of
the offering), unless extended by the Company for a period of up
to an additional 180 days. Alliance has the right to terminate
the offering at any time. In the event a Minimum Class A Block
has not been fully subscribed for prior to the termination date
of the offering, or Alliance does not have a commitment for at
least $2,720,000 of debt financing with respect to a Minimum
Class A Block prior to or concurrently with such date, all
outstanding subscriptions for Class A Shares that do not
constitute a Minimum Class A Block or for which such a commitment
is not obtained, as the case may be, will be rejected and any
amounts received by the Company in payment of the public offering
price will be returned to subscribers. In the event a Minimum
Class B Block has not been fully subscribed for prior to the
termination date of the offering, or Alliance does not have a
commitment for at least $2,160,000 of debt financing with respect
to a Minimum Class B Block prior to or concurrently with such
date, all outstanding subscriptions for Class B Shares that do
not constitute a Minimum Class B Block or for which such a
commitment is not obtained, as the case may be, will be rejected
and any amounts received by the Company in payment of the public
offering price will be returned to subscribers. In the event a
Minimum Class C Block has not been fully subscribed for prior to
the termination date of the offering, or Alliance does not have a
commitment for at least $2,160,000 of debt financing with respect
to a Minimum Class C Block prior to or concurrently with such
date, all outstanding subscriptions for Class C Shares that do
not constitute a Minimum Class C Block or for which such a
commitment is not obtained, as the case may be, will be rejected
and any amounts received by the Company in payment of the public
offering price will be returned to subscribers. See "Plan of
Distribution--Subscription Procedure."

LEGAL MATTERS

The validity of the Shares will be passed upon for the
Company by Stinson, Mag & Fizzell, P.C., 1201 Walnut Street,
Kansas City, Missouri 64106-2150.

<PAGE>

EXPERTS

The financial statements of Alliance Farms Cooperative
Association as of August 31, 1997 and August 31, 1996 and for the
years ended August 31, 1997 and 1996, included herein and
elsewhere in the registration statement of which this Prospectus
is a part, have been included herein and in the registration
statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere
herein, and upon the authority of said firm as experts in
accounting and auditing.

ADDITIONAL INFORMATION

The Company is currently subject to the informational
requirements of the Exchange Act, and in accordance therewith the
Company files annual and quarterly reports and other information
with the Commission. Such reports and other information may be
inspected and copied at the Commission's office located at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
regional offices of the Commission located at Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511
and at 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of such materials can be obtained from the Public
Reference Section of the Commission located at 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates. The public may
obtain information on the operation of the Public Reference Room
by calling the Commission at 1-800-SEC-0330. Materials also may
be obtained from the Commission's Internet web site
(http://www.sec.gov), which contains reports, proxy and
information statements and other information regarding companies
that file electronically with the Commission.

This Prospectus constitutes an integral part of a
Registration Statement on Form SB-2 (No. 333-25501) (which,
together with all amendments, exhibits and schedules thereto, is
referred to as the "Registration Statement") filed by the Company
with the Commission in Washington, D.C. under the Securities Act
of 1933, as amended, with respect to the Shares being offered by
this Prospectus. This Prospectus does not contain all
information set forth in the Registration Statement, certain
portions of which have been omitted as permitted by the rules and
regulations of the Commission. For further information with
respect to the Company and the Shares offered hereby, reference
is made to the Registration Statement and related exhibits. The
Registration Statement, including the exhibits and schedules
thereto, may be inspected and copied at the Commission's offices
located at the addresses set forth above. Copies of the
Registration Statement or any portion thereof can be obtained at
prescribed rates from the Public Reference Section of the
Commission located at the address set forth above.

<PAGE>

INDEX OF FINANCIAL STATEMENTS
Page

ALLIANCE FARMS COOPERATIVE ASSOCIATION

Independent Auditors' Report . . . . . . . . . . . . . . . . .F-2

Balance Sheets as of August 31, 1997 and 1996. . . . . . . . .F-3

Statements of Operations for the years ended
August 31, 1997 and 1996. . . . . . . . . . . . . . . . .F-4

Statement of Shareholders' Equity for the years ended
August 31, 1997 and 1996. . . . . . . . . . . . . . . . .F-5

Statements of Cash Flows for the years ended August 31,
1997 and 1996 . . . . . . . . . . . . . . . . . . . . . .F-6

Notes to Financial Statements. . . . . . . . . . . . . . . . .F-7

Condensed Balance Sheets as of May 31, 1998 (unaudited) and
August 31, 1997 . . . . . . . . . . . . . . . . . . . . F-13

Condensed Statements of Operations for the three and
nine months ended May 31, 1998 and 1997 (unaudited) . . F-14

Condensed Statements of Cash Flows for the nine months ended
May 31, 1998 and 1997 (unaudited) . . . . . . . . . . . F-15

Notes to Condensed Financial Statements. . . . . . . . . . . F-16

<PAGE>

Independent Auditors' Report

The Board of Directors
Alliance Farms Cooperative Association:

We have audited the accompanying balance sheets of Alliance Farms
Cooperative Association as of August 31, 1997 and 1996 and the
related statements of operations, shareholders' equity and cash
flows for the years then ended. These financial statements are
the responsibility of the Association's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Alliance Farms Cooperative Association as of August 31, 1997
and 1996 and the results of its operations and its cash flows for
the years then ended, in conformity with generally accepted
accounting principles.

Kansas City, Missouri KPMG Peat Marwick LLP
October 10, 1997

<PAGE>

ALLIANCE FARMS COOPERATIVE ASSOCIATION
BALANCE SHEETS

August 31, 1997 and 1996

August 31, August 31,
1997 1996
ASSETS
Current Assets:
Receivables, trade 69,550 48,546
Receivables, non-trade (Note 3) 200,137 23,902
Inventory (Note 4) 3,179,402 2,435,477
Other current assets 0 48,273
Total current assets 3,449,089 2,556,198

Property, plant and equipment,
at cost (Note 5) 19,610,833 16,491,601
Less accumulated depreciation 2,193,650 1,333,291
17,417,183 15,158,310

Breeding stock 4,603,996 3,928,215
Less accumulated depreciation 1,353,650 1,013,872
3,250,346 2,914,343
Other assets, net of $77,261 and
$51,568 accumulated
amortization 263,788 216,762
$24,380,406 $20,845,613

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Bank overdraft 1,106,122 575,749
Current maturities of long-
term debt (Note 6) 1,262,700 870,000
Accounts payable (Note 3) 952,431 526,193
Accrued rebates (Note 2) 0 670,167
Accrued expenses 242,261 171,791
Total current liabilities 3,563,514 2,813,900

Long-term debt (Note 6) 14,320,724 13,425,424

Shareholders' equity
Class A common stock of
$.01 par value; authorized
5,000 shares, issued and
outstanding 119 shares
(102 shares at August 31, 1996) 1 1

Class B common stock of $.01
par value; authorized
2,500 shares, none issued 0 0

Class C common stock of $.01
par value; authorized
2,500 shares, none issued 0 0

Additional paid-in capital 8,719,237 7,487,653

Accumulated deficit (2,223,070) (2,881,365)
Total shareholders' equity 6,496,168 4,606,289
Commitments (Note 7 & 8) ------ ------
$24,380,406 $20,845,613

See accompanying notes to financial statements

<PAGE>

ALLIANCE FARMS COOPERATIVE ASSOCIATION
STATEMENTS OF OPERATIONS

For the years ended August 31, 1997 and 1996

1997 1996

Net sales (Notes 2 and 3) $13,669,706 $7,037,927
Cost of goods sold (Note 3) 11,222,169 6,422,838

Gross margin 2,447,537 615,089

Expenses related to start-up
of new production
facilities 281,025 426,926
Administrative expenses 424,565 369,787
(Gain) loss on sale of
breeding stock (94,123) 226,738

Operating income (loss) $ 1,836,070 ($408,362)

Other income (expense):
Interest expense (1,321,984) (1,001,329)
Other 144,209 66,604
(1,177,775) (934,725)

Net income (loss) $ 658,295 ($1,343,087)

See accompanying notes to financial statements

<PAGE>

ALLIANCE FARMS COOPERATIVE ASSOCIATION
STATEMENTS OF SHAREHOLDERS' EQUITY

For the years ended August 31, 1997 and August 31, 1996

Class A Additional Total
Common paid-in Accumulated Shareholders'
stock capital deficit equity

Balance at
August 31, 1995 1 6,165,970 (1,538,278) 4,627,693

Sale of 17 shares
of Class A common
stock - $.01 par
per share, net of
$38,317 offering
costs --- 1,321,683 --- 1,321,683

Net loss --- --- (1,343,087) (1,343,087)

Balance at
August 31, 1996 1 7,487,653 (2,881,365) 4,606,289

Sale of 17 shares
of Class A common
stock - $.01 par
per share, net of
$128,416 offering
costs --- 1,231,584 --- 1,231,584

Net income --- --- 658,295 658,295

Balance at
August 31, 1997 1 8,719,237 (2,223,070) 6,496,168

See accompanying notes to financial statements

<PAGE>

ALLIANCE FARMS COOPERATIVE ASSOCIATION
STATEMENTS OF CASH FLOWS

For the years ended August 31, 1997 and 1996

1997 1996

Cash flow from operating activities:
Net income (loss) $ 658,295 $(1,343,087)
Adjustment to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Provision for depreciation and
amortization 2,179,473 1,721,482
(Gain) Loss on sale of breeding
stock (94,123) 226,738
Changes in assets and liabilities:
Receivables (197,239) (40,561)
Inventory (743,925) (1,366,333)
Other current assets 48,273 (28,999)
Other assets (70,896) (38,593)
Accounts payable 426,238 (146,764)
Accrued rebates (670,167) 629,028
Accrued expenses 70,470 106,640
Net cash provided by (used in) 1,606,399 (280,449)
operating activities

Cash flows from investing activities:
Capital expenditures (5,896,799) (8,808,888)
Proceeds from sale of breeding
stock 1,246,443 626,268
Net cash used in investing
activities (4,650,356) (8,182,620)

Cash flows from financing activities
Proceeds from issuance of long
term debt 1,877,131 3,798,000
Net increase in revolving
term credit 300,869 1,276,000
Payment on long term debt (870,000) (580,000)
Increase (decrease) in note payable
to Farmland (20,000) 636,424
Issuance of Class A common stock,
net of offering costs 1,231,584 1,321,683
Loan origination fees (6,000) (42,000)
Increase (decrease) in bank
overdraft 530,373 575,749
Net cash provided by
financing activities: 3,043,957 6,985,856

Decrease in cash and cash
equivalents 0 (1,477,213)

Cash and cash equivalents at
beginning of period 0 1,477,213
Cash and cash equivalents at
end of period $ 0 $ 0

Supplemental schedule of cash paid
for interest: $ 1,337,319 $ 989,334

See accompanying notes to financial statements

<PAGE>

ALLIANCE FARMS COOPERATIVE ASSOCIATION

NOTES TO FINANCIAL STATEMENTS

1. Description of the Business and Summary of Significant
Accounting Policies

Alliance Farms Cooperative Association (Alliance) is a
cooperative association engaged in the production of feeder
pigs for sale to its members. As of August 31, 1997 Alliance
owned and was operating five 2,450-sow feeder pig production
facilities in Yuma County, Colorado, one 2,450-sow feeder
pig production facility in Wayne County, Illinois and a
second comparable facility was being developed in Wayne
County, Illinois.

(a) Inventory

Inventories are stated at the lower of cost or market. Cost
has been determined by the average cost method for feeder
pigs and under the FIFO method for other inventories.

Inventoriable costs are costs incurred in producing feeder
pigs at the feeder pig production facility from the time of
gestation through sale of the feeder pig. Such costs
include feed, care and a proportionate share of the
depreciation of the breeding stock and facilities. Market
value used for purposes of computing lower of cost or market
approximates the ultimate sale price of feeder pigs which is
determined contractually between Alliance Farms and its
members/patrons.

(b) Property, Plant and Equipment

Property, plant and equipment are stated at cost.
Depreciation is calculated on the straight-line method over
the estimated useful lives of the assets, generally from
three to twenty years. Major repairs that extend the life
of an asset are capitalized. Normal repair and maintenance
costs are expensed.

Statement of Financial Accounting Standards No. 121 -
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of ("Statement 121") was
adopted by Alliance on September 1, 1996. Statement 121
establishes accounting standards for the impairment of
long-lived assets, certain identifiable intangible assets
and goodwill related to those assets to be held and used and
for long-lived assets and certain identifiable intangibles
to be disposed of. The adoption of Statement 121 is not
expected to have a significant impact on Alliance's
financial statements.

Breeding stock is stated at cost. Depreciation on breeding
stock is calculated on the straight-line method over the
estimated breeding life of the animals, three years.

(d) Cash and Cash Equivalents

Cash and cash equivalents in the accompanying statement of
cash flows include cash on hand and short-term investments
with original maturities of less than ninety days.

(e) Other Assets

Other assets consist of organizational costs which are
amortized over five years and loan origination fees which
are amortized over the term of the loan, 12 years.

(f) Sales

Alliance Farms recognizes sales at the time pigs are
shipped.

<PAGE>

(g) Income Taxes

Alliance operates as a cooperative that is not exempt from
federal income taxes and, therefore, is subject to taxes on
all income not paid or allocated to members. Deferred
income taxes have not been provided because all sales since
inception have been to members and all future sales are
anticipated to be to members.

Alliance incurred patronage-sourced losses through August
31, 1996 which were not allocated to members. These
patronage-sourced losses are therefore available to offset
future patronage-sourced income. During the year ended
August 31, 1997, a portion of patronage sourced losses were
used to offset 1997 patronage-sourced income. At August 31,
1997, approximately $3,594,000 of patronage-sourced losses
are available to offset future patronage-sourced income.
These losses expire in 2009 through 2011.

(h) Common Stock

The common stock of Alliance is subject to certain
restrictions as to transferability and Alliance has the
right to purchase a member's common stock under certain
circumstances.

The authorized common stock of Alliance consists of Class A
common stock, Class B common stock and Class C common stock.
Only qualified agricultural producers who have delivered a
Feeder Pig Purchase Agreement may own Class A common stock,
only qualified agricultural producers who have delivered a
Weaned Pig Purchase Agreement may own Class B common stock,
and only qualified agricultural producers who have delivered
a Class C Weaned Pig Purchase Agreement may own Class C
common stock. Holders of Class A common stock and Class B
common stock are entitled to one vote for each share held,
and holders of Class C common stock are entitled to three-
fourths of one vote for each share held. The preferences,
powers and rights of Class A, Class B and Class C common
stock are identical. Alliance intends to compute its
patronage-sourced income or loss separately for each class
of stockholders (members).

(i) Use of Estimates

Management of Alliance has made a number of estimates and
assumptions relating to the reporting of assets and
liabilities and the disclosure of contingent assets and
liabilities to prepare these financial statements in
conformity with generally accepted accounting principles.
Actual results could differ from those estimates.

2. Sales

Alliance has sold 100% of its feeder pigs to its members for
the fiscal years ended August 31, 1997 and 1996 at a
contractual price which is based on Alliance's operating
costs (which are based on a twelve month rolling average),
debt service and an additional $4.50 per pig.

Alliance's sales for the fiscal year ended August 31, 1996
were reduced by the accrual of a rebate of $670,167. The
1996 rebate was paid to members during fiscal 1997.
Alliance has not accrued a rebate in fiscal 1997 as it does
not intend to pay a rebate to its members on fiscal 1997
sales.

Because the contractual price for the sale of a feeder pig
is determined based upon, among other things, a twelve month
historical rolling average for operating costs and to the
extent that current operating costs per pig exceed the
historical average operating costs, Alliance may incur a
negative gross margin on the sale of its feeder pigs during
periods of rising costs.

<PAGE>

Alliance's average net sales price and the average industry
market price were as follows:

Fiscal Year Ended
August 31
1997 1996

Average Net Sales Price 59.02 48.12
Average Industry Market* 56.84 41.15

*As published by Spark's Companies, Inc. (from the USDA's
Market News Service)

3. Transactions with Farmland and Yuma Cooperative

As of August 31, 1997 and 1996, Farmland Industries, Inc.
(Farmland) owned approximately 43.7% and 49%, respectively,
of the Common Stock of Alliance, and Yuma Farmers' Milling
and Mercantile Cooperative (Yuma Cooperative) owned
approximately 10.08% and 11.8%, respectively, of the Common
Stock of Alliance.

Alliance purchased feed from Yuma Cooperative and animal
health supplies and breeding stock from Farmland based on
market prices. Yuma Cooperative and Farmland are members of
Alliance. Alliance also sold feeder pigs to Farmland and
Yuma Cooperative. Such purchases and sales were as follows:

Fiscal Year Ended
August 31
1997 1996

Feed Purchases $4,338,732 $3,423,773
Animal Health Purchases 638,730 303,963
Breeding Stock 2,367,524 872,979
Feeder Pig Sales 7,924,763 5,035,160

Farmland also pays Alliance a royalty for any pigs raised by
Alliance and sold to a Farmland finisher that are then
selected as breeding stock for Farmland's contract herds
pursuant to a swine production services agreement. The
royalty, which is $10 per head selected, paid to Alliance
under such agreement was as follows:

Fiscal Year Ended
August 31
1997 1996

Royalty Income $123,620 $31,590

Farmland provides Alliance with an administrative office in
Yuma, Colorado at no cost. Farmland also performs
administrative, advisory and consulting services on behalf
of Alliance pursuant to a contractual agreement. The
agreement provides that Farmland will be compensated for
such services in an amount equal to one dollar per pig
shipped adjusted annually for inflation for a term of ten
years commencing July 13, 1994. Amounts paid by Alliance to
Farmland under such agreement were as follows:

Fiscal Year Ended
August 31
1997 1996

Management Fee $250,967 $151,905

<PAGE>

Alliance had $200,137 and $23,902 of non-trade receivables
at August 31, 1997 and 1996, respectively. Of the $200,137
due Alliance at August 31, 1997, $120,195 was due from Yuma
Cooperative as a result of a feed pricing adjustment and the
remainder was due from Farmland for items received out of
Alliance's shop stock inventory, and from Pig Producers I,
LP ("Pig Producers"), a limited partnership in which
Farmland holds a 12.5% interest, for the reimbursement of
wages, benefits and other costs attributable to Alliance
employees that are assigned to perform various duties at Pig
Producers, as well as for items received out of Alliance's
shop stock inventory. The $23,902 due Alliance at August
31, 1996 was due for wages and benefits as described above
from Pig Producers, in addition to charges for items
received out of Alliance's shop stock inventory by both Pig
Producers and Farmland.

Alliance owed $197,755 and $185,413 at August 31, 1997 and
$38,650 and $137,722 at August 31, 1996 to Farmland and Yuma
Cooperative, respectively, for goods and services. Alliance
is also obligated to Farmland in the amount of $616,424 at
August 31, 1997 pursuant to a $760,000 promissory note. See
note 6.

4. Inventory

Major components of inventories as of August 31, 1997 and
August 31, 1996 are as follows:

1997 1996

Feeder Pigs $2,922,594 $2,265,056
Other 256,808 170,421
$3,179,402 $2,435,477

5. Property, Plant and Equipment

Property, plant and equipment at August 31, 1997 and 1996
consisted of the following:

1997 1996

Land $ 1,875,125 $ 1,717,079
Buildings 15,693,994 13,129,134
Site Improvements 1,494,249 1,019,936
Machinery and equipment 368,572 254,316
Mobile equipment 60,719 27,346
Furniture and office
equipment 21,454 21,694
Construction in progress 96,720 322,096
$19,610,833 $16,491,601

6. Long-Term Debt

Long term debt at August 31, 1997 and 1996 consisted of the
following:

1997 1996

CoBank Term Loan $12,525,131 $11,518,000
CoBank Revolving Term Credit 2,441,869 2,141,000
Note Payable to Farmland 616,424 636,424
15,583,424 14,295,424

Less Current Maturities 1,262,700 870,000
$14,320,724 $13,425,424

<PAGE>

On May 19, 1995, Alliance entered into a $23,600,000 secured
credit facility with CoBank. This agreement provided for
$18,850,000 of term loans and $4,750,000 of revolving term
credit. Proceeds from the term loans are used for
construction of feeder pig production facilities and are
advanced by CoBank as Alliance incurs construction costs.
Proceeds from revolving term credit may be used for working
capital and other purposes. The unused commitments expire
December 31, 1997 for the term loans and June 20, 2006 for
the revolving term credit. Interest accrues on the
outstanding principle balance of the loan at a rate equal to
CoBank's national variable rate, plus 1.25% (9.75% at
August 31, 1997). Alliance capitalized $29,533 and $38,181
of interest on construction for the fiscal years ended
August 31, 1997 and 1996 respectively.

At August 31, 1997, $443,869 of term loans were immediately
available, $211,000 of term loans will be made available by
CoBank upon final acceptance of the feeder pig production
facility under construction in Wayne County, Illinois and
$938,131 of revolving term credit was immediately available.

Additional amounts available of term loans of $4,220,000 and
revolving term credit of $1,220,000 are restricted and
available only as additional shares of common stock are sold
($2,110,000 of term loans and $610,000 of revolving term
credit for every $1,360,000 of common stock sold).

Alliance is required to comply with various covenants,
including, but not limited to (i) maintaining at least
$3,900,000 of shareholder's equity, (ii) maintaining
modified working capital (calculated as current assets, plus
the available revolving term credit, minus current
liabilities excluding the current portion of term debt
payments) of at least $504,000, (iii) restrictions on the
incurrence of additional indebtedness, and (iv) restrictions
on the declaration and payment of the cash portion of
patronage distributions and other distributions or
allocations of earnings, surplus or assets. As of August
31, 1997 Alliance was in compliance with all covenants.
Alliance may be required to make equity investments in
CoBank in an amount not to exceed 1% of the average
five-year principal loan balance until Alliance meets
CoBank's target level of equity investment, which is
currently 11.5% of the average five-year principal loan
balance. As of August 31, 1997, substantially all assets of
Alliance were pledged to CoBank.

At August 31, 1997, $616,424 had been borrowed from Farmland
pursuant to a $760,000 loan agreement. The loan agreement
with Farmland provides for interest at CoBank's prime rate
and requires repayment in 2005.

Long-term debt as of August 31, 1997 matures during the
fiscal years ending August 31 in the following amounts:

1998 1,262,700
1999 1,550,400
2000 1,550,400
2001 1,550,400
2002 1,550,400
Thereafter 6,289,924
$15,583,424

7. Operating Leases

Alliance incurred $121,754 and $2,137 of lease expenses
related to operating lease agreements the company entered
into for facilities and equipment for the fiscal years ended
August 31, 1997 and 1996, respectively. Future minimum
lease payments for the next five fiscal years ending August
31 are as follows:

<PAGE>

1998 $ 266,954
1999 23,319
2000 23,319
2001 23,319
2002 and thereafter 23,319
$ 342,740

8. Commitments

As of August 31, 1997, Alliance Farms was operating six
2,450 sow feeder pig production units and had an additional unit
under construction. At August 31, 1997, commitments for
construction of such facilities totaled approximately $699,000.
These commitments will be funded through bank borrowings.

9. Fair Value of Financial Instruments

Alliance has financial instruments which are comprised of
cash and cash equivalents, receivables, payables, and long-term
debt. The fair value of long-term debt is estimated using
current interest rates for similar instruments. The fair value
of long-term debt approximates the carrying amount at August 31,
1997 because the long-term debt accrues interest at a variable
rate. The carrying amounts of cash and cash equivalents,
receivables and payables approximate fair value because of the
short maturity of these instruments.

<PAGE>

ALLIANCE FARMS COOPERATIVE ASSOCIATION
UNAUDITED BALANCE SHEETS

MAY 31, 1998 AUGUST 31, 1997
ASSETS
Current Assets:
Receivables, trade 13,589 69,550
Receivables, non-trade (Note 3) 191,376 200,137
Inventory (Note 4) 3,720,201 3,179,402
Other current assets 68,025 0
Total current assets 3,993,191 3,449,089

Property, plant and
equipment, at cost (Note 5) 24,376,151 19,610,833
Less accumulated depreciation 2,982,345 2,193,650
21,393,806 17,417,183

Breeding stock 4,190,176 4,603,996
Less accumulated depreciation 1,055,288 1,353,650
3,134,888 3,250,346
Other assets, net of $100,476
and $77,261 accumulated
amortization 333,351 263,788
$ 28,855,236 $24,380,406

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Bank Overdraft 400,074 1,106,122
Current maturities of
long-term debt (Note 5) 1,744,800 1,262,700
Accounts payable (Note 3) 1,464,717 952,431
Accrued expenses 390,955 242,261
Total current liabilities 4,000,546 3,563,514

Long-term debt (Note 5) 15,100,561 14,320,724

Shareholders' Equity
Class A common stock of $.01
par value; authorized 5,000
shares, issued and outstanding
119 shares 1 1
Class B common stock of $.01 par
value; authorized 2,500 shares,
issued and outstanding 36 shares 0 0
Class C common stock of $.01 par
value; authorized 2,500 shares,
none issued 0 0
Additional paid-in capital 10,751,325 8,719,237
Accumulated deficit (997,197) (2,223,070)
Total shareholders' equity 9,754,129 6,496,168
Commitments (Note 6) -- --
$ 28,855,236 $ 24,380,406

See accompanying notes to condensed financial statements

<PAGE>

ALLIANCE FARMS COOPERATIVE ASSOCIATION
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

THREE MONTH NINE MONTH
PERIODS ENDED PERIODS ENDED
MAY 31 MAY 31
1998 1997 1998 1997
Net sales (Note 2)
Cost of goods sold $4,375,672 $3,351,997 $13,346,482 $9,871,995
3,355,709 2,690,524 9,587,739 8,239,573

Gross income 1,019,963 661,473 3,758,743 1,632,422

Expenses related to
start-up of new
production facilities 342,814 98,547 791,861 174,215

Administrative
expenses 424,610 111,174 751,269 326,170

(Gain) Loss on sale of
breeding stock 103,518 (4,310) 159,057 76,710

Operating income $149,021 $456,062 $2,056,556 $1,055,327

Other income (expense):
Interest expense (412,924) (238,776) (1,129,039) (919,360)
Other 246,194 15,325 298,355 101,111

(166,730) (223,451) (830,684) (818,249)

Net income (loss) ($17,709) $232,611 $1,225,872 $237,078

See accompanying notes to condensed financial statements

<PAGE>

ALLIANCE FARMS COOPERATIVE ASSOCIATION
UNAUDITED STATEMENTS OF CASH FLOWS

NINE MONTH PERIODS ENDED
MAY 31
1998 1997
Cash flow from operating activities:
Net income $ 1,225,872 $ 237,078
Adjustment to reconcile net income
to net cash provided by operating
activities:
Provision for depreciation and
amortization 1,922,780 1,581,526
Loss on sale of breeding stock 159,057 76,710

Changes in assets and liabilities:
Receivables 64,722 13,138
Inventory (540,799) (594,810)
Other current assets (68,025) (39,945)
Other assets (104,778) (70,897)
Accounts payable 512,286 741,510
Accrued expenses 148,694 105,882
Net cash provided by operating
activities 3,319,809 2,050,192

Cash flows from investing activities:
Capital expenditures (7,305,367) (3,888,065)
Proceeds from sale of breeding stock 1,385,582 609,636
Net cash used in investing activities (5,919,785) (3,278,429)

Cash flows from financing activities:
Proceeds from issuance of long term debt 2,658,785 422,000
Net decrease in revolving term credit (309,782) 151,000
Payment on long term debt (970,400) (652,500)
Increase (decrease) in note payable to
Farmland (116,666) 1,340,000
Loan origination fees 12,000 0
Issuance of common shares, net of offering
cost 2,032,087 0
Increase (decrease) in bank overdraft (706,048) (32,263)
Net cash provided by financing
activities: 2,599,976 1,228,237

Change in cash and cash equivalents 0 0

Cash and cash equivalents at
beginning of period 0 0
Cash and cash equivalents at
end of period $ 0 $ 0

See accompanying notes to condensed financial statements

<PAGE>

Alliance Farms Cooperative Association

Notes to Condensed Financial Statements
(Unaudited)

1. Interim Financial Statements

The accompanying condensed unaudited financial statements
reflect all adjustments (consisting of only normal recurring
adjustments) which in the opinion of management, are
necessary for a fair presentation of the financial position,
results of operations and cash flows for the interim periods
presented.

Certain information and footnote disclosures normally
included in financial statements presented in accordance
with generally accepted accounting principles have been
condensed or omitted. The accompanying unaudited condensed
financial statements should be read in conjunction with the
financial statements and notes in Alliance's August 31, 1997
Annual Report on Form 10-KSB.

The balance sheet as of August 31, 1997 has been derived
from the audited financial statements as of that date.

2. Sales

Alliance sold nearly 100% of its feeder pigs to its members
for the three and nine month periods ended May 31, 1998 and
1997 at a contractual price which is based on Alliance's
operating costs (which are based on a twelve month rolling
average), debt service and an additional $4.50 per pig sold.

Because the contractual price for the sale of a feeder pig
is determined based upon, among other things, a twelve month
historical rolling average of operating costs and to the
extent that current operating costs per pig exceed the
historical average operating costs, Alliance may incur a
negative gross margin on the sale of its feeder pigs during
periods of rising costs. Conversely, in periods of falling
costs, Alliance may earn higher than normal gross margins.

Alliance's average net sales price and the average industry
market price for feeder pigs were as follows:

Three Months Nine Months
Ended Ended
May 31 May 31
1998 1997 1998 1997

Average Net Sales Price 56.05 59.16 58.53 58.26
Average Industry Market* 35.14 64.99 39.48 57.65

*As published by the USDA's Market News Service

3. Transactions with Farmland and Yuma

Alliance purchased feed from Yuma Farmers' Milling and
Mercantile Cooperative (Yuma), and animal health supplies
and breeding stock from Farmland Industries, Inc. (Farmland)
based on market prices. Yuma and Farmland are members of
Alliance. Alliance also sold feeder pigs to Farmland and
Yuma. Such purchases and sales were as follows:

<PAGE>

Three Months Nine Months
Ended Ended
May 31 May 31
1998 1997 1998 1997

Feed Purchases $806,062 $1,072,431 $2,874,834 $3,167,871
Animal Health
Purchases 82,698 172,686 169,736 549,933
Breeding Stock 795,685 789,328 2,308,245 1,284,084
Feeder Pig
Sales 2,293,777 2,111,550 8,009,564 6,072,633

Three Months Nine Months
Ended Ended
May 31 May 31
1998 1997 1998 1997

Royalty Income $ 14,730 $ 7,240 $ 21,100 $ 79,840

Alliance had $191,376 and $200,137 of non-trade receivables
at May 31,1998 and August 31, 1997, respectively. The
$191,376 due to Alliance at May 31, 1998 was due from
Farmland for royalties as described above and for items
received by Farmland out of Alliance's shop stock inventory,
and from Pig Producers I, LP ("Pig Producers"), a limited
partnership in which Farmland holds a 12.5% interest, for
the reimbursement of wages, benefits and other costs
attributable to Alliance employees that are assigned to
perform various duties at Pig Producers, as well as for
items received by Pig Producers out of Alliance's shop stock
inventory. Of the $200,137 due to Alliance at August 31,
1997, $120,195 was due from Yuma Cooperative as a result of
a feed pricing adjustment and the remainder was due for
wages and benefits as described above from Pig Producers, in
addition to charges for items received out of Alliance's
shop stock inventory by both Pig Producers and Farmland.

Farmland performs administrative, advisory and consulting
services on behalf of Alliance pursuant to a contractual
agreement. The agreement provides that Farmland will be
compensated for such services in an amount equal to one
dollar per pig shipped adjusted annually for inflation for a
term of ten years commencing July 13, 1994. Amounts paid by
Alliance to Farmland under such agreement were as follows:

Three Months Nine Months
Ended Ended
May 31 May 31
1998 1997 1998 1997

Management Fee $ 87,277 $ 61,701 $254,344 $183,297

Alliance owed $60,762 and $188,849 at May 31, 1998 and
$197,755 and $185,413 at August 31, 1997 to Farmland and
Yuma, respectively, for goods and services. Alliance is
also obligated to Farmland in the amounts of $499,758 and
$616,424 at May 31, 1998 and August 31, 1997, respectively,
pursuant to a promissory note. See note 5.

<PAGE>

4. Major components of inventories as of May 31, 1998 and
August 31, 1997 are as follows:

MAY 31 AUGUST 31
1998 1997

Feeder Pigs $3,590,694 $2,922,594
Other 129,507 256,808
$3,720,201 $3,179,402

5. Long-Term Debt

Long term debt at May 31, 1998 and August 31, 1997 consisted
of the following:

MAY 31 AUGUST 31
1998 1997

CoBank Term Loan $12,209,600 $12,525,131
CoBank Construction Loan $ 2,003,916 0
CoBank Revolving Term Credit $ 2,132,087 $ 2,441,869
Note Payable, Farmland $ 499,758 $ 616,424
$16,845,361 $15,583,424

Less Current Maturities $ 1,744,800 $ 1,262,700
$15,352,861 $14,320,724

On May 19, 1995, Alliance entered into a new $34,506,700
secured credit facility with CoBank to provide financing for
the debt portion of the construction of up to six 2,450-sow
weaned and/or feeder pig production facilities, related
support facilities and initial breeding stock associated
with each unit and to restate and modify the terms and
conditions of the existing loan agreements, including the
commitments for financing the debt portion of the two 2,450-
sow weaned pig facilities already under construction, along
with these units related support facilities, initial
breeding stock and capitalized start-up costs. This
agreement provides for $26,846,700 of term loans and
$7,660,000 of revolving term credit. The availability of
non-revolving term debt and revolving term credit under the
CoBank credit facility is subject to specified equity
investment levels in the Company being satisfied. There is
no assurance that additional shares of common stock will be
sold and the specified equity investment levels satisfied.
Under this new credit facility, proceeds from the
construction loan are used for construction of facilities
and are advanced by CoBank as construction costs are
incurred by Alliance. Proceeds from the term loans and
revolving term credit are used to repay the construction
loan upon completion of a facility, and for working capital.

The credit facility was also amended to accommodate the
construction of two weaned pig facilities in place of two
feeder pig facilities. The unused revolving term credit
expires June 20, 2006. Interest accrues on the outstanding
principle balance of the loan at a rate equal to CoBank's
national variable rate, plus 1.25% (9.75% at May 31, 1998).
Alliance capitalized $38,606 and $8,241 of interest on
construction for the nine months ended May 31, 1998 and 1997
respectively.

At May 31, 1998, Alliance had $3,564,000 immediately
available under its credit facility with CoBank, consisting
of $2,316,000 of term loans and $1,248,000 of revolving term
credit. An additional $4,320,000 is to become available
following CoBank's acceptance of certain documents, as
specified in the loan agreement.

The new credit facility provides for the monthly payment of
principal and interest. The existing non-revolving term
loans will change from ten year to eight year terms
effective August 31, 1998. Each new tranche of non-
revolving term credit will be repaid with monthly interest
payments and with 97 monthly principal payments of $21,800
for feeder pig facilities and $17,300 for weaned pig
facilities to begin 18 months after the initial advance on
each new construction loan commitment. The revolving credit

<PAGE>

facility will mature on August 31, 2010 and will decrease in
40 equal amounts at the end of each of the Company's fiscal
quarters based on the amount of available commitment at
August 31, 2001.

Alliance is required to comply with various covenants,
including, but not limited to (i) maintaining a total equity
to total assets ratio of not less than 0.25, (ii)
maintaining a debt service coverage ratio of not less than
1.00 (calculated as average annual cash flow divided by
current debt), (iii) restrictions on the occurrence of
additional indebtedness. As of May 31, 1998, Alliance was
in compliance with all covenants. Alliance may be required
to make equity investments in CoBank in an amount not to
exceed 1% of the average five-year principal loan balance
until Alliance meets CoBank's target level of equity
investment, which is currently 11.5% of the average five-
year principal loan balance. As of May 31, 1998,
substantially all assets of Alliance were pledged to CoBank.

At May 31, 1998, $499,758 had been borrowed from Farmland
pursuant to a $760,000 loan agreement. The $760,000 loan
agreement provides for interest at CoBank's prime rate and
requires repayment in 2005.

Long-term debt as of May 31, 1998 matures during the fiscal
years ending August 31 in the following amounts:

1998 $ 385,800
1999 1,812,000
2000 2,227,200
2001 2,280,502
2002 2,440,409
Thereafter 7,699,450
$16,845,361

6. Alliance Farms is currently operating seven 2,450 sow feeder
pig facilities and has one weaned pig facility under
construction in Yuma County, Colorado and in Wayne County,
Illinois. As of May 31, 1998, commitments for construction
of these two facilities totaled $261,396. Also, there is a
commitment of $3,243,200 for an additional 5,000 sow
facility in Yuma County, Colorado. As of May 31, 1998
construction had not begun.

Exhibit A

SUBSCRIPTION AGREEMENT

Alliance Farms Cooperative Association
c/o Farmland Industries, Inc.
3315 North Oak Trafficway
Department 47
Kansas City, Missouri 64116
Attention: Wayne N. Snyder

Gentlemen:

1. Subscription.

a. The undersigned understands that Alliance Farms
Cooperative Association, a Colorado cooperative association (the
"Company"), may offer up to (i) an aggregate of 51 shares (the
"Class A Shares") of its (Class A) Common Stock, $.01 par value,
on a "best efforts, all-or-none" basis for not less than 17 Class
A Shares (a "Minimum Class A Block"), and thereafter may continue
to offer Class A Shares on such basis with respect to successive
Minimum Class A Blocks until 51 Class A Shares have been issued
and sold, (ii) an aggregate of 54 shares (the "Class B Shares")
of its Class B Common Stock, $.01 par value, on a "best efforts,
all-or-none" basis for not less than 18 Class B Shares (a
"Minimum Class B Block"), and thereafter may continue to offer
Class B Shares on such basis with respect to successive Minimum
Class B Blocks until 54 Class B Shares have been issued and sold,
and (iii) an aggregate of 72 shares (the "Class C Shares" and
together with the Class A Shares and the Class B Shares, the
"Shares") of its Class C Common Stock, $.01 par value, on a "best
efforts, all-or-none" basis for not less than 24 Class C Shares
(a "Minimum Class C Block"), and thereafter may continue to offer
Class C Shares on such basis with respect to successive Minimum
Class C Blocks until 72 Class C Shares have been issued and sold.
The undersigned acknowledges and agrees that prior to the
execution of this Subscription Agreement, the undersigned has
received the Company's Prospectus dated November 24, 1998 for the
Shares, which Prospectus contains the form of this Subscription
Agreement.

b. The undersigned hereby subscribes for and agrees
to purchase (i) ______ Class A Shares at a price of $80,000 per
share, (ii) ______ Class B Shares at a price of $60,000 per
share, and (iii) ______ Class C Shares at a price of $45,000 per
share, pursuant to the terms and conditions of this Subscription
Agreement (the "Subscription")1/. The undersigned understands
and agrees that in order to subscribe for any Shares, the
following items must be delivered to the Company on or before
5:00 p.m. on January 7, 1999 (or by 5:00 p.m. on July 6, 1999 if
the termination of the offering is extended by the Company):

1/ One Class A Share, one Class B Share or one Class C Share is
the minimum number of Shares for which an investor may
subscribe, as described in the Prospectus.

<PAGE>

(A) two completed and executed copies of this
Subscription Agreement;

(B) the undersigned's check, bank draft or wire
transfer (contact the Company for wire transfer
instructions), payable to the order of "Alliance Farms
Cooperative Association Escrow No. 465450" in an amount
representing the aggregate purchase price of the Shares
being subscribed for hereunder (which amount is equal to the
sum of (i) the product obtained by multiplying the number of
Class A Shares being subscribed for by $80,000 per Share,
plus (ii) the product obtained by multiplying the number of
Class B Shares being subscribed for by $60,000 per Share,
plus (iii) the product obtained by multiplying the number of
Class C Shares being subscribed for by $45,000 per Share);

(C) two completed and executed copies of the Pig
Purchase Agreement in the form attached to the Prospectus as
Exhibit B; 2/

(D) one executed stock power respecting the Class
A Shares, Class B Shares and Class C Shares, respectively,
subscribed for by the undersigned hereunder in favor of the
Company as contemplated by Section 17 of the Pig Purchase
Agreement.3/

In addition, if the undersigned is a resident of Iowa, or
otherwise is subscribing for Shares in Iowa, the undersigned may
be required to deliver to the Company a completed and executed
Potential Investor Questionnaire with respect to the
representation and warranty made pursuant to Section 3.l below.
The undersigned understands that pending the Company's acceptance
of subscriptions for a Minimum Class A Block, a Minimum Class B
Block or a Minimum Class C Block in this offering and the
satisfaction of certain other conditions, all funds received by
the Company in payment of the offering price for the Shares
promptly will be deposited in an interest-bearing escrow account
established at The Bank of New York (successor trustee to
NationsBank, N.A.), New York, New York. Payment of the
applicable offering price must be made payable to the order of
"Alliance Farms Cooperative Association Escrow No. 465450", the
escrow account established at such bank. Upon the Company's
acceptance of subscriptions for a Minimum Class A Block of 17
Class A Shares, for a Minimum Class B Block of 18 Class B Shares
or for a Minimum Class C Block of 24 Class C Shares, and the
satisfaction of certain other conditions, all funds deposited in
the escrow account with respect to such Shares, together with any
interest earned thereon, will be paid to the Company. In the
event that the Company does not issue Shares for which funds have
been deposited in the escrow account prior to the termination of
the offering, such funds will be refunded to the respective
subscribers, together with any interest earned thereon and
without any deduction being made for expenses.

2/ Please do not date the Pig Purchase Agreement; the Company
will date the Pig Purchase Agreement upon acceptance of
subscriptions.

3/ A form stock power is attached hereto as Annex 1 for your
convenience. Please do not date or otherwise complete the
stock power; the Company will date and complete the stock
power upon acceptance of subscriptions.

<PAGE>

c. The undersigned understands that this Subscription
shall be irrevocable, except as otherwise provided by virtue of
applicable federal and state securities laws, and shall survive
the death or disability of the undersigned, in the case of an
individual, or the dissolution or bankruptcy of the undersigned,
in the case of an entity.

2. Acceptance of Subscription. The undersigned
understands that if and to the extent this Subscription is not
accepted by the Company, in whole or in part, prior to 5:00 p.m.
on January 7, 1999 (or by 5:00 p.m. on July 6, 1999 if the
termination date of the offering is extended by the Company), any
amount so received by the Company will be returned to the
undersigned. The undersigned acknowledges that the management of
the Company reserves the right, in its sole and absolute
discretion, to accept or reject this Subscription, in whole or in
part, and that this Subscription shall not be binding unless and
until accepted by the Company. The undersigned agrees that
subscriptions need not be accepted in the order they are
received.

3. Representations, Warranties and Agreement. The
undersigned represents and warrants to the Company and its
officers, directors, employees, agents and controlling persons,
and agrees with such persons, as follows:

a. The undersigned and his or her
representative, if any, have been furnished all
additional information relating to the Company, its
business and financial condition, the offering of the
Shares and any other matter set forth in the Prospectus
which they have requested.

b. The undersigned agrees that the certificates
evidencing the Shares being purchased by the
undersigned shall be stamped or otherwise imprinted
with a conspicuous legend in substantially the
following form:

Sale, transfer or hypothecation of the shares
represented by this certificate is restricted
by the provisions of the Colorado cooperative
association law and the Articles of
Incorporation and Bylaws of Alliance Farms
Cooperative Association (the "Company"), a
copy of which provisions may be inspected at
the principal offices of the Company, and all
provisions of which are hereby incorporated
by reference in this certificate.

The undersigned agrees that the Shares or any of them
shall be sold, pledged, assigned, hypothecated, or
otherwise transferred (with or without consideration)
(a "Transfer") only if such Transfer is permissible
under the Colorado cooperative <PAGE> association law and the
Company's Articles of Incorporation and Bylaws. The
undersigned understands that the Company has not agreed
to register the Shares for distribution in accordance
with the provisions of certain applicable state
securities law (the "State Acts"), that the Company is
the only party who may register the Shares under
certain State Acts and that the Company has not agreed
to comply with any exemption under the State Acts for
the resale of the Shares. The undersigned understands
that there is and likely will be no market for the
(Class A) Common Stock, Class B Common Stock or Class C
Common Stock of the Company and that the undersigned
therefore may be unable to sell or dispose of the
Shares.

c. The undersigned agrees that a stop transfer
order shall be placed on the transfer books maintained
with respect to the Shares which gives effect to the
restrictive legend set forth in Section 3.b.

d. The undersigned understands that no federal
or state agency has passed upon the Shares or upon the
accuracy or adequacy of the Prospectus, or made any
finding or determination as to the fairness of the
investment or any recommendation or endorsement of the
Shares. The undersigned understands that the
Prospectus may not have been filed with or reviewed by
certain state securities administrators.

e. The undersigned is a producer of agricultural
products, an association of such producers, or a
federation of such associations.

f. If a natural person, the undersigned is a
citizen of the United States of America, is at least 21
years of age, and has the legal capacity to execute,
deliver and perform this Agreement, and his or her
principal residence is located within the state
designated under his or her name below.

g. If the undersigned is a corporation, trust,
partnership, or any other entity, such entity is
authorized and otherwise duly qualified and empowered
to execute and deliver this Subscription Agreement and
thereupon shall become legally bound thereby, all
necessary actions have been taken to authorize and
approve the investment in the Shares, such entity was
not formed for the purpose of making the investment in
the Shares and such entity's principal place of
business is located at the address set forth on the
signature page hereof.

h. The undersigned acknowledges and agrees that
certain commissions as described in the Prospectus may
be due and payable to certain selling agents or other
representatives of the Company in connection with this
Subscription.

<PAGE>

i. The undersigned acknowledges that the Company
may assign the Company's rights in and to the Pig
Purchase Agreement executed by the undersigned and any
and all other assets of the Company to any lender that
may provide financing to the Company in connection with
the construction of feeder or weaned pig production
facilities or the operation thereof, or both, and the
undersigned consents to any such assignment.

j. If the undersigned is a resident of Iowa, or
otherwise is subscribing for Shares in Iowa, the
undersigned certifies that the undersigned either (i)
has a net worth, or joint net worth with the
undersigned's spouse, in either case, exclusive of
home, furnishings and automobiles ("Adjusted Net
Worth") of at least $65,000 as of the date hereof, and
an annual gross income of at least $65,000 for each of
the undersigned's two most recent tax years; or
(ii) has Adjusted Net Worth of at least $250,000 as of
the date hereof.

4. Taxpayer Identification Number. The undersigned agrees
to complete, execute and return to the Company a Form W-9,
"Payer's Request for Taxpayer Identification Number and
Certification", concurrently with the delivery of the executed
copy of this Subscription Agreement.4/

5. Indemnification. The undersigned agrees to indemnify
and hold harmless the Company, its officers, directors,
employees, shareholders and affiliates, and any person acting on
behalf of the Company, from and against any and all damage, loss,
liability, cost and expense (including attorneys' fees) which any
of them may incur by reason of the failure by the undersigned to
fulfill any of the terms or conditions of this Subscription
Agreement. All representations, warranties and covenants
contained in this Subscription Agreement, and the indemnification
contained in this Section 5 shall survive the acceptance of this
Subscription.

6. No Waiver. Notwithstanding any of the representations,
warranties, acknowledgements or agreements made herein by the
undersigned, the undersigned does not thereby or in any other
manner waive any of the rights granted to the undersigned under
federal or state securities law.

7. Entire Agreement; Modification. This Subscription
Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof, and neither
this Subscription Agreement nor any provisions hereof shall be
waived, changed, discharged or terminated except by an instrument
in writing signed by the party against whom any waiver, change,
discharge or termination is sought.

4/ A Form W-9 is attached hereto as Annex 2 for your convenience.

<PAGE>

8. Notices. Any notice, demand or other communication
which any party hereto may be required, or may elect, to give to
anyone interested hereunder shall be effective only if it is in
writing and personally delivered or sent by certified or
registered mail, return receipt requested, postage prepaid, or by
a nationally recognized overnight delivery service, with delivery
confirmed, addressed to: in the case of the Company: Alliance
Farms Cooperative Association, c/o Farmland Industries, Inc.,
3315 North Oak Trafficway, Department 47, Kansas City, Missouri
64116, Attention: Wayne N. Snyder, or at such other address as
the Company shall so notify the undersigned pursuant hereto, and
in the case of the undersigned at the address set forth on the
signature page thereof or at such other address as the
undersigned shall so notify the Company pursuant hereto. Any
such notice, demand or other communication shall be deemed to
have been given as of the date when so delivered.

9. Binding Effect. Except as otherwise provided herein,
this Subscription Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs,
executors, administrators, successors, legal representatives and
assigns. If the undersigned is more than one person, the
obligations of the undersigned shall be joint and several and the
agreements, representations, warranties and acknowledgements
herein contained shall be deemed to be made by and be binding
upon each such person and the undersigned's respective heirs,
executors, administrators, successors, legal representatives and
assigns.

10. Type of Ownership. The Subscriber wishes to own the
Shares as follows (mark one):

[ ] Separate or individual property;

[ ] Joint tenants with right of survivorship (both parties
must sign all required documents);

[ ] Community property (both parties must sign all required
documents);

[ ] Trust (include name of trust, name of trustee, and
include a copy of the trust instrument);

[ ] Corporation (include articles of incorporation, bylaws
and certified corporate resolution authorizing the
investment and signature);

[ ] Partnership (include a copy of the partnership
agreement and a written consent of partners authorizing
the investment and signature);

[ ] Other (specify): _________________________________.

(Note: Subscribers should seek the advice of their attorney in
deciding in which of the above forms they should take ownership
of the Shares, since different forms of ownership may have
varying gift tax, estate tax, income tax and other consequences,
depending on the state of the Subscriber's domicile and the
Subscriber's particular personal circumstances.)

<PAGE>

The name(s) in which the Shares are to be held is:

__________________________________________________________

11. Assignability. The undersigned agrees not to transfer
or assign this Subscription Agreement, or any of the
undersigned's interest herein, and further agrees that the
transfer or assignment of the Shares shall be made only in
accordance with the terms and conditions of this Subscription
Agreement, the Company's Articles of Incorporation and Bylaws,
and all applicable laws.

12. Applicable Law. This Subscription Agreement shall be
governed by and construed in accordance with the laws of the
State of Colorado.

[The remainder of this page intentionally has been left blank]

<PAGE>

THE UNDERSIGNED HEREBY REPRESENTS THAT THE UNDERSIGNED HAS
READ THIS SUBSCRIPTION AGREEMENT IN ITS ENTIRETY.

IN WITNESS WHEREOF, the undersigned has executed this
Subscription Agreement this ___ day of _____________, 199__, at
_________________, ____________.
(city) (state)

INDIVIDUALS SIGN HERE

Note: If the Subscriber wishes to own the Shares with another
person as joint tenants, or as community property, both
individuals must sign this Subscription Agreement.

_____________________________
Signature

_____________________________
Name (please print)

_____________________________
Social Security Number

Principal Residence Address of Subscriber

_____________________________
Street Address

_____________________________
City and State Zip Code

Additional Individual (if any)

_____________________________
Signature

_____________________________
Name (please print)

_____________________________
Social Security Number

Principal Residence Address of Subscriber

_____________________________
Street Address

_____________________________
City and State Zip Code

<PAGE>

THE UNDERSIGNED HEREBY REPRESENTS THAT THE UNDERSIGNED HAS
READ THIS SUBSCRIPTION AGREEMENT IN ITS ENTIRETY.

IN WITNESS WHEREOF, the undersigned has executed this
Subscription Agreement this ___ day of _____________, 199__, at
_________________, ____________.
(city) (state)

ORGANIZATIONS SIGN HERE

Note: If signed on behalf of a corporation, please submit the
corporation's articles of incorporation, bylaws, and certified
corporate resolution authorizing the investment and signature.
If signed on behalf of a partnership, please submit a copy of the
partnership agreement and a written consent of partners
authorizing the investment and signature. If signed on behalf of
a trust, please submit the name of the trust, name of the
trustee, and a copy of the trust instrument.

_____________________________
Printed Name of Organization

By:_____________________________
Signature

_____________________________
Printed Name and Title

By: _____________________________
(Additional signature if required by
governing instrument)

_____________________________
Printed Name and Title

_____________________________
Federal Taxpayer Identification Number

Address of Principal Place of Business:

_____________________________
Street Address

_____________________________
City and State Zip Code

_____________________________
Country (if other than U.S.A.)

<PAGE>

ALLIANCE FARMS COOPERATIVE ASSOCIATION hereby [accepts][rejects]
the above Subscription on this _____ day of _____________, 199__,
at Yuma, Colorado.

ALLIANCE FARMS COOPERATIVE
ASSOCIATION

By:_____________________________
Name:_________________________
Title:________________________

<PAGE>

ANNEX 1

STOCK POWER

FOR VALUE RECEIVED, ______________________________________ hereby
sell, assign and transfer unto _______________________________
___________________________ (__________) Shares of the Class __
Common Capital Stock of the Alliance Farms Cooperative
Association standing in its name on the books of said association
represented by Certificate No. ____ herewith and do hereby
irrevocably constitute and appoint ____________________________
attorney to transfer the said stock on the books of the within
named Company with full power of substitution in the premises.

Dated ____________ 19_____

In the Presence of

_____________________________

<PAGE>

ANNEX 2

Form W-9
(Rev. March 1994) REQUEST FOR TAXPAYER Give form to the
Department of the IDENTIFICATION NUMBER requester. Do NOT
Treasury AND CERTIFICATION send to the IRS.
Internal Revenue
Service

Please print or type:

Name (if joint names, list first and circle the name of the person or entity
whose number you enter in Part 1 below. SEE INSTRUCTIONS ON PAGE 2 IF YOUR
NAME HAS CHANGED.)

____________________________________________________________________________
Business name (Sole proprietors see instructions on page 2.)

____________________________________________________________________________
Please check appropriate box: [ ] Individual/Sole proprietor
[ ] Corporation [ ] Partnership [ ] Other ________________

Address (number, street, and apt. or suite no.)
Requester's name and address (optional)

_________________________________________
City, state and ZIP code

______________________________________________________________________________
PART I TAXPAYER IDENTIFICATION NUMBER (TIN) List account numbers(s)
here (optional)

Enter your TIN in the appropriate Social security number
box. For individuals, this is your _____ -_____-______
social security number (SSN). For
sole proprietors, see the instructions
on page 2. For other entities, it is PART II For Payees Exempt
your employer identification number From Backup Withholding (See
(EIN). IF you do not have a number, Part II Instructions on page 2
see How To Get a TIN below. Note:
If the account is in more than one OR
name, see the chart on page 2 for Employer identification number
guidelines on whose number to enter. ____ - _____________

______________________________________________________________________________
PART III CERTIFICATION
______________________________________________________________________________

Under penalties of perjury, I certify that:

1. The number shown on this form is my correct taxpayer identification
number (or I am waiting for a number to be issued to me), and

2. I am not subject to backup withholding because: (a) I am exempt from
backup withholding, or (b) I have not been notified by the Internal
Revenue Service that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (d) the IRS has notified
me that I am no longer subject to backup withholding.

CERTIFICATION INSTRUCTIONS.--You must cross out item 2 above if you have been
notified by the IRS that you are currently subject to backup withholding
because of underreporting interest or dividends on your tax return. For real
estate transactions, item 2 does not apply. For mortgage interest paid, the
acquisition or abandonment of secured property, cancellation of debt,
contributions to an individual retirement arrangement (IRA), and generally
payments other than interest and dividends, you are not required to sign the
Certification, but you must provide your correct TIN. (Also see PART III
INSTRUCTIONS on page 2.)

______________________________________________________________________________
Sign
Here Signature _________________________________ Date ___________________

Section references are to the Internal Revenue Code.

PURPOSE OF FORM.--A person who is required to file an information return with
the IRS must get your correct TIN to report income paid to you, real estate
transactions, mortgage interest you paid, the acquisition or abandonment of
secured property, cancellation of debt, or contributions you made to an IRA.
Use Form W-9 to give your correct TIN to the requester (the person requesting
your TIN) and, when applicable, (1) to certify the TIN you are giving is
correct (or you are waiting for a number to be issued), (2) to certify you are
not subject to backup withholding, or (3) to claim exemption from backup
withholding if you are an exempt payee. Giving your correct TIN and making
the appropriate certifications will prevent certain payments from being
subject to backup withholding.

NOTE: If a requester gives you a form other than a W-9 to request your TIN,
you must use the requester's form if it is substantially similar to this Form
W-9.

WHAT IS BACKUP WITHHOLDING?--Persons making certain payments to you must
withhold and pay to the IRS 31% of such payments under certain conditions.
This is called "backup withholding." Payments that could be subject to backup
withholding include interest, dividends, broker and barter exchange
transactions, rents, royalties, nonemployee pay, and certain payments from
fishing boat operators. Real estate transactions are not subject to backup
withholding.

If you give the requester your correct TIN, make the proper certifications,
and report all your taxable interest and dividends on your tax return, your
payments will not be subject to backup withholding. Payments you receive will
be subject to backup withholding if:

1. You do not furnish your TIN to the requestor, or

2. The IRS tells the requester that you furnished an incorrect TIN,
or

3. The IRS tells you that you are subject to backup withholding
because you did not report all your interest and dividends on your tax return
(for reportable interest and dividends only), or

4. You do not certify to the requester that you are not subject to
backup withholding under 3 above (for reportable interest and dividend
accounts opened after 1983 only), or

5. You do not certify your TIN. See the Part III instructions for
exceptions.

<PAGE>

Certain payees and payments are exempt from backup withholding and
information reporting. See the Part II instructions and the separate
INSTRUCTIONS FOR THE REQUESTER OF FORM W-9.

HOW TO GET A TIN.--If you do not have a TIN, apply for one immediately.
To apply, get FORM SS-5, Application for a Social Security Number Card (for
individuals), from your local office of the Social Security Administration, or
FORM SS-4, Application for Employer Identification Number (for businesses and
all other entities), from your local IRS office.

If you do not have a TIN, write "Applied For" in the space for the TIN
in Part I, sign and date the form, and give it to the requester. Generally,
you will then have 60 days to get a TIN and give it to the requester. If the
requester does not receive your TIN within 60 days, backup withholding, if
applicable, will begin and continue until you furnish your TIN.

<PAGE>

NOTE: Writing "Applied For" on the form means that you have already applied
for a TIN OR that you intend to apply for one soon.

As soon as you receive your TIN, complete another Form W-9, include your
TIN, sign and date the form, and give it to the requester.

PENALTIES

FAILURE TO FURNISH TIN.--If you fail to furnish your correct TIN to a
requester, you are subject to a penalty of $50 for each such failure unless
your failure is due to reasonable cause and not to willful neglect.

CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make
a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.

CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.

MISUSE OF TINs.--If the requester discloses or uses TINs in violation of
Federal law, the requester may be subject to civil and criminal penalties.

SPECIFIC INSTRUCTIONS

NAME.--If you are an individual, you must generally enter the name shown on
your social security card. However, if you have changed your last name, for
instance, due to marriage, without informing the Social Security
Administration of the name change, please enter your first name, the last name
shown on your social security card, and your new last name.

Sole Proprietor.--You must enter your INDIVIDUAL name. (Enter either
your SSN or EIN in Part I.) You may also enter your business name or "doing
business as" name on the business name line. Enter your name as shown on your
social security card and business name as it was used to apply for your EIN on
Form SS-4.

<PAGE>

PART I--TAXPAYER IDENTIFICATION NUMBER (TIN)

You must enter your TIN in the appropriate box. If you are a sole proprietor,
you may enter your SSN or EIN. Also see the chart on this page for further
clarification of name and TIN combinations. If you do not have a TIN, follow
the instructions under HOW TO GET A TIN on page 1.

PART II--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING

Individuals (including sole proprietors) are not exempt from backup
withholding. Corporations are exempt from backup withholding for certain
payments, such as interest and dividends. For a complete list of exempt
payees, see the separate Instructions for the Requestor of Form W-9.

If you are exempt from backup withholding, you should still complete
this form to avoid possible erroneous backup withholding. Enter your correct
TIN in Part I, write "Exempt" in Part II, and sign and date the form. If you
are a nonresident alien or a foreign entity not subject to backup withholding,
give the requester a completed FORM W-8, Certificate of Foreign Status.

PART III--CERTIFICATION

For a joint account, only the person whose TIN is shown in Part I should sign.

1. INTEREST, DIVIDEND, AND BARTER EXCHANGE ACCOUNTS OPENED BEFORE 1984
AND BROKER ACCOUNTS CONSIDERED ACTIVE DURING 1983. You must give your correct
TIN, but you do not have to sign the certification.

2. INTEREST, DIVIDEND, BROKER, AND BARTER EXCHANGE ACCOUNTS OPENED
AFTER 1983 AND BROKER ACCOUNTS CONSIDERED INACTIVE DURING 1983. You must sign
the certification or backup withholding will apply. If you are subject to
backup withholding and you are merely providing your correct TIN to the
requester, you must cross out item 2 in the certification before signing the
form.

3. REAL ESTATE TRANSACTIONS. You must sign the certification. You may
cross out item 2 of the certification.

4. OTHER PAYMENTS. You must give your correct TIN, but you do not have
to sign the certification unless you have been notified of an incorrect TIN.
Other payments include payments made in the course of the requester's trade or
business for rents, royalties, goods (other than bills for merchandise),
medical and health care services, payments to a nonemployee for services
(including attorney and accounting fees), and payments to certain fishing boat
crew members.

5. MORTGAGE INTEREST PAID BY YOU, ACQUISITION OR ABANDONMENT OF SECURED
PROPERTY, CANCELLATION OF DEBT, OR IRA CONTRIBUTIONS. You must give your
correct TIN, but you do not have to sign the certification.

PRIVACY ACT NOTICE

Section 6109 requires you to give your correct TIN to persons who must file
information returns with the IRS to report interest, dividends, and certain
other income paid to you, mortgage interest you paid, the acquisition or
abandonment of secured property, cancellation of debt, or contributions you
made to an IRA. The IRS <PAGE> uses the numbers for identification purposes
and to help verify the accuracy of your tax return. You must provide your TIN
whether or not you are required to file a tax return. Payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not give a TIN to a payer. Certain penalties may also apply.

WHAT NAME AND NUMBER TO GIVE THE REQUESTER

FOR THIS TYPE OF ACCOUNT GIVE NAME AND SSN OF:

1. Individual The individual

2. Two or more individuals (joint account) The actual owner of the account
or, if combined funds, the first
individual on the account(1)

3. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)

4. a. The usual revocable savings (grantor The grantor-trustee(1)
is also trustee)
b. So-called trust account that is not a The actual owner(1)
legal or valid trust under state law

5. Sole proprietorship The owner(3)

For this type of account: Give name and EIN of:

6. Sole proprietorship The owner(3)

7. A valid trust, estate, or pension trust Legal entity(4)

8. Corporate The corporation

9. Association, club, religious, The organization
charitable, educational, or other
tax-exempt organization

10. Partnership The partnership

11. A broker or registered nominee The broker or nominee

12. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a state or local
government, school district, or prison)
that receives agricultural program payments

(1) List first and circle the name of the person whose number you furnish.

(2) Circle the minor's name and furnish the minor's SSN.

(3) You must show your individual name, but you may also enter your business
or "doing business as" name. You may use either your SSN or EIN.

(4) List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the TIN of the personal representative or trustee
unless the legal entity itself is not designated in the account title.)

Note: If no name is circled when more than one name is listed, the number
will be considered to be that of the first name listed.

Exhibit B
PIG PURCHASE AGREEMENT

THIS PIG PURCHASE AGREEMENT (this "Agreement") is entered
into as of this ____ day of _______________, 199__, by and
between ALLIANCE FARMS COOPERATIVE ASSOCIATION (hereinafter
"Association"), and
_________________________________________________ (hereinafter
"Purchaser").

WHEREAS, Association is engaged in the production and sale
of feeder pigs and weaned pigs; and

WHEREAS, Purchaser is a purchaser of pigs, possesses
expertise in swine production and management, and desires to
enter into this Agreement for membership purposes of Association;

NOW, THEREFORE, in consideration of the mutual agreements
contained herein, the parties hereto agree as follows:

1. PURCHASE/SALE OF PIGS.

(A) GENERAL. This Agreement provides for the sale by
Association to Purchaser of feeder pigs or weaned pigs, as the
case may be, as determined by reference to the class of capital
stock of Association identified below from which the right of
Purchaser to purchase Lots (as defined below) of Qualifying Pigs
(as defined in Section 2) under this Agreement derives (check one
box only):

[ ] Class A Common Stock. If this box is checked, (i) the
class of capital stock of Association from which the
right of Purchaser to purchase Lots under this
Agreement derives is Class A Common Stock (as defined
in Article SIXTH of Association's Articles of
Incorporation), (ii) the Lots to which such right
extends shall consist solely of feeder pigs, and (iii)
this Agreement shall constitute a "Feeder Pig Purchase
Agreement", as such term is used in Association's
Bylaws.

[ ] Class B Common Stock. If this box is checked, (i) the
class of capital stock of Association from which the
right of Purchaser to purchase Lots under this
Agreement derives is Class B Common Stock (as defined
in Article SIXTH of Association's Articles of
Incorporation), (ii) the Lots to which such right
extends shall consist solely of weaned pigs, and (iii)
this Agreement shall constitute a "Weaned Pig Purchase
Agreement", as such term is used in Association's
Bylaws.

[ ] Class C Common Stock. If this box is checked, (i) the
class of capital stock of Association from which the
right of Purchaser to purchase Lots under this
Agreement <PAGE> derives is Class C Common Stock (as defined
in Article SIXTH of Association's Articles of
Incorporation), (ii) the Lots to which such right
extends shall consist solely of weaned pigs, and (iii)
this Agreement shall constitute a "Class C Weaned Pig
Purchase Agreement", as such term is used in
Association's Bylaws.

Upon and subject to all terms and conditions set forth in this
Agreement, Purchaser shall purchase from Association, and
Association shall sell to Purchaser, Qualifying Pigs produced by
Association during the term of this Agreement in lots
(hereinafter "Lot" or "Lots") of (A) feeder pigs of no less than
900, and no more than 1,000, Qualifying Pigs per Lot (as
determined by Association), if the right of Purchaser to purchase
Lots under this Agreement derives from Class A Common Stock, or
(B) weaned pigs of no less than 925, and no more than 1,025,
Qualifying Pigs per Lot (as determined by Association), if the
right of Purchaser to purchase Lots under this Agreement derives
from Class B Common Stock or Class C Common Stock, which Lots of
feeder pigs or weaned pigs, as the case may be, shall be made
available to Purchaser on a rotating schedule with other members
of Association owning the class of capital stock of Association
from which the right of Purchaser to purchase Lots under this
Agreement derives, as such rotating schedule is determined and
implemented by Association on any reasonable basis.

(B) SCHEDULE. Purchaser acknowledges that Association
intends to conduct a blind drawing, immediately following the
consummation of each and every offering of the class of capital
stock of Association from which the right of Purchaser to
purchase Lots under this Agreement derives, for purposes of
adjusting such rotating schedule as warranted by the resulting
changes in the members of Association.

(C) AVAILABILITY. The number of Lots made available
to Purchaser and the frequency of availability of such Lots will
be based upon Purchaser's proportionate equity interest in
Association with respect to the class of capital stock of
Association from which the right of Purchaser to purchase Lots
under this Agreement derives. Purchaser acknowledges that Lots
will not be made available to Purchaser under this Agreement
until Qualifying Pigs are produced and available from the
facilities constructed or acquired using the proceeds of the
issuance of the capital stock of Association (including the
capital stock of Association assigned or transferred to
Purchaser) from which the right of Purchaser to purchase such
Lots under this Agreement derives, and that the number of Lots
made available to Purchaser and the frequency of availability of
such Lots will be subject to actual production of Qualifying Pigs
from all facilities of Association; provided, however, that any
increased production of Qualifying Pigs attributable to the
addition of a Production Unit constructed or acquired by
Association with the proceeds of a facilities expansion loan (and
not the proceeds of Association's issuance of capital stock) may
be made available by Association exclusively to the provider of
such loan, as determined by Association in its discretion.
Association shall give notice to Purchaser when a Lot is
available for purchase by Purchaser hereunder, which notice shall
specify the anticipated number of Qualifying Pigs in such Lot and
the scheduled shipment date.

(D) EXCESS PRODUCTION. The production of Qualifying
Pigs is anticipated to produce, on a prospective rolling 12-month
basis, (i) approximately two and seven-tenths (2.7) Lots <PAGE> of
feeder pigs per share of Class A Common Stock of Association
owned by members of Association for which Lots are to be made
available for purchase hereunder, (ii) approximately two and
seven-tenths (2.7) Lots of weaned pigs per share of Class B
Common Stock of Association owned by members of Association for
which Lots are to be made available for purchase hereunder, and
(iii) approximately two and one-tenths (2.1) Lots of weaned pigs
per share of Class C Common Stock of Association owned by members
of Association for which Lots are to be made available for
purchase hereunder. To the extent that the production of pigs
exceeds such anticipated production, Association shall either
sell such excess production to any person (including a member of
Association), at a price as shall be determined by Association in
good faith, or retain such excess production for Association's
own purposes, in lieu of selling such excess production to the
members of Association pursuant to the Pig Purchase Agreements
between Association and the members of Association.

2. QUALIFYING PIGS. For purposes of this Agreement, the
term "Qualifying Pig" shall mean an individual pig, of the type
(feeder or weaned) to which this Agreement relates, that has the
genetic characteristics described in Section 6, that has been
managed in accordance with Section 7, and that (a) in the case of
weaned pigs, is not utility grade, has a minimum weight of at
least six (6) pounds at point in time of delivery, and has a
significant likelihood to perform economically and reach market
weight efficiently, and (b) in the case of feeder pigs, has a
minimum weight of 30 pounds and is free of the following defects
(with terms used in reference to defects being given the meaning
generally utilized in the swine industry) at the time of loading:

(i) uncastrated or freshly castrated males;
(ii) ruptures, umbilical or scrotal hernia larger
than a two-inch diameter;
(iii) unthrifty, poor-doing pigs;
(iv) observable signs of lameness, stiffness, or
other locomotor disorders evidenced by
swelling or malformed joints;
(v) transmissible gastroenteritis;
(vi) observable abscesses; and
(vii) anal prolapse.

3. PURCHASE PRICE OF PIGS.

(a) PRICE. The purchase price for each Qualifying Pig
purchased by Purchaser under this Agreement shall be an amount
equal to the sum of the following:

Financing Cost Per Pig, plus
Operating Cost Per Pig, plus
Production Margin.

Purchaser acknowledges that Association has constructed or
acquired, or is in the process of constructing or acquiring, or
both, Production Units <PAGE> as a result of previous offers and sales
of shares of its capital stock and that Association from time to
time may construct additional Production Units as a result of
additional offers and sales of shares of its capital stock. In
light of the foregoing, the determination of the Financing Cost
Per Pig portion of the purchase price for a Qualifying Pig
hereunder shall be made separately with respect to each Lot in
relation to the Production Unit(s) that were constructed or
acquired using the proceeds of the issuance of the capital stock
of Association (including the capital stock of Association
assigned or transferred to Purchaser) from which Purchaser's
right to purchase such Lot under this Agreement derives.

(b) DEFINITIONS. As used in this Section 3, the
following terms shall have the following meanings:

FINANCING COST PER PIG shall be determined on a prospective
rolling 12-month basis and shall mean an amount equal to the
quotient of (i) the sum of the required payments of interest
and principal (including any scheduled sinking fund
payments) to be made during the upcoming 12-month period
with respect to Purchaser's Debt, divided by (ii) Pigs
Shipped.

OPERATING COST PER PIG shall be determined on a rolling
five-month historical basis and shall mean an amount equal
to the quotient of (i) the sum of (A) all direct and
indirect production, operating, selling, general,
administrative, and other expenses incurred by Association
in producing the type of pigs (feeder or weaned) to which
this Agreement relates during the five months preceding the
then present month of shipment as determined by
Association's accountants utilizing generally accepted
accounting principles consistently applied (excluding any
provision for interest expense or depreciation or
amortization of the cost of buildings, equipment, breeding
stock or other capitalized costs which were purchased as a
result of Purchaser's Debt or as a result of the issuance of
any capital stock of Association to any third party), plus
(B) the net cash flow cost of all capital expenditures by
Association (including any capital sinking fund payments)
for production facility and breeding stock improvements and
replacements incurred by Association in producing the type
of pigs (feeder or weaned) to which this Agreement relates
during the five months preceding the then present month of
shipment as determined by Association's accountants, divided
by (ii) Pigs Shipped. The direct and indirect production
and operating expenses attributable to a Production Unit
which is in the process of commencing production shall not
be included in the determination of Operating Cost Per Pig,
and shipments of pigs attributable to such Production Unit
shall not be included in Pigs Shipped, until such Production
Unit has completed one entire month of full production,
shipping pigs in each week thereof. The net cash flow with
respect to capital expenditures for production facility and
breeding stock improvements and replacements (which net cash
flow shall be determined after taking into account the
breeding stock and production facility retirements
attributable to a Production Unit which is in the process of
commencing production) shall not be included in the
determination of Operating Cost Per Pig until the respective
Production Unit has completed one entire month of full
production, shipping pigs in each week thereof.

PIGS SHIPPED shall mean (a) for purposes of determining the
Operating Cost Per Pig, the total number of Qualifying Pigs
produced and shipped from Association over the same five-
month <PAGE> period used in determining the Operating Cost Per Pig,
and (b) for purposes of determining the Financing Cost Per
Pig, the product of (i) Association's total estimated number
of Qualifying Pigs to be produced and shipped by Association
from all Production Units during the 12-month period used in
determining the Financing Cost Per Pig, multiplied by (ii) a
fraction, the numerator of which shall be the number of
Production Units constructed or acquired by Association with
respect to the issuance of the capital stock of Association
(including the capital stock of Association assigned or
transferred to Purchaser) from which the right of Purchaser
to purchase Lots of Qualifying Pigs under this Agreement
derives, and the denominator of which shall be the number of
Production Units constructed or acquired by Association with
respect to all issuances of any class of capital stock of
Association. All estimates relating to Pigs Shipped shall
be made by Association using such historical data and
projections as are available to Association.

PRODUCTION MARGIN shall mean an amount of up to $4.50, as
determined by the Board of Directors of Association, from
time to time, in its sole and absolute discretion.

PRODUCTION UNIT shall mean the land and facilities necessary
to house, feed and care for a group of 2,450 sows and the
attendant offspring thereof and which land and facilities
are used in the production of the type of pigs (feeder or
weaned) to which this Agreement relates. A Production Unit
may exist on a stand-alone basis or as a part of a multi-
Production Unit complex.

PURCHASER'S DEBT shall mean the greater of: (a) $1,970,000
for each Production Unit constructed or acquired by
Association with respect to the issuance of the capital
stock of Association (including the capital stock of
Association assigned or transferred to Purchaser) from which
the right of Purchaser to purchase Lots of Qualifying Pigs
under this Agreement derives in the event that this
Agreement relates to feeder pigs and $1,600,000 for each
such Production Unit in the event that this Agreement
relates to weaned pigs, or (b) the sum of (i) the debt
incurred by Association for the Production Unit(s)
constructed or acquired by Association with respect to the
issuance of the capital stock of Association (including the
capital stock of Association assigned or transferred to
Purchaser) from which the right of Purchaser to purchase
Lots of Qualifying Pigs under this Agreement derives,
including any debt incurred for purposes of financing the
acquisition of land for, and construction or acquisition of,
such Production Unit(s), (ii) any debt incurred for the
initial working capital requirements with respect to the
operation of such Production Unit(s), and (iii) any debt
incurred for purposes of refinancing any such debt.

4. PAYMENT OF PURCHASE PRICE. Association shall furnish
to Purchaser, at the time Association notifies Purchaser that a
Lot is available for purchase by Purchaser hereunder, an estimate
of the total purchase price of the Qualifying Pigs included in
the Lot, and Purchaser shall, not less than one day prior to the
scheduled shipment date as specified in the notice by Association
to Purchaser, pay such estimated total purchase price to
Association in cash, or by such other means as may be acceptable
to Association in its sole and absolute discretion. Association
shall have no <PAGE> obligation to commence transportation of such
Qualifying Pigs to Purchaser prior to receiving full payment of
such estimated total purchase price for such Qualifying Pigs as
herein provided. The actual total purchase price of all
Qualifying Pigs included in a Lot shall be based upon weight at
the time of loading and settlement of any adjustments shall be
made within five days following delivery.

5. WEIGHT ADJUSTMENT. The purchase price for each
Qualifying Pig as provided in Section 3 is for a Lot of
Qualifying Pigs having an average weight of (i) 45 pounds, in the
case of feeder pigs, and (ii) between 8 pounds and 12 pounds, in
the case of weaned pigs. In the event that this Agreement
relates to feeder pigs and the average weight of a Lot of feeder
pigs is more or less than 45 pounds, the purchase price for such
Lot of feeder pigs is subject to adjustment pursuant to
subsection (a) of this Section 5. In the event that this
Agreement relates to weaned pigs and the average weight of a Lot
of weaned pigs is less than 8 pounds or more than 12 pounds, the
purchase price for such Lot of weaned pigs is subject to
adjustment pursuant to subsection (b) of this Section 5.

(A) FEEDER PIG PRICE ADJUSTMENT. In the event that
the average weight of the Qualifying Pigs in a Lot of feeder pigs
sold to Purchaser exceeds 45 pounds, Purchaser shall pay
Association an additional twenty-five cents ($0.25) per pound per
Qualifying Pig on the number of pounds (not to exceed five
pounds) that the Lot's average shipping weight per feeder pig
exceeds 45 pounds, and an additional twenty cents ($0.20) per
pound per Qualifying Pig on the number of pounds (not to exceed
ten pounds) that the Lot's average shipping weight per feeder pig
exceeds 50 pounds. To the extent that the average weight of the
Qualifying Pigs in a Lot of feeder pigs sold to Purchaser is less
than 45 pounds, twenty-five cents ($0.25) per pound on the number
of pounds that the Lot's average shipping weight per feeder pig
is less than 45 pounds shall be deducted from the purchase price
that Purchaser is to pay to Association for each Qualifying Pig.
Purchaser shall have the right to, but shall not be obligated to,
purchase a Lot of Qualifying Pigs hereunder at an average weight
of less than 35 pounds per feeder pig.

(B) WEANED PIG PRICE ADJUSTMENT. In the event that
the average weight of the Qualifying Pigs in a Lot of weaned pigs
sold to Purchaser exceeds 12 pounds, Purchaser shall pay
Association an additional one dollar ($1.00) per pound per
Qualifying Pig on the number of pounds that the Lot's average
shipping weight per weaned pig exceeds 12 pounds. To the extent
that the average weight of the Qualifying Pigs in a Lot of weaned
pigs sold to Purchaser is less than 8 pounds, one dollar ($1.00)
per pound on the number of pounds that the Lot's average shipping
weight per weaned pig is less than 8 pounds shall be deducted
from the purchase price that Purchaser is to pay to Association
for each Qualifying Pig. Purchaser shall have the right to, but
shall not be obligated to, purchase a Lot of Qualifying Pigs
hereunder at an average weight of less than 8 pounds per weaned
pig.

6. GENETIC QUALITY. Qualifying Pigs produced by
Association will be progeny from genetic stock selected by
Association, from time to time, in its sole and absolute
discretion. Such selection of such genetic stock will be
determined and implemented by Association on a basis that
reasonably would be expected to produce Qualifying Pigs that are
capable of producing market hogs <PAGE> having carcasses that are
responsive to consumer demand and thereby maximize the sales
price to be received therefore.

7. MANAGEMENT OF HEALTH AND NUTRITION. Association agrees
to comply with the following health and nutrition programs with
respect to all pigs to be purchased under this Agreement:

(a) Association shall dock tails within 48 hours
of a pig's birth.

(b) Association shall castrate male pigs within ten
days of the pig's birth.

(c) Association shall administer all vaccines and
antibiotic treatments and perform such other procedures that
are reasonably determined by Association to be necessary or
advisable with respect to a herd health program.

(d) Association shall maintain Association's swine
free from the pseudorabies virus ("PRV") or any swine
disease that would prohibit interstate shipment of pigs
produced by Association, or that might otherwise materially
impair Purchaser's ability to utilize the pigs to be
purchased under this Agreement. If, in the opinion of two
veterinarians selected by Association and reasonably
acceptable to Purchaser, any of the swine produced by
Association or used in the production of pigs for delivery
hereunder contracts PRV, Association shall have the
opportunity to cure such impairment within a reasonable
period of time and to suspend, at any time and from time to
time, the sale and purchase of pigs hereunder until such
time as said veterinarians determine that PRV no longer
exists.

(e) Association shall use a feeding regimen, feed
products, and herd health products developed or marketed by
Farmland Industries, Inc., or any of its affiliates.

8. RIGHT OF INSPECTION. Upon reasonable notice to
Association, Purchaser or its representative shall have the right
to inspect Association's production records to verify the genetic
quality and management of nutrition and health programs
prescribed by this Agreement during normal business hours.

9. ADJUSTMENT FOR NON-QUALIFYING PIGS. Purchaser shall
have the right to inspect Purchaser's Lot of Qualifying Pigs
prior to loading. In the event that, after delivery of such Lot,
Purchaser believes that any pig was not a Qualifying Pig prior to
loading (a "Subject Pig"), Purchaser shall notify Association by
telephone of such belief within one (1) business day following
delivery as well as promptly notify Association of such belief in
the manner provided in Section 19 hereof. Association shall have
the right to inspect any and all Subject Pigs in investigation of
Purchaser's belief, and thereafter Association and Purchaser
shall agree in good faith upon an appropriate adjustment, if any,
with respect to such Subject Pigs. Purchaser hereby acknowledges
and agrees that such adjustment described above shall be
Purchaser's sole and exclusive remedy as against Association
arising out of the purchase hereunder of a pig that was not a
Qualifying Pig at the time <PAGE> of loading and that the failure of
Association to deliver Qualifying Pigs as otherwise required
hereunder shall not give rise to a right of Purchaser to
terminate this Agreement. Furthermore, in no event shall
Purchaser reject delivery of a Lot of pigs hereunder, but in lieu
thereof Purchaser shall accept each delivery of a Lot of pigs
hereunder and, with respect to any and all pigs that Purchaser
believes were not Qualifying Pigs prior to loading, shall comply
with the provisions of this Section 9 and, until such adjustment,
if any, is agreed upon by Association and Purchaser, shall, at
Purchaser's expense, feed, water, treat and care for any and all
such pigs as if Purchaser believed such pigs were Qualifying Pigs
prior to loading.

10. HEALTH PERMITS. Association shall provide Purchaser,
at Association's expense, all health permits necessary to qualify
all Qualifying Pigs for interstate shipment.

11. WEIGHING CONDITIONS. All Lots of Qualifying Pigs shall
be weighed at Association's expense at a state-inspected scale in
close proximity to Association's production facility. A copy of
all scale tickets will be provided to Association and to
Purchaser.

12. IDENTIFICATION. Association shall appropriately
identify, prior to shipment, all Qualifying Pigs in accordance
with the rules that will allow interstate shipment to the states
to which the pigs are being shipped.

13. TRANSPORTATION OF PIGS. Qualifying Pigs shall be
shipped to Purchaser FOB shipping point. Association shall at
Purchaser's expense arrange for transportation of Qualifying Pigs
from any of Association's production facilities as determined by
Association; provided, however, that Purchaser shall pay such
transportation costs no later than the time of delivery. Trucks
shall be thoroughly cleaned and disinfected prior to hauling any
pigs from Association's production facilities and after any
previously hauled pigs.

14. TERM OF AGREEMENT. The term of this Agreement shall
commence on the date first written above and shall continue for
120 months after the month in which the first Lot of Qualifying
Pigs is shipped by Association to Purchaser (or Purchaser's
direct or indirect assignor or transferor) with respect to each
share of the capital stock of Association (including the capital
stock of Association assigned or transferred to Purchaser) from
which the right of Purchaser to purchase Lots of Qualifying Pigs
under this Agreement derives, subject to the following:

(a) In the event that Purchaser fails to purchase, pay
for, and take delivery of any two Lots (as defined herein or
in any other agreement between Purchaser and Association)
when and as made available to Purchaser in accordance with
the terms of this Agreement, or any other Pig Purchase
Agreement between Purchaser and Association, this Agreement
shall terminate and Association shall have the right to
exercise its remedies as provided in Section 17 hereof;
provided, however, that in the event Purchaser owns ten or
more shares of capital stock of Association, this Agreement
shall terminate and Association shall have the right to
exercise its remedies as provided in Section 17 hereof only
upon Purchaser failing to purchase, pay for, and take
delivery of a number of Lots (as defined herein or in any
other <PAGE> agreement between Purchaser and Association) when and
as made available to Purchaser in accordance with the terms
of this Agreement, of any other Pig Purchase Agreement
between Purchaser and Association equal to the sum of (i)
the quotient (rounded down to the nearest whole number) of
(A) the number of shares of capital stock owned by
Purchaser, divided by (B) ten (10), plus (ii) two (2).

(b) In the event of a material breach of any agreement
or covenant of Association contained in this Agreement,
Purchaser may give written notice of such breach to
Association and, in the event that such breach is not cured
within a period (the "Cure Period") of thirty (30) days
following such notice of breach by Purchaser to Association,
Purchaser shall have the right to terminate this Agreement
upon notice to Association, provided that such notice of
termination is given by Purchaser to Association within
thirty (30) days following the Cure Period.

(c) If the first Lot of Qualifying Pigs is not shipped
to Purchaser hereunder within twenty-four (24) months of the
date of this Agreement, Purchaser shall have the right to
terminate this Agreement upon notice to Association,
provided that such notice of termination is given by
Purchaser to Association within three (3) months after the
expiration of such twenty-four (24) month period; provided,
however, that any such termination shall not terminate or
otherwise affect any other Pig Purchase Agreement between
Purchaser and Association.

(d) In the event Purchaser assigns or transfers, in
accordance with the Articles of Incorporation and Bylaws of
Association, all shares of the capital stock of Association
from which Purchaser's right to purchase Lots under this
Agreement derives, this Agreement automatically shall
terminate.

(e) This Agreement shall be extended
automatically for succeeding and consecutive twelve
(12) month terms unless Purchaser gives to Association,
not less than twelve (12) months prior to the
expiration of the initial term or any extended term
hereof, notice that Purchaser desires to terminate this
Agreement as of the expiration of such initial or
extended term.

Notwithstanding the foregoing, however, the rights of Association
to collect damages and to exercise its remedies under Section 17
hereunder shall survive any termination of this Agreement.

15. WARRANTIES. ASSOCIATION MAKES NO WARRANTIES EITHER
EXPRESS OR IMPLIED TO PURCHASER OTHER THAN AS HEREIN EXPRESSLY
PROVIDED, AND SPECIFICALLY (A) MAKES NO WARRANTY AS TO ANY
SPECIFIC LEVEL OF PERFORMANCE WITH RESPECT TO ANY PIGS SOLD
HEREUNDER, AND (B) DISCLAIMS ANY WARRANTIES OF MERCHANTABILITY OR
OF FITNESS FOR A PARTICULAR PURPOSE.

<PAGE>

16. FORCE MAJEURE. Either party to this Agreement shall be
relieved of its responsibility and obligations hereunder during
any period when performance is commercially impossible because of
reasons beyond its control such as, but not limited to, fire,
explosion, strike, accident, governmental regulations or
intervention, and acts of God.

17. DEFAULT BY PURCHASER; GRANT OF SECURITY INTEREST.
Purchaser acknowledges that the damages suffered by Association
in the event of any failure by Purchaser to purchase, pay for,
and take delivery of any Lot when and as made available to
Purchaser in accordance with the terms hereof shall equal, and
Purchaser shall be liable to Association for and shall pay to
Association upon demand, the sum of the following: (a) the
difference between the price payable by Purchaser hereunder for
Qualifying Pigs included in such Lot and the then current market
price (as of the scheduled shipment date for such Lot) for
Qualifying Pigs as quoted in any independent industry publication
or source selected by Association, multiplied by the number of
Qualifying Pigs in such Lot that Purchaser has failed to
purchase, pay for, and take delivery of, in accordance with the
terms hereof; plus (b) administrative and other costs and
expenses relating to such Lot, which are hereby agreed to equal
the amount of $3,000; plus (c) costs of collection, enforcement,
and prosecution of Association's rights and remedies hereunder or
otherwise arising, whether or not involving a case, action, or
other proceeding before any state or federal court or other body,
including, but not limited to, reasonable attorney's fees,
collection agency fees, and other costs of collection; provided,
however, that to the extent applicable law prohibits collection
of attorney's fees and/or costs, this subsection (c) shall be
null and void to the extent of such prohibition, except to
preserve Association's rights pursuant to 11 U.S.C. Section 506(b).
During any period in which Purchaser has been notified that it is
obligated to pay an amount for damages pursuant to the
immediately preceding sentence and has not paid such amount
within three days of such demand, Association shall not make any
future Lots available to Purchaser for purchase hereunder or
under any other Pig Purchase Agreement between Purchaser and
Association until Purchaser has paid such amount. In the event
that Purchaser is not made available any Lot for purchase
hereunder pursuant to the immediately preceding sentence that
Association otherwise would have made available to Purchaser for
purchase hereunder, then Purchaser shall be deemed to have failed
to purchase, pay for, and take delivery of such Lot, and
Purchaser shall be liable for damages with respect to such Lot
computed in accordance with the first sentence of this Section.
Upon any termination of this Agreement, Purchaser's liability for
damages incurred by Association with respect to Purchaser's
obligation to purchase, pay for and take delivery of Lots made
available to the Purchaser shall be limited to the damages with
respect to such Lots computed in accordance with the preceding
provisions of this Section 17, and Purchaser shall not be liable
for any other damages for the failure to purchase, pay for or
take delivery of Lots hereunder after the termination of this
Agreement.

As security for the due and punctual performance of all of
Purchaser's obligations under this Agreement, Purchaser hereby
pledges and grants to Association, its successors and assigns, a
security interest in and lien upon any and all interest (the
"Coop Interest") Purchaser now has or hereafter may have in
Association, including, without limitation, any capital stock or
other rights or interests owned or held by Purchaser, or to which
Purchaser is entitled, as a stockholder of Association and any
interest of Purchaser in and to any dividends, capital or other
credits, patronage or other distributions, <PAGE> or participations
arising therefrom. Purchaser shall also deliver and endorse such
stock or other certificates and execute and deliver such
financing statements and other instruments (including, without
limitation, stock powers duly endorsed in blank), and take such
other action, as Association may request for purposes of
perfecting or protecting the security interest granted under this
Section 17. Purchaser represents, warrants and agrees that the
pledge of the Coop Interest pursuant to this Section 17 creates a
valid and perfected first priority security interest in the Coop
Interest in favor of Association, subordinate only to any
permissible pledge or other security interest granted by
Purchaser to any financial institution for purposes of securing a
loan by such financial institution to Purchaser, the proceeds of
which are used to finance Purchaser's acquisition of the Coop
Interest. Notwithstanding the foregoing, however, Association
may release such pledge and grant of a security interest for good
cause, as determined in Association's sole and absolute
discretion.

If Purchaser shall be in default under this Agreement,
Association may exercise any and all rights and remedies
available to Association hereunder, under the Articles of
Incorporation or Bylaws of Association, under any applicable
Uniform Commercial Code, or otherwise at law or in equity. The
rights and remedies afforded to Association hereunder shall be
cumulative and in addition to, and not in limitation of, any
rights and remedies which Association may otherwise have under
the Articles of Incorporation or Bylaws of Association or under
applicable law, including any applicable Uniform Commercial Code.
The exercise or partial exercise of any right or remedy of
Association hereunder or under the Articles of Incorporation or
Bylaws of Association or under applicable law shall not preclude
or prejudice the further exercise of that right or remedy or the
exercise of any other right or remedy of Association. No delay
or omission on the part of Association in exercising any right
hereunder or otherwise shall operate as a waiver of such right.
A waiver on any one occasion shall not be construed as a bar or
waiver of any right or remedy on any future occasion.

18. ARBITRATION. In the event of any controversy arising
out of or relating to this Agreement, or any breach hereof, other
than any controversy arising out of or relating to Section 17
hereof or the exercise of any rights or remedies thereunder, the
parties agree to submit the dispute to binding arbitration in
accordance with the Commercial Arbitration Rules then in force of
the American Arbitration Association. Such arbitration shall be
initiated by either party by notifying the other party in writing
and requesting a panel of five (5) arbitrators from the American
Arbitration Association, which arbitrators shall be individuals
skilled in the legal and business aspects of the subject matter
of this Agreement and of the dispute. Alternate strikes shall be
made to the panel commencing with the party requesting the
arbitration until one individual remains. Such individual shall
be the arbitrator for the controversy. The party requesting the
arbitration shall notify the arbitrator who shall hold a
hearing(s) within 60 days of the notice. Any hearing(s) shall
take place in Denver, Colorado, or such other location as the
parties may agree upon. The arbitrator shall render a decision,
including a written opinion in support thereof, within 30 days
after the conclusion of the hearing(s), which decision shall be
final and binding upon the parties without right of appeal.
Judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. Costs of the
arbitration will be assessed by the arbitrator against either or
both of the parties, and will be paid promptly by the party or
parties so assessed.

<PAGE>

19. NOTICES. Any notice given or required to be given
hereunder shall be deemed to have been effectively given when
delivered personally or sent by United States certified or
registered mail, return receipt requested, postage prepaid,
addressed or transmitted to Association at Alliance Farms
Cooperative Association, c/o Farmland Industries, Inc., 3315
North Oak Trafficway, Department 47, Kansas City, Missouri
64116, Attention: Mr. Wayne N. Snyder, and to Purchaser at the
address set forth below Purchaser's signature, and/or to such
other (or additional) address(es) requested by a notice given in
accordance with this Section.

20. ENTIRE AGREEMENT. This Agreement contains all of the
terms agreed upon by the parties with respect to the subject
matter hereof and supersedes all prior agreements of the parties
as to the subject matter hereof; provided, however, any and all
other Pig Purchase Agreements between Purchaser and Association,
shall not be superseded, modified or otherwise affected by this
Agreement. This Agreement may not be modified except in writing,
signed by the parties hereto, that specifically references this
Agreement.

21. ASSIGNMENT. This Agreement may not be assigned by
either party without prior written consent of the other party;
provided, however, that Association may assign Association's
rights herein and hereto to any lender that may provide financing
to Association in connection with the construction of facilities
or the operation thereof, or both. This Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and
their respective heirs, legal representatives, successors, and
permitted assigns.

22. CONSTRUCTION. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Colorado
(without reference to conflict of laws principles) applicable to
agreements made and to be performed entirely within such State.
The parties hereto hereby agree that if any part, term or
provision of this Agreement is held by a court of competent
jurisdiction to be illegal or unenforceable or in conflict with
any controlling state law, the validity of the remaining parts,
terms and provisions of this Agreement shall not be affected, and
the rights and obligations of the parties shall be construed and
enforced as if this Agreement did not contain the particular
part, term or provision held to be illegal or unenforceable or in
conflict with any controlling state law. This Agreement and the
transactions contemplated hereunder constitute commercial, and
not consumer, transactions.

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<PAGE>

THIS AGREEMENT CONTAINS A BINDING ARBITRATION CLAUSE THAT
MAY BE ENFORCED BY THE PARTIES.

IN WITNESS WHEREOF, the parties have executed this Agreement
effective the day and year first above written.

ASSOCIATION: PURCHASER:

ALLIANCE FARMS COOPERATIVE _____________________________
ASSOCIATION

By: ________________________ By:__________________________
Name: ______________________ Name: _______________________
Title: _____________________ Title: ______________________

Purchaser's Address:

_________________________
_________________________
_________________________