Letter to Stockholders               Exhibit 20
                                February 9, 1996
Dear Stockholder:

I am pleased to report that while our earnings for the second  quarter of fiscal
1996 were  down  from the same  period a year ago,  they  represent  a  sizeable
improvement compared to this year's first quarter loss.

Our net income for the second quarter was $195,000,  or $0.02 per share on sales
of $55,751,000  versus net income of $2,237,000,  or $0.23 per share on sales of
$44,488,000 for the prior year's second quarter.

For  the  first  six  months  of  fiscal  1996,  we  experienced  a net  loss of
$2,182,000,  or $0.22 per share on sales of $102,911,000.  For the first half of
fiscal  1995,  we had net income of  $4,993,000,  or $0.51 per share on sales of
$90,472,000.

The improvements we experienced  since the first quarter were largely the result
of an intense cash  management  program,  and  increased  sales of premium wheat
starch,  alcohol  products  and alcohol  by-products,  which  consist  mainly of
distillers  feeds.  I am encouraged  by the  direction we are taking.  I am also
encouraged by a proposed agreement between our government and the European Union
(E.U.), which includes a measure to curb excess shipments of wheat gluten to the
United States.

Final  ratification  of the  agreement  is expected to occur  during the current
quarter. It states that "If the market share of European Commission origin wheat
gluten  exports into the United States  increases in comparison to their average
1990-92 market share, the European  Commission and the United States  government
shall consult with a view to finding a mutually acceptable solution."

The  continuing  flood of gluten  imports  from  Europe in the  second  quarter,
however,  together with  exorbitantly  high raw material costs for wheat,  had a
severe  negative  impact on our results  compared to the same period a year ago.
Our  average per bushel  cost for wheat in the  quarter  was  approximately  26%
higher than the prior year's second quarter  average.  Wheat prices  continue to
hover well above  levels that were in place a year ago due to a worldwide  wheat
shortage.

Prices for corn and milo also remain  exceptionally high due to global shortages
of these grains as well. Our costs in the second  quarter  averaged 54% more per
bushel  compared to the second quarter of fiscal 1995.  This adversely  affected
alcohol production costs, especially in the fuel grade category.

While  conditions in the fuel grade alcohol  market remain flat,  demand for our
food grade  alcohol for beverage  and  industrial  applications  continues to be
strong.  Demand for our premium wheat  starches,  both modified and  unmodified,
also  remains  strong  due  to  their  effectiveness  in  satisfying  functional
requirements in a growing variety of food products.











As we go forward,  we will continue to focus on increasing the  effectiveness of
our  cash  management  measures  and  on  improving  cost  efficiencies  in  all
marketing,  production  and  administrative  processes.  As I stated  in my last
report to you on November 9, we are prepared to increase production and sales in
all three of our principal  product areas and to realize  significant  long-term
growth when grain costs and selling prices return to more normal levels.

Sincerely,
 s/Ladd M. Seaberg
Ladd M. Seaberg
President and CEO