Exhibit (20)
                          LETTER TO STOCKHOLDERS
                               THIRD QUARTER
                        PERIOD ENDED MARCH 31, 1996



                                                                     May 9, 1996

Dear Stockholder:

While our earnings in the third quarter of fiscal 1996 were negatively  affected
by a  combination  of greatly  increased raw material  costs for grain,  extreme
competitive  pressures in the vital wheat gluten market and softness in the fuel
alcohol market, our operational cash flow remained positive. Our solid financial
footing has allowed us to withstand  the intense  impact these  factors have had
during  what is  proving  to be one of the most  challenging  times  in  Midwest
Grain's 55-year  history.  With a return to more normal  conditions,  we will be
prepared to show significantly improved results.

During the third quarter, we incurred a net loss of $410,000, or $0.04 per share
on sales of  $53,871,000.  During  the same  period the prior  year,  we had net
income of $298,000, or $0.03 per share on sales of $42,005,000.

For the  first  nine  months  of  fiscal  1996,  we  experienced  a net  loss of
$2,592,000,  or $0.27 per share on sales of  $156,782,000.  This compares to net
income of $5,291,000,  or $0.54 per share on sales of $132,477,000 for the first
nine months of fiscal 1995.

For the past several  months,  we have been confronted with unusually high grain
prices. In the third quarter, our average per bushel cost for corn and milo rose
approximately  54% above the  average we paid  during  the same  period the year
before.  Our wheat costs  averaged  34% more per bushel  compared to a year ago.
Grain prices have  continued to climb  during the current  quarter,  driven by a
worldwide  shortage of grain  supplies and concerns  about  planting and growing
conditions for this year's crops.  In response,  we have  strengthened  our risk
management program to adjust grain procurement strategies daily if necessary. As
has been the case for  practically  all of fiscal  1996,  the higher wheat costs
compound  the severe  negative  effects  caused by European  Union  (E.U.) wheat
gluten producers, who continue to dump their excess gluten in the United States.
Final  ratification of a grains  agreement  between our government and the E.U.,
which includes a measure to curb excess shipments of gluten to the U.S., did not
occur in the third quarter as expected. Nevertheless, Dan Glickman, Secretary of
the U.S. Department of Agriculture, has directed his staff to begin preparations
for consultations on this issue with E.U. officials.  The start of consultations
is uncertain at this time, but,  according to the grains agreement,  they are to
focus on "finding a mutually acceptable solution" to the problem.
Prices for fuel grade alcohol thus far have not reflected  increased  production
costs  resulting from the  substantially  higher corn prices.  Neither have they
kept pace with recent hikes in gasoline prices.  As a result,  our production of
fuel alcohol is being  minimized  until  selling  prices and raw material  costs
achieve  greater  balance.  While demand for our food grade alcohol for beverage
and industrial applications has declined since the third quarter,  conditions in
those markets generally remain healthy.





Demand  continues to be strong for our premium wheat starch,  as well as for our
distillers feeds, a by-product of our alcohol production process.

During  this  exceptionally  challenging  time,  we are  continuing  to position
ourselves to be highly  flexible in determining our production and product sales
mix to optimize operational efficiency and cash flow.

Sincerely,


Ladd M. Seaberg
President and CEO