Kansas City, Mo ? Farmland Industries, the agricultural cooperative struggling with cash-flow problems, paid its employees two days early this week.

The workers were paid on Wednesday, and employees said they were told to cash their checks within 24 hours.

The cooperative’s third quarter ends on Friday, the same day that a $10 million payment is due on a $500 million loan it received in February.

Accelerating payroll will help Farmland reconcile its books on the last day of the quarter, managers were told in an e-mail from Holly McCoy, vice president of human resources.

“May 31 is an important time when our finances will be measured against our bank facility,” McCoy said in the e-mail that Farmland provided to The Kansas City Star. “By depositing your paycheck early, we’ll have a better reflection of our debt in order to measure our covenants against our loan facilities.”

A sharp decline in the sale of fertilizer, the biggest source of income for the nation’s largest ag cooperative, has left it in a financial crunch. It lost $49 million in its second quarter, after a $90 million loss in the fiscal year ending last Aug. 31.

In its latest quarterly filing with the Securities and Exchange Commission, Farmland mentioned the possibility that it could file for Chapter 11 bankruptcy protection if its cash flow did not improve and if it failed to meet terms of the bank loan.

Earlier this month Lawrence resident Bob Honse retired after less than two years as president and CEO of the cooperative. He was replaced by Robert Terry, who had been Farmland’s executive vice president, general counsel and corporate secretary.

Terry said two weeks ago that the co-op could work through the immediate cash shortage without seeking bankruptcy protection. He said the cooperative was current on its loan agreement, was paying its bills and was working closely with its lenders, led by Deutsche Bank AG.

Farmland employs about 900 people in the Kansas City area and about 14,500 worldwide. Terry has said there probably will be layoffs as the cooperative works its way back to profitability.