1

                       SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                  FORM 10-K

                Annual Report Pursuant to Section 13 or 15(d)
                   of the Securities Exchange Act of 1934

     For the fiscal year ended July 31, 1997 Commission File No. 0-8675

                       OIL-DRI CORPORATION OF AMERICA
   ---------------------------------------------------------------
           (Exact name of registrant as specified in its Charter)

       Delaware                                     36-2048898
 -------------------------------            -------------------------
 (State or other jurisdiction of            (I.R.S. Employer identifi-
incorporation or organization)                cation no.)

   410 North Michigan Avenue
     Chicago, Illinois                              60611
 ------------------------------------       --------------------------
    (Address of principal executive               (Zip Code)
           offices)

       Registrant's telephone number, including area code: (312) 321-1515

          Securities registered pursuant to Section 12(b) of the Act:

                                                   Name of each exchange
              Title of each class                   on which registered
   ---------------------------------------      -------------------------
   Common Stock, par value $.10 per share        New York Stock Exchange

          Securities registered pursuant to Section 12(g) of the Act:

                                      None
                                     ------
                                (Title of Class)

Number of Shares of each class of Registrant's common stock outstanding as of
September 30, 1997:

     Common Stock - 5,417,130 shares (including 964,552 treasury shares)
     Class B Stock - 1,818,388 shares
     Class A Common Stock - 0 shares

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:
Yes   X    No
    ----      ----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.  [X]

Aggregate market value of Registrant's Common Stock owned by non-affiliates -
$65,213,965 (based on the closing price on September 30, 1997).

   2

                     DOCUMENTS INCORPORATED BY REFERENCE

  The following documents are incorporated herein by reference:

1.  Registrant's Proxy Statement for its 1997 Annual Meeting of
    Stockholders ("Proxy Statement"), which will be filed with the Securities
    and Exchange Commission not later than November 28, 1997 (120 days after
    the end of Registrant's fiscal year ended July 31, 1997), is incorporated
    into Part III of this Annual Report on Form 10-K, as indicated herein.

2.  The following portions of Registrant's 1997 Annual Report to
    Stockholders ("Annual Report"), which is an exhibit to this Annual Report
    on Form 10-K, are incorporated into Parts I, II and IV of this Annual
    Report on Form 10-K, as indicated herein (page numbers refer to the Annual
    Report):

    a)   Common Stock on page 34.

    b)   Five-Year Summary of Financial Data on page 13.

    c)   Management's Discussion and Analysis of Financial
         Condition and Results of Operations on pages 14 to 17.

    d)   Consolidated Statements of Income on page 20.

    e)   Consolidated Statements of Stockholders' Equity on
         page 21.

    f)   Consolidated Balance Sheets on pages 18
         and 19.

    g)   Consolidated Statements of Cash Flows on page 22.

    h)   Notes to Consolidated Financial Statements on pages
         23 to 33.

    i)   Independent Auditor's Report on page 34.

    j)   Selected Quarterly Financial Data on page 33.

    k)   Financial Highlights, including Sales Trends, on page 1.

                                     ii

   3

                                   PART I

Item 1. BUSINESS

Oil-Dri Corporation of America was incorporated in 1969 in Delaware as the
successor to an Illinois corporation incorporated in 1946 which was the
successor to a partnership which commenced business in 1941.  Except as
otherwise indicated herein or as the context otherwise requires, references
herein to "Registrant" or to "Company" are to Oil-Dri Corporation of America
and its subsidiaries.  The Registrant is a leader in developing, manufacturing
and marketing sorbent products and related services for the consumer,
industrial, environmental, agricultural and fluids purification markets.  The
Registrant's products are principally produced from clay minerals and, to a
lesser extent, other sorbent materials. Consumer products, consisting primarily
of cat litter, are sold through the grocery products industry, mass
merchandisers, warehouse clubs, and pet specialty retail outlets.  Industrial
and environmental products, consisting primarily of oil, grease and water
sorbents (both clay and non-clay), are sold to distributors of industrial
cleanup and automotive products, environmental service companies, and retail
outlets.  Agricultural products, which include carriers for crop protection
chemicals and fertilizers, drying agents, soil conditioners, pellet binders for
animal feeds and flowability aids, are sold to manufacturers of agricultural
chemicals and distributors of other agricultural products.  Fluids purification
products, consisting primarily of bleaching, filtration and clarification
clays, are sold to processors and refiners of edible and petroleum-based oils.

The Registrant's sorbent technologies include absorbent and adsorbent products.
Absorbents, like sponges, draw liquids up into their many pores.  Examples of
Oil-Dri's absorbent products are CAT'S PRIDE(R) Premium Cat Litter and other
cat litters, OIL-DRI ALL PURPOSE(R) clay floor absorbent and AGSORB(R) granular
agricultural chemical carriers.

Adsorbent products attract liquids, impurities, metals and surfactants to
themselves and form low level chemical bonds.  The Registrant's adsorbents are
used for cleanup and filtration mediums.  The Registrant's adsorbent products
include OIL-DRI LITE(R) Sorbents for industrial and environmental cleanup,
PURE-FLO(R), PURE-FLO(R) SUPREME, PERFORM(TM) and SELECT(TM) Bleaching Clays
for edible oils, fats and tallows, and ULTRA-CLEAR(R) Clarification Aids for
petroleum based oils and by-products.

The Registrant has pursued a strategy of developing value-added and branded
products for consumer, industrial and environmental, agricultural and fluids
purification uses, where the Registrant's marketing and research and
development capabilities can play important roles.  The Registrant's products
are sold through its specialized divisional sales staffs supported by technical
service representatives and through a network of industrial distributors and
food brokers.  The Registrant maintains its own research and development
facility and staff.  The Registrant's transportation subsidiary ships Oil-Dri
products and the products of its customers and other third parties.

Certain financial information about Registrant's foreign and domestic
operations is contained in Note 2 of Notes to Consolidated Financial Statements
on page 25 of the Annual Report and is incorporated herein by reference.
Certain financial information on revenues from classes of similar products and
services is contained in Sales Trends on page 1 of the Annual Report to
Stockholders and incorporated herein by reference.

                                     iv

   4

Consumer Products

The Registrant's cat litter products, in both coarse granular and fine granular
clumping (scoopable) forms, are sold under the Registrant's CAT'S PRIDE(R) and
LASTING PRIDE(TM) brand names, FRESH STEP(R) and CONTROL(R) brands manufactured
for The Clorox Company and private label cat litters manufactured for mass
merchandisers, wholesale clubs, drug chains, pet superstores and retail grocery
stores.  The registrant also packages and markets Cat's Pride(R) Kat Kit(TM)
which contains cat litter in a disposable tray.  These products are sold
through independent food brokers and the Registrant's representatives to major
grocery outlets such as Albertsons, Publix, Winn Dixie, and others.  LASTING
PRIDE is principally sold to mass merchandisers such as Wal-Mart and K-Mart.

The Registrant and The Clorox Company have long-term arrangements under which
they developed FRESH STEP(R) and CONTROL(R) premium-priced cat litter products.
FRESH STEP(R) and CONTROL(R) brands, which are owned, trademarked and marketed
by The Clorox Company, both utilize the Registrant's special low density,
highly absorbent clay mineral.  FRESH STEP(R) contains microencapsulated odor
controllers which are activated by the cat.  The Registrant has a long-term
exclusive right to supply The Clorox Company's requirements for FRESH STEP(R)
and CONTROL(R) up to certain levels.  According to independently published
supermarket industry reports, FRESH STEP(R) Scoopable was the largest dollar
grossing branded cat litter sold through grocery chains in the United States
during the year ended July 13, 1997.

Traditional coarse granular clay litters once represented approximately 98% of
the market. Beginning in 1990, the cat litter market changed and traditional
coarse litters are now complemented by new, fine granule clumping (scoopable)
products.  These clumping products have the characteristic of binding together
and expanding when moisture is introduced.  The Registrant's clumping cat
litter is based on naturally occurring organic ingredients which are
biodegradable.  On an industry-wide basis, clumping cat litters have assumed
market shares in excess of 46% of retail dollar sales volume in the grocery
industry and 57% of retail dollar sales volume in the mass merchandiser
industry in the 52 week period ended July 13, 1997, compared with 42% and 56%,
respectively, in a similar period last year.

Industrial and Environmental Products

Products for industrial applications include the Registrant's oil, grease, and
water sorbents, which are cost effective floor maintenance products that
provide a nonslip and nonflammable surface for workers.  These products are
sold through a wide range of distribution channels and have achieved a high
level of brand name recognition.  The Registrant distributes clay-based
sorbents sold in granular form and in other configurations such as pillows and
socks.  The Registrant also distributes non-clay sorbents including its
OIL-DRI(R) Industrial Pad and OIL-DRI(R) Industrial Rug, which are made of
needle-punched polypropylene.

The Registrant added polypropylene products to its industrial sorbents product
line and also entered the marine oil spill response market through its
acquisition of Industrial Environmental Products, Inc. ("IEP") in April, 1990.
IEP was a distributor and marketer of these products, primarily in the
southeast United States.  The Registrant purchases the majority of these
polypropylene materials from several unaffiliated suppliers.  The Registrant
has acquired equipment affording it the capability to cut polypropylene
products, acquired in bulk form, to customer specifications and to fill a
variety of configurations.  The polypropylene products will collect up to
approximately 15 times their own weight in liquids and offer the added benefit
of incinerability and recyclability in accordance with environmentally
permissible methods.  OIL-DRI(R) Sorbent Booms and OIL-DRI(R) Sorbent Pads,
which are made from meltblown polypropylene, will selectively remove oil from
the surface of any body of water.  They can be used for emergency spill
response or for cleaning and maintenance.  The Registrant's needle-punched
polypropylene products will adsorb oil and aqueous liquids from industrial
floors and surfaces.

                                      v

   5

The Registrant sells its industrial and environmental products through a
distributor network that includes industrial, auto parts, safety, sanitary
supply, chemical and paper distributors and environmental service companies.
The Registrant supports the efforts of the industrial distributors with
specialized divisional sales personnel.

The Registrant also produces for the consumer market OIL-DRI(R) Automotive, a
floor absorbent for home and garage use.  This product is sold through
automobile parts distributors and mass merchandisers.

Agrisorbents Product Group

The Registrant produces and markets a wide range of granular and powdered
mineral absorbent products that are used with crop protection chemicals, animal
feed, fertilizers and other horticultural applications.  Products include
AGSORB(R) agricultural chemical carriers and drying agents; FLO-FRE(R), a
highly absorbent microgranule flowability aid; PEL-UNITE(R) and CONDITIONADE,
pelleting aids, used in the manufacture of animal feeds, and TERRA GREEN(R)
Soil Conditioner.

The AGSORB(R) Carriers are used as mediums of distribution for crop protection
chemicals, including herbicides, fungicides, insecticides, and fertilizers.
AGSORB(R) customized carriers are designed to reduce dust and to increase
accuracy of application.  The Registrant's AGSORB(R) Drying Agent is used to
prevent clogging in specialized farm machinery and enables farmers to evenly
apply granular fertilizers and liquid pesticides to their fields in one
application.  The Registrant has also developed AGSORB(R) as a blending agent
for fertilizers and chemicals used in the lawn and garden market.

Agricultural products are marketed in the United States by technical salesmen
employed by the Company who sell to crop protection chemical manufacturers,
feed producers and agricultural product distributors.  The Registrant's
principal customers for these products include the agricultural groups of
Monsanto, DowElanco and Zeneca.

Fluids Purification Products Group

Fluids purification products include PURE-FLO(R) Bleaching Clays,
ULTRA-CLEAR(R) clarification aids, and PURE-FLO(R) Supreme.  These products are
supported by a team of technical sales and support representatives employed by
the Company and the services of the Registrant's research and development
group.  The products are marketed in the United States and international
markets.

PURE-FLO(R) Bleaching Clays, used in the bleaching of edible oils, remove
impurities and color bodies from these oils.  The primary customers for these
products are refiners of food oils.  ULTRA-CLEAR(R) Clarification Aid is used
as a filtration and purification medium for jet fuel and other petroleum based
oils.  This product adsorbs unwanted moisture and other impurities, and is
primarily sold to oil refiners.

The Registrant also produces PERFORM(TM) and SELECT(TM) which offer performance
advances to refiners.  The Perform(TM) products are the next generation of
bleaching clays, providing increased activity for hard-to-bleach oils.  The
SELECT(TM) line of products is used earlier in the process stream to remove a
variety of impurities from edible oils.  SELECT(TM) can also be used to replace
the water wash step in the caustic refining of edible oils.

Transportation Services

Oil-Dri Transportation Company leases or contracts for 105 tractors, 241
trailers, 193 covered rail hopper cars and other special use equipment for the
delivery of the Registrant's products in package and bulk form.  Through this
subsidiary, the Registrant can control freight costs, maintain delivery
schedules and assure equipment availability. Oil-Dri Transportation Company
primarily performs transportation services for the Registrant on outbound
movements from the Registrant's production plants.  Oil-Dri Transportation
Company also generates revenue from transporting third parties' products on
return trips.

                                     vi

   6

Patents

Registrant has obtained or applied for patents for certain of its processes and
products. These patents expire at various times, beginning in 1997.  Patented
processes and products are not material to Registrant's overall business.

Foreign

SAULAR(R), manufactured and marketed by Favorite Products Company, Ltd., the
Registrant's wholly-owned Canadian subsidiary, is a leading brand of cat litter
sold in Canada.  Favorite Products Company, Ltd. also packages and markets the
SAULAR KAT-KIT which contains cat litter in a disposable tray.  Certain of the
products sold in Canada are blends of clay and synthetic sorbent materials.

The Registrant's wholly-owned subsidiary in England, Oil-Dri, U.K., LTD.,
packages clay granules produced by the Registrant's domestic manufacturing
facilities and, for certain applications, blends a synthetic sorbent material
which it manufactures locally.  Oil-Dri, U.K., LTD. markets these products,
primarily in the United Kingdom, as an oil and grease absorbent and as a cat
litter.

The Registrant's wholly-owned subsidiary in Switzerland, Oil-Dri S.A., performs
various management, sales and administrative functions for the Registrant and
its foreign subsidiaries.

The Company's foreign operations are subject to the normal risks of doing
business overseas, such as currency devaluations and fluctuations, restrictions
on the transfer of funds and import/export duties.  The Registrant to date has
not been materially affected by these risks.

Backlog; Seasonality

At July 31, 1997 and 1996, Registrant's backlog of orders was approximately
$3,049,000 and $3,150,000 respectively.  The Registrant does not consider its
clay sorbent business, taken as a whole, to be seasonal to any material extent.
However, certain business activities of certain customers of the Registrant
(such as agricultural) are subject to such factors as crop acreage planted and
product formulation cycles.

Customers

Sales to Wal-Mart Stores, Inc. and its affiliate Sam's Club accounted for
approximately 24% of the Registrant's net sales for the fiscal year ended July
31, 1997.  Sales to The Clorox Company accounted for approximately 8% of the
Registrant's net sales for the fiscal year ended July 31, 1997.  Clorox and the
Registrant are parties to a long term supply contract.  The loss of any other
of Registrant's customers would not have a materially adverse effect on the
Registrant.

Competition

Registrant has approximately seven principal competitors in the United States,
some of which have substantially greater financial resources than the Company,
which compete with the Registrant in certain markets and with respect to
certain products.  Price, service and technical support, product quality and
delivery are the principal methods of competition in Registrant's markets and
competition has historically been very vigorous.  The Registrant believes that
it can compete favorably in all of its present markets.

                                     vii

   7

Reserves

Registrant mines sorbent materials, consisting of either montmorillonite,
attapulgite or diatomaceous earth on leased or owned land near its mills in
Mississippi, Georgia and Oregon, and on leased and owned land in Florida (see
"Item 2- Properties" below).  The Registrant estimates that its proven
recoverable reserves of these sorbent materials aggregate approximately
512,704,000 tons.  Based on its rate of consumption during the 1997 fiscal
year, Registrant considers its proven recoverable reserves adequate to supply
Registrant's needs for approximately 45 years.  It is the Registrant's policy
to attempt to add to reserves each year an amount at least equal to the amount
of reserves consumed in that year.  Registrant has a program of exploration for
additional reserves and, although reserves have increased, Registrant cannot
assure that such reserves will continue to increase.  The Registrant's use of
these reserves will be subject to compliance with existing and future federal
and state statutes and regulations regarding mining and environmental
compliance.  Also, requirements for environmental compliance may restrict
exploration or use of lands that might otherwise be utilized as a source of
reserves.  During the fiscal year ended July 31, 1997, the Registrant utilized
these reserves to produce substantially all of the sorbent minerals that it
sold.

In 1997, the Registrant acquired mineral reserves on approximately 4,735 acres
in Nevada. This acreage is in addition to approximately 598 acres acquired in
1991 in Washoe County, Nevada of which 415 acres are mineral in character.  The
Registrant estimates that there are 298 million tons of proven reserves of
sorbent materials on the combined acreage.  Mining these reserves requires the
approval of federal, state and local agencies, which approvals the Registrant
is in the process of seeking.  In the future, the Registrant hopes to develop
facilities so as to use these reserves as a source of supply for its West Coast
customers.  However, there can be no assurance that this will be accomplished.

Mining Operations

The Registrant has conducted mining operations in Ripley, Mississippi since
1963; in Ochlocknee, Georgia since 1971; in Christmas Valley, Oregon since
1979; and in Blue Mountain, Mississippi since 1989.

The Registrant's raw materials are open pit mined on a year round basis,
generally using large earth moving scrapers and bulldozers to remove
overburden, and then loaded into dump trucks with backhoe or dragline equipment
for movement to the processing facilities.  The mining and hauling of the
Registrant's clay is performed by the Registrant and by independent
contractors.

The Registrant's current operating mines range in distance from immediately
adjacent to several miles from its processing plants.  Access to processing
facilities from the mining areas is generally by private road; and in some
instances public highways are utilized.

Each of the Registrant's processing facilities maintains stockpiles of
unprocessed clay of approximately one to three weeks production requirements.

Proven reserves are those reserves for which (a) quantity is computed from
dimensions revealed in outcrops, trenches, workings or drill holes; grade
and/or quality are computed from results of detailed sampling, and (b) the
sites for inspection, sampling and measurement are spaced so closely and the
geologic character is so well defined that size, shape, depth and mineral
content of reserves are well established.  Probable reserves are computed from
information similar to that used for proven reserves, but the sites for
inspection, sampling, and measurement are farther apart or are otherwise less
adequately spaced.  The degree of assurance, although lower than that for
proven reserves, is high enough to assume continuity between points of
observation.

The Registrant employs a staff of geologists and mineral specialists who
estimate and evaluate existing and potential reserves in terms of quality,
quantity and availability.

                                    viii

   8

The following schedule summarizes, for each of the Registrant's manufacturing
facilities the net book value of land and other plant and equipment.

                                                     PLANT AND
                                      LAND           EQUIPMENT
                                    ----------      -----------
Ochlocknee, Georgia                 $1,784,543      $19,129,608
Ripley, Mississippi                 $1,491,765      $13,660,318
Blue Mountain, Mississippi          $  938,182      $ 7,785,138
Christmas Valley, Oregon            $   68,044      $   539,959

Employees

As of July 31, 1997, the Registrant employed 665 persons, 55 of whom were
employed by the Registrant's foreign subsidiaries.  The Registrant's corporate
offices, research and development center and manufacturing facilities are
adequately staffed and no material labor shortages are anticipated.
Approximately 50 of the Registrant's employees in the U.S. and approximately 12
of the Registrant's employees in Canada are represented by labor unions, which
have entered into separate collective bargaining agreements with the Company.
Employee relations are considered satisfactory.

Environmental Compliance

The Registrant's mining and manufacturing operations and facilities in Georgia,
Mississippi and Oregon are required to comply with state strip mining statutes
and various federal, state and local statutes, regulations and ordinances which
govern the discharge of materials, water and waste into the environment and
restrict mining on "wetlands" or otherwise regulate the Registrant's
operations.  In recent years, environmental regulation has grown increasingly
stringent, a trend which the Registrant expects will continue.  The Registrant
endeavors to stay in substantial compliance with applicable environmental
controls and regulations and to work with regulators to correct any deficiency.
As a result, expenditures relating to environmental compliance have increased
over the years; however, in recent years expenditures have not been material.
The Registrant continues, and will continue, to incur costs in connection with
reclaiming exhausted mining sites.  The costs of reclamation have not had a
material effect on its mining costs.  These costs are treated as part of the
Registrant's mining expense.

In addition to the environmental requirements relating to mining and
manufacturing operations and facilities, there is increasing federal and state
legislation and regulation with respect to the labeling, use, and disposal
after use, of various of the Registrant's products.  The Registrant endeavors
to stay in substantial compliance with that legislation and regulation and to
assist its customers in that compliance.

The Registrant cannot assure that, despite its best efforts, it will always be
in compliance with environmental legislation and regulations or with
requirements regarding the labeling, use, and disposal after use, of its
products; nor can it assure that from time to time enforcement of such
requirements will not have an adverse impact on its business.

Energy

The Registrant uses natural gas and fuel oil as energy sources for the
processing of its clay products.  In prior years, the Registrant has switched
from natural gas to fuel oil during the winter months due to the seasonal
unavailability and higher cost of natural gas relative to fuel oil.  The
Registrant also utilizes a significant amount of diesel fuel in its
transportation operation.

                                     ix

   9

Research and Development

At the Registrant's research facility, the research and development staff
develops new products and applications and improves existing products.  The
staff and various consultants consist of geologists, mineralogists and
chemists.  In the past several years, the Registrant's research efforts have
resulted in a number of new sorbent products and processes including
PURE-FLO(R) Supreme, PURE-FLO(R) B80, B81, PERFORM(TM), SELECT(TM) CAT'S
PRIDE(R) Scoopable and LASTING PRIDE.  The technical center produces prototype
samples and tests new products for customer trial and evaluation.

Registrant spent approximately $2,049,000, $2,026,000 and $1,826,000 during its
fiscal years ended July 31, 1997, 1996 and 1995, respectively, for research and
development.  None of such research and development was customer sponsored, and
all research and development costs are expensed in the year in which incurred.

Other

The Registrant holds approximately a 13% equity interest in Kamterter, Inc., a
research and development company located in Lincoln, Nebraska.  Kamterter
applies biotechnology in the agricultural field and utilizes the Registrant's
clay products in a development-stage process to prime seeds.  At July 31, 1997,
the Registrant's investment, at cost, in Kamterter was approximately $752,000.
Although Kamterter has a substantial negative net worth, during the year ended
February 28, 1997, and in recent interim periods, Kamterter has generated
operating profits.  While the Registrant believes that Kamterter's prospects
have improved, Kamterter's future financial condition and results of operations
cannot be predicted.

Item 2.  PROPERTIES

Registrant's properties are generally described below:

                      LAND HOLDINGS & MINERAL RESERVES

              LAND     LAND                 PROVEN         PROBABLE
              OWNED   LEASED    TOTAL      RESERVES        RESERVES         TOTAL
             (acres)  (acres)  (acres)  (000s of tons)  (000s of tons)  (000s of tons)
             -------  -------  -------  --------------  --------------  --------------
                                                      
Georgia        1,484    1,804    3,288          43,395           8,436          51,831
Mississippi    2,317    1,423    3,740         129,703         118,323         248,026
Oregon         1,260    1,580    2,840          36,778           5,802          42,580
Florida          537      446      983           4,512           1,092           5,604
Nevada           415    4,735    5,150         298,316         227,976         526,292
Illinois           4        -        4               -               -               -
             -------------------------------------------------------------------------
               6,017    9,988   16,005         512,704         361,629         874,333
             =======  =======  =======  ==============  ==============  ==============

See "Item 1.  Business-Reserves"

There are no mortgages on the property owned by Registrant.  The Mississippi,
Georgia, Oregon and Florida land is used primarily for mining.  Parcels of such
land are also sites of mills operated by Registrant.  The Illinois land is the
site of Registrant's research and development facility.  The Registrant owns
approximately one acre of land in Laval, Quebec, Canada, which is the site of
the processing and packaging facility for the Registrant's Canadian subsidiary.

                                      x

   10

The Registrant's mining operations are conducted on leased or owned land.  The
Georgia, Florida and Mississippi mining leases, with expiration dates ranging
from 1999 to 2053, no one of which is material, generally provide for a lease
term which continues as long as the Registrant pays a minimum monthly rental.
This rental payment is applied against a royalty related to the number of
unprocessed, or in some cases processed, tons of mineral extracted from the
leased property.

The Registrant operates mills at Ripley, Mississippi, Ochlocknee, Georgia,
Christmas Valley, Oregon, and Blue Mountain, Mississippi; production and
packaging plants at Laval, Quebec, Canada and Wisbech, United Kingdom.
Registrant's facilities at Ripley, Mississippi; Ochlocknee, Georgia; Christmas
Valley, Oregon; Laval, Quebec, Canada and Wisbech, United Kingdom are wholly
owned by Registrant and Registrant's mill at Blue Mountain, Mississippi is
owned in-part by Registrant, with the balance leased as herein after described.
Registrant is a party to leases that relate to certain plant acquisition and
expansion projects at the Registrant's mill at Blue Mountain, Mississippi.  The
Blue Mountain, Mississippi lease was entered into with The Town of Blue
Mountain, Mississippi in 1988 in connection with the issuance by the Town of
$7,500,000 in aggregate principal amount of industrial revenue bonds,
($5,000,000 of which has been subsequently retired), full payment of which is
guaranteed by the Registrant. Upon expiration of the leases in 2008, a
subsidiary of the Registrant has the right to purchase the leased property for
$100 upon full payment of the bonds.  The land on which the mill at Wisbech,
United Kingdom is located is leased pursuant to a long-term lease arrangement
with the Port Authority of Wisbech which expires in 2032.

All of Registrant's domestic mills, whether owned or leased, consist of related
steel frame, sheet steel covered or brick buildings of various heights, with
concrete floors and storage tanks.  The buildings occupy approximately 208,000
square feet at Ripley, Mississippi, 247,000 square feet at Ochlocknee, Georgia,
18,000 square feet at Christmas Valley, Oregon and 140,000 square feet at Blue
Mountain, Mississippi.  Registrant maintains railroad siding facilities near
the Ripley, Mississippi; Ochlocknee, Georgia and Blue Mountain, Mississippi
mills.  Equipment at all mills is in good condition, well maintained and
adequate for current processing levels.

All of the Registrant's foreign facilities are owned and consist of related
steel frame, sheet steel covered or brick buildings of various heights, with
concrete floors and storage tanks.  The buildings occupy 22,500 square feet at
Laval, Quebec, Canada and 32,500 square feet at Wisbech, United Kingdom.

Registrant's research and development facility is located on land in Vernon
Hills, Illinois and consists of brick buildings of approximately 19,100 square
feet, including a pilot plant facility.

Registrant's principal office, consisting of approximately 20,000 square feet
in Chicago, Illinois, is presently occupied under a lease expiring on June 30,
2008.

Item 3.  LEGAL PROCEEDINGS

There are no material pending legal proceedings.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

                                      xi

   11

Item 401(b) OF REGULATION S-K.  EXECUTIVE OFFICERS OF REGISTRANT

The following table gives certain information with respect to the Executive
Officers of the Registrant.

                                       PRINCIPAL OCCUPATION
      NAME (3)                         FOR LAST FIVE YEARS                               AGE
- ---------------------  ----------------------------------------------------              ---
                                                                                   
Richard M. Jaffee      Chairman of the Board of the Registrant; President                  61
                         from 1960 to June, 1995; Chief Executive Officer
                         from 1962 until 1997.
Daniel S. Jaffee (2)   President and Chief Executive Officer of the                        33
                         Registrant; President and Chief Operating Officer
                         from June, 1995 until August , 1997; Chief
                         Executive Officer of Favorite Products Company,
                         Ltd., a subsidiary of the Registrant since 1990;
                         Chief Financial Officer of the Registrant from 1990
                         to 1995; Group Vice President, Consumer Products of
                         the Registrant from 1994 to 1995; Group Vice
                         President Canadian Operations and Consumer Products
                         - Grocery from 1992 until June, 1994.
Joseph C. Miller       Vice Chairman of The Board of the Registrant;                       55
                         Senior Vice President for Consumer, Industrial &
                         Environmental and Transportation from 1993 to 1995;
                         Group Vice President for Sales, Marketing and
                         Distribution, from 1990 to 1993.
Norman B. Gershon      Vice President, International Operations of the                     62
                         Registrant; Managing Director of Oil-Dri, S.A., a   
                         subsidiary of the Registrant.
Michael L. Goldberg    Executive Vice President & Chief Financial Officer                  47
                         of the Registrant; Vice President & Chief Financial
                         Officer from May, 1996 until August, 1997; Vice
                         President & Controller, Alberto-Culver USA, Inc.
                         from August 1991 until April, 1996.
Richard V. Hardin (1)  Group Vice President, Technology, of the Registrant.                58

Daniel J. Jones          Vice President of Favorite Products Co., LTD, a                   36
                         subsidiary of the Registrant; Div. III National
                         Sales Manager - Grocery of the Registrant 1994 to
                         1996; National Sales Manager, Favorite Products Co.
                         1990 to 1994.
Steven M. Levy         Vice President Consumer Products Group of the                       38
                         Registrant; General Manager Consumer Products Div.
                         1995 to 1996; Miles, Inc. Director of Marketing,
                         1992 to 1995.

                                     xii

   12

          The term of each executive officer expires at the 1997 Annual Meeting
     of the Stockholders and when his successor is elected and qualified.

     (1)  Richard V. Hardin is Richard M. Jaffee's son-in-law.

     (2)  Daniel S. Jaffee and Richard M. Jaffee are the nephew and
          brother, respectively, of Robert D. Jaffee, a director of the
          registrant.

     (3)  Of the persons in this table, only Richard M. Jaffee and
          Daniel S. Jaffee are directors.

                                     xiii

   13

                                   PART II

Item 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
         SECURITY HOLDER MATTERS

Information concerning stock prices and dividends with regard to the Common
Stock of Registrant, which is traded on the New York Stock Exchange, and
information concerning dividends with regard to the Class B Stock of
Registrant, for which there is no established public trading market,is
contained on page 34 of the Annual Report under the caption "Common Stock" and
is incorporated herein by this reference.  No shares of Class A common stock
are outstanding.  Registrant's ability to pay dividends is limited by the
Registrant's Credit Agreement with Harris Trust and Savings Bank dated
September 21, 1994. See Note 3 of "Notes to Consolidated Financial Statements"
in the Annual Report, incorporated herein by reference.

Item 6.  SELECTED FINANCIAL DATA

See the "Five Year Summary of Financial Data" on page 13 of the Annual Report,
and "Financial Highlights" on page 1 incorporated herein by reference.

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 14 to 17 of the Annual Report, incorporated herein by
reference.

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See "Consolidated Statements of Income," "Consolidated Statements of
Stockholders' Equity," "Consolidated Balance Sheets," "Consolidated Statements
of Cash Flows," "Notes to Consolidated Financial Statements" and "Independent
Auditor's Report" on pages 18 to 34 of the Annual Report, "Five Year Summary of
Financial Data" on page 13 of the Annual Report, and "Selected Quarterly
Financial Data" on page 33 of the Annual Report, incorporated herein by
reference.

Item 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

                                     xiv

   14

                                   PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item is (except for information in Part I,
hereof, concerning executive officers) contained in the Registrant's Proxy
Statement for its 1997 Annual Meeting of stockholders ("Proxy Statement") under
the caption "Election of Directors" and is incorporated herein by this
reference.

Item 11. EXECUTIVE COMPENSATION

The information required by this Item is contained in the Registrant's Proxy
Statement under the captions "Executive Compensation," "Report of the
Compensaton and Stock Option Committee of Oil-Dri Corporation of America on
Executive Compensation," "Compensation Committee Interlocks and Insider
Participation" and "Performance Graph" and is incorporated herein by this
reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this Item is contained in the Registrant's Proxy
Statement under the captions "General - Principal Stockholders" and "Security
Ownership of Management" and is incorporated herein by this reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is contained in the Registrant's Proxy
Statement under the caption "Compensation Committee Interlocks and Insider
Participation" and is incorporated herein by this reference.

                                      xv

   15

                                   PART IV

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
          ON FORM 8-K

(a)(1) The following financial statements are contained on pages 18 to 34 of
the Annual Report and are incorporated herein by this reference:

      Consolidated Balance Sheets as of July 31, 1997 (audited) and July
      31, 1996 (audited).

      Consolidated Statements of Income for the fiscal years ended July
      31, 1997 (audited), July 31, 1996 (audited) and July 31, 1995
      (audited).

      Consolidated Statements of Stockholders' Equity for the fiscal
      years ended July 31, 1997 (audited), July 31, 1996 (audited) and
      July 31, 1995 (audited).

      Consolidated Statements of Cash Flows for the fiscal years ended
      July 31, 1997 (audited), July 31, 1996 (audited) and July 31, 1995
      (audited).

      Notes to Consolidated Financial Statements.

      Independent Auditor's Report.

(a)(2)The following financial statement schedules are contained herein:

      Independent Auditor's Report on Schedules.

      Schedules to Financial Statements, as follows:

      Schedule II - Valuation and Qualifying Accounts, years ended July
                    31, 1997, 1996 and 1995.

(a)(3)The following documents are exhibits to this Report:
                
          (3)(a)(1)     Articles of Incorporation of Registrant, as amended.

          (3)(b)(2)     By-Laws of Registrant, as amended of June 16, 1995.

          (10)(c)(1)(3) Agreement ("Clorox Agreement") dated January 12,
                        1981 between The Clorox Company and Registrant, as
                        amended. (Confidential treatment of certain portions of
                        this Exhibit has been granted.)

          (10)(c)(2)(4) Amendment to Clorox Agreement dated March 3, 1989,
                        as accepted by the Registrant on March 20, 1989, between
                        The Clorox Company and the Registrant.  

- -------------

        (1)  Incorporated by reference to Exhibit (3) to Registrant's Quarterly
    Report on Form 10-Q for the quarter ended January 31, 1995.  Documents
    incorporated by reference are at Commission File No. 0-8675.
        
        (2)  Incorporated by reference to Exhibit (3)(b) to Registrant's Annual
    Report on Form 10-K for the fiscal year ended July 31, 1995.

        (3)  Incorporated by reference to Exhibit 10(f) to Registrant's
    Registration Statement on Form S-2 (Registration No. 2-97248) made effective
    on May 29, 1985.

        (4)  Incorporated by reference to Exhibit 10(e)(2) to Registrant's
    Annual Report on Form 10-K for the fiscal year ended July 31, 1989.

                                     xvi

   16

                    (Confidential treatment of certain portions of this Exhibit 
                    has been granted.)

     (10)(c)(3)(5)  Amendment to Clorox Agreement dated February 14, 1991, 
                    between The Clorox Company and Registrant (Confidential 
                    treatment of certain portions of this Exhibit has been 
                    granted).

     (10)(d)(6)     Description of 1987 Executive Deferred Compensation
                    Program.*

     (10)(e)(7)     Salary Continuation Agreement dated August 1, l989
                    between Richard M. Jaffee and the Registrant.*

     (10)(f)(8)     1988 Stock Option Plan.*

     (10)(g)(9)     Note Agreement, dated April 5, 1991, between
                    Registrant and the Teacher's Insurance and Annuity
                    Association of America regarding $8,000,000 9.38% Senior
                    Notes due November 15, 2001.

     (10)(h)(10)    Note Agreement, dated as of April 15, 1993, between
                    Registrant and the Teacher's Insurance and Annuity
                    Association of America regarding $6,500,000 7.17% Senior
                    Notes due August 15, 2004.

     (10)(i)(11)    Credit Agreement, dated as of September 21, 1994,
                    between Registrant and Harris Trust and Savings Bank
                    regarding $5,000,000 7.78% Term Loan Note and $5,000,000
                    Revolving Credit Note.

     (10) (j)(12)   The Oil-Dri Corporation of America
                    Deferred Compensation Plan adopted November 15, 1995 and
                    related resolution.*

     (10) (k)       Oil-Dri Corporation of America 1995 Long
                    Term Incentive Plan as amended through July 31, 1997.*

     (10) (l)       $10,000,000 unsecured line of credit
                    agreement dated as of July 25, 1996 between Registrant and

- --------------
     (5) Incorporated by reference to Exhibit 10(e)(3) to Registrant's
Annual Report on Form 10-K for the fiscal year ended July 31, 1991.

     (6) Incorporated by reference to Exhibit 10(f) to Registrant's Annual 
Report on Form 10-K for the fiscal year ended July 31, 1988.

     (7) Incorporated by reference to Exhibit 10(g) to Registrant's Annual 
Report on Form 10-K for the fiscal year ended July 31, 1989.

     (8) Incorporated by reference to Exhibit 4(a) to Registrant's
Registration Statement on Form S-8, filed June 30, 1989, Registration 
No.l 33-29650.

     (9) Incorporated by reference to Exhibit 10(h) to Registrant's Annual 
Report on Form 10-K for the fiscal year ended July 31, 1991.
         
     (10) Incorporated by reference to Exhibit 10(i) to Registrant's Annual 
Report on Form 10-K for the fiscal year ended July 31, 1993.

     (11) Incorporated by reference to Exhibit 10(i) to Registrant's Annual
Report on Form 10-K for the fiscal year ended July 31, 1994.

     (12) Incorporated by reference to Exhibit 10(j) to Registrant's Annual
Report on Form 10-K for the year ended July 31, 1995.

                                     xvii

   17

Exhibit
 Index

                        Harris Trust and Savings Bank incorporated by 
                        reference toExhibit 10(l) to Registrant's Annual 
                        Report on Form 10-K for the fiscal year ended 
                        July 31, 1996.

          (11)          Statement re: computation of per share earnings.

          (13)          1997 Annual Report to Stockholders of Registrant.

          (21)          Subsidiaries of Registrant.

          (23)          Consent of Blackman Kallick Bartelstein, LLP.

          (27)          Financial Data Schedule.

          *Management contract or compensatory plan or arrangement.

          The Registrant agrees to furnish the following agreements upon
          the request of the Commission:

         Exhibit 4(b)   Letter of Credit Agreement, dated as of October 1,
                        1988 between Harris Trust and Savings Bank and Blue
                        Mountain Production Company in the amount of 
                        $2,634,590 in connection with the issuance by Town of 
                        Blue Mountain, Mississippi of Variable/Fixed Rate 
                        Industrial Development Revenue Bonds, Series 1988 B 
                        (Blue Mountain Production Company Project) in the 
                        aggregate principal amount of $2,500,000 and related 
                        Indenture of Trust, Lease Agreement, Remarketing 
                        Agreement and Guaranties.

     (b)     No reports on Form 8-K were filed by Registrant with the
             Commission during the last fiscal quarter of the fiscal year ended
             July 31, 1997.

                                      xvii

   18

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                  OIL-DRI CORPORATION OF AMERICA
                                          (Registrant)

                        By /s/ Daniel S. Jaffee 
                           ----------------------------------------
                               Daniel S. Jaffee,
                           President and Chief Executive Officer 
                                      Director

Dated:  October 21, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:

/s/ Richard M. Jaffee                       October 21, 1997
- ---------------------------------- 
    Richard M. Jaffee
Chairman of the Board of Directors

/s/ Michael L. Goldberg                     October 21, 1997
- ----------------------------------  
Michael L. Goldberg
Executive Vice President and
Chief Financial Officer
Principal Financial Officer

/s/ James F. Japczyk                        October 21, 1997
- ----------------------------------
James F. Japczyk
Corporate Controller
Principal Accounting Officer

/s/ Robert D. Jaffee                        October 21, 1997
- ---------------------------------- 
Robert D. Jaffee
    Director

/s/ Ronald B. Gordon                        October 21, 1997
- ----------------------------------        
Ronald B. Gordon
    Director

/s/ J. Steven Cole                          October 21, 1997
- ----------------------------------  
    J. Steven Cole
       Director

                                    xviii

   19

/s/ Joseph C. Miller                              October 21, 1997
- ---------------------  
Joseph C. Miller
    Director

/s/ Edgar D. Jannotta                             October 21, 1997
- --------------------- 
Edgar D. Jannotta
    Director

/s/ Paul J. Miller                                October 21, 1997
- ---------------------  
Paul J. Miller
    Director

/s/ Haydn H. Murray                               October 21, 1997
- ---------------------  
Haydn H. Murray
    Director

/s/ Allan H. Selig                                October 21, 1997
- --------------------- 
Allan H. Selig
    Director

/s/ Arnold W. Donald                              October 21, 1997
- ---------------------  
Arnold W. Donald
    Director

                                      xx

   20

                  INDEPENDENT AUDITOR'S REPORT ON SCHEDULES

Board of Directors
Oil-Dri Corporation of America
Chicago, Illinois

In connection with our audit of the consolidated financial statements of OIL-DRI
CORPORATION OF AMERICA AND SUBSIDIARIES as of July 31, 1997 and 1996 and for
each of the three years in the period ended July 31, 1997, which report thereon
dated August 30, 1997, is incorporated by reference in this Annual Report on
Form 10-K, we also examined the financial statement schedules listed in the
accompanying index at Item 14(A)(2).  In our opinion, these financial statement
schedules present fairly, when read in conjunction with the related consolidated
financial statements, the financial data required to be set forth therein.

August 30, 1997

                                      xxi

   21
                                                                     SCHEDULE II

               OIL-DRI CORPORATION OF AMERICA AND SUBSIDIARIES
                                      
                      Valuation and Qualifying Accounts
                                      
                   Years Ended July 31, 1997, 1996 and 1995

                                              Additions
                                  Balance at  Charged to                Balance
                                  Beginning   Costs and                 at End
Description                       of Period    Expenses   Deductions*  of Period
- -----------                       ----------  ----------  -----------  ---------
                                                           
Allowance for doubtful accounts:
Year Ended July 31, 1997            $225,970    $125,000     $ 90,440   $260,530
                                    ========    ========     ========   ========
Year Ended July 31, 1996            $180,602    $202,690     $157,322   $225,970
                                    ========    ========     ========   ========
Year Ended July 31, 1995            $171,940    $ 51,013     $ 42,351   $180,602
                                    ========    ========     ========   ========

*Net of recoveries.

                                      xxi

   1

                                                                 EXHIBIT 10(K)

                         OILDRI CORPORATION OF AMERICA

                         1995 LONG TERM INCENTIVE PLAN

                            AS AMENDED AND RESTATED
                                    3/14/97

                                      xxii

   2

                               TABLE OF CONTENTS

                                                                                           Page
                                                                                           ----
                                                                                        
1.  Establishent, Purpose and Effective Date and Termination of the 
    Oil-Dri Corporation of America ........................................................  1
    1988 Stock Option Plan
    (a)Establishment ......................................................................  1
    (b)Purpose ............................................................................  1
    (c)Effective Date .....................................................................  1
    (d)Termination of Oil-Dri Corporation of America 1988 Stock Option Plan ...............  1
    
 2. Definitions ...........................................................................  1
    
 3. Scope of Plan .........................................................................  4
    (a)Number of Shares Available Under the Plan ..........................................  4
    (b)Reduction in the Available Shares in Connection with Award Grants ..................  4
    (c)Effect of the Expiration or Termination of Awards ..................................  5
    (d)Maximum Number of Options and Stock Appreciation Rights to any Individual Grantee ..  5
    
 4. Administration ........................................................................  5
    (a)Committee Administration ...........................................................  5
    (b)Board Reservation and Delegation ...................................................  5
    (c)Committee Authority ................................................................  5
    (d)Committee Determinations Final .....................................................  6
    
 5. Eligibility ...........................................................................  6
    
 6. Conditions to Grants ..................................................................  6
    (a)General Conditions .................................................................  6
    (b)Grant Options and Option Price .....................................................  6
    (c)Grant of Incentive Stock Options ...................................................  7
    (d)Grant of Shares of Restricted Stock ................................................  7
    (e)Grant of Stock Appreciation Rights .................................................  9
    (f)Grant of Performance Units and Performance Shares ..................................  9
    (g)Grant of Phantom Stock .............................................................  9
    (h)Grant of Stock Bonuses .............................................................  9
    (i)Tandem Awards ......................................................................  10
    (j)Performance Goals ..................................................................  10
    
 7. Non-transferability ...................................................................  10
    
 8. Exercise ..............................................................................  10
    (a)Exercise of Options ................................................................  10
    (b)Exercise of Stock Appreciation Rights ..............................................  11
    (c)Exercise of Performance Units ......................................................  11
    (d)Payment of Performance Shares ......................................................  12
    (e)Payment of Phantom Stock Awards ....................................................  12
    (f)Full Vesting Upon Change of Control ................................................  12
    (g)Pooling of Interest ................................................................  13
    (h)Exercise, Cancellation, Expiration or Forfeiture of Tandem Awards ..................  13
    
 9. Effect of Certain Transactions ........................................................  13
    
10. Mandatory Withholding Taxes ...........................................................  13
    
11. Termination of Employment .............................................................  13
    
12. Securities Law Matters ................................................................  14
    
13. No Funding Required ...................................................................  14
    
14. No Employment Rights ..................................................................  14

                                     ii

   3

                           TABLE OF CONTENTS (CONT'D)

                                                                              Page
                                                                              ----
                                                                        
  15.  Rights as a Stockholder .............................................    14
  
  16.  Nature of Payments ..................................................    14
  
  17.  Non-Uniform Determinations ..........................................    14
  
  18.  Adjustments .........................................................    14
  
  19.  Amendment of the Plan ...............................................    15
  
  20.  Termination of the Plan .............................................    15
  
  21.  No Illegal Transactions .............................................    15
  
  22.  Governing Law .......................................................    15
  
  23.  Severability ........................................................    15

                                     iii

   4

                         OIL DRI CORPORATION OF AMERICA
                         1995 LONG-TERM INCENTIVE PLAN
                                  (AS AMENDED)

1.   Establishment, Purpose and Effective Date and Termination of the Oil-Dri
Corporation of America 1988 Stock Option Plan.

     (a) Establishment.  The Company hereby establishes the Oil-Dri Corporation
of America 1995 Long-Term Incentive Plan ("Plan").

     (b) Purpose.  The primary purpose of the Plan is to provide a means by
which key employees of the Company and its Subsidiaries can acquire and
maintain stock ownership, thereby strengthening their commitment to the success
of the Company and its Subsidiaries and their desire to remain employed by the
Company and its Subsidiaries, focusing their attention on managing the Company
as an equity owner, and aligning their interests with those of the Company's
stockholders.  The Plan also is intended to attract and retain key employees
and to provide such employees with additional incentive and reward
opportunities designed to encourage them to enhance the profitable growth of
the Company and its Subsidiaries.

     (c) Effective Date.  The Plan shall become effective upon its adoption by
the Board, subject to the approval of the votes of a majority of the shares of
Common Stock and Class B Stock of the Company voting together present or
represented by proxy at the 1995 annual meeting of stockholders.  Until such
approval shall have been obtained, no Option, stock appreciation right, or
performance unit shall be exercised, no stock bonus shall be granted, no
performance share shall be paid, and no shares of restricted stock shall become
nonforfeitable.  If such shareholder approval is not obtained at the 1995
annual meeting of shareholders, all Awards shall automatically become null and
void and no further Awards shall be granted.

     (d) Termination of the Oil-Dri Corporation of America 1988 Stock Option
Plan.  Effective upon stockholder approval of this Plan, the Oil-Dri
Corporation of America 1988 Stock Option Plan shall terminate and the shares of
Stock allotted for stock option grants under that plan, which are not the
subject of outstanding options granted under that plan, shall not be available
for the granting of any further options or other awards under that plan or any
other employee or director plan or arrangement of the Company.  The options
outstanding under the Oil-Dri Corporation of America 1988 Stock Option Plan
shall remain outstanding and exercisable in accordance with their respective
terms.

2.   Definitions.  As used in the Plan, terms defined parenthetically 
immediately after their use shall have the respective meanings provided by such
definitions and the terms set forth below shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms
of the terms defined):
        
          (a)"Award" means Options, shares of restricted Stock, stock 
     appreciation rights, performance units, or performance shares stock 
     bonuses or shares of phantom stock granted under the Plan.

          (b)"Award Agreement" means the written agreement by which an Award is
     evidenced.

          (c)"Beneficial Owner", "Beneficially Owned", "Beneficially Owning", 
     and "Beneficial Ownership" shall have the meanings applicable under 
     Rule 13d-3 promulgated under the 1934 Act.

          (d)"Board" means the board of directors of the Company.

          (e)"Change in Capitalization" means any increase or reduction in the
     number of shares of Stock, or any change in the shares of Stock or exchange
     of shares of Stock for a different number or kind of shares or other
     securities by reason of a stock dividend (either as a dividend of the same
     class of Stock or as a dividend of a different class of Stock), stock
     split, reverse stock split, share combination, reclassification,
     recapitalization, merger, consolidation, spin-off, split-up,
     reorganization, issuance of warrants or rights, liquidation, exchange of
     shares, repurchase of shares, change in corporate structure, or
     similar event, of or by the Company.
        
          (f)"Change of Control" means any of the following

                                      1
   5

       (i)  Class B Stock, together with the Common Stock held by the Beneficial
            Owner of the Class B Stock, has less than 50% of the Voting Power 
            of the Company, and

            (A)  the acquisition by any person or group of Beneficial
                 Ownership of stock possessing more than 20% of the Voting Power
                 of the Company, except that (i) no such person or group shall
                 be deemed to own beneficially (a) any securities acquired 
                 directly from the Company pursuant to a written agreement with
                 the Company, or (b) any securities held by the Company or a    
                 Subsidiary or any      employee benefit plan (or any   related 
                 trust) of the Company or a Subsidiary, and (ii) no Change of 
                 Control shall be deemed to have occurred solely by reason of
                 any such acquisition by a corporation with respect to which,
                 after such acquisition, more than 60% of both the
                 then-outstanding common shares of such corporation and the
                 Voting Power of such corporation are then Beneficially Owned,
                 directly or indirectly, by the persons who were the Beneficial
                 Owners of the Stock and voting securities of the Company
                 immediately before such acquisition in substantially the same
                 proportions as their ownership, immediately before such
                 acquisition, of the then outstanding Stock or the Voting Power
                 of the Company, as the case may be; or
        
            (B)  individuals who, as of the Effective Date, constitute
                 the Board (the "Incumbent Board") cease for any reason to
                 constitute at least a majority of the Board; provided that any
                 individual who becomes a director after the Effective Date
                 whose election or nomination for election by the Company's
                 stockholders was approved by a vote of at least two-thirds of
                 the directors then comprising the Incumbent Board shall be
                 considered as though such individual were a member of the
                 Incumbent Board, but excluding, for this purpose, any such
                 individual whose initial assumption of office is in connection
                 with an actual or threatened election contest relating to the
                 election of the directors of the Company (as such terms are
                 used in Rule 14a-11 under the 1934 Act); or
        
       (ii) approval by the stockholders of the Company of (A) a merger, 
            reorganization or consolidation with respect to which the
            individuals and entities who were the respective Beneficial Owners
            of the Stock and Voting Power of the Company immediately before
            such merger, reorganization or consolidation do not, immediately
            after such merger, reorganization or consolidation, beneficially
            own, directly or indirectly, more than 60% of, respectively, the
            then outstanding common shares and the Voting Power of the
            corporation resulting from such merger, reorganization or
            consolidation, (B) a liquidation or dissolution of the Company or
            (C) the sale or other disposition   of all or substantially all of  
            the assets of the Company.
        
       For purposes of this definition, "person" means such terms as used in
   SEC Rule 13d-5(b) under the 1934 Act, and "group" means two or more persons
   acting together in such a way to be deemed a person for purposes of Section
   13(d) of the 1934 Act.

       Notwithstanding the foregoing, a Change of Control shall be deemed not
   to have occurred with respect to any Grantee or Transferee with respect to
   an Award initially issued to such Grantee if such Grantee is, by written
   agreement, a participant on such Grantee's own behalf in a transaction in
   which the persons (or their affiliates) with whom such Grantee has the
   written agreement cause the Change of Control to occur and, pursuant to the
   written agreement, the Grantee has or is to acquire an equity interest in
   the resulting entity.

    (g)"Committee" means the committee of the Board appointed pursuant to
   Article 4.

    (h)"Company" means Oil-Dri Corporation of America, a Delaware corporation.

    (i)"Disability" means for purposes of the exercise of an incentive stock
   option, a disability within the meaning of Section 22(e)(3) of the
   Code, and for all other purposes, a mental or physical condition which, in
   the opinion of the Committee, renders a Grantee unable or incompetent to
   carry out the job responsibilities which such Grantee held or the duties to
   which such Grantee was assigned at the time the disability was incurred, and
   which is expected to be permanent or for an indefinite duration.

    (j)"Effective Date" means  the date that the Plan is adopted by the
   Board.

                                      2

   6

       (k)"Fair Market Value" of any security of the Company or any other
  issuer means, as of any applicable date:

            (i)if the security is listed for trading on the New York Stock
       Exchange, the closing price, regular way, of the security as reported on
       the New York Stock Exchange Composite Tape, or if no such reported sale
       of the security shall have occurred on such date, on the next preceding
       date on which there was such a reported sale, or

            (ii)if the security is not so listed, but is listed on another
       national securities exchange or authorized for quotation on the National
       Association of Securities Dealers Inc.'s NASDAQ National Market Systems
       ("NASDAQ/NMS"), the closing price, regular way, of the security on such
       exchange or NASDAQ/NMS, as the case may be, or if no such reported sale
       of the security shall have occurred on such date, on the next preceding
       date on which there was such a reported sale, or

            (iii)if the security is not listed for trading on a national
       securities exchange or authorized for quotation on NASDAQ/NMS, the
       average of the closing bid and asked prices as reported by the National
       Association of Securities Dealers Automated Quotation System ("NASDAQ")
       or, if no such prices shall have been so reported for such date, on the
       next preceding date for which such prices were so reported, or

            (iv)if the security is not listed for trading on a national
       securities exchange or is not authorized for quotation on NASDAQ/NMS or
       NASDAQ, the fair market value of the Common Stock of the Company as
       determined in good faith by the above terms.

       (l)"Grant Date" means the date of  grant of an Award determined in
  accordance with Article 6.

       (m)"Grantee" means an individual who has been granted an Award.

       (n)"Holder" means a person who holds an Award, either as a Grantee or a
  Transferee.

       (o)"Incentive Stock Option" means an Option satisfying the requirements
  of Section 422 of the Internal Revenue Code and designated by the Committee
  as an Incentive Stock Option.

       (p)"Internal Revenue Code" means the Internal Revenue Code of 1986, as
  amended, and regulations and rulings thereunder.  References to a particular
  Section of the Internal Revenue Code shall include references to successor
  provisions.

       (q)"Measuring Period" has the meaning specified in Article 6(f)(ii)(B).

       (r)"Minimum Consideration" means the $.10 par value per share of Stock
  or such larger amount determined pursuant to resolution of the Board to be
  capital within the meaning of Section 154 of the Delaware General Corporation
  Law.

       (s)"1934 Act" means the Securities Exchange Act of 1934, as amended.

       (t)"Nonqualified Stock Option" means an Option which is not an Incentive
  Stock Option or other type of statutory stock option under the Internal
  Revenue Code.

       (u)"Option" means an option to purchase Stock granted under the Plan.

       (v)"Option Price" means the per share purchase price of (i) Stock
  subject to an Option or (ii) restricted Stock subject to an Option.

       (w)"Performance Goals" has the meaning set forth in Article 6(j).

       (x)"Performance Percentage" has the meaning specified in Article
  6(f)(ii)(C).

       (y)"Person" means a person within the meaning of Sections 13(d) or 14(d)
  of the 1934 Act.

                                      -3-

   7

       (z)"Plan" has the meaning set forth in Article 1(a).

       (aa)"SEC" means the Securities and Exchange Commission.

       (bb)"Section 16 Grantee" means a person subject to potential liability
  with respect to equity securities of the Company under Section 16(b) of the
  1934 Act.

       (cc)"Stock" means Class A Common Stock or if no Class A Common Stock is
  issued and publicly traded on any securities market described in Article 2(k)
  above, then Common Stock par value $.10 per share, of the Company.  Class A
  Common Stock, Class B Stock and Common Stock shall have the meaning as
  provided in the Company's Certificate of Incorporation.

       (dd)"Subsidiary" means for purposes of grants of incentive stock
  options, a corporation as defined in Section 424(f) of the Internal Revenue
  Code, with the Company being treated as the employer corporation for purposes
  of this definition and, for all other purposes, a corporation with respect to
  which the Company owns, directly or indirectly, 25% of the then-outstanding
  common shares.

       (ee)"10% Owner" means a person who owns stock (including stock treated
  as owned under Section 424(d) of the Internal Revenue Code) possessing more
  than 10% of the Voting Power of the Company.

       (ff)"Transferee" means a person who is the Holder of an Award as the
  result of a transfer of the Award in accordance with the terms of the Award
  and the Plan.

       (gg)"Termination of Employment" occurs the first day on which an
  individual is for any reason no longer employed by the Company or any of its
  Subsidiaries, or with respect to an individual who is an employee of a
  Subsidiary, the first day on which the Company no longer owns Voting
  Securities possessing at least 25% of the Voting Power of such Subsidiary.

       (hh)"Voting Power" means the combined voting power of the then
  outstanding Voting Securities.

       (ii)"Voting Securities" means, with respect to the Company or any
  Subsidiary, any securities issued by the Company or such Subsidiary,
  respectively, which generally entitle the holder thereof to vote for the
  election of directors of the Company.

     3. Scope of the Plan.

       (a)Number of Shares Available Under the Plan.  The maximum number of
  shares of Stock that may be made the subject of Awards granted under the Plan
  is 500,000 (or the number and kind of shares of Stock or other securities to
  which such shares of Stock are adjusted upon a Change in Capitalization
  pursuant to Article 18).  The Company shall reserve for the purpose of the
  Plan, out of its authorized but unissued shares of Stock or out of shares
  held in the Company's treasury, or partly out of each, such number of shares
  as shall be determined by the Board.  The Board shall have the authority to
  cause the Company to purchase from time to time shares of Stock to be held as
  treasury shares and used for or in connection with Awards.

       (b)Reduction in the Available Shares in Connection with Awards Grants.
  Upon the grant of an Award, the number of shares of Stock available under
  Article 3(a) for the granting of further Awards shall be reduced as follows:

          (i)Performance Units Denominated in Dollars.  In connection with the
     granting of each performance unit denominated in dollars, the number of
     shares of Stock available under Article 3(a) for the granting of further
     Awards shall be reduced by the quotient of (x) the dollar amount
     represented by the performance unit divided by (y) the Fair Market Value
     of a share of Stock on the date immediately preceding the Grant Date of
     the performance unit.

          (ii)Other Awards.  In connection with the granting of each Award,
     other than a performance unit denominated in dollars, the number of shares
     of Stock available under Article 3(a) for the granting of further

                                      -4-

   8

        Awards shall be reduced by a number of shares equal to the number of
        shares of Stock in respect of which the Award is granted or
        denominated.

        Notwithstanding the foregoing, where two or more Awards are granted with
  respect to the same shares of Stock, such shares shall be taken into account
  only once for purposes of this Article 3(b).

       (c)Effect of the Expiration or Termination of Awards.  If and to the
  extent an Award expires, terminates or is canceled or forfeited for any
  reason without having been exercised in full (including, without limitation,
  a cancellation of an Option pursuant to Article 4(c)(vi)), the shares of
  Stock associated with the expired, terminated, canceled or forfeited portion
  of the Award (to the extent the number of shares available for the granting
  of Awards was reduced pursuant to Article 3(b)) shall again become available
  for Awards under the Plan.

       In addition, during the period that any Awards remain outstanding under
  the Plan the Committee may make good faith adjustments with respect to the
  number of shares of Stock attributable to such Awards for purposes of
  calculating the maximum number of shares available for the granting of future
  Awards under the Plan.

       (d)Maximum Number of Options and Stock Appreciation Rights to any
  Individual Grantee.  No individual Grantee may be granted Options and stock
  appreciation rights to purchase more than one-fourth of the maximum number of
  shares of Stock that may be made subject of Awards under the Plan as set
  forth in Article 3(a).

     4.  Administration.

     (a) Committee Administration.  Subject to Article 4(b), the Plan shall be
administered by the Committee, which shall consist of not less than three
"disinterested persons" within the meaning of Rule 16b-3 under the 1934 Act;
provided, however, that the membership of the Committee shall be subject to
such changes (including, if appropriate, a change in the minimum number of
members of the Committee) as the Board deems appropriate and permissible to
permit transactions pursuant to the Plan to be exempt from potential liability
under Section 16(b) of the 1934 Act.

     (b) Board Reservation and Delegation.  The Board may, in its discretion,
reserve to itself or delegate to another committee of the Board any or all of
the authority and responsibility of the Committee with respect to Awards to
Grantees who are not Section 16 Grantees at the time any such delegated
authority or responsibility is exercised.  Such other committee may consist of
one or more directors who may, but need not be, officers or employees of the
Company or of any of its Subsidiaries.  To the extent that the Board has
reserved to itself or delegated the authority and responsibility of the
Committee to such other committee, all references to the Committee in the Plan
shall be to the Board or to such other committee.

     (c) Committee Authority.  The Committee shall have full and final
authority, in its discretion, but subject to the express provisions of the
Plan, as follows:

          (i)   to grant Awards,

          (ii)  to determine (A) when Awards may be granted and (B) whether or
     not specific Awards shall be identified with other specific Awards, and if
     so, whether they shall be exercisable cumulatively with, or alternatively
     to, such other specific Awards,

          (iii) to interpret the Plan and to make all determinations necessary
     or advisable for the administration of the Plan,

          (iv)  to prescribe, amend, and rescind rules and regulations relating
     to the Plan, including without limitation, rules with respect to the
     exercisability and non-forfeitability of Awards upon the Termination of
     Employment of a Grantee regardless of whether the Award is held by such
     Grantee or a Transferee of an Award initially issued to such Grantee,

          (v)   to determine the terms and provisions of the Award Agreements,
     including Performance Goals, if any, which need not be identical and, with
     the consent of the Holder, to modify any such Award Agreement at anytime,
     provided that the consent of the Holder shall not be required for any
     amendment which (A) does not adversely

                                      -5-

   9

     affect the rights of the Holder, or (B) is necessary or advisable (as
     determined by the Committee) to carry out the purpose of the Award as a
     result of any new or change in existing applicable law, regulation, ruling
     or judicial decision; provided that any such change shall be applicable
     only to Awards which have not been exercised;

          (vi)   to cancel, with consent of the Holder, outstanding Awards,
                 
          (vii)  to accelerate or extend (subject to Article 6(a)(ii)) the time
     during which any Award or Grant of Award may be exercised and to
     accelerate or waive any or all of the restrictions and conditions
     applicable to, any Award,

          (viii) to make such adjustment or modifications to Awards to Grantees
     working outside the United States as are necessary and advisable to
     fulfill the purposes of the Plan,

          (ix)   to authorize any action of or make any determination by the
     Company as the Committee shall deem necessary or advisable for carrying
     out the purposes of the Plan, and

          (x)    to impose such additional conditions, restrictions, and
     limitations upon the grant, exercise or retention of Awards as the
     Committee may, before or concurrently with the grant thereof deem
     appropriate, including, without limitation, requiring simultaneous
     exercise of related identified Awards, and limiting the percentage of
     Awards which may from time to time be exercised by a Holder.

     (d) Committee Determinations Final.  The determination of the Committee on
all matters relating to the Plan or any Award Agreement shall be conclusive and
final.  No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Award.

     5. Eligibility.  Awards may be granted to any employee of the Company or
any of its Subsidiaries.  In selecting the individuals to whom Awards may be
granted, as well as in determining the number of shares of Stock subject to,
and the other terms and conditions applicable to, each Award, the Committee
shall take into consideration such factors as it deems relevant in promoting
the purposes of the Plan.

     6. Conditions to Grants.

     (a) General Conditions.

       (i)  The Grant Date of an Award shall be the date on which the Committee
  grants the Award or such later date as specified in advance by the Committee.

       (ii) The term of each Award (subject to Article 6(c) with respect to
  Incentive Stock Options) shall be a period of not more than ten years from
  the Grant Date, and shall be subject to earlier termination as provided
  herein or in the applicable Award Agreement.

       (iii)The Committee may grant Awards with terms and conditions which
  differ among the Grantees thereof.  To the extent not set forth in the Plan,
  the terms and conditions of each Award shall be set forth in an Award
  Agreement.

     (b) Grant of Options and Option Price.  The Committee may, in its
  discretion, grant Options to acquire unrestricted Stock or restricted Stock
  to any employee eligible under Article 5 to receive Awards.  No later than
  the Grant Date of

                                      -6-

   10

  any *Option, the Committee shall determine the Option Price which shall not
  be less than 100% of the Fair Market Value of the Stock on the Grant Date.

     (c) Grant of Incentive Stock Options.  At the time of the grant of any
  Option, the Committee may designate that such Option shall be an Incentive
  Stock Option.  Any Option designated as an Incentive Stock Option:

       (i) shall have an Option Price of (A) not less than 100% of the Fair
  Market Value of the Stock on the Grant Date or (B) in the case of a 10%
  Owner, not less than 110% of the Fair Market Value of the Stock on the Grant
  Date;

       (ii) shall have a term of not more than ten years (five years, in the
  case of 10% Owner) from the Grant Date, and shall be subject to earlier
  termination as provided herein or in the applicable Award Agreement;

       (iii) shall not have an aggregate Fair Market Value (determined for each
  Incentive Stock Option at its Grant Date) of Stock with respect to which
  Incentive Stock Options are exercisable for the first time by such Grantee
  during any calendar year (under the Plan and any other employee stock option
  plan of the Grantee's employer or any parent or subsidiary thereof ("other
  Plans")), determined in accordance with the provisions of Section 422 of the
  Internal Revenue Code, which exceeds $100,000 (the "$100,000 Limit");

       (iv) shall, if, with respect to any grant, the aggregate Fair Market
  Value of Stock (determined on the Grant Date) of all Incentive Stock Options
  previously granted under the Plan and any Other Plans ("Prior Grants") and
  any Incentive Stock Options under such grant (the "Current Grant") which are
  exercisable for the first time during any calendar year would exceed the
  $100,000 Limit, be exercisable as follows:

        (A) the portion of the Current Grant exercisable for the first time by
   the Grantee during any calendar year which would be, when added to any
   portions of any Prior Grants exercisable for the first time by the Grantee
   during such calendar year with respect to Stock which would have an
   aggregate Fair Market Value (determined as of the respective Grant Date for
   such Options) in excess of the $100,000 Limit shall, notwithstanding the
   terms of the Current Grant, be exercisable for the first time by the Grantee
   in the first subsequent calendar year or years in which it could be
   exercisable for the first time by the Grantee when added to all Prior Grants
   without exceeding the $100,000 Limit; and

        (B) if, viewed as of the date of the Current Grant, any portion of a
   Current Grant could not be exercised under the provisions of Article
   6(c)(iv)(A) during any calendar year commencing with the calendar year in
   which it is first exercisable through and including the last calendar year
   in which it may by its terms be exercised, such portion of the Current Grant
   shall not be an Incentive Stock Option, but shall be exercisable as a
   separate Nonqualified Stock Option at such date or dates as are provided in
   the Current Grant;

       (v) shall be granted within ten years from the earlier of the date of
  the Plan is adopted by the Board or the date the Plan is approved by the
  stockholders of the Company; and

       (vi) shall require the Grantee to notify the Committee of any
  disposition of any Stock issue pursuant to the exercise of the Incentive
  Stock Option under the circumstances described in Section 421(b) of the
  Internal Revenue Code (relating to certain disqualifying dispositions) within
  ten days of such disposition.

     (d) Grant of Shares of Restricted Stock.

       (i) The Committee may, in its discretion, grant shares of restricted
  Stock to any employee eligible under Article 5 to receive Awards.

       (ii) Shares of restricted Stock will be Class A Common Stock or if no
  Class A Common Stock is publicly traded on any securities market described in
  Article 2(k) on the Grant Date of such shares of restricted Stock, then such
  shares of restricted Stock shall be Common Stock.

       (iii) Before the grant of any shares of restricted Stock, the Committee
  shall determine, in its discretion:

                                      -7-

   11

          (A) whether the certificates for such shares shall be delivered to the
   Grantee or held (together with a stock power executed in blank by the
   Grantee) in escrow by the Secretary of the Company until such shares become
   nonforfeitable or are forfeited,

          (B) the per share purchase  price of such shares, which may be zero,
   provided, however, that

              (1) the per share purchase price of all such shares (other than
          treasury shares) shall not be less than the Minimum Consideration for
          each such share; and

          (C) the restrictions applicable to such grant; and

          (D) whether the payment to the Grantee of dividends, or a specified
   portion thereof, declared or paid on such shares by the Company shall be
   deferred until the lapsing of the restrictions imposed upon such shares
   shall be held by the Company for the account of the Grantee, whether such
   dividends shall be reinvested in additional shares of restricted Stock (to
   the extent shares are available under Article 3) subject to the same
   restrictions and other terms as apply to the shares with respect to which
   such dividends are issued or otherwise reinvested in Stock or held in
   escrow, whether interest will be credited to the account of the Grantee with
   respect to any dividends which are not reinvested in restricted or
   unrestricted Stock, and whether any Stock dividends issued with respect to
   the restricted Stock to be granted shall be treated as additional shares of
   restricted Stock.

   (iv)   Payment of the purchase price (if greater than zero) for shares of
   restricted Stock shall be made in full by the Grantee before the delivery of
   such shares and, in any event, no later than ten days after the Grant Date
   for such shares.  Such payment may be made, as determined in advance by
   either the Board or the Committee in its discretion, in any one or any
   combination of the following:

          (A) cash, or

          (B) shares of restricted or unrestricted Class A Common Stock or 
   Common Stock owned by the Grantee prior to such grant and valued at its Fair
   Market Value on the business day immediately preceding the date of payment;

   provided, however, that in the case of payments in shares of restricted or 
   unrestricted Class A Common Stock or Common Stock,

              (1) if the purchase price for restricted Stock ("New Restricted
          Stock") is paid with shares of restricted Class A Common Stock or
          restricted Common Stock ("Old Restricted Stock"),  the restrictions   
          applicable to the New Restricted Stock shall be the same as if the  
          Grantee had paid for the New Restricted Stock in cash unless, in the
          judgment of the Committee, the Old Restricted Stock was subject to a
          greater risk of forfeiture, in which case a number of shares of New
          Restricted Stock equal to the number of shares of Old Restricted
          Stock tendered in payment for New Restricted Stock shall be subject
          to the same restrictions as the Old Restricted Stock, determined
          immediately before such payment.

   (v)    Upon the date that shares of restricted Stock become non-forfeitable, 
          the Company shall exchange such shares of Common Stock for an equal
          number of shares of Class A Common Stock if such shares of restricted
          Stock have been granted as shares of Common Stock and if such A
          Common Stock is issued and publicly traded on any securities market
          as described in Article 2(k).

   (vi)   The Committee may, but need not, provide that all or any portion of
   a Grantee's Award of restricted Stock shall be forfeited

          (A) except as otherwise specified in the Award Agreement, upon the
   Grantee's Termination of Employment within a specified time period after the
   Grant Date, or

          (B) if the Company or the Grantee does not achieve specified
   performance goals within a specified time period after the Grant Date and
   Before the Grantee's Termination of Employment, or

                                      -8-

   12

          (C) upon failure to satisfy such other restrictions as the Committee
   may specify in the Award Agreement.

   (vii) If a share of restricted Stock is forfeited, then

          (A) the Grantee shall be deemed to have resold such share of 
   restricted Stock to the Company at the lesser (1) the purchase price paid
   by the Grantee (such purchase price shall be deemed to be zero dollars 
   ($0) if no purchase price was paid) or (2) the Fair Market Value of a share
   of Stock on the date of such forfeiture;

          (B) the Company shall pay to the Grantee the amount determined under
   clause (A) of this sentence, if not zero, as soon as is administratively
   practicable, but in any case within 90 days after forfeiture; and

          (C) such share of restricted Stock shall cease to be outstanding, and
   shall no longer confer on the Grantee thereof any rights as a stockholder of
   the Company, from and after the date of the Company's tender of the payment
   specified in clause (B) of this sentence, whether or not such tender is
   accepted by the Grantee, or the date the restricted Stock is forfeited if no
   purchase price was paid for the restricted Stock.

        (viii)  Any share of restricted Stock shall bear an appropriate legend
      specifying that such share is non-transferable and
      subject to the restrictions set forth in the Plan.  If any shares of
      restricted Stock become nonforfeitable, the Company shall cause
      certificates for such shares to be issued or reissued without such
      legend and delivered to the Grantee or, at the request of the Grantee,
      shall cause such shares to be credited to a brokerage account
      specified by the Grantee.

      (e) Grant of Stock Appreciation Rights.  The Committee may grant stock
    appreciation rights to any employee eligible under Article 5 to receive
    Awards. When granted, stock appreciation rights may, but need not, be
    identified with shares of Stock subject to a specific Option awarded to the
    Grantee (including any Option granted on or before the Grant Date of the
    stock appreciation rights) in a number equal to or different from the
    number of stock appreciation rights so granted.  If stock appreciation
    rights are identified with shares of Stock subject to an Option then,
    unless otherwise provided in the applicable Award Agreement, (i) the
    Grantee's associated stock appreciation rights shall terminate upon the
    exercise, expiration, termination, forfeiture, or cancellation of such
    Option and (ii) the stock appreciation right and such Option can only be
    transferred pursuant to Article 7 to the same Transferee. 

     (f) Grant of Performance Units and Performance Shares.

      (i) The Committee may, in its discretion, grant performance units or
   performance shares to any employee eligible under Article 5 to receive
   Awards.

     (ii) Before the grant of any performance unit or performance share, the
   Committee shall:

          (A) determine Performance Goals applicable to such grant,

          (B) designate a period, of not less than one year nor more than five
   years, for the measurement of the extent to which Performance Goals are
   attained (the "Measuring Period"), and

          (C) assign a "Performance Percentage" to each level of attainment of
   Performance Goals during the Measuring Period, with the percentage
   applicable to minimum attainment being zero percent (0%) and the percentage
   applicable to optimum attainment to be determined by the Committee from time
   to time.

     (g) Grant of Phantom Stock.  The Committee may, in its discretion, grant
   shares of phantom stock to any employee who is eligible under Article 5 to
   receive Awards and is employed outside the United States.  Such phantom stock
   shall be subject to the terms and conditions established by the Committee and
   set forth in the applicable Award Agreement.

     (h) Grant of Stock Bonuses.  The Committee may grant shares of Stock as a
   bonus to any individual eligible under Article 5 to receive Awards.

     (i) Tandem Awards.  The Committee may grant and identify any Award with
   any other Award granted under the Plan, on terms and conditions determined by
   the Committee.

                                      9

   13

     (j) Performance Goals.  Performance Goals shall mean the goals applicable
to an Award which shall be set forth in a written document prior to the
commencement of the Grantee's services to which the Performance Goals under the
Award relate and while the outcome is still substantially uncertain.  In
establishing Performance Goals, the Committee may consider such factor or
factors relating to performance as it deems appropriate, including net income,
growth in net income, earnings per share, growth of earnings per share return
on equity, return on capital, or any other business criteria as contemplated in
Section 162(m) of the Code.  The Committee, if applicable, shall certify in
writing prior to payment of compensation related to any applicable performance
unit, performance share, restricted stock or share of phantom stock that the
Performance Goals and any other material terms were satisfied.  The Committee
may, at any time, modify Performance Goals as a result of changes required in
applicable laws.  If a Grantee is promoted, demoted or transferred to a
different business unit of the Company during a performance period, then, to
the extent the Committee determines the Performance Goals are no longer
appropriate, the Committee may adjust, change or eliminate the Performance
Goals  or as it deems appropriate in order to make them appropriate and
comparable to the initial Performance Goals.

     7. Non-transferability. Except as hereinafter provided, each Award granted
hereunder shall by its terms not be assignable or transferable, and may be
exercised, during the Grantee's lifetime, only by the Grantee.  Notwithstanding
the foregoing (a) if the Award is exercisable after the Grantee's death, it may
be exercised by the Grantee's legal representative or by a beneficiary
designated in writing by the Grantee to exercise his or her Award after the
Grantee's death, and (b) the Grantee may transfer an Award held by such Grantee
(other than an Incentive Stock Option or restricted Stock) (i) for no
consideration to any of the following permissible transferees: any member of
the Grantee's Immediate Family, and any general or limited partnership each of
the partners of which are members of the Grantee's Immediate Family and which
prohibits a transfer of all or any part of any interest in the partnership
except to the partnership or to any of the foregoing; and (ii) to such other
person or entity, and on such terms and conditions, as the Committee, in its
discretion, may permit.  Any Award so transferred shall be subject after
transfer to all of the terms and conditions of such Award prior to the transfer
and shall not be further transferable without the consent of the Committee.
"Immediate Family" means, with respect to a particular Grantee, that Grantee's
spouse, any parent and any lineal descendent (including any adopted child) of
any parent of that Grantee or of that Grantee's spouse, and any trustee,
guardian or custodian for any of the foregoing.  Each share of restricted Stock
shall be non-transferable until such share becomes nonforfeitable.

8.   Exercise.

     (a) Exercise of Options.  Subject to Article 4(c)(vii), 11 and 12 and such
terms and conditions as the Committee may impose, each Option shall be
exercisable in one or more installments commencing not earlier than the first
anniversary of the Grant Date of such Option; provided, however, that all
Options shall become fully (100%) exercisable upon the occurrence of a Change
of Control regardless of whether the acceleration of the exercisability of such
Options would cause such Options to lose their eligibility for treatment as
Incentive Stock Options.  Notwithstanding the foregoing, Options may not be
exercised by a Grantee for twelve months following a hardship distribution to
the Grantee, to the extent such exercise is prohibited under Treasury
Regulation 1.401(k)-1(d)(2)(iv)(B)(4).  Each Option shall be exercised by
delivery to the Company of written notice of intent to purchase a specific
number of shares of Stock or restricted Stock subject to the Option.  Such
stock will be Class A Common Stock or if no Class A Common Stock is publicly
traded on any securities market described in Article 2(k) on the date such
options are exercised, then Common Stock.  The Option Price of any shares of
Stock or restricted Stock as to which an Option shall be exercised shall be
paid in full at the time of the exercise.  Payment may be made, as determined
in advance by either the Board or the Committee in its discretion, in any one
or any combination of the following:

       (i) cash,

      (ii) shares of restricted or unrestricted Class A Common Stock or Common
  Stock owned by the Holder prior to the exercise of the Option and valued at
  its Fair Market Value on the last business day immediately preceding the date
  of exercise, or

     (iii) through simultaneous sale through a broker of shares of
  unrestricted Stock acquired on exercise, as permitted under Regulation T of
  the Federal Reserve Board.

  Payment of the option price with Stock simultaneously acquired by option
exercise may be made, with the consent in advance of the Board or the
Committee.

                                      -10-

   14

     If restricted Class A Common Stock or Common Stock ("Tendered Restricted
Stock") is used to pay the Option Price for Stock, then a number of shares of
Stock acquired on exercise of the Option equal to the number of shares of
Tendered Restricted Stock shall be subject to the same restrictions as the
Tendered Restricted Stock, determined as of the date of exercise of the Option.
If the Option Price for restricted Stock is paid with Tendered Restricted
Stock, and if the Committee determines that the restricted Stock acquired on
exercise of the Option shall be subject to restrictions ("Greater
Restrictions") that cause it to have a greater risk of forfeiture than the
Tendered Restricted Stock, then notwithstanding the preceding sentence, all the
restricted Stock acquired on exercise of the Option shall be subject to such
Greater Restrictions.

     Shares of unrestricted Stock acquired by a Holder on exercise of an Option
shall be delivered to the Holder or, at the request of the Holder, shall be
credited directly to a brokerage account specified by the Holder.

     (b) Exercise of Stock Appreciation Rights.  Subject to Article 4(c)(vii),
11 and 12 and such terms and conditions as the Committee may impose, each stock
appreciation right shall be exercisable not earlier than the first anniversary
of the Grant Date of such stock appreciation right and, if such stock
appreciation right is identified with an Option, to the extent such Option may
be exercised unless otherwise provided by the Committee, Stock appreciation
rights shall be exercised by delivery to the Company of written notice of
intent to exercise a specific number of stock appreciation rights.  Unless
otherwise provided in the applicable Award Agreement, the exercise of stock
appreciation rights which are identified with shares subject to an Option shall
result in the forfeiture of such Option to the extent of such exercise.

     The benefit for each stock appreciation right exercised shall be equal to
     the excess, if any, of

         (i)  the Fair Market Value of a share of Stock on the date of such
     exercise, over

         (ii) an amount equal to

              (A) in the case of a stock appreciation right identified with a
         share of Stock subject to an Option, the Option Price of such Option,
         unless the Committee in the grant of the stock appreciation right
         specified a  higher amount, or

              (B) in the case of any other stock appreciation right, the Fair 
         Market Value of a share of Stock on the Grant Date of such stock
         appreciation right, unless the Committee in the grant of the stock
         appreciation right specified a higher amount;

provided that the Committee, in its discretion, may provide that the benefit
for any stock appreciation right shall not exceed a maximum amount (i.e. a cap)
set by Committee, which cap may be expressed as (i) a percentage of the excess
amount described above (not to exceed 100%), (ii) a percentage of the Fair
Market Value of a share of Stock on the Grant Date of the stock appreciation
right, or (iii) a fixed dollar amount.  The benefit upon the exercise of a
stock appreciation right shall be payable in cash, except that the Committee,
with respect to any particular exercise, may, in its discretion, pay benefits
wholly or partly in Stock delivered to the Holder or credited to a brokerage
account specified by the Holder.

     (c) Exercise of Performance Units.

         (i) Subject to Article 4(c)(vii), 11 and 12 and such terms and
     conditions as the Committee may impose, and unless otherwise provided
     in the applicable Award Agreement, if, with respect to any performance
     unit, the minimum Performance Goals have been achieved during the
     applicable Measuring Period, then such performance unit shall be deemed
     exercised on the date on which it first becomes exercisable.

         (ii) The benefit for each performance unit exercised shall be an amount
     equal to the product of

              (A) The Unit Value (as defined below), multiplied by

              (B) the Performance Percentage attained during the Measuring 
         Period for such performance unit.

        (iii) The Unit Value shall be, as specified by the Committee,

              (A) a dollar amount,

                                      -11-

   15

        (B) an amount equal to the Fair Market Value of a share of Stock on the
     Grant Date,

        (C) an amount equal to the Fair Market Value of a share of Stock on the
     exercise date of the performance unit, plus, if so provided in the Award
     Agreement, an amount ("Dividend Equivalent Amount") equal to the Fair
     Market Value of the number of shares of Stock that would have been 
     purchased if each dividend paid on a share of Stock on or after the Grant
     Date and on or before the exercise date were invested in shares of Stock
     at a purchase price equal to its Fair Market Value on the respective
     dividend payment date, or

        (D) an amount equal to the Fair Market Value of a share of Stock on the
     exercise date of the performance unit (plus, if so specified in the Award  
     Agreement, a Dividend Equivalent Amount), reduced by the Fair Market Value
     of a share of Stock on the Grant Date of the performance unit.

     (iv) The benefit upon the exercise of a performance unit shall be payable
     to the Holder (or at the request of the Holder, deliver to a brokerage 
     account specified by the Holder), as soon as is administratively     
     practicable (but in any event within 90 days) after the later of (A) the
     date the Holder is deemed to exercise such performance unit, or (B) the
     date (or dates in the event of installment payments) as provided in the
     applicable Award Agreement.  Such benefit shall be payable in cash, except
     that the Committee, with respect to any particular exercise, may, provide
     in the Award Agreement that benefits may be paid wholly or partly in
     Stock.  The number of shares of Stock payable in lieu of cash shall be
     determined by valuing the Stock at its Fair Market Value on the business
     day next preceding the date such benefit is to be paid.

   (d) Payment of Performance Shares.  Subject to Article 4(c)(vii), 11 and
12 and such terms and conditions as the Committee may impose, and unless
otherwise provided in the applicable Award Agreement, if the minimum
Performance Goals specified by the Committee with respect to an Award of
performance shares have been achieved during the applicable Measuring Period,
then the Company shall pay to the Holder of such Award (or, at the request of
the Holder, deliver to a brokerage account specified by the Holder) shares of
Stock equal in number to the product of the number of the performance share(s)
specified in the applicable Award Agreement multiplied by the Performance
Percentage achieved during such Measuring Period, except to the extent that the
Committee in its discretion determines that cash be paid in lieu of some or all
of such shares of Stock.  The amount of cash payable in lieu of a share of
Stock shall be determined by valuing such share at its Fair Market Value on the
business day next preceding the date such cash is to be paid.  Payment pursuant
to this Article 8(d) shall be made as soon as administratively practicable (but
in any event within 90 days) after the end of the applicable Measuring Period.
Any performance shares with respect to which the Performance Goals have not
been achieved by the end of the applicable Measuring Period shall expire.

   (e) Payment of Phantom Stock Awards.  Upon the vesting of a phantom stock
Award, the Holder shall be entitled to receive a cash payment in respect of
each share of phantom stock which shall be equal to the Fair Market Value of a
share of Stock as of the date the phantom stock Award was granted, or such
other date as determined by the committee at the time the phantom stock Award
was granted.  The Committee may at the time a phantom stock Award is granted,
provide a limitation on the amount payable in respect of each share of phantom
stock.

   (f) Full Vesting upon Change of Control.  In the event of a Change of
Control, all unvested Awards shall become immediately vested and exercisable;
provided that the benefit payable with respect to any performance unit of
performance share with respect to which the Measuring Period has not ended as
of the date of such Change of Control shall be equal to the product of the Unit
Value multiplied successively by each of the following:

       (1) a fraction, the numerator of which is the number of months
   (including as a whole month any partial month) that have elapsed since the   
   beginning of such Measuring Period until the date of such Change of Control
   and the denominator of which is the number of months (including as a whole
   month any partial month) in the Measuring Period; and

       (2) a percentage equal to the greater of the target percentage, if any,
   specified in the applicable Award Agreement or the maximum percentage, if
   any, that would be earned under the terms of the applicable Award Agreement  
   assuming that the rate at which the performance goals have been achieved as
   of the date of such Change of Control would continue until the end of the
   Measuring Period.

                                      -12-

   16

   (g) Pooling of Interests.  If the Committee in its discretion determines
that the exercise of an Award would preclude the use of pooling of interests
accounting following a sale of the Company which is reasonably likely to occur
and that such preclusion of pooling would have a material adverse effect on the
sale of the Company, the Committee, in its discretion, may take such action as
it deems appropriate in order to preserve the pooling of interests accounting
including either unilaterally barring the exercise of such Award by canceling
the Award prior to the Change of Control or by causing the Company to pay the
Award rights benefit in Stock if it determines that such payment would not
cause the transaction to be ineligible for pooling.

   (h) Exercise, Cancellation, Expiration or Forfeiture of Tandem Awards.
Upon the exercise, cancellation, expiration, forfeiture or payment in respect
of any Award which is identified with any other Award (the "Tandem Award")
pursuant to Article 6(i), the Tandem Award shall automatically terminate to the
extent of the number of shares in respect of which the Award is so exercised,
canceled, expired, forfeited or paid, unless otherwise provided by the
Committee at the time of grant of the Tandem Award or thereafter.

   9.  Effect of Certain Transactions.  With respect to any Award which
relates to Stock, in the event of a merger or consolidation of the Company (a
"Transaction"), the Plan and the Awards issued hereunder shall continue in
effect in accordance with their respective terms and each Holder shall be
entitled to receive in respect of each share of Stock subject to any
outstanding Awards, upon the vesting, payment or exercise of the Award (as the
case may be), the same number and kind of stock, securities, cash, property, or
other consideration that each holder of a share of Stock was entitled to
receive in the Transaction in respect of a share of Stock.  With respect to any
Award which relates to stock, in the event of a liquidation or dissolution of
the Company, the Committee may take such actions as it deems appropriate.

   10. Mandatory Withholding Taxes.  The Company shall have the right to
deduct from any distribution of cash to any Holder an amount equal to the
federal, state and local income taxes and other amounts as may be required by
law to be withheld (the "Withholding Taxes") with respect to any Award.  If a
Holder is to experience a taxable event in connection with the receipt of
shares pursuant to an Option exercise or the vesting or payment of another type
of Award (a "Taxable Event"), the Holder shall pay the Withholding Taxes to the
Company prior to the issuance, or release from escrow, of such shares or
payment of such Award. Payment of the applicable Withholding Taxes may be made,
as determined in advance by the Board or the Committee in its discretion, in
any one or any combination of (i) cash, (ii) shares of restricted or
unrestricted Class A Common Stock or Common Stock owned by the Holder prior to
the Taxable Event and valued at its Fair Market Value on the business day
immediately preceding the date of exercise, or (iii) by making a Tax Election
(as described below).  For purposes of this Article 10, a Holder may make a
written election (the "Tax Election"), to have withheld a portion of the shares
then issuable to him or her having an aggregate Fair Market Value, on the date
preceding the date of such issuance, equal to the Withholding Taxes.

   11. Termination of Employment.  The Award Agreement pertaining to each
Award shall set forth the terms and conditions applicable to such Award upon a
Termination of Employment of the Grantee by the Company, a Subsidiary or an
operating division or unit, as the Committee may, in its discretion, determine
at the time the Award is granted or thereafter; provided, however, that if a
Grantee's employment is terminated as a result of (i) the Grantee's conviction
of a felony which is, in the opinion of the Committee, likely to result in
injury of a material nature to the Company or a Subsidiary, or (ii) the gross
and habitual negligence by the Grantee in the performance of the Grantee's
duties to the Company or its Subsidiaries (termination for "Cause"), the
Grantee's shares of restricted stock that are forfeitable, subject to the
provisions of Article 6(d)(vii) regarding repayment of certain amounts to the
Grantee, and any unexercised option, stock appreciation right, performance
unit, performance share or share of phantom stock shall thereupon terminate.
If a Grantee has transferred an Award pursuant to Article 7, then, upon a
Termination of Employment of such Grantee, the terms and conditions applicable
to such Award, including the time of its termination, shall be the same as
would have applied to the Award if the Grantee had not transferred it.

                                      -13-

   17

     12. Securities Law Matters.

     (a) If the Committee deems it necessary to comply with the Securities Act
of 1933, the Committee may require a written investment intent representation
by the Holder and may require that a restrictive legend be affixed to
certificates for shares of Stock.

     (b) If, based upon the opinion of counsel for the Company, the Committee
determines that the exercise or non-forfeitability of, or delivery of benefits
pursuant to, any Award would violate any applicable provision of (i) federal or
state securities law or (ii) the listing requirements of any national
securities exchange on which are listed any of the Company's equity securities,
then the Committee may postpone any such exercise, non-forfeitability or
delivery, as the case may be, but the Company shall use its best efforts to
cause such exercise, non-forfeitability or delivery to comply with all such
provisions at the earliest practicable date.

     (c) Subject to Articles 12(a) and (b) above,  no shares of Stock shall be
issued to any Holder in respect of any Award prior to the time a registration
statement under the Securities Act of 1933 is effective with respect to such
shares.

     13. No Funding Required.  Benefits payable under the Plan to any person
shall be paid directly by the Company.  The Company shall not be required to
fund, or otherwise segregate assets to be used for payment of, benefits under
the Plan.

     14. No Employment Rights.  Neither the establishment of the Plan, nor the
granting of any Award shall be construed to (a) give any Grantee the right to
remain employed by the Company or any of its Subsidiaries or to any benefits
not specifically provided by the Plan or (b) in any manner modify the right of
the Company or any of its Subsidiaries to modify, amend, or terminate any of
its employee benefit plans.

     15. Rights as a Stockholder.  A Holder shall not, by reason of any Award
(other than restricted Stock), have any right as a stockholder of the Company
with respect to the shares of Stock which may be deliverable upon exercise or
payment of such Award until such shares have been delivered to him.  Shares of
restricted Stock held by a Grantee or held in escrow by the Secretary of the
Company shall confer on the Grantee all rights of a stockholder of the Company,
except as otherwise provided in the Plan.

     16. Nature of Payments.  Any and all grants, payments of cash, or
deliveries of shares of Stock hereunder shall constitute special incentive
payments to the Grantee and shall not be taken into account in computing the
amount of salary or compensation of the Grantee for the purpose of determining
any pension, retirement, death or other benefits under (a) any pension,
retirement, profit-sharing, bonus, life insurance or other employee benefit
plan of the Company or any of its Subsidiaries or (b) any agreement between the
Company or any Subsidiary, on the one hand, and the Grantee, on the other hand,
except as such plan or agreement shall otherwise expressly provide.

     17. Non-Uniform Determinations.  Neither the Committee's nor the Board's
determinations under the Plan need be uniform and may be made by the Committee
or the Board selectively among persons who receive, or are eligible to receive,
Awards (whether or not such persons are similarly situated).  Without limiting
the generality of the foregoing, the Committee shall be entitled, among other
things, to make non-uniform and selective determinations, to enter into
non-uniform and selective Award Agreements as to (a) the identity of the
Grantees, (b) the terms and provisions of Awards, and (c) the treatment of
Terminations of Employment.

     18. Adjustments.  In the event of Change in Capitalization, the Committee
shall, in its sole discretion, make equitable adjustment of

       (a) the aggregate number and class of shares of Stock or other stock or
  securities available under Article 3,

       (b) the number and class of shares of Stock or other stock or securities
  covered by an Award,

       (c) the Option Price applicable to outstanding Options,

       (d) the terms of performance unit and performance share grants, and

                                      -14-

   18

       (e) the Fair Market Value of Stock to be used to determine the amount of
  the benefit payable upon exercise of stock appreciation rights, performance
  units, performance shares or phantom stock.

     19. Amendment of the Plan.  The Board may from time to time in its
discretion amend or modify the Plan without the approval of the stockholders of
the Company, except as such stockholder approval may be required (a) to retain
Incentive Stock Option treatment under Section 422 of the Internal Revenue Code
or (b) under the listing requirements of any securities exchange on which any
of the Company's equity securities are listed.

     20. Termination of the Plan.  The Plan shall terminate on the tenth (10th)
anniversary of the Effective Date or at such earlier time as the Board may
determine.  Any termination, shall not affect any Award then outstanding under
the Plan.

     21. No Illegal Transactions.  The Plan and all Awards granted pursuant to
it are subject to all laws and regulations of any governmental authority which
may be applicable thereto; and notwithstanding any provision of the Plan or any
Award, Holders shall not be entitled to exercise Awards or receive the benefits
thereof and the Company shall not be obligated to deliver any Stock or pay any
benefits to a Holder if such exercise, delivery, receipt or payment of benefits
would constitute a violation by the Holder or the Company of any provision of
any such law or regulation.

     22. Governing Law.  Except where preempted by federal law, the law of the
State of Delaware shall be controlling in all matters relating to the Plan,
without giving effect to the conflicts of law principles thereof.

     23. Severability.  If all or any part of the Plan is declared by any court
or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of the Plan not declared
to be unlawful or invalid.  Any Article or part of an Article so declared to be
unlawful or invalid shall, if possible, be construed in a manner which will
give effect to the terms of such Article or part of an Article to the fullest
extent possible while remaining lawful and valid.

                                      -15-

   1

                                                                      EXHIBIT 11

                 OIL-DRI CORPORATION OF AMERICA AND SUBSIDIARIES

                       Computation of Earnings per Share

                              1997                  1996              1995           1994                    1993
                             ------                ------          --------         ------                  -----    

Average number of
shares outstanding
during the year              6,595,782              6,806,448       6,931,726       6,990,435               6,994,942

Options exercisable,
less shares that
could have been
purchased based on
the average market
value for the period             3,314                    443           4,429          20,289                  36,174
                            ----------             ----------      ----------      ----------              ----------    
Average number of
common and common
equivalent shares
outstanding during
the year (a)                 6,599,096              6,806,891       6,935,975       7,010,724               7,031,116
                            ==========             ==========      ===========     ==========              ==========
Net earnings                $6,793,473             $3,374,257      $8,002,828      $9,852,200              $9,419,642
                            ==========             ==========      ===========     ==========              ==========
Net earnings per share      $     1.03             $     0.50      $     1.15      $     1.41              $     1.34
                            ==========             ==========      ===========     ==========              ==========

(a) Does not include options which are not dilutive.  Effect under fully diluted
    computations is not material.

   1

                                                                      EXHIBIT 13

FINANCIAL HIGHLIGHTS

                                                                     1997              1996             Change
                                                                  ---------         ---------          --------
                                                                                               
Net Sales                                                        $ 156,616,350     $ 153,786,754        +1.8%
Income from Operations                                           $  10,668,852     $   5,983,473       +78.3%
Income before Income Taxes                                       $   9,514,265     $   4,783,402       +98.9%
Net Income                                                       $   6,793,473     $   3,374,257      +101.3%
Net Income per Share                                             $        1.03     $        0.50      +106.0%
Net Income as a Percentage of Sales                                       4.3%              2.2%            -
Return on Average Stockholders' Equity                                    8.8%              4.3%            -
Working Capital                                                  $  31,165,394     $  30,398,649        +2.5%
Stockholders' Equity                                             $  77,330,301     $  77,229,496        +0.1%
Book Value per Share                                             $       12.03     $       11.46        +5.0%
Average Shares Outstanding                                           6,599,096         6,806,891        -3.1%
Dividends Declared                                               $   1,935,845     $   2,022,205        -4.3%
Capital Expenditures                                             $   5,394,600     $   7,184,337       -24.9%
Depreciation and Amortization                                    $   7,587,001     $   7,925,806        -4.3%
Long-Term Debt                                                   $  17,052,000     $  18,978,000       -10.1%

Sales Trends (millions of dollars)                                   1997             1996        1995      1994      1993
                                                                    ------           -----       -----     -----      ----
                                                                                                     
Consumer Products                                                   $ 95.7          $ 90.5      $ 91.1     $ 84.4   $ 81.7
Industrial and Environmental Products                                 18.8            20.2        22.2       22.8     22.3
Agricultural Products                                                 18.9            19.9        16.6       18.3     18.4
Fluids Purification Products                                          15.5            13.6        13.7       14.1     10.8
Transportation Services                                                7.8             9.6         9.3        7.5      7.7
                                                                    ------          -------     ------     ------   ------    
                                                                    $156.7          $153.8      $152.9     $147.1   $140.9
                                                                    ======          ======      ======     ======   ======    

Land Holdings & Mineral Reserves
                                                                  Owned         Leased       Total       Proven Reserves
                                                                 (acres)        (acres)     (acres)      (1,000s of tons)
                                                                 -------        --------    -------       ---------------

Georgia                                                            1,484         1,804       3,288            43,395
Mississippi                                                        2,317         1,423       3,740           129,703
Oregon                                                             1,260         1,580       2,840            36,778
Florida                                                              537           446         983             4,512
Nevada                                                               415         4,735       5,150           298,316
Illinois                                                               4             -           4                 -
                                                                  ------       -------     -------          --------
                                                                   6,017         9,988      16,005           512,704
                                                                  ======       =======     =======          ========    

                                        
                                      18

   2

                             TO OUR SHAREHOLDERS

FROM THE CHAIRMAN

  Selecting corporate officers and senior management and monitoring their
performance are the most important responsibilities of a corporation's board of
directors. As chairman, I would like to discuss the importance of the
transition in leadership that has taken place at Oil-Dri in recent years
culminating in August 1997 with Dan Jaffee accepting the additional
responsibilities of chief executive officer.
        
  Oil-Dri and the Jaffee family have been linked throughout the Company's 
56 year history. My father founded the Company in 1941. I became chief
executive officer in 1960, and in 1995 Dan Jaffee became president and chief
operating officer.
        
  At various times the board of directors has discussed whether family 
management of the business is in the best interest of all its shareholders or
whether the CEO and other senior managers should be sought elsewhere. Based on
the transition in management during the last several years and the excellent
performance during this past fiscal year, the board and I are confident that
Dan's acceptance of the leadership of the Company is in the best interest of
all of our shareholders.
        
  In the ten years since joining Oil-Dri, Dan has worked his way up through
the ranks of the Company. He has clearly demonstrated the leadership skills
needed to grow the business in a challenging and changing external environment.
He and his team have made Cat's Pride(r) cat litter products the market's
fastest growing - in spite of increased competition. This, combined with the
progress we have enjoyed in our specialties businesses, leads me to be very
optimistic about the future.
        
  The team of experienced and energetic management that Dan has put in the most
critical areas of the business are the best assurance that we as shareholders
can have that Oil-Dri will be ably led and profitably managed.

  I very much appreciate the support I've received from our shareholders in the
past. I know that you will lend the same encouragement to Dan and his team.
Going forward, I will be directly involved in several areas of the business and
hope to lend advisory assistance where my experience can be of most help. I
have never felt better about Oil-Dri's prospects than I do today. The future
will certainly be challenging, but we have great strengths in our resources,
technology, marketing and sales capabilities and, most of all, in the
management team that will be led by Dan Jaffee as chief executive officer.
        
Sincerely,

RICHARD M. JAFFEE
Chairman

   3

FROM THE PRESIDENT

  July 31, 1997 marked the end of Oil-Dri's 56th year in business and my second
as president and chief operating officer. In last year's president's letter, I
spoke of building teams, brands and profits that would combine to increase
shareholder value. I also harkened back to the glory days of Oil-Dri's historic
growth. Fiscal 1997 is particularly gratifying because we have delivered on our
goals and are back on a growth track. Our stock began the fiscal year at $14.25
per share and closed twelve months later at $17.56, up 23%. This created nearly
$21 million in additional shareholder value during the period.
        
  A 101% increase in earnings and tight control of capital expenditures allowed
us to repurchase 307,000 shares for $4,883,000, pay $1,961,000 in dividends,
reduce long-term debt by $1,628,000 and still finish the year with $11,541,000
in cash and investments. We controlled marketing expenditures related to the
launch of the Cat's Pride(r) Scoopable "Stretch Jug" and Cat's Pride(r)
KatKit(r) and saw our dollar share of the branded cat litter category climb
10%. Total company sales grew 2% to $156,616,000.
        
REDEFINING OUR MISSION

  During the year, Oil-Dri's senior management team built a new five-year
growth plan. We enter fiscal 1998 with a
unified vision regarding where we are going and how we are going to get there.
The planning process began by redefining our corporate mission statement which
now reads:

           DELIVERING INNOVATIVE SOLUTIONS THAT HELP OUR CUSTOMERS
                 MAKE THE WORLD CLEANER, SAFER AND HEALTHIER
 
  It sounds lofty, but it is true. Whether it's a consumer's home, an industrial
workplace, a farmer's crops or livestock, or a refiner's oils, Oil-Dri products
help make them all cleaner, safer and healthier. This mission statement will
serve as one of the screens used to identify growth opportunities best
fitting with our core strengths while broadening some of the traditional
definitions used for our business.

EXTENDING OUR REACH

  Growth opportunities will be driven by the marketplace. Leveraging
relationships with current customers, we can deliver more of what they need.
For example, we can deliver pet products to our consumer products customers,
not just cat litter. Similarly, we are developing a broad range of agricultural
products. We are not limited to supplying crop protection chemical carriers.
This same approach will be applied to our fluids purification and industrial
businesses.
        
  Future innovations for these markets may be products or services. They may
come from our existing raw materials or new sources. Through innovation we will
create value for our customers and capture some of that value for Oil-Dri and
our shareholders.
        
  There are also numerous international opportunities. While we already do
business in over sixty countries, we can increase all of our businesses
globally, with special emphasis on fluids purification adsorbents and           
agricultural products.
        
  Our strategic plans focus on extending our reach with new products, new 
markets and new territories. On the ensuing pages, you will get a glimpse of
the growth strategies for each of our four core businesses.
        
  I once heard a quote that I have never forgotten, "If you don't know where you
are going, any road will take you there." We, on the other hand, know where we
want to go, and, while a well-crafted, carefully executed roadmap to the future
may not guarantee our arrival, I know our chances are infinitely greater than
if we just got in the car and started to drive.

  I am proud of what we have accomplished so far and even more excited about 
what the future has to offer. As we begin a new year and I take on the
responsibilities of chief executive officer, I would like to thank you, our
shareholders, for your support. We are continually striving to make your
investment in Oil-Dri more valuable.

DANIEL S. JAFFEE
President and Chief Executive Officer

                                      3

   4

                                   CONSUMER
                                   PRODUCTS

  Oil-Dri manufactures approximately 25% of the cat litter products sold in
the United States including branded and private label products. Cat litter
products now represent 62% of net sales. By developing innovative, branded
products that help consumers keep their homes clean and odor free, Oil-Dri
gained more market share than any other competitor over the last two years to
become the fastest growing cat litter manufacturer.*
        
  What we want to be in the future is a leading supplier of quality pet 
products. To attain this goal we will continue the product innovation that has
built branded market share, increased distribution and established our track
record with retailers and consumers.
        
  Our consumers are pet lovers that want quality and value. We deliver both
through innovation. The Cat's Pride(r) Scoopable "Stretch Jug" delivers 40%
more product to consumers every day at about the same price as the leading
competitor. Cat's Pride(r) KatKit(r) and KatKit(r) Jumbo, disposable cat litter
trays with litter inside, free consumers from ever cleaning the cat box again.
Cat's Pride(r) Heavy TrafficTM Scoopable cat litter has a harder, faster
clumping formula for homes with more than one cat or heavy traffic in the
litter box.

  These products and the rest of the Cat's Pride(r), Lasting Pride(r) and
Saular(r) brand families are sold through the finest retailers in North
America. Oil-Dri's success in serving these retailers will be leveraged when
introducing new, branded pet products.

* As reported by IRI for the 52 weeks ended 8/10/97.

                                      4

   5

                                 AGRICULTURAL
                                   PRODUCTS

  Agsorb(r) carriers have been helping deliver crop protection chemicals to
fields safely and effectively for almost 30 years. Agricultural products,
driven by Agsorb(r), represent 12% of net sales.

  We plan to extend our reach in the agricultural market by leveraging the
qualities of our special mineral reserves. Oil-Dri is developing new products
and product advancements for agricultural chemical, animal health and
nutrition, sports turf, and lawn and garden markets.

  The first example is a new carrier for crop protection applications previously
out of our reach. This product promises to reduce formulation costs and
increase the efficiencies of crop protection chemicals. This same development
has potential in lawn care applications.

  In the animal health and nutrition industry, ConditionAdeTM applications are
expanding. In addition to improving feed pellet quality, field testing has
established that it also improves feed mill production rates.

  Odor-control products for poultry producers are also in development. By
reducing ammonia levels, producers can increase the health of poultry flocks
while reducing energy costs associated with ventilating enclosed facilities.
 
  In addition to exploring opportunities  available with existing raw materials
and product technologies, Oil-Dri is expanding sales geographically. New
international markets and the global expansion of existing customers will
provide opportunities to increase sales overseas.

                                      5

   6

                                    FLUIDS
                                 PURIFICATION

     Oil-Dri began to leverage the adsorptive capacity of our mineral reserves
when we introduced Ultra-Clear [R]clarification aids to remove impurities from
jet fuels. Later, the Pure-Flo(r) line of products was introduced for refining
edible oils and oleochemicals. These products have successfully gained market
share on a global basis and now represent 9% of net sales.
        
     Future growth in this area will come, in part, from extending our reach
geographically. As the specifications for edible oils have become more
stringent in Latin America, the Pacific Rim and other developing areas,
bleaching clay usage has increased and new markets for Oil-Dri's fluids
purification products have opened. This trend is expected to continue, and
Oil-Dri is establishing international sales representatives, technical support
and customer service to meet the needs of these markets.
        
     Additional growth will come from technical advancement of existing
product lines. Companies like ADM, Cargill, Exxon, British Petroleum and many
others are using our fluids purification products for only a portion of their
needs. Expanded business with these customers represents a significant
opportunity, particularly as they increase their global activity.

     In addition, identifying niche applications for existing products has 
been effective. Specialty applications for Pure-Flo(r) products include
removing protein impurities from food and recycling cooling oils during metals
processing. Continuing along these lines, development or acquisition of new
products will create other filtration and purification applications.

                                      6

   7

                                INDUSTRIAL AND
                                ENVIRONMENTAL

  Oil-Dri has been delivering products that keep floors and work surfaces clean
and safe since 1941. Today, Oil-Dri(r) floor absorbents and Oil-Dri Lite(r)
sorbents represent 12% of net sales. These products have traditionally been
sold through a network of small to medium-sized industrial and automotive
distributors, as well as mass merchandisers.
        
  This distributor base is undergoing significant change driven by end users.
Industrial customers are consolidating their vendors, focusing on services that
deliver economies and efficiencies, like Electronic Data Interchange (EDI),
Vendor Managed Inventory (VMI) and cost reduction programs. Many large- scale
industrial customers are actually outsourcing their purchase functions by
forming integrated supply contracts with quality distributors. Oil-Dri is
working with this growing segment of the industrial distributor market,
offering value-added products, product education and systems support.

  On the automotive side of the business, Oil-Dri has historically sold floor 
absorbents through small to medium-sized automotive distributors or wholesalers
that target smaller auto shop owners/operators. Many of these automotive
distributors and auto shops are being replaced by larger, national chains. The
growth of Oil-Dri(r) product sales in automotive markets will come from
expanding the product line and using the systems and logistics we have in place
to serve distributors, automotive after-market chains and mass merchandisers.

        
                                      7

   8

                                  HISTORICAL
                                 PERSPECTIVE

IN 1987...

The United States celebrated the 200th anniversary of the Constitution.

The first treaty that would reduce nuclear arsenals was signed by President
Reagan and General Secretary Gorbachev of the U.S.S.R.

Cats surpassed dogs as America's favorite pet.

Irises by Vincent Van Gogh was sold at auction for an unprecedented
$53,900,000.

The single worst day in the history of the NYSE occurred when the Dow Jones
Industrial average fell 508 points, a decline of 22.6%.

The tenth anniversary of Elvis Presley's death was marked by the pilgrimage of
20,000 fans to Graceland, his home in Memphis.

AND AT OIL-DRI...

Sales reached $59,655,000.

Ultra-Clear(r) products were developed for clarifying petroleum products,
specifically jet fuels.

Oil-Dri established a lipids laboratory for further development of Pure-Flo(r)
bleaching clays.

Favorite Products, Ltd., a wholly owned subsidiary of Oil-Dri, was marketing
Saular(r), the number one selling Canadian cat litter.

The Ripley, Mississippi facility was expanded to handle increased Agsorb(r)
product demand and improve manufacturing flexibility.

                                      8

   9

                      FIVE YEAR SUMMARY OF FINANCIAL DATA

                                                                                         Year Ended July 31
- ------------------------------------------------------------------------------------------------------------------------------------
                                                             1997           1996           1995           1994           1993
                                                         ---------------------------------------------------------------------------
                                                                                                     
SUMMARY OF OPERATIONS
NET SALES                                             $  156,616,350   $ 153,786,754   $ 152,899,109  $ 147,146,793  $ 140,866,110
COST OF SALES                                            108,687,385     107,729,770     108,268,431    102,456,815     97,396,563
                                                      ---------------------------------------------------------------------------
GROSS PROFIT                                              47,928,965      46,056,984      44,630,678     44,689,978    43,469,547
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES              37,260,113      40,073,511      31,920,779     30,393,702    29,552,630
                                                      ---------------------------------------------------------------------------
INCOME FROM OPERATIONS                                    10,668,852       5,983,473      12,709,899     14,296,276    13,916,917
                                                      ---------------------------------------------------------------------------
OTHER INCOME (EXPENSE)
  Interest Income                                            636,695         586,623         448,268        440,796       451,519
  Interest Expense                                        (1,774,509)     (1,916,569)     (1,921,261)    (1,751,839)   (1,728,817)
  Foreign Exchange Gains (Losses)                                191          (6,693)         (5,463)         3,009       (87,655)
  Other, Net                                                 (16,964)        136,568         (84,018)       171,142      (298,485)
                                                      ---------------------------------------------------------------------------
    Total Other Expense, Net                              (1,154,587)     (1,200,071)     (1,562,474)    (1,136,892)   (1,663,438)
                                                      ---------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES                                 9,514,265       4,783,402      11,147,425     13,159,384    12,253,479
INCOME TAXES                                               2,720,792       1,409,145       3,144,597      3,307,184     2,833,837
                                                      ---------------------------------------------------------------------------
NET INCOME                                            $    6,793,473   $   3,374,257   $   8,002,828  $   9,852,200  $  9,419,642
                                                      ==============   =============   =============  =============  ============

AVERAGE SHARES OUTSTANDING                                 6,599,096       6,806,891       6,935,975      7,010,724     7,031,116
NET INCOME PER SHARE                                  $         1.03   $        0.50   $        1.15  $        1.41  $       1.34
IMPORTANT HIGHLIGHTS
    Total Assets                                      $  114,558,284   $ 117,692,868   $ 116,987,683  $ 112,267,182  $102,116,632
     Long-Term Debt                                   $   17,052,000   $  18,978,000   $  20,422,265  $  21,521,243  $ 17,765,941
     Working Capital                                  $   31,165,394   $  30,398,649   $  33,074,318  $  29,337,449  $ 26,043,415
     Working Capital Ratio                                       3.0             2.7             3.1            3.0           2.7
     Dividends Declared                               $    1,935,845   $   2,022,205   $   2,046,644  $   1,806,736  $  1,678,894
     Capital Expenditures                             $    5,394,600   $   7,184,337   $   7,032,064  $  13,559,232  $  9,158,173
     Depreciation and Amortization                    $    7,587,001   $   7,925,806   $   7,808,496  $   6,798,038  $  5,834,854
     Long-Term Debt to Equity Ratio                             22.1%           24.6%           26.1%          29.5%         26.7%
     Net Income as a Percent of Net Sales                        4.3%            2.2%            5.2%           6.7%          6.7%
     Return on Average Stockholders' Equity                      8.8%            4.3%           10.6%          14.1%         14.9%
     Gross Profit as a Percent of Net Sales                     30.6%           29.9%           29.2%          30.4%         30.9%
     Operating Expenses as a Percent of Net Sales               23.8%           26.1%           20.9%          20.7%         21.0%

                                      13
   10

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

RESULTS OF OPERATIONS
FISCAL 1997 COMPARED TO FISCAL 1996
Consolidated net sales for the year ended July 31, 1997, were $156,616,000, an
increase of 1.8% over net sales of $153,787,000 in fiscal 1996. Net income for
fiscal 1997 was $6,793,000 or $1.03 per share, an increase of 101.3% from
$3,374,000 or $0.50 per share earned in fiscal 1996.

Net sales of cat box absorbents increased $5,773,000 or 6.4% over prior year
amounts, even though such sales to Sam's Club were down approximately
$4,100,000 from the prior year. The growth resulted from increased sales of
branded and private label products in both the grocery and mass merchandiser
markets. Net sales of fluids purification products increased $2,065,000 or
15.2% from fiscal 1996, due to increased demand for Pure-Flo(r) Supreme
products. Agricultural product sales decreased $897,000 or 4.5% compared to
fiscal 1996, primarily due to reduced demand in the industry for agricultural
carriers. Net sales of industrial and environmental sorbents decreased
$1,246,000 or 6.2% from prior year levels. The decrease was due to an internal
focus on profitability versus sales growth as well as open positions in the
sales force responsible for these products during the first quarter. Net sales
of transportation services decreased $1,464,000 or 15.8% from fiscal 1996 due
to lower backhaul revenue resulting from a reduction in the Company's fleet.
        
Consolidated gross profit as a percentage of net sales for fiscal 1997
increased to 30.6% from 29.9% in fiscal 1996. Changes in sales mix and a
Company-wide effort to reduce costs contributed to this increase.

Operating expenses as a percentage of net sales decreased to 23.8% for fiscal
1997 from 26.1% in fiscal 1996. This decrease is primarily attributable to
lower advertising and promotion costs for the consumer products introduced last
year and a one-time charge in the second quarter of fiscal 1996 of $921,000,
reflecting settlement costs and legal fees related to patent litigation.
        
Interest expense decreased $142,000 while interest income increased $50,000.
The lower interest expense is primarily due to reduced notes payable balances.
The Company's effective tax rate decreased to 28.6% of pre-tax income in fiscal
1997 from 29.5% in fiscal 1996 due to higher domestic income subject to
depletion allowances.
        
Total assets of the Company decreased $3,135,000 or 2.7% during the year ended
July 31, 1997. Current assets decreased $1,300,000 or 2.7% from fiscal 1996
year-end balances primarily due to lower inventory levels. Property, plant and
equipment, net of accumulated depreciation, decreased $2,417,000 during the
year due to depreciation expense exceeding capital expenditures. Investments in
property, plant and equipment included expenditures for increased productivity
and pollution control equipment. Additionally, the Company leased substantial
acreage in Nevada containing a mineral reserve for potential development in the
future.

                                      14
   11

As of July 31, 1997, the Company has invested approximately $752,000 in
Kamterter, Inc., a company that researches and applies biotechnology in the
agricultural field. This investment, recorded at cost, represents a 13% equity
interest in Kamterter. During the year ended February 28, 1997, and in
subsequent interim periods, Kamterter has generated operating profits. While
the Company believes that Kamterter's prospects have improved, Kamterter's
future financial condition and results of operation cannot be predicted.
        
Total liabilities decreased $3,235,000 or 8.0% during the year due primarily to
the repayment of long-term debt and a reduction in accounts payable. Current
liabilities decreased $2,067,000 or 11.6% from July 31, 1996 balances, due to a
reduction in accounts payable, income taxes payable, and accrued trade
promotions and advertising, partially offset by an increase in accrued
salaries, wages, and commissions. 

EXPECTATIONS
The Company anticipates net sales for fiscal 1998 will be higher than the net
sales in fiscal 1997. Sales of branded cat box absorbents are expected to
increase moderately as existing products and new product introductions gain
incremental distribution. However, this sales growth is subject to continuing
competition for shelf space in the grocery, mass merchandiser and club markets.
Sales of the Company's fluids purification and agricultural products are also
expected to increase compared to fiscal 1997 due to strong export demand,
expanded domestic distribution and new product development.
        
The foregoing statements under this heading are "forward-looking statements"
within the meaning of that term in the Securities Exchange Act of 1934, as
amended. Actual results may be lower than those reflected in these
forward-looking statements, due primarily to continued vigorous competition in
the grocery, mass merchandiser and club markets, the level of success of new
products, and the cost of product introductions and promotions in the consumer
market. These forward-looking statements also involve the risk of changes in
market conditions in the overall economy and, for the agricultural and fluids
purification markets, in planting activity, crop quality, and overall
agricultural demand, including export demand and foreign exchange rate
fluctuations. Other factors affecting these forward-looking statements may be
detailed from time to time in reports filed with the Securities and Exchange
Commission.
        
LIQUIDITY AND CAPITAL RESOURCES
The current ratio increased to 3.0 at July 31, 1997 from 2.7 at July 31, 1996.
Working capital increased $767,000 during fiscal 1997 to $31,165,000. Cash
provided by operations continues to be the Company's primary source of funds to
finance investing and financing activities. During the year, the balances of
cash, cash equivalents and investment securities decreased $167,000. Cash
provided by operating activities of $13,189,000 was used to fund capital
expenditures

                                      15
   12

($5,395,000), purchase the Company's Common Stock ($4,883,000), pay dividends
($1,961,000) and reduce debt ($1,628,000). On August 1, 1997, the Company
purchased an additional $2,606,000 of the Company's Common Stock, and expects
to continue to purchase shares of its Common Stock from time to time. Total
cash and investment balances held by the Company's foreign subsidiaries at July
31, 1997 and July 31, 1996 were $2,803,000 and $2,594,000, respectively.
        
RESULTS OF OPERATIONS
FISCAL 1996 COMPARED TO FISCAL 1995
Consolidated net sales for the year ended July 31, 1996, were $153,787,000, an
increase of 0.6% over net sales of $152,899,000 in fiscal 1995. Net income for
fiscal 1996 was $3,374,000 or $0.50 per share, decreasing 57.8% from net income
of $8,003,000 or $1.15 per share in fiscal 1995.
        
Net sales of industrial and environmental sorbents, consisting of clay and
non-clay products, decreased $1,615,000 or 8.6% from prior year levels due to
decreased unit shipments of both clay and non-clay products. Net sales of
industrial clay products fell $557,000 or 4.2% from prior year levels. Net
sales of non-clay sorbents decreased $1,058,000 or 19.8%, reflecting increased
competition in the markets in which the Company participates and a refocused
sales and marketing effort towards higher margin products. Net sales of cat box
absorbents decreased $363,000 or 0.5% below fiscal 1995 levels. Although the
Company expanded dollar share in the grocery and mass merchandiser markets,
these market share gains were offset by the decline in sales to the Company's
largest club account, Sam's Club, which introduced a private label scoopable
litter that replaced the Company's branded scoopable product in a substantial
number of Sam's stores. The Company's branded cat litter products were
reintroduced into Sam's stores during the fourth quarter of fiscal 1996. Net
sales of agricultural carriers and absorbents increased $3,257,000 or 19.6%
from the prior fiscal year due to increased unit shipments resulting from
increased planting acreage. Net sales of fluids purification adsorbents
decreased $362,000 or 3.0% from fiscal 1995 due primarily to competitive
pressures and continued sluggish demand in certain of the Company's markets.
Sales of transportation services increased $357,000 or 3.8% from fiscal 1995
levels due to increased backhaul revenue. 
         
Consolidated gross profit as a percentage of net sales increased to 29.9% of
net sales in fiscal 1996 from 29.2% in fiscal 1995. This increase was
principally due to a greater portion of net sales being generated in the
agricultural market and net sales of higher value products in the grocery
market. Additionally, cost increases for packaging and fuel in fiscal 1995
moderated in fiscal 1996.
        
Operating expenses as a percentage of net sales increased to 26.1% of net sales
in fiscal 1996 from 20.9% of net sales in fiscal 1995. This increase included
$6,500,000 for promotional and advertising programs associated with new product
introductions. Also included in operating expenses is a charge of $921,000
reflecting the settlement of a patent infringement action in the second quarter
of fiscal 1996.

                                      16
   13

Interest expense remained unchanged in fiscal 1996. Increased interest-bearing
deferred compensation balances offset reductions in the balance of current and
long-term notes payable. Interest income increased $138,000 from fiscal 1995
due to higher invested balances.
        
The Company's effective income tax rate increased to 29.5% in fiscal 1996 from
28.2% in the prior fiscal year. This change was the result of two factors:
lower domestic income subject to depletion allowances and a greater percentage
of total income earned in higher tax jurisdictions. The provision for income
tax expense for the fourth quarter and year ended July 31, 1995 included a
charge of $263,000 reflecting a change in the estimated amounts of depletion
deductions and temporary differences between financial reporting and tax
reporting for the year ended July 31, 1994.
        
Total assets of the Company increased $705,000 or 0.6% during the year ended
July 31, 1996. Current assets decreased $535,000 or 1.1% from prior fiscal
year-end balances due to lower accounts receivable and prepaid income taxes.

Property, plant and equipment, net of accumulated depreciation and
amortization, decreased $1,247,000 or 2.1% due primarily to depreciation
expense exceeding capital expenditures by $563,000 and the sale of fixed assets
with a net book value totaling $646,000. Investments in property, plant and
equipment included expenditures for increased productivity, capacity
enhancements, pollution control and equipment upgrades.

        
As of July 31, 1996, the Company had invested approximately $752,000 in
Kamterter, Inc., a company that researches and applies biotechnology in the
agricultural field. This investment, recorded at cost, represented a 13% equity
interest in Kamterter.
        
Total liabilities increased $1,814,000 or 4.7% in the year ended July 31, 1996
due primarily to increased accounts payable, deferred compensation and income
taxes payable.
        
FOREIGN OPERATIONS
Net sales by the Company's foreign subsidiaries during fiscal 1997 were
$12,000,000 or 7.7% of total Company sales. This represents an increase of
$113,000 from fiscal 1996, in which foreign subsidiary sales were $11,887,000
or 7.7% of total Company sales. Net income of the foreign subsidiaries for
fiscal 1997 was $556,000 compared with $554,000 in fiscal 1996. Identifiable
assets of the Company's foreign subsidiaries as of July 31, 1997 were
$9,866,000, an increase of $830,000 from $9,036,000 as of July 31, 1996. The
increase is primarily due to higher current assets.
        
Net sales by foreign subsidiaries during fiscal 1996 were $11,887,000
constituting 7.7% of net sales. This amount represents a decrease of $361,000
from fiscal 1995, in which foreign net sales were $12,248,000 and constituted
8.0% of net sales. The decrease in foreign subsidiary sales resulted primarily
from reduced sales in the United Kingdom due to lower demand for the Company's
animal nutrition products. Net income of the Company's foreign subsidiaries
during fiscal 1996 was $554,000, as compared with $763,000 in fiscal 1995.
Identifiable assets of the Company's foreign subsidiaries as of July 31, 1996,
were $9,036,000, a decrease of $535,000 from fiscal 1995 year-end balances.

                                      17
   14

                         CONSOLIDATED BALANCE SHEETS

                                                                                                           JULY 31
                                                                                                --------------------------------
                                                                                                    1997               1996
                                                                                                -------------------------------- 
                                                                                                              
ASSETS
CURRENT ASSETS
  Cash and cash equivalents...................................................................   $  9,996,952     $  10,113,544 
  Investment securities.......................................................................      1,544,000         1,594,000 
  Accounts receivable, less allowance of $260,530 in 1997 and $225,970 in 1996................     20,080,176        20,440,653 
  Inventories.................................................................................     10,604,272        11,737,068 
  Prepaid expenses............................................................................      4,685,017         4,325,061 
                                                                                                -------------------------------- 
                  Total Current Assets........................................................     46,910,417        48,210,326 
                                                                                                -------------------------------- 
                                                                                                                                
PROPERTY, PLANT AND EQUIPMENT, AT COST                                                                                          
  Buildings and leasehold improvements........................................................     16,962,647        15,666,801 
  Machinery and equipment.....................................................................     81,580,493        78,918,785 
  Office furniture and equipment..............................................................      8,742,449         8,181,596 
  Vehicles....................................................................................         95,315           119,622 
                                                                                                -------------------------------- 
                                                                                                  107,380,904       102,886,804 
  Less accumulated depreciation and amortization..............................................   ( 58,737,021)     ( 54,730,624)
                                                                                                -------------------------------- 
                                                                                                   48,643,883        48,156,180 
  Construction in progress....................................................................        839,857         4,024,354  
  Land........................................................................................      6,312,101         6,031,888
                                                                                                -------------------------------- 
                  Total Property, Plant and Equipment, Net                                         55,795,841        58,212,422 
                                                                                                -------------------------------- 

OTHER ASSETS                                                                                          
  Goodwill (Net of accumulated amortization of $1,337,224 in 1997 and $1,205,164 in 1996).....      4,040,466         4,172,526
  Deferred income taxes.......................................................................      2,445,657         2,264,291
  Other.......................................................................................      5,365,903         4,833,303
                                                                                                -------------------------------- 
                  Total Other Assets..........................................................     11,852,026        11,270,120
                                                                                                -------------------------------- 
    Total Assets                                                                                $ 114,558,284     $ 117,692,868
                                                                                                =============     ============== 

The accompanying notes are an integral part of the consolidated financial statements.

                                      18
   15

                                                                 JULY 31
                                                        ----------------------------
                                                           1997           1996
                                                        -----------     ------------       
                                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY                                                       
CURRENT LIABILITIES                                                                        
  Current maturities of notes payable                  $  1,945,630     $  1,626,762        
  Accounts payable                                        4,049,807        5,338,787        
  Income taxes payable                                            -          691,106        
  Dividends payable                                         475,030          519,610        
  Accrued expenses                                                                      
  Salaries, wages and commissions                         3,177,756        1,970,422        
     Trade promotions and advertising                     2,902,090        4,188,756        
     Freight                                                553,646          711,513        
     Other                                                2,641,064        2,764,721        
                                                       ------------     ------------        
       Total Current Liabilities                         15,745,023       17,811,677        
                                                       ------------     ------------        
                                                                                           
NONCURRENT LIABILITIES                                                                     
  Notes payable                                          17,052,000       18,978,000        
  Deferred compensation                                   2,749,794        2,253,313        
  Other                                                   1,681,166        1,420,382        
                                                       ------------     ------------        
       Total Noncurrent Liabilities                      21,482,960       22,651,695        
                                                       ------------     ------------        
       Total Liabilities                                 37,227,983       40,463,372        
                                                       ------------     ------------        
                                                                                           
Stockholders' Equity                                                                       
  Common and Class B Stock                                  723,552          723,552        
  Paid-in capital in excess of par value                  7,686,100        7,684,444        
  Restricted unearned stock compensation                   ( 17,630)      (   23,844)       
  Retained earnings                                      82,243,142       77,385,514        
  Cumulative translation adjustments                       (907,006)      (1,018,416)       
                                                       ------------     ------------        
                                                         89,728,158       84,751,250        
  Less treasury stock, at cost                          (12,397,857)      (7,521,754)       
                                                       ------------     ------------        
       Total Stockholders' Equity                        77,330,301       77,229,496        
                                                       ------------     ------------        
       Total Liabilities and Stockholders' Equity      $114,558,284     $117,692,868       
                                                       ============     ============

                                      19

   16

                      CONSOLIDATED STATEMENTS OF INCOME

                                                             YEAR ENDED JULY 31
                                                   1997              1996                    1995
                                             --------------------------------------------------------
                                                                               
NET SALES                                    $ 156,616,350       $153,786,754            $152,899,109         
                                             --------------------------------------------------------
COST OF SALES                                  108,687,385        107,729,770             108,268,431           
                                             --------------------------------------------------------
GROSS PROFIT                                    47,928,965         46,056,984              44,630,678                  
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES    37,260,113         40,073,511              31,920,779                  
                                             --------------------------------------------------------
INCOME FROM OPERATIONS                          10,668,852          5,983,473              12,709,899                   
                                             --------------------------------------------------------
OTHER INCOME (EXPENSE)                                                                                            
     Interest income                               636,695            586,623                 448,268                        
     Interest expense                           (1,774,509)       ( 1,916,569)            ( 1,921,261)             
     Foreign exchange gains (losses)                   191        (     6,693)            (     5,463)                      
     Other, net                                 (   16,964)           136,568             (    84,018)                      
                                             --------------------------------------------------------
       Total Other Expense, Net                 (1,154,587)       ( 1,200,071)            ( 1,562,474)             
                                             --------------------------------------------------------
INCOME BEFORE INCOME TAXES                       9,514,265          4,783,402              11,147,425              
INCOME TAXES                                     2,720,792          1,409,145               3,144,597              
                                             --------------------------------------------------------
NET INCOME                                   $   6,793,473        $ 3,374,257             $ 8,002,828                
                                             =============        ===========             ===========
AVERAGE SHARES OUTSTANDING                       6,599,096          6,806,891               6,935,975                
                                             =============        ===========             ===========
NET INCOME PER SHARE                         $        1.03        $      0.50             $      1.15                
                                             =============        ===========             ===========

The accompanying notes are an integral part of the consolidated financial
statements.        

                                      20

   17

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                                                                                                         
                                                                  Stock                                  
                                                          --------------------------       Paid-In        Restricted  
                                                             Shares                        Capital In      Unearned   
                                                          -------------------              Excess of        Stock         Retained
                                                          Common      Class B   Amount     Par Value      Compensation    Earnings
                                                        ---------------------------------------------------------------------------
                                                                                                        
BALANCE, JULY 31, 1994                                  5,100,623   2,132,895  $723,352    $7,657,394    $      -      $ 70,077,278
     Net income                                                 -           -         -             -           -         8,002,828
     Dividends declared                                         -           -         -             -           -        (2,046,644)
     Conversion of Class B Stock to
        Common Stock                                        18,201    (18,201)        -             -           -                 -
                                                        ---------------------------------------------------------------------------
BALANCE, JULY 31, 1995                                   5,118,824  2,114,694   723,352     7,657,394           -        76,033,462
     Net income                                                  -          -         -             -           -         3,374,257
     Dividends declared                                          -          -         -             -           -        (2,022,205)
     Conversion of Class B Stock to
        Common Stock                                        72,326    (72,326)        -             -           -                 -
     Issuance of stock under 1995 Long Term
        Incentive Plan                                       2,000          -       200        27,050     (27,250)                -
     Amortization of Restricted Common
        Stock Compensation                                       -          -         -             -       3,406                 -

                                                        ---------------------------------------------------------------------------
BALANCE, JULY 31, 1996                                   5,193,150  2,042,368    723,552    7,684,444     (23,844)       77,385,514
     Net income                                                  -          -          -            -           -         6,793,473
     Dividends declared                                          -          -          -            -           -        (1,935,845)
     Conversion of Class B Stock to
        Common Stock                                        73,980    (73,980)         -            -           -                 -
     Issuance of stock under 1995 Long Term
        Incentive Plan                                           -          -          -        1,656      (8,469)                -
     Amortization of Restricted Common
        Stock Compensation                                       -          -          -            -      14,683                 -
                                                        ---------------------------------------------------------------------------
BALANCE, JULY 31, 1997                                   5,267,130  1,968,388   $723,552   $7,686,100    $(17,630)      $82,243,142
                                                        ==========  =========   ========   ==========    ========       ===========

     The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                      21

   18

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                              YEAR ENDED JULY 31
                                                                                   ----------------------------------------     
                                                                                         1997       1996         1995
                                                                                   ----------------------------------------     
                                                                                                      
CASH FLOWS FROM OPERATING ACTIVITIES 
     Net income                                                                     $ 6,793,473  $ 3,374,257   $ 8,002,828
                                                                                    --------------------------------------
     Adjustments to reconcile net income to net cash provided 
        by operating activities
       Depreciation and amortization                                                  7,587,001    7,925,806     7,808,496
       Deferred income taxes                                                           (181,366)  (1,791,247)     (575,130)
       Provision for bad debts                                                          125,000      202,690        51,013
       (Increase) decrease in
          Accounts receivable                                                           235,476      692,363    (1,680,287)
          Inventories                                                                 1,132,796     (838,308)      319,844
          Prepaid expenses and taxes                                                   (382,829)   1,190,548    (1,608,299)
          Other assets                                                                 (536,993)    (830,161)     (960,720)
       Increase (decrease) in
          Accounts payable                                                           (1,288,979)     636,215       774,083
          Income taxes payable                                                         (691,123)     456,708             -
          Accrued expenses                                                             (360,856)     332,842       (32,319)
          Deferred compensation                                                         496,481      475,238        16,257
          Other                                                                         260,783      642,270       201,428
                                                                                    --------------------------------------
             Total Adjustments                                                        6,395,391    9,094,964     4,314,366
                                                                                    --------------------------------------
             Net Cash Provided by Operating Activities                               13,188,864   12,469,221    12,317,194
                                                                                    --------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
       Capital expenditures                                                          (5,394,600)  (7,184,337)   (7,032,064)
       Proceeds from sale of property, plant and equipment                              555,232      923,437             -
       Purchases of investment securities                                              (350,000)    (167,000)   (3,691,201)
       Dispositions of investment securities                                            400,000      906,283     4,722,543
       Other                                                                           (141,551)    (267,693)      159,709
                                                                                    --------------------------------------
       Net Cash Used in Investing Activities                                         (4,930,919)  (5,789,310)   (5,841,013)
                                                                                    --------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
       Principal payments on long-term debt                                          (1,628,410)  (1,145,479)   (1,244,481)
     Proceeds from issuance of long-term debt                                            21,278      230,000             -
     Dividends paid                                                                  (1,960,893)  (2,015,383)   (1,983,291)
     Purchase of treasury stock                                                      (4,882,916)  (2,433,710)     (825,475)
     Other                                                                               76,404      (31,462)       12,418
                                                                                    --------------------------------------
     Net Cash Used in Financing Activities                                           (8,374,537)  (5,396,034)   (4,040,829)
                                                                                    --------------------------------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                   (116,592)   1,283,877     2,435,352
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                         10,113,544    8,829,667     6,394,315
                                                                                    --------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR                                              $ 9,996,952 $ 10,113,544   $ 8,829,667
                                                                                    =========== ============   ===========    

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

22

   19

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Oil-Dri
Corporation of America and its wholly owned subsidiaries. All significant
intercompany balances and transactions have been eliminated from the
consolidated financial statements.

No provision has been made for possible income taxes which may be paid on the
distribution of approximately $9,870,000 and $9,796,000 as of July 31, 1997 and
1996, respectively, of retained earnings of foreign subsidiaries, as
substantially all such amounts are intended to be indefinitely invested in these
subsidiaries or no additional income taxes would be incurred when such earnings
are distributed. It is not practicable to determine the amount of income taxes
or withholding taxes that would be payable upon the remittance of assets that
represent those earnings.

MANAGEMENT USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

REVENUE RECOGNITION
Revenues from sales of products and transportation services are recognized upon
shipment.

INCOME TAXES
Deferred income taxes reflect the impact of temporary differences between the
assets and liabilities recognized for financial reporting purposes and amounts
recognized for tax purposes.

INTEREST RATE DERIVATIVE INSTRUMENTS
An interest rate swap agreement is utilized in the management of interest rate
exposure. Interest differentials on the swap contract (Note 3) are recorded as
interest expense in the contract period incurred. The Company recognized
additional interest expense of $60,100, $58,100 and $58,900 in fiscal years
1997, 1996 and 1995, respectively, as a result of this contract.

RECLASSIFICATION
Certain items in prior year financial statements have been reclassified to
conform to the presentation used in fiscal 1997.

TRANSLATION OF FOREIGN CURRENCIES
Assets and liabilities of foreign subsidiaries, where the local currency is the
functional currency, are translated at the exchange rates in effect at period
end. Income statement items are translated at the average exchange rate on a
monthly basis. Resulting translation adjustments are recorded as a separate
component of stockholders' equity.

Changes in the cumulative translation adjustments account are as follows:

                                                                                        1997         1996         1995
                                                                                       -----       -------       ------ 
                                                                                                                
Balance, at beginning of year                                                       $(1,018,416)   $(987,781)   $(1,135,951)
Translation adjustments resulting from exchange rate changes and 
     intercompany transactions                                                          111,410      (30,635)       148,170
                                                                                    -----------  -----------    -----------    
Balance, at end of year                                                             $  (907,006) $(1,018,416)   $  (987,781)
                                                                                    ===========  ===========    ===========    

                                                                         23

   20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CASH EQUIVALENTS
Cash equivalents are highly liquid investments with maturities of three months
or less when purchased.

INVENTORIES

The composition of inventories is as follows:

- -------------------------------------------------------------------------------------------------------------------------------
                                                                                                -------------------------------
                                                                                                   1997                 1996
                                                                                                -------------------------------
                                                                                                              
Finished goods                                                                                  $ 6,683,755         $ 6,728,150
Packaging                                                                                         3,167,909           3,754,087
Other                                                                                               752,608           1,254,831
                                                                                               ------------        ------------
                                                                                               $ 10,604,272        $ 11,737,068
                                                                                               ============        ============
- -------------------------------------------------------------------------------------------------------------------------------

Inventories are valued at the lower of cost (first-in, first-out) or market.

CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Company to concentrations
of credit risk consist principally of cash investments and accounts receivable.
The Company places its cash investments in government backed instruments, both
foreign and domestic, and with other quality institutions. Concentrations of
credit risk with respect to accounts receivable are subject to the financial
condition of certain major customers, principally the customer referred to in
Note 2. The Company generally does not require collateral to secure customer
receivables.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment expenditures are generally depreciated using the
straight-line method over their estimated useful lives as follows:

                                                                                   
                                                                                      Years
                                                                                      -----
Buildings and leasehold improvements                                                  5-30
Machinery and equipment                                                               3-15
Office furniture and equipment                                                        2-10
Vehicles                                                                              2-8

RESEARCH AND DEVELOPMENT
Research and development costs of $2,049,000 in 1997, $2,026,000 in 1996 and
$1,826,000 in 1995, were charged to expense as incurred.

ACQUISITIONS
The excess of the Company's original investment over the fair value of the net
assets acquired at the date of acquisition is being amortized by the
straight-line method over 40 years.

ADVERTISING COSTS
The Company defers recognition of advertising production costs until the first
time the advertising takes place; other advertising costs are expensed as
incurred. Advertising expenses were $3,562,000, $6,269,000 and $2,122,000 for
the years ended July 31, 1997, 1996 and 1995, respectively. Prepaid advertising
production costs at July 31, 1997, 1996 and 1995 were not material.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Non-derivative financial instruments included in the consolidated balance
sheets are cash and cash equivalents, investment securities and notes payable.
These instruments, except for notes payable, were carried at amounts
approximating fair value as of July 31, 1997. The fair value of notes payable
was estimated based on future cash flows discounted at current interest rates
available to the Company for debt with similar maturities and characteristics.
The fair value of notes payable as of July 31, 1997 and 1996 was less than its
carrying value by approximately $720,000 and $600,000, respectively.

NET INCOME PER SHARE AND COMMON SHARE EQUIVALENTS

Net income per share and common share equivalents are computed based upon the
weighted average number of shares outstanding during each year and include
outstanding options, when dilutive.

NEW ACCOUNTING PRONOUNCEMENT

In February 1997, the Financial Accounting Standards Board issued Statement No.
128 (FAS 128), "Earnings Per Share,"
effective for financial statements issued after December 15, 1997. The Company
intends to adopt FAS 128 in fiscal year 1998. The Company has not determined
the financial statement impact of FAS 128.

                                     -24-

   21

NOTE 2 - BUSINESS AND GEOGRAPHIC REGION
INFORMATION

NATURE OF BUSINESS
The Company is a leader in developing, manufacturing and marketing sorbent
products for consumer, industrial, environmental, agricultural and fluids
purification markets, and operates within a single segment. The Company has
operations in the United States, Canada and the United Kingdom and exports
goods worldwide. The Company had net sales in excess of 10% of total net sales
to one unaffiliated customer in 1997, 1996 and 1995. Accounts receivable
related to this major customer amounted to $4,736,000, $4,905,000 and
$5,083,000 as of July 31, 1997, 1996 and 1995, respectively.

The sales to this customer were as follows:
- ---------------------------------------------------------------------------------------------------------------------
                                                                              1997             1996          1995
                                                                            ----------------------------------------- 
                                                                                         (Thousands of Dollars)

     Amount                                                                 $ 37,219          $ 39,916       $ 40,884
     Percent of net sales                                                         24%               26%            27%

The following is a summary of financial information by geographic region:
- ---------------------------------------------------------------------------------------------------------------------
 
                                                                                            YEAR ENDED JULY 31
                                                                            -----------------------------------------
                                                                                         (Thousands of Dollars)
                                                                            -----------------------------------------
                                                                              1997             1996          1995
                                                                            -----------------------------------------
                                                                                                    
Sales to unaffiliated customers:
     Domestic                                                               $ 144,616         $141,900       $140,651
     Foreign subsidiaries                                                      12,000           11,887         12,248
Sales or transfers between  geographic areas:
     Domestic                                                               $   5,611         $  5,039       $  4,067
Income before income taxes:
     Domestic                                                               $   8,637         $  3,920       $ 10,094
     Foreign subsidiaries                                                         877              863          1,053
Net Income:
     Domestic                                                               $   6,237         $  2,820       $  7,240
     Foreign subsidiaries                                                         556              554            763
Identifiable assets:
     Domestic                                                               $ 104,692         $108,657       $107,417
     Foreign subsidiaries                                                       9,866            9,036          9,571
- ---------------------------------------------------------------------------------------------------------------------

                                      25
   22
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - NOTES PAYABLE

The composition of notes payable is as follows:
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       --------------------------
                                                                                                           1997          1996
                                                                                                       --------------------------
                                                                                                                
Town of Blue Mountain, Mississippi                                                                      
  Principal payable on October 1, 2008. Interest payable monthly at a variable interest rate 
  set weekly based on market conditions for similar instruments. The average rates were      
  3.91% and 3.98% in fiscal 1997 and fiscal 1996, respectively. Payment of these bonds by    
  the Company is guaranteed by a letter of credit issued by Harris Trust and Savings Bank.   
  In May 1991, the Company entered into a seven-year interest rate swap contract. Under this
  agreement, the Company receives a floating interest rate based on LIBOR and pays interest
  at a fixed rate of 6.53%..........................................................................    $ 2,500,000   $ 2,500,000
Teachers Insurance and Annuity Association of America
  Payable in annual principal installments on November 15; $1,800,000 in fiscal 1998;
  $1,200,000 in fiscal 2000; $1,100,000 in fiscal 2001; and $1,000,000 in fiscal 2002. Interest
  is payable semiannually at an annual rate of 9.38%................................................      5,100,000     6,600,000
Teachers Insurance and Annuity Association of America
  Payable in annual principal installments on August 15; $500,000 in fiscal 2002;
  $1,000,000 in fiscal 2003; $2,500,000 in fiscal 2004; and $2,500,000 in fiscal 2005. Interest
  is payable semiannually at an annual rate of 7.17%................................................      6,500,000     6,500,000
Harris Trust and Savings Bank
  Payable in annual principal installments on June 20; $1,950,000 in fiscal 1999; $900,000 in
  fiscal 2000; $650,000 in fiscal years 2001 and 2002; and $350,000 in fiscal 2003. Interest is
  payable quarterly at an annual rate of 7.78%......................................................      4,500,000     4,500,000
Other...............................................................................................        397,630       504,762
                                                                                                       --------------------------
                                                                                                         18,997,630    20,604,762
  Less current maturities of notes payable..........................................................    ( 1,945,630)  ( 1,626,762)
                                                                                                       --------------------------
                                                                                                       $ 17,052,000  $ 18,978,000
                                                                                                       ============  ============

- ------------------------------------------------------------------------------------------------------------------------------------

                                      26
   23
NOTE 3 - NOTES PAYABLE (Continued)

During fiscal 1995, the Company executed a Credit Agreement with Harris Trust
and Savings Bank which replaced the Term Note Agreement dated April 20, 1994.
In addition to providing continued term financing, the Credit Agreement
provides for a $5,000,000 committed unsecured revolving line of credit which
expires on August 1, 1999, at certain short-term rates. No borrowings were made
against this line during fiscal years 1997 and 1996.
        
The agreements with the Town of Blue Mountain, Mississippi, Teachers Insurance
and Annuity Association of America and Harris Trust and Savings Bank impose
working capital requirements, dividend and financing limitations, minimum
tangible net worth requirements and other restrictions. The Company's Credit
Agreement with Harris Trust and Savings Bank indirectly restricts dividends by
requiring the Company to maintain tangible net worth, as defined, in the amount
of $50,000,000 plus 25% of cumulative annual earnings from July 31, 1994.
        
In prior years, The Town of Blue Mountain, Mississippi issued long-term bonds
to finance the purchase of substantially all of the assets of certain plant
expansion projects, and leased the projects to the Company and various of its
subsidiaries (with the Company and various of its wholly owned subsidiaries as
guarantors) at rentals sufficient to pay the debt service on the bonds.

The following is a schedule by year of future maturities of notes payable as of July 31, 1997:
- ----------------------------------------------------------------------------------------------
                                                                                        
Year Ending July 31:                                                                          
1999 ..........................................................................   $  2,076,000
2000 ..........................................................................      2,226,000
2001 ..........................................................................      1,750,000
2002 ..........................................................................      2,150,000
2003 ..........................................................................      1,350,000
Later years....................................................................      7,500,000
                                                                                  ------------
                                                                                  $ 17,052,000
                                                                                  ============

NOTE 4 - INCOME TAXES

The provision for income tax expense consists of the following:
- ----------------------------------------------------------------------------------------------
                                                 ---------------------------------------------
                                                     1997             1996            1995     
                                                 ---------------------------------------------
                                                                         
Current                                                                                        
  Federal .....................................  $ 1,988,007      $ 2,019,796     $ 2,756,283  
  Foreign .....................................      308,130          332,127         292,664  
  State .......................................      606,021          848,469         670,780  
                                                 ---------------------------------------------
                                                   2,902,158        3,200,392       3,719,727  
                                                 ---------------------------------------------

Deferred                                                                                       
  Federal .....................................       34,751       (  799,382)      ( 535,093) 
  Operating loss carryforward .................    ( 154,475)      (  644,108)              -  
  Foreign .....................................       12,590       (   22,709)      (   2,142) 
  State .......................................    (  74,232)      (  325,048)      (  37,895) 
                                                 ---------------------------------------------
                                                   ( 181,366)      (1,791,247)      ( 575,130) 
                                                 ---------------------------------------------
Total Income Tax Provision ....................  $ 2,720,792      $ 1,409,145     $ 3,144,597  
                                                 ===========      ===========     ============

- ----------------------------------------------------------------------------------------------

                                      27
   24

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Principal reasons for variations between the statutory federal rate and the effective rates were as follows:
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                   1997         1996         1995  
                                                                                                 ----------------------------------
                                                                                                                       
U.S. federal statutory income tax rate.......................................................      34.0%        34.0%        34.0% 
Depletion deductions allowed for mining......................................................    ( 11.4 )     ( 23.4 )     ( 12.2 )
State income taxes, net of federal tax benefit...............................................       5.6         10.9          5.7  
Valuation allowance without income tax benefit...............................................       1.6         12.0            -  
Difference in effective tax rate of foreign subsidiaries.....................................     ( 0.1 )      ( 0.1 )      ( 0.6 )
Other........................................................................................     ( 1.1 )      ( 3.9 )        1.3  

                                                                                                 ----------------------------------
                                                                                                 ----------------------------------
                                                                                                   28.6%        29.5%        28.2% 
                                                                                                 =======      =======      ======= 

The consolidated balance sheets as of July 31, 1997 and 1996, included
the following tax effects of cumulative temporary  differences:
- --------------------------------------------------------------------------------

                                                                   ---------------------------------------------------------------
                                                                              1997                                 1996
                                                                   ---------------------------------------------------------------
                                                                      Assets      Liabilities              Assets      Liabilities
                                                                   ---------------------------------------------------------------
                                                                                                           
Depreciation                                                       $         -    $ 1,667,174           $         -    $ 1,528,266
Deferred Compensation                                                1,031,173              -               844,992              -
Postretirement Benefits                                                473,883              -               356,656              -
Trade Promotions and Advertising                                       117,445              -               269,200              -
Accrued Expenses                                                       464,282              -               408,986              -
Tax Credits                                                            921,557              -               905,016              -
Operating Loss Carryforward                                          1,527,874              -             1,219,070              -
Other                                                                  306,617              -               363,637              -
                                                                   ---------------------------------------------------------------
                                                                     4,842,831      1,667,174             4,367,557      1,528,266
Valuation Allowance                                                  ( 730,000)             -             ( 575,000)             -
                                                                   ---------------------------------------------------------------
Total Deferred Taxes                                               $ 4,112,831    $ 1,667,174           $ 3,792,557    $ 1,528,266
                                                                   ===========    ===========           ===========    ===========

The valuation allowance represents operating loss carryforwards not
anticipated to be utilized.  As of July 31, 1997, for federal income tax
purposes there were regular tax operating loss carryforwards of approximately
$3,938,000 which begin to expire in the year 2011.  A valuation allowance has
been established for $730,000 of the deferred tax benefit related to those loss
carryforwards for which it is considered more likely than not the benefit will
not be realized. Tax credits of $921,557 primarily consisting of foreign tax
credits expiring in 2001 and later are also being carried forward.

                                      28
   25

NOTE 5 - DEFERRED COMPENSATION

In December 1995, the Company adopted the Oil-Dri Corporation of America
Deferred Compensation Plan. Deferrals are no longer being made under the
original plan, The Oil-Dri Corporation of America Key Employee and Directors
Deferred Compensation Plan. The new plan permits Directors and certain
management employees to defer portions of their compensation and earn interest
on the deferred amounts. The compensation, which has been deferred since the
inception of the original plan, has been accrued as well as interest thereon.
The Company has purchased life insurance contracts on some participants to
partially fund the original plan. The new plan is unfunded.
        
NOTE 6 - STOCKHOLDERS' EQUITY

On December 13, 1994, the stockholders of the Company approved an amendment to
the Company's Certificate of Incorporation authorizing 30,000,000 shares of a
new class of common stock, par value $.10, which has been designated as Class A
Common Stock, in addition to the currently authorized 15,000,000 shares of
Common Stock and 7,000,000 shares of Class B Stock, each with a par value of
$.10.  There are no Class A shares currently outstanding.
        
The Common Stock and Class B Stock are equal, on a per share basis, in all
respects except as to voting rights, conversion rights, cash dividends and
stock splits or stock dividends.  The Class A Common Stock is equal, on a per
share basis, in all respects, to the Common Stock except as to voting rights
and stock splits or stock dividends.  In the case of voting rights, Common
Stock is entitled to one vote per share and Class B Stock is entitled to ten
votes per share, while Class A Common Stock generally has no voting rights.
Common Stock and Class A Common Stock have no conversion rights.  Class B Stock
is convertible on a share-for-share basis into Common Stock at any time and is
subject to mandatory conversion under certain circumstances.
        
Common Stock is entitled to cash dividends, as and when declared or paid, equal
to 133 1/3% on a per share basis of the cash dividend paid on Class B Stock.
Class A Common Stock is entitled to cash dividends on a per share basis equal
to the cash dividend on Common Stock.  Additionally, while shares of Common
Stock, Class A Common Stock and Class B Stock are outstanding, the sum of the
per share cash dividend paid on shares of Common Stock and Class A Common
Stock, must be equal to at least 133 1/3% of the sum of the per share cash
dividend paid on Class B Stock and Class A Common Stock.  See Note 3 regarding
dividend restrictions.
        
Shares of Common Stock, Class A Common Stock and Class B Stock are equal in
respect of all rights to dividends (other than cash) and distributions in the
form of stock or other property (including stock dividends and split-ups) in
each case in the same ratio except in the case of a Special Stock Dividend. The
Special Stock Dividend, which can be issued only once, is either a dividend of
one share of Class A Common Stock for each share of Common Stock and Class B
Stock outstanding or a recapitalization, in which half of each outstanding
share of Common Stock and Class B Stock would be converted into a half share of
Class A Common Stock.
        
All per share amounts included in the financial statements and notes reflect
the dilutive effect of all common share equivalents.  See Note 7 for
information regarding common share equivalents.
        
In June 1997, the Board of Directors of the Company authorized the repurchase,
from time to time, of up to 400,000 shares of the Company's stock.  This
authorization, in addition to previous authorizations, totals 1,100,000 shares.
As of July 31, 1997, 644,322 shares have been repurchased under these
authorizations.  On August 1, 1997, the Company purchased an additional 150,000
shares at a cost of $2,606,250.

The following reflects the changes in treasury stock (Common) over the last three years:

                                                         Shares           Amount    
                                                       -----------------------------                             
                                                                 
Balance, July 31, 1994 ............................     281,696        $  4,262,569 
     Purchased during fiscal 1995 .................      50,500             825,475 
                                                       -----------------------------                             
Balance, July 31, 1995 ............................     332,196           5,088,044 
     Purchased during fiscal 1996 .................     166,871           2,433,710 
                                                       -----------------------------                             
Balance, July 31, 1996 ............................     499,067           7,521,754 
     Reissued during fiscal 1997 ..................       ( 500)            ( 6,813)
     Purchased during fiscal 1997 .................     306,985           4,882,916 
                                                       -----------------------------                             
Balance, July 31, 1997 ............................     805,552        $ 12,397,857 
                                                       ========        =============                             

NOTE 7 - STOCK OPTION PLANS

The Company instituted the Oil-Dri Corporation of America 1995 Long Term
Incentive Plan during the fiscal year ended July 31, 1996.  The Plan was
approved by the stockholders of the Company at the annual meeting on December
12, 1995.  All shares of stock awarded under the 1995 Plan will be Class A
Common Stock, except that, if there is no Class A Common Stock issued or
publicly traded on a securities exchange when such awards are exercised, the
shares awarded would be Common Stock.  The Plan provides for various types of
awards. Awards of restricted stock were 500 and 2,000 shares during the fiscal
years ended July 31, 1997 and 1996, respectively.
        
The Oil-Dri Corporation of America 1988 Stock Option Plan terminated on December
12, 1995, for purposes of future grants.  The outstanding options under this
plan will remain outstanding and exercisable in accordance with their respective
terms.

                                      29
   26

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - STOCK OPTION PLANS (Continued)

A summary of option transactions under the plans follows:

                                                      1988 Option Plan                  1995 Option Plan
                                                ------------------------------------------------------------------
                                                      Number of Shares                  Number of Shares
                                                (Weighted Average Option Price)    (Weighted Average Option Price)
                                                ------------------------------------------------------------------
                                                     1997      1996         1995      1997       1996      1995
                                                ------------------------------------------------------------------
                                                                                         
Outstanding, Beginning of Year                    250,909     267,409     138,659     195,000         -      -
                                                 $ (18.63)   $ (18.66)   $( 19.61)   $ (14.92)        -      -

Granted                                                 -           -     197,250     145,375   199,000      -
                                                        -           -    $( 19.22)    $(14.82) $ (14.93)     -

Exercised                                               -           -           -           -         -      - 
                                                        -           -           -           -         -      -
Canceled/Terminated                                52,070      16,500      68,500      16,000     4,000      -
                                                 $ (19.14)   $ (19.13)   $ (22.21)     $(14.96) $ (15.13)     -
Outstanding, End of Year                          198,839     250,909     267,409      324,375   195,000      -
                                                 $ (18.49)   $ (18.63)   $ (18.66)     $(14.88) $ (14.92)     -

                                                                                                 Combined Plans
                                                                                         -------------------------------
                                                                                                Number of Shares
                                                                                         -------------------------------
                                                                                         (Weighted Average Option Price)
                                                                                         -------------------------------
                                                                                          1997         1996        1995
                                                                                         -------------------------------
                                                                                                       
Outstanding, Beginning of Year                                                           445,909     267,409     138,659
                                                                                        $( 17.00)   $( 18.66)   $( 19.61)
Granted                                                                                  145,375     199,000     197,250
                                                                                        $( 14.82)   $( 14.93)   $( 19.22)
Exercised                                                                                      -           -           -
                                                                                               -           -           -
Canceled/Terminated                                                                       68,070      20,500      68,500
                                                                                        $( 18.16)   $( 18.34)   $( 22.21)
Outstanding, End of Year                                                                 523,214     445,909     267,409
                                                                                        $( 16.21)   $( 17.00)   $( 18.66)

                                      30

   27

NOTE 7 - STOCK OPTION PLANS (Continued)

The Company has reserved 173,125 shares of Common Stock for future grants and
issuances under the Oil-Dri Corporation of America 1995 Long Term Incentive
Plan.

Exercise prices of the options outstanding under the 1988 Option Plan range
between $15.60 and $20.00 per share with a weighted average price of $18.49 per
share and a weighted average contractual life of 5.3 years. As of July 31,
1997, 141,388 options were exercisable.

Exercise prices of the options outstanding under the 1995 Long Term Incentive
Plan range between $13.63 and $15.13 per share with a weighted average exercise
price of $14.88 per share and a weighted average contractual life of 8.6 years.
None of these options are exercisable as of July 31, 1997.

The Company has elected to continue to account for stock-based compensation
using the intrinsic value method under APB Opinion No. 25.  Consequently, no
compensation expense has been recognized for stock options.  If compensation
expense for the Company's stock options issued in the fiscal years ended July
31, 1997 and 1996 had been determined based on the fair value method of
accounting, as defined in SFAS No. 123, the Company's net income and net income
per share would have been reduced to the pro forma amounts indicated below:

                                                1997            1996
Net income as reported                    $ 6,793,473      $3,374,257
     pro forma                            $ 6,651,129      $3,311,131
Net income per share as reported          $      1.03      $     0.50
     pro forma                            $      1.01      $     0.49

The fair value of issued stock options is estimated on the grant date using the
Black-Scholes Option Pricing Method with the following assumptions for the
fiscal years ended July 31, 1997 and 1996, respectively:  Dividend yields of
2.1% and 2.2%; volatility of 25.7% and 26.0%; risk-free interest rates of 6.0%
and 6.2%; and an expected life of 5 years for both years.  The weighted average
fair value of the options granted was $4.22 and $4.28 for the fiscal years
ended July 31, 1997 and 1996, respectively.  The fair value method of
accounting has not been applied for options granted prior to August 1, 1995.

NOTE 8 - EMPLOYEE BENEFIT PLANS

The Company and its subsidiaries have defined benefit pension plans for
eligible salaried and hourly employees.  Benefits are based on a formula of
years of credited service and levels of compensation or stated amounts for each
year of credited service.  The assets of these plans are invested in various
high quality marketable securities.

The net periodic pension cost for the years 
 ended July 31, 1997, 1996 and 1995, consists of the following:

                                                        -------------------------------------
                                                             1997       1996        1995
                                                        -------------------------------------

Service cost                                            $   347,800   $ 349,232    $ 326,650
Interest cost on projected benefit obligations              441,708     426,730      384,901
Earnings on plan assets                                 ( 1,892,062)  ( 561,276)   ( 836,171)
Net amortization and deferral                             1,426,826     153,900      495,586
                                                        -------------------------------------
Net pension cost                                        $   324,272   $ 368,586    $ 370,966
                                                        ===========   =========    ==========

The funded status of the plans at July 31 is as follows:
                                                                    ---------------------------
                                                                          1997         1996
                                                                    ---------------------------
                                                                            
Actuarial Present Value of Benefit Obligations
  Accumulated Benefit Obligations
  Vested                                                            $ 4,710,700    $  4,329,417
  Nonvested                                                             446,765         457,959
                                                                    ---------------------------
     Total Accumulated Benefit Obligations                          $ 5,157,465    $  4,787,376
                                                                    ===========    ============

     Projected Benefit Obligations                                  $ 6,565,616    $  6,287,994

Plan Assets at Fair Value                                             7,546,326       5,706,087
                                                                    ---------------------------
Excess (Deficiency) of Plan Assets Over (Under) Projected 
 Benefit Obligations                                                    980,710      (  581,907)
Unrecognized Net Gain                                                (2,360,522)     (  626,115)
Unrecognized Prior Service Cost                                         535,050         574,726
Unrecognized Net Excess Plan Assets as of August 1, 1987 Being
     Recognized Principally Over 21 Years                             ( 291,176)     (  317,800)
Adjustment Required to Recognize Minimum Liability                            -      (   91,161)
                                                                    ---------------------------
Accrued Pension Included in Noncurrent Liabilities - Other          $(1,135,938)   $ (1,042,257)
                                                                    ============   ============

                                     -31-
   28

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - EMPLOYEE BENEFIT PLANS (Continued)

   Assumptions used in the previous calculations are as follows:

                                                          ----------
                                                          1997  1996
                                                          ----------
   Discount rate..........................................7.5%  7.5%
   Rate of increase in compensation levels................5.0%  5.0%
   Long-term expected rate of return on assets............8.0%  8.0%

The Company has funded the plans based upon actuarially determined
contributions that take into account the amount deductible for income tax
purposes and the minimum contribution required under the Employee Retirement
Income Security Act of 1974 (ERISA), as amended.

For the years ended July 31, 1997, 1996 and 1995, the Company maintained a
profit sharing/401(k) savings plan under which the Company matches a portion of
employee contributions.  The plan is available to essentially all domestic
employees who have completed one year of continuous service and are at least 21
years of age.  The Company's contributions to this plan, and to similar plans 
maintained by the Company's foreign subsidiaries, were $174,667, $140,967 and 
$137,570 for fiscal years 1997, 1996 and 1995, respectively.

NOTE 9 - CONTINGENT LIABILITIES

The Company is involved in various litigation of a nature that is normal to its
business. While it is impossibe at this time to determine with certainty the
ultimate outcome of these or other lawsuits, each lawsuit is either covered by
insurance or adequate provisions have been made for probable losses with
respect thereto as best can be determined at this time. Management therefore
believes that none of the pending litigation will have a material adverse 
effect on the financial condition of the Company or on results of operations.

NOTE 10 - LEASES

The Company's mining operations are conducted on leased or owned property.
These leases generally provide the Company with the right to mine as long as
the Company continues to pay a minimum monthly rental, which is applied against
the per ton royalty when the property is mined. During fiscal 1997, the Company
leased 4,735 acres in Nevada for potential future development of a new mineral
reserve base.

The Company leases its corporate offices in Chicago, Illinois (20,000 square
feet), office and warehouse space in Alpharetta, Georgia (26,000 square feet)
and office facilities in Europe. The office space in Chicago is subject to a
lease expiring in 2008. The Alpharetta, Georgia lease expires in 2000, and the
facilities in Europe are leased on a year-to-year basis.

In addition, the Company leases transportation equipment, including tractor
trailers and railcars, data processing equipment, and office equipment.  In
most cases, the Company expects that, in the normal course of business, leases
will be renewed or replaced by other leases.

The following is a schedule by year of future minimum rental requirements under
operating leases that have initial or remaining noncancelable lease terms in
excess of one year as of July 31, 1997:

Year Ending July 31:
1998...................................................... $ 3,095,414
1999......................................................   2,432,227
2000......................................................   1,653,454
2001......................................................   1,296,943
2002......................................................   1,029,323
Later years...............................................   5,161,476
                                                           -----------
                                                           $14,668,837
                                                           ===========

The following schedule shows the composition of total rental expense for all
operating leases, including those with terms of one month or less which were
not renewed:
                                  ------------------------------------
                                     1997         1996        1995
                                  ------------------------------------
Transportation equipment........  $2,734,000  $ 3,770,000  $ 3,439,000
  Office facilities.............     382,000      377,000      373,000
  Mining properties                         
   Minimum......................     177,000      168,000      180,000
   Contingent...................     361,000      239,000      162,000
  Other.........................     654,000      688,000      649,000
                                  ----------  -----------  -----------
                                  $4,308,000  $ 5,242,000  $ 4,803,000    
                                  ==========  ===========  ===========

                                      32

   29

NOTE 11 - OTHER CASH FLOW INFORMATION

 Cash payments for interest and income taxes were as follows:
                                                                         ----------------------------------------------------
                                                                            1997                1996                 1995
                                                                         ----------------------------------------------------
                                                                                                         
Interest                                                                 $ 1,557,208          $ 1,706,424         $ 1,750,054
                                                                         ===========          ===========         ===========
Income Taxes                                                             $ 3,996,586          $ 1,352,594         $ 4,013,110
                                                                         ===========          ===========         ===========

NOTE 12 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

A summary of selected information for 1997 and 1996 is as follows:
- ------------------------------------------------------------------------------

                                                                                   Fiscal 1997 Quarter Ended                        
                                                                             (Thousands Except Per Share Amounts)            
                                                                          ---------------------------------------------------
                                                                            Oct. 31   Jan. 31   April 30   July 31    Total  
                                                                          ---------------------------------------------------
                                                                                                           
Net Sales                                                                 $ 40,525   $ 42,792   $ 36,002  $ 37,297  $ 156,616
Gross Profit                                                                12,292     13,635     10,064    11,938     47,929
Net Income                                                                   1,930      2,264      1,164     1,435      6,793
Net Income Per Share                                                      $   0.29   $   0.34   $   0.18  $   0.22  $    1.03

                                                                                   Fiscal 1996 Quarter Ended                 
                                                                             (Thousands Except Per Share Amounts)            
                                                                          ---------------------------------------------------
                                                                            Oct. 31   Jan. 31   April 30  July 31     Total  
                                                                          ---------------------------------------------------
                                                                                                           
Net Sales                                                                 $ 39,308   $ 41,797   $ 36,427  $ 36,255  $ 153,787
Gross Profit                                                                11,659     12,322     11,153    10,923     46,057
Net Income                                                                   1,413        477        670       814      3,374
Net Income Per Share                                                      $   0.21   $   0.07   $   0.10  $   0.12  $    0.50
- -----------------------------------------------------------------------------------------------------------------------------

                                      33

   30

INDEPENDENT AUDITOR'S REPORT

STOCKHOLDERS AND BOARD OF DIRECTORS
Oil-Dri Corporation of America

We have audited the consolidated balance sheets of OIL-DRI
CORPORATION OF AMERICA AND SUBSIDIARIES as of July 31, 1997 and 1996, and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the three years in the period ended July 31, 1997.  These financial
statements are the responsibility of the Company'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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of OIL-DRI CORPORATION
OF AMERICA AND SUBSIDIARIES as of July 31, 1997 and 1996, and the results of
their operations and their cash flows for each of the three years in the period
ended July 31, 1997 in conformity with generally accepted accounting
principles.

Blackman Kallick Bartelstein, LLP
Chicago, Illinois

August 30, 1997

- --------------------------------------------------------------------------------
COMMON STOCK

The following table sets forth the closing high and low prices as quoted on the
New York Stock Exchange for the period indicated.
The number of holders of record of Common Stock on July 31, 1997 was 1,247.
There is no established public trading market for the Class B Stock.
The number of holders of record of Class B Stock on July 31, 1997 was 20.

Dividends
                                                             Amount Per Share

                                                        Date paid Common Class B
                                                        ------------------------
Quarterly                                               09/16/96   $0.08   $0.06
Quarterly                                               12/16/96   $0.08   $0.06
Quarterly                                               03/14/97   $0.08   $0.06
Quarterly                                               06/13/97   $0.08   $0.06

Market Prices

- --------------------------------------------------------------------------------
Fiscal 1997                                                  Closing Prices
- --------------------------------------------------------------------------------
                                                           High            Low
1st Quarter                                                15 1/4         13 1/4
2nd Quarter                                                17 1/8         12 3/4
3rd Quarter                                                17 3/4         15 1/2
4th Quarter                                                17 5/8         15 3/8
- --------------------------------------------------------------------------------
Fiscal 1996                                                  Closing Prices
- --------------------------------------------------------------------------------
                                                           High            Low
1st Quarter                                                16             14 1/8
2nd Quarter                                                16 1/8         14
3rd Quarter                                                16             13 1/4
4th Quarter                                                14 7/8         12
- --------------------------------------------------------------------------------

                                      34
   31

                              BOARD OF DIRECTORS
                                   OFFICERS
                              SENIOR MANAGEMENT

BOARD OF DIRECTORS
Richard M. Jaffee, Chairman
Daniel S. Jaffee, President and Chief Executive Officer
Robert D. Jaffee, Retired Chairman, Amco Corporation
J. Steven Cole, President, Cole & Associates, Chairman, Sav-A-Life Systems, Inc.
Arnold W. Donald, Co-President, Ag Sector, Monsanto Life Sciences Company
Ronald B. Gordon, Chief Executive Officer, Beiersdorf North America, Inc.
Edgar D. Jannotta, Senior Director, William Blair & Company, L.L.C.
Joseph C. Miller, Vice Chairman
Paul J. Miller, Partner, Sonnenschein Nath & Rosenthal
Haydn H. Murray, Professor Emeritus of Geology, Indiana University
Allan H. Selig, President, Milwaukee Brewers Baseball Club, Inc., President and
Chairman, Selig Executive Leasing, Inc., Chairman of the Executive Council of
 Major League Baseball

OFFICERS
Richard M. Jaffee, Chairman
Daniel S. Jaffee, President and Chief Executive Officer
Joseph C. Miller, Vice Chairman
Michael L. Goldberg, Executive Vice President and Chief Financial Officer
Richard V. Hardin, Group Vice President, Technology
Norman B. Gershon, Vice President, International Operations, Managing Director,
 Oil-Dri S.A.
Daniel J. Jones, Vice President, Favorite Products, Ltd.
Dennis E. Peterson, President, Oil-Dri Transportation Company
Thomas F. Cofsky, Vice President, Logistics, Quality & Service
William O. Thompson, Vice President, Manufacturing
Donald J. Deegan, Vice President, Corporate Development & Planning
Steven M. Levy, Vice President and General Manager, Consumer Products Group
Louis T. Bland, Jr., Vice President, Human Resources and Corporate Secretary
Richard L. Pietrowski, Treasurer
Brian P. Curtis, General Counsel and Assistant Secretary

SENIOR MANAGEMENT
Elwyn J. Allbritton, Vice President, Operational Development
Charles M. Boland, General Manager, Agricultural Products Group
Wade R. Bradley, General Manager, Industrial & Environmental Group
Karen Jaffee Cofsky, Director, Human Resources
Sam J. Colello, Director, Information Systems
B. Fielden Fraley, General Manager, Fluids Purification Group
Fred G. Heivilin, Vice President, Raw Materials Development
Heidi M. Jaffee, Corporate Attorney, Assistant Secretary
Richard D. Johnsonbaugh, Senior Regional Manager, Manufacturing
Kelly A. McGrail, Manager, Corporate Communications
V.R. Roskam, Vice President, Agricultural Products Group
John McMaster, Western Regional Manager, Manufacturing

                                      35

   32
        
INVESTOR INFORMATION

CORPORATE HEADQUARTERS
Oil-Dri Corporation of America
410 North Michigan Avenue, Suite 400
Chicago, Illinois 60611-4211
(312) 321-1515

INVESTOR INQUIRIES

Securities analysts, portfolio managers and representatives of financial
institutions seeking information about the corporation should contact Kelly
McGrail, manager, Corporate Communications, at the corporate headquarters.
        
Stockholders with inquiries related to stockholder records, stock transfers,
change of ownership, change of address or dividend payments should contact the
Company's registrar and transfer agent:

Harris Trust and Savings Bank 
Shareholder Service Department
311 W. Monroe, 11th Floor
Post Office Box A-3504
Chicago, Illinois 60690-9502
(312) 461-3309

STOCK LISTING
Oil-Dri Corporation of America's Common Stock is listed under the ticker
symbol ODC on the New York Stock Exchange.  The corporation's daily trading
activity, stock price and dividend information are in the financial sections of
most major newspapers.

ANNUAL MEETING
Oil-Dri Corporation of America will hold its 1997 Annual Meeting of
Stockholders on Tuesday, December 9, 1997 at 10:30 a.m. (Local Time) at the
Standard Club, 320 South Plymouth Court, Chicago, Illinois.

INDEPENDENT PUBLIC ACCOUNTANTS
Blackman Kallick Bartelstein, LLP

LEGAL COUNSEL
Sonnenschein Nath & Rosenthal

OIL-DRI SUBSIDIARIES
Oil-Dri Corporation of Georgia
Georgia, U.S.A.

Oil-Dri Production Company
Mississippi and Oregon, U.S.A.

Oil-Dri U.K. Limited
Wisbech, United Kingdom

Oil-Dri Transportation Company
Georgia, U.S.A.

Oil-Dri S.A.
Coppet, Switzerland

Blue Mountain Production Company
Mississippi, U.S.A.

Favorite Products Company, Ltd.
Quebec, Canada

CREDITS
Cover photograph: FPG International Illustrations:  Michael Maydak.  

Portrait photographs: Pages 2 and 3: Andy Goodwin.

Produced by: Kelly McGrail, manager, Corporate Communications

Design: Lee Ann Jaffee Design Associates, Inc.

                                      36

   1

                                                                      EXHIBIT 21

                          SUBSIDIARIES OF THE COMPANY

                                 State of Country
Subsidiary                       of Incorporation
- ----------                       ----------------
                              
Oil-Dri Corporation of Georgia   Georgia
Oil-Dri Production Company       Mississippi
Oil-Dri Transportation Company   Delaware
Oil-Dri, S.A                     Switzerland
Favorite Products Company, Ltd.  Canada
Blue Mountain Production Co.     Mississippi
Oil-Dri (U.K.) Limited           United Kingdom
Ochlocknee Holding Co., S.A      Spain
Ochlocknee Mining Co., S.A       Spain
Oil-Dri Corporation of America   Nevada

                                      -63-

   1

                                                                      EXHIBIT 23

                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our reports
and to all references to our Firm included in or by incorporation by reference
made a part of the Annual Report on Form 10-K of Oil-Dri Corporation of America
for the fiscal year ended July 31, 1997 and the Registration Statement of Form
S-8 relating to the Oil-Dri Corporation of America Stock Option Plan.

October 23, 1997

  

 5

                   12-MOS
                          JUL-31-1997
                               JUL-31-1997
                                       9,996,952
                                 1,544,000
                               20,340,706
                                   260,530
                                 10,604,272
                            46,910,417
                                     114,532,862
                            (58,737,021)
                             114,558,284
                       15,745,023
                                     17,052,000
                                0
                                          0
                                       723,552
                                  76,606,749
               114,558,284
                                    156,616,350
                           156,616,350
                                      108,687,385
                              108,687,385
                            36,515,194
                               125,000
                           1,774,509
                              9,514,265
                                 2,720,792
                          6,793,473
                                       0
                                      0
                                            0
                                 6,793,473
                                     1.03
                                     1.03