<PAGE>   1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q



[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934


For the quarterly period ended               September 30, 1999
                               -------------------------------------------------

                                       or

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from               to
                              --------------------------------------------------


Commission File Number: 0-15638
                       ---------------------------------------------------------


                               MICHAEL FOODS, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         Minnesota                                       41-0498850
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


Suite 324, Park National Bank Building
5353 Wayzata Boulevard
Minneapolis, MN,                                            55416
--------------------------------------------------------------------------------
(Address of principal executive offices)                  (Zip code)


                                 (612) 546-1500
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

     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.    [X]Yes    [ ]No

     The number of shares outstanding of the registrant's Common Stock, $.01 par
value, as of November 8, 1999 was 20,281,824 shares.

<PAGE>   2


                         PART I - FINANCIAL INFORMATION

                      MICHAEL FOODS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                     September 30,           December 31,
ASSETS                                                                   1999                    1998
------                                                               -------------           ------------
CURRENT ASSETS
<S>                                                                 <C>                    <C>
  Cash and equivalents                                              $    9,685,000         $    2,047,000
  Accounts receivable, less allowances                                  92,492,000             97,639,000
  Inventories                                                           74,998,000             74,250,000
  Prepaid expenses and other                                             7,300,000              3,884,000
                                                                    --------------         --------------
       Total current assets                                            184,475,000            177,820,000

PROPERTY, PLANT AND EQUIPMENT-AT COST
  Land                                                                   4,129,000              4,336,000
  Buildings and improvements                                           104,771,000            105,567,000
  Machinery and equipment                                              375,829,000            328,067,000
                                                                    --------------         --------------
                                                                       484,729,000            437,970,000
  Less accumulated depreciation                                        202,763,000            187,759,000
                                                                    --------------         --------------
                                                                       281,966,000            250,211,000
OTHER ASSETS
  Goodwill, net                                                        117,589,000            120,172,000
  Investments in Joint Ventures and other assets                        23,252,000              3,313,000
                                                                    --------------         --------------
                                                                       140,841,000            123,485,000
                                                                    --------------         --------------
                                                                    $  607,282,000         $  551,516,000
                                                                    ==============         ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Current maturities of long-term debt                              $    8,218,000         $   10,663,000
  Accounts payable                                                      46,764,000             44,376,000
  Accrued Liabilities
     Compensation                                                       12,036,000             11,034,000
     Insurance                                                           6,926,000              7,369,000
     Customer programs                                                  20,906,000             19,624,000
     Other                                                              22,375,000             23,457,000
                                                                    --------------         --------------
       Total current liabilities                                       117,225,000            116,523,000

LONG-TERM DEBT, less current maturities                                196,393,000            155,444,000
DEFERRED INCOME TAXES                                                   40,321,000             35,400,000
COMMITMENTS AND CONTINGENCIES                                                    -                      -

SHAREHOLDERS' EQUITY
  Common stock                                                             202,000                211,000
  Additional paid-in capital                                           102,325,000            119,871,000
  Retained earnings                                                    150,816,000            124,067,000
                                                                    --------------         --------------
                                                                       253,343,000            244,149,000
                                                                    --------------         --------------
                                                                    $  607,282,000         $  551,516,000
                                                                    ==============         ==============
</TABLE>

See accompanying notes to condensed consolidated financial statements.







<PAGE>   3



                      MICHAEL FOODS, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                  Three Months Ended September 30, (Unaudited)


<TABLE>
<CAPTION>

                                                                         1999                  1998
                                                                         ----                  ----
<S>                                                                <C>                   <C>
Net sales                                                          $ 269,911,000         $ 253,790,000

Cost of sales                                                        223,162,000           210,357,000
                                                                   -------------         -------------
    Gross profit                                                      46,749,000            43,433,000

Selling, general and administrative expenses                          25,355,000            22,660,000
                                                                   -------------         -------------
    Operating profit                                                  21,394,000            20,773,000

Interest expense, net                                                  3,241,000             2,637,000
                                                                   -------------         -------------
    Earnings before income taxes                                      18,153,000            18,136,000

Income tax expense                                                     7,440,000             7,620,000
                                                                   -------------         -------------
    NET EARNINGS                                                   $  10,713,000         $  10,516,000
                                                                   =============         =============

Net Earnings Per Share
     Basic                                                         $        0.53         $        0.49

     Diluted                                                       $        0.52         $        0.48
                                                                   =============         =============

Weighted average shares outstanding
     Basic                                                            20,251,000            21,627,000

     Diluted                                                          20,522,000            21,922,000
                                                                   =============         =============
</TABLE>





See accompanying notes to condensed consolidated financial statements.




<PAGE>   4



                      MICHAEL FOODS, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                   Nine Months Ended September 30, (Unaudited)


<TABLE>
<CAPTION>
                                                                                              1999                  1998
                                                                                              ----                  ----
<S>                                                                                      <C>                   <C>
Net sales                                                                                $  781,320,000        $  743,064,000

Cost of sales                                                                               642,301,000           615,021,000
                                                                                         --------------        --------------
    Gross profit                                                                            139,019,000           128,043,000

Selling, general and administrative expenses                                                 77,831,000            68,175,000
                                                                                         --------------        --------------
    Operating profit                                                                         61,188,000            59,868,000

Interest expense, net                                                                         8,862,000             7,981,000
                                                                                         --------------        --------------
    Earnings before income taxes                                                             52,326,000            51,887,000

Income tax expense                                                                           21,450,000            21,800,000
                                                                                         --------------        --------------
    NET EARNINGS                                                                         $   30,876,000        $   30,087,000
                                                                                         ==============        ==============

Net Earnings Per Share
     Basic                                                                               $         1.50        $         1.38

     Diluted                                                                             $         1.48        $         1.36
                                                                                         ==============        ==============
Weighted average shares outstanding
     Basic                                                                                   20,574,000            21,804,000

     Diluted                                                                                 20,818,000            22,156,000
                                                                                         ==============        ==============
</TABLE>



See accompanying notes to condensed consolidated financial statements.






<PAGE>   5


                      MICHAEL FOODS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                   Nine Months Ended September 30, (Unaudited)


<TABLE>
<CAPTION>

                                                                             1999                  1998
                                                                             ----                  ----
<S>                                                                    <C>                   <C>
Net cash provided by operating activities                              $   73,327,000        $  53,837,000

Cash flows from investing activities:
  Capital expenditures                                                    (60,918,000)         (49,579,000)
  Investments in joint ventures and other assets                          (20,976,000)              96,000
                                                                       --------------        -------------
Net cash used in investing activities                                     (81,894,000)         (49,483,000)

Cash flows from financing activities:
  Payments on long-term debt                                             (138,696,000)         (15,965,000)
  Proceeds from long-term debt                                            177,200,000           33,400,000
  Proceeds from issuance of common stock                                      755,000            2,844,000
  Repurchase of common stock                                              (18,927,000)         (21,355,000)
  Dividends                                                                (4,127,000)          (3,729,000)
                                                                       --------------        -------------
Net cash provided by (used in) financing activities                        16,205,000           (4,805,000)
                                                                       --------------        -------------
Net increase (decrease)  in cash and equivalents                            7,638,000             (451,000)

Cash and equivalents at beginning of year                                   2,047,000            4,038,000
                                                                       --------------        -------------
Cash and equivalents at end of period                                  $    9,685,000        $   3,587,000
                                                                       ==============        =============
</TABLE>


See accompanying notes to condensed consolidated financial statements.



<PAGE>   6


                      MICHAEL FOODS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with Regulation S-X pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although management believes that the
disclosures are adequate to make the information presented not misleading.

Michael Foods, Inc. (the "Company") utilizes a fiscal year consisting of either
52 or 53 weeks, ending on the Saturday nearest to December 31 each year. The
quarters ended September 30, 1999 and 1998 each included thirteen weeks of
operations. For clarity of presentation, the Company has described both periods
presented as if the quarters ended on September 30.

In the opinion of management, the unaudited condensed consolidated financial
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position as of September
30, 1999 and the results of operations for the three and nine month periods
ended September 30, 1999 and 1998 and cash flows for the nine months ended
September 30, 1999 and 1998. The results of operations for the nine months ended
September 30, 1999 are not necessarily indicative of the results for the full
year.

The Company's basic net earnings per share is computed by dividing net earnings
by the weighted average number of outstanding common shares. The Company's
diluted net earnings per share is computed by dividing net earnings by the
weighted average number of outstanding common shares and common share
equivalents relating to stock options, when dilutive. Options to purchase
390,275 and 734,824 shares of Common Stock, with a weighted average exercise
price of $25.56 and $24.80, which were outstanding during the three and nine
month periods ended September 30, 1999, were excluded from the computation of
common share equivalents for those periods because they were anti-dilutive.
Options to purchase 20,000 and 10,678 shares of common stock, with a weighted
average exercise price of $29.31 and $29.43, were outstanding during the three
and nine month periods ended September 30, 1998, but were excluded from the
computation of common share equivalents for those periods because they were
anti-dilutive.

NOTE B - INVENTORIES

Inventories, other than flocks, are stated at the lower of cost (determined on a
first-in, first-out basis) or market. Flock inventory represents the cost of
purchasing and raising flocks to laying maturity, at which time their cost is
amortized to operations over their expected useful life of generally one to two
years, assuming no salvage value.

Inventories consist of the following:

<TABLE>
<CAPTION>
                                                                       September 30,          December 31,
                                                                            1999                  1998
                                                                       -------------          ------------
<S>                                                                     <C>                   <C>
Raw materials and supplies                                              $17,651,000           $15,389,000
Work in process and finished goods                                       37,273,000            36,977,000
Flocks                                                                   20,074,000            21,884,000
                                                                        -----------           -----------
                                                                        $74,998,000           $74,250,000
                                                                        ===========           ===========
</TABLE>






<PAGE>   7


                      MICHAEL FOODS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE C - COMMITMENTS AND CONTINGENCIES

Use of Estimates

Preparation of the Company's consolidated financial statements requires
management to make estimates and assumptions that affect reported amounts of
assets and liabilities and related revenues and expenses. Actual results could
differ from the estimates used by management.

License Agreement

The Company has an exclusive license agreement for a patented process for the
production and sale of extended shelf-life egg products. Under the license
agreement, the Company has the right to defend and prosecute infringement of the
licensed patents. The U.S. Federal Court of Appeals has upheld the validity of
the patents subject to the license agreement, but, subsequently, a patent
examiner at the U.S. Patent and Trademark Office ("PTO") rejected the patents.
In August 1999, the examiner's rejections were largely overturned by the Board
of Appeals and Interferences of the PTO. Formal reexamination and reissue
certificates should be issued shortly confirming that the patents remain valid
and in full force and effect. These patents are scheduled to expire in 2006.

Litigation

The Company is engaged in routine litigation incidental to its business.
Management believes it will not have a material effect upon its consolidated
financial position, liquidity or results of operations.

NOTE D - SHAREHOLDERS' EQUITY

During the third quarter the Company repurchased no common stock under the share
repurchase program which began in July 1998.

NOTE E - RISKS AND UNCERTAINTIES

The Year 2000 issue relates to limitations in computer systems and applications
that may prevent proper recognition of the year 2000. The potential effect of
the Year 2000 issue on the Company and its business partners will not be fully
determinable until 2000 and thereafter. If Year 2000 modifications are not
properly completed either by the Company, or entities the Company conducts
business with, the Company's net sales and financial condition could be
adversely effected.

NOTE F - INTERNATIONAL INVESTMENTS AND DAIRY PRODUCTS ACQUISITION

The Company made three international investments to further its leadership in
global egg products processing in 1999. The first investment was a 25% interest
in Belovo, S. A., a specialty egg products company based in Belgium. The second
investment was in a 50/50 joint venture with the founding shareholders of Belovo
forming The Lipid Company, S.A. a company involved in the extraction of
phospholipids from egg yolks for use in the field of nutraceuticals. The third
investment was the formation of a Canadian joint venture, Trilogy Egg Products,
Inc., with two partners, Canadian Inovatech, Inc. and The Egg Producers Co-op
Ltd. Trilogy Egg Products, Inc. will sell value-added egg products in Canada.

In May 1999, the Company's Kohler Mix Specialties, Inc. subsidiary acquired
certain operating assets, a customer list and a long-term lease, of a dairy mix
plant from H. P. Hood Inc., with an option to purchase the building and land at
the lease's termination. The Company also entered into a non-compete agreement
with H.P. Hood covering a period of six years under which the Company will pay
H.P. Hood $12,000,000 over five years beginning April 30, 1999. The plant mainly
produces ultra-high temperature pasteurized dairy mixes for foodservice
customers in


<PAGE>   8

                      MICHAEL FOODS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE F - INTERNATIONAL INVESTMENTS AND DAIRY PRODUCTS ACQUISITION, CONT.

the eastern United States. The facility generated 1998 net sales of
approximately $37 million.

NOTE G - BUSINESS SEGMENTS

The Company has adopted Statement of Financial Accounting Standards No. 131,
Disclosures about Segments of an Enterprise and Related Information. The Company
operates in four reportable segments - Egg Products, Refrigerated Distribution,
Dairy Products and Potato Products. Certain financial information on the
Company's operating segments is as follows (unaudited, in thousands):

<TABLE>
<CAPTION>
                                              Egg       Refrigerated     Dairy        Potato
                                           Products     Distribution    Products     Products   Corporate       Total
                                           --------     ------------    --------     --------   ---------       -----
<S>                                        <C>           <C>           <C>           <C>        <C>           <C>
THREE MONTHS ENDED SEPTEMBER 30, 1999:
External net sales                         $157,843      $ 55,833      $ 41,498      $14,737        N/A       $269,911
Intersegment sales                            3,235            24           415          577        N/A          4,251
Operating profit (loss)                      17,935         2,462           919        2,006     (1,928)        21,394
THREE MONTHS ENDED SEPTEMBER 30, 1998:
External net sales                         $147,846      $ 53,388      $ 39,442      $13,114        N/A       $253,790
Intersegment sales                            4,523            11           499          590        N/A          5,623
Operating profit (loss)                      16,782         1,855         2,182          840       (886)        20,773

NINE MONTHS ENDED
SEPTEMBER 30, 1999:
External net sales                         $460,481      $166,382      $112,251      $42,206        N/A       $781,320
Intersegment sales                           12,723            69           993        1,775        N/A         15,560
Operating profit (loss)                      52,537         7,046         3,872        4,565     (6,832)        61,188
NINE MONTHS ENDED
SEPTEMBER 30, 1998:
External net sales                         $444,026      $156,254      $104,309      $38,475        N/A       $743,064
Intersegment sales                           14,909            85         1,434        1,548        N/A         17,976
Operating profit (loss)                      51,575         5,412         5,372        1,922     (4,413)        59,868
</TABLE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 1999 VS THREE MONTHS ENDED SEPTEMBER 30, 1998

RESULTS OF OPERATIONS

Readers are directed to Note G - Business Segments for data on the unaudited
financial results of the Company's four business segments for the three months
ended September 30, 1999 and 1998.




<PAGE>   9


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

THREE MONTHS ENDED SEPTEMBER 30, 1999 VS THREE MONTHS ENDED SEPTEMBER 30, 1998,
CONT.

RESULTS OF OPERATIONS, CONT.

Egg Products Division net sales for the 1999 period reflected unit sales
increases, particularly for value-added products, which more than offset
significant deflationary pricing impacts on certain products. Sales were
particularly strong for precooked frozen omelets, patties and curds. Egg prices
decreased approximately 12% compared to third quarter 1998 levels, as reported
by Urner Barry Publications - a widely quoted industry pricing service. This
decrease helped reduce the cost of purchased eggs, while also reducing selling
prices for certain egg products and shell eggs.

Approximately two-thirds of the Division's annual egg needs are purchased under
contracts, or in the spot market. While a portion of these eggs are secured
under fixed price contracts, a majority are priced according to the cost of
grain inputs or to egg market prices as reported by Urner Barry. Approximately
one-third of annual egg needs are sourced from internal flocks, where feed costs
typically represent roughly two-thirds of the cost of producing such eggs. Feed
costs were lower in the 1999 period, compared to the 1998 period, due to lower
prices for both corn and soybean meal. Decreased egg costs, for both internally
and externally procured eggs, in the 1999 period, compared to the 1998 period,
were offset by pricing weakness, creating margin pressure for certain egg
products. Whereas profitability from egg products sold into the industrial, or
ingredient, market declined in the 1999 period, profitability for value-added
egg products increased. The net effect was that operating profit from base
operations rose slightly. Included in the 1999 period results were two
non-recurring items. First, a gain was recorded on the sale of a shell egg
production facility. Second, a Belgian animal feed contamination scare resulted
in losses at the Company's two European egg products joint ventures. The net
after-tax impact of these two events added $0.01 to net earnings per share.

Refrigerated Distribution Division net sales for the 1999 period reflected
strong unit sales increases, with cheese and butter showing particular strength.
Sales growth resulted from a brand repositioning over the past two years and a
more recent consumer advertising campaign in selected markets, along with new
account activity and new product introductions. The volume growth, along with a
decline in certain product costs related to the national butterfat market,
resulted in margin expansion in the 1999 period.

The Dairy Products Division net sales increase for the 1999 period reflected
strong unit sales gains from creamer products and the impact of sales from a
plant acquired during 1999's second quarter. Sales were weak for dairy core mix
items and certain cartoned specialty dairy products, the latter due to the
product line having not fully recovered from a recall in 1999's first quarter.
Divisional operating profit declined in the 1999 period as a result of
incremental operating expenses incurred post-recall, above average labor and
freight costs, and inefficient plant operations. Labor costs were high due, in
part, to training costs for newer production personnel and overtime incurred to
meet orders in a timely manner during a strong demand period.

Potato Products Division net sales for the 1999 period reflected a strong unit
sales increase, particularly for foodservice and retail mashed items. New
account activity, same-account sales growth and new product introductions all
contributed to the sales gain. The strong operating profit increase in the 1999
period resulted primarily from the volume growth, as plant operations at the
main potato processing facility benefited from the increased production
throughput.





<PAGE>   10


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

THREE MONTHS ENDED SEPTEMBER 30, 1999 VS THREE MONTHS ENDED SEPTEMBER 30, 1998,
CONT.

RESULTS OF OPERATIONS, CONT.

The increase in gross profit margin of the Company for the period ended
September 30, 1999, as compared to the results of the same period in 1998,
reflected the factors discussed above, particularly the strength in the
Refrigerated Distribution and Potato Products segments. It is management's
strategy to increase value-added product sales as a percent of total sales over
time, while decreasing commodity-sensitive products' contribution to
consolidated sales. These efforts historically have been beneficial to gross
profit margins in most periods. Selling, general and administrative expenses
increased as a percent of sales in the period ended September 30, 1999, as
compared to the results of the same period in 1998. Expenses increased due to
amortization of the costs associated with the Company's information systems
upgrade project, amortization of a non-compete agreement related to a Dairy
Products acquisition, and additional sales and marketing efforts.

NINE MONTHS ENDED SEPTEMBER 30, 1999 VS NINE MONTHS ENDED SEPTEMBER 30, 1998

RESULTS OF OPERATIONS

Readers are directed to Note G - Business Segments for data on the unaudited
financial results of the Company's four business segments for the nine months
ended September 30, 1999 and 1998.

Egg Products Division net sales for the 1999 period reflected unit sales
increases, particularly for value-added products, which more than offset
significant deflationary pricing impacts on certain products. Sales were
particularly strong for precooked frozen omelets, patties and curds. Egg prices
decreased approximately 10% compared to levels in the first nine months of 1998,
as reported by Urner Barry Publications. This decrease helped reduce the cost of
purchased eggs, while also reducing selling prices for certain egg products and
shell eggs.

Approximately two-thirds of the Division's annual egg needs are purchased under
contracts, or in the spot market. While a portion of these eggs are secured
under fixed price contracts, a majority are priced according to the cost of
grain inputs or to egg market prices as reported by Urner Barry. Approximately
one-third of annual egg needs are sourced from internal flocks, where feed costs
typically represent roughly two-thirds of the cost of producing such eggs. Feed
costs were lower in the 1999 period, compared to the 1998 period, due to lower
prices for both corn and soybean meal. Decreased egg costs, for both internally
and externally procured eggs, in the 1999 period, compared to the 1998 period,
were offset by pricing weakness, creating margin pressure for certain egg
products. Profitability from egg products sold into the industrial, or
ingredient, market declined in the 1999 period, while profitability for
value-added egg products increased. The net effect was that operating profit
from base operations rose slightly. Included in the 1999 period results were two
non-recurring items. First, a gain was recorded on the sale of a shell egg
production facility. Second, a Belgian animal feed contamination scare resulted
in losses at the Company's two European egg products joint ventures. The net
after-tax impact of these two events added $0.01 to net earnings per share.

Refrigerated Distribution Division net sales for the 1999 period reflected
strong unit sales increases, with cheese and butter showing particular strength.
Sales growth resulted from a brand repositioning over the past two years and a
more recent consumer advertising campaign in selected markets, along with new
account activity and new product introductions. The volume growth, along with a
decline



<PAGE>   11


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

NINE MONTHS ENDED SEPTEMBER 30, 1999 VS NINE MONTHS ENDED SEPTEMBER 30, 1998,
CONT.

RESULTS OF OPERATIONS, CONT.

in certain product costs related to the national butterfat market, resulted in
margin expansion in the 1999 period.

The Dairy Products Division net sales increase for the 1999 period reflected
strong unit sales gains for core dairy mix and creamer products and the effect
of five months' of sales from a plant acquired during 1999's second quarter.
Sales were weak for cartoned specialty dairy products as a result of a recall of
certain items in 1999's first quarter. Divisional operating profit declined in
the 1999 period as a result of incremental operating expenses incurred as a
result of the recall, above average labor and freight costs, and inefficient
plant operations. Labor costs were high due, in part, to training costs for
newer production personnel and overtime incurred to meet orders in a timely
manner during the high demand summer season.

Potato Products Division net sales for the 1999 period reflected a strong unit
sales increase, particularly for foodservice and retail mashed items. New
account activity, same-account sales growth and new product introductions all
contributed to the sales gain. The strong operating profit increase in the 1999
period resulted primarily from the volume growth, as plant operations at the
main potato processing facility benefited from the increased production
throughput.

The increase in gross profit margin of the Company for the period ended
September 30, 1999, as compared to the results of the same period in 1998,
reflected the factors discussed above, particularly the strength in the
Refrigerated Distribution and Potato Products segments. It is management's
strategy to increase value-added product sales as a percent of total sales over
time, while decreasing commodity-sensitive products' contribution to
consolidated sales. These efforts historically have been beneficial to gross
profit margins in most periods.

Selling, general and administrative expenses increased as a percent of sales in
the period ended September 30, 1999, as compared to the results of the same
period in 1998. Expenses increased due to amortization of the costs associated
with the Company's information systems upgrade project, amortization of a
non-compete agreement related to a Dairy Products acquisition, and additional
sales and marketing efforts.

GENERAL

Certain of the Company's products are sensitive to changes in commodity prices.
The Company's Egg Products Division derived less than 5% of the Division's net
sales for the first nine months of 1999 from shell eggs, which are sensitive to
commodity price swings. Value-added extended shelf-life liquid egg products
lines and precooked egg products accounted for approximately 50% of the Egg
Products Division's net sales. The remainder of Egg Products Division sales is
derived from the sale of other egg products, which vary from being
commodity-sensitive to value-added. Gross profit from shell eggs is primarily
dependent upon the relationship between shell egg prices and the cost of feed,
both of which can fluctuate significantly. Shell egg pricing in the 1999 period
was approximately 10% below 1998 levels as measured by a widely quoted pricing
service. Gross profit margins for extended shelf-life liquid eggs, egg
substitutes, and precooked egg products are less sensitive to commodity price
fluctuations than are other egg products or shell eggs.

The Company's Refrigerated Distribution Division derives approximately 70% of
its net sales from refrigerated products produced by others, thereby reducing
the effects of commodity price swings.


<PAGE>   12


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

GENERAL, CONT.

The balance of refrigerated distribution sales are from shell eggs, some of
which are produced by the Egg Products Division and are sold on a distribution,
or non-commodity, basis by the Refrigerated Distribution Division.

The Dairy Products Division sells its products primarily on a cost-plus basis
and, therefore, the Division's earnings are not typically affected greatly by
raw ingredient price fluctuations, except over short time periods.

The Potato Products Division typically purchases 75%-95% of its raw potatoes
from contract producers under annual contracts. The remainder is purchased at
market prices to satisfy short-term production requirements or to take advantage
of market prices when they are lower than contracted prices. Moderate variations
in the purchase price of raw materials or the selling price per pound of
finished products can have a significant effect on Potato Products Division
operating results.

Inflation is not expected to have a significant impact on the Company's
business. The Company generally has been able to offset the impact of inflation
through a combination of productivity gains and price increases.

In August 1999, the Company announced that it retained investment bankers to
assist the Company in exploring strategic alternatives to enhance shareholder
value. The alternatives under consideration include strategic alliances,
acquisitions, mergers and the sale of all, or some, of the Company's businesses.
The Company does not intend to offer additional comments about these matters
unless and until the Company decides to proceed with a material transaction.

CAPITAL RESOURCES AND LIQUIDITY

Acquisitions and capital expenditures have been, and will likely continue to be,
a significant capital requirement. The Company plans to continue to invest in
state-of-the-art production facilities to enhance its competitive position.
Historically, the Company has financed its growth principally from internally
generated funds, bank borrowings, issuance of senior debt and the sale of Common
Stock. The Company believes that these financing alternatives will continue to
meet its anticipated needs.

During the first nine months of 1999, the Company made three international egg
products investments. The first investment was a 25% interest in Belovo, S. A.,
a specialty egg products company based in Belgium. The second investment was a
50/50 joint venture with the founding shareholders of Belovo forming The Lipid
Company, S.A. a company involved in the extraction of phospholipids from egg
yolks for use in the field of nutraceuticals. The third investment was the
formation of a Canadian joint venture, Trilogy Egg Products, Inc., with two
partners, Canadian Inovatech, Inc. and The Egg Producers Co-op Ltd. Trilogy Egg
Products, Inc. will sell value-added egg products in Canada. The cash paid at
the time of closing the transactions was approximately $12 million, which was
funded through the Company's bank line of credit. The investments will expand
the Company's leadership position in global egg products processing.

Also in the first nine months of 1999, the Company acquired certain operating
assets and the long-term lease of a dairy products plant in Connecticut. The
cash paid at time of closing was approximately $5.7 million, which was funded
through the Company's bank line of credit. This transaction greatly expanded the
Company's Dairy Products business in the eastern United States.





<PAGE>   13


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

CAPITAL RESOURCES AND LIQUIDITY, CONT.

The Company invested $60,918,000 in capital expenditures during the nine months
ended September 30, 1999. The Company plans to spend approximately $89,500,000
in total capital expenditures in 1999, the majority of which is to expand
production capacity for value-added products.

The Company has an unsecured line of credit for $80,000,000 with its principal
banks which expires in February 2002. As of September 30, 1999, $63,100,000 was
outstanding under this line of credit.

In July 1998, the Company's Board of Directors authorized the purchase of up to
two million shares of Common Stock on the open market. Through September 30,
1999, the Company had repurchased 1,902,800 shares of Common Stock for
$43,005,000. There were no stock purchases in the three month period ended
September 30, 1999.

SEASONALITY

Consolidated quarterly operating results are affected by the seasonality of the
Company's net sales and operating profits. Specifically, shell egg prices
typically rise seasonally in the first and fourth quarters of the year due to
increased demand during holiday periods. Generally, refrigerated distribution
operations experience higher net sales and operating profits in the fourth
quarter, coinciding with incremental consumer demand during the holiday season.
Net sales and operating profits from dairy operations typically are
significantly higher in the second and third quarters due to increased
consumption of ice milk and ice cream products during the summer months.
Operating profits from potato products are less seasonal, but tend to be higher
in the second half of the year coinciding with the potato harvest.

YEAR 2000

The Company's Year 2000 initiative is separated into several projects: legacy
systems, personal computer components, wide area network components, local area
network components, and non-computer components. The approach for each of these
projects includes an inventory of approximately 2000 components, an assessment
of Year 2000 compliance of each component, and identification and execution of
corrective actions for items that fail the assessment phase.

In 1995, the Company undertook implementation of the SAP Enterprise Resource
Planning system as a means to present a single interface with customers and to
have better information available for management to make more effective
decisions. The SAP system encompasses all significant processes and has been
certified Year 2000 compliant by an outside party. The SAP system will be
implemented for all but two of the operating companies prior to the end of 1999.
The legacy systems of the remaining two operating companies are certified as
Year 2000 compliant. Beyond the SAP project, several non-critical legacy systems
are being addressed throughout 1999. The costs to modify and test any remaining
legacy systems, if necessary, would not be material to the consolidated
financial position, liquidity or results of operations of the Company.

The Company has completed corrective actions for all personal computer hardware
and software, as well as the information technology systems for wide area
networking and local area networking. The Company's overall business risk from
these systems is not significant.

As of May 1999, the Company's non-computer components were assessed for Year
2000 compliance. Corrective actions to achieve Year 2000 compliance for these
components are nearly completed.




<PAGE>   14


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

YEAR 2000, CONT.

The Year 2000 projects also include an evaluation of critical vendors,
suppliers, brokers and customers relative to their Year 2000 readiness.
Information is being solicited from these important business partners and will
be evaluated as it is received. Electronic data communications with customers
have been tested and are Year 2000 compliant.

Based upon the assessment completed at this time, the Company does not
anticipate any significant Year 2000 issues. All Year 2000 projects are
generally proceeding according to management's expectations. However, if there
are significant delays in their completion, or if major suppliers or customers
experience Year 2000 issues with their systems, such issues could adversely
affect the operations of the Company. After assessing the information received
from its business partners and evaluating the status of the Year 2000 projects,
the Company will develop an appropriate contingency plan, as required.

Achieving Year 2000 compliance for the Company will largely be a by-product of
the SAP system installation. The costs of achieving Year 2000 compliance for
software not affected by the SAP system, computer components, and non-computer
components is estimated to be less than $3,000,000, of which approximately
$2,750,000 has already been incurred and expensed through September 30, 1999.

FORWARD-LOOKING STATEMENTS

Certain items in this Form 10-Q are forward-looking statements, which are made
in reliance upon the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are subject to numerous
risks and uncertainties, including the possibility that capital projects and the
Year 2000 initiative may not be completed as rapidly as management expects.
Additional risks and uncertainties include variances in the demand for the
Company's products due to consumer developments and industry developments, as
well as variances in the costs to produce such products, including normal
volatility in egg and feed costs. The Company's actual financial results could
differ materially from the results estimated by, forecasted by, or implied by
the Company in such forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There were no material changes in the Company's market risk during the nine
month period ended September 30, 1999.

                           PART II - OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits
<TABLE>
<S>     <C>
10.70*  Severance Plan For Eligible Employees of Michael Foods, Inc. and its
        Subsidiaries, revised August 8, 1999

10.71*  Employment Agreement with Gregg A. Ostrander dated as of July 15, 1999

10.72*  Employment Agreement with Jeffrey M. Shapiro dated as of July 15, 1999

10.73*  Employment Agreement with John D. Reedy dated as of July 15, 1999
</TABLE>




<PAGE>   15



Item 6. Exhibits and Reports on Form 8-K (cont.)

<TABLE>
<S>     <C>
10.74*  Employment Agreement with Bill L. Goucher dated as of August 6, 1999

10.75*  Employment Agreement with James D. Clarkson dated as of August 6, 1999

10.76*  Employment Agreement with Norman A. Rodriguez dated as of August 6, 1999

27.1    Financial Data Schedule
</TABLE>

[FN]
*    Management Contract or Compensation Plan Arrangement
</FN>

(b) Reports on Form 8-K

The Company filed a Form 8-K on August 17, 1999 disclosing its decision to
retain investment bankers to assist in exploring strategic alternatives to
enhance shareholder value.

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.


                                MICHAEL FOODS, INC.
                                ------------------------------------------------
                                (Registrant)


Date:  November 15, 1999             By: /s/  Gregg A. Ostrander
                                         ---------------------------------------
                                         Gregg A. Ostrander
                                         (President and Chief Executive Officer)


Date:  November 15, 1999             By: /s/  John D. Reedy
                                         ---------------------------------------
                                         John D. Reedy
                                         (Vice President - Finance, Treasurer,
                                         Chief Financial Officer and Principal
                                         Accounting Officer)