`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 period ended:   September 28, 2002

                                       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: 333-64180

                            PSF Group Holdings, Inc.
             (Exact name of Registrant as specified in its charter)


           Delaware                                      43-1818535
 State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization

423 West 8th Street, Suite 200, Kansas City, Missouri             64105
    (Address of principal executive office)                    (Zip Code)

       Registrant's telephone number, including area code: (816) 472-7675

                                 Not Applicable
--------------------------------------------------------------------------------

             (Former name, former address and former fiscal year, if
                           changed since last report)

     Indicate by check mark whether the  Registrant  has (1) filed all documents
and  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 [ ]

     As of September  28, 2002,  there were 100,000  shares of the  Registrant's
Class A Common Stock outstanding and 113,301 shares of the Registrant's  Class B
Common Stock outstanding.`

---

`PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


                    PSF Group Holdings, Inc. and Subsidiaries
                      Condensed Consolidated Balance Sheets
                      September 28, 2002 and March 30, 2002
                                   (in 000's)

                                                                  (Unaudited)
                                                                  September 28,          March 30,
                                                                     2002                 2002
                                                                ----------------------------------------
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                    $          -       $       7,182
   Accounts receivable, net                                           21,654              21,332
   Inventories                                                       153,680             141,165
   Federal income tax receivable                                       3,325               3,319
   Deferred income taxes                                              15,680              15,680
   Prepaid expenses and other                                          2,953               2,158
                                                                ----------------------------------------
      Total current assets                                           197,292             190,836

PROPERTY, PLANT, EQUIPMENT AND BREEDING STOCK, at cost:
   Land and improvements                                              99,746              95,349
   Buildings                                                         292,584             292,154
   Machinery and equipment                                           257,670             251,664
   Breeding stock                                                     36,394              38,126
   Construction in progress                                            9,992              16,306
                                                                ----------------------------------------
                                                                     696,386             693,599
   Less- accumulated depreciation                                    189,851             166,591
                                                                ----------------------------------------
      Total property, plant, equipment and breeding stock            506,535             527,008

GOODWILL                                                              75,998              75,998
OTHER LONG-TERM ASSETS:
   Deferred financing costs, net                                       7,957               7,241
   Other                                                               5,612               6,556
                                                                ----------------------------------------
      Total other long-term assets                                    13,569              13,797
                                                                ----------------------------------------

Total assets                                                    $    793,394       $     807,639
                                                                ========================================


LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
   Checks issued against future deposits                        $      3,656       $           -
   Accounts payable                                                    6,567               8,385
   Accrued expenses                                                   27,841              29,494
   Due to related party                                                  930               1,317
   Accrued interest                                                    6,135               4,914
   Current maturities of long-term debt and capital leases               752              26,629
                                                                ----------------------------------------
      Total current liabilities                                       45,881              70,739

LONG-TERM LIABILITIES:
   Long-term debt and capital leases, less current maturities        282,066             246,153
   Other long-term liabilities                                         8,047               8,243
   Due to related party                                                  921                 921
   Deferred income taxes                                              88,128              98,016
                                                                ----------------------------------------
      Total long-term liabilities                                    379,162             353,333
                                                                ----------------------------------------
      Total liabilities                                              425,043             424,072

SHAREHOLDERS' EQUITY:
   Common stock                                                            2                   2
   Additional paid-in capital                                        373,987             373,673
   Accumulated other comprehensive (loss) income, net of tax            (419)                345
   (Accumulated deficit) Retained earnings                            (5,219)              9,547
                                                                ----------------------------------------
       Total shareholders' equity                                    368,351             383,567
                                                                ----------------------------------------

Total liabilities and shareholders' equity                      $    793,394       $     807,639
                                                                ========================================

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

                                       1`

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`PSF Group Holdings, Inc. and Subsidiaries
                 Condensed Consolidated Statements of Operations
         13 and 26 weeks ended September 28, 2002 and September 29, 2001
                                   (in 000's)
                                   (Unaudited)


                                                            13 Weeks Ended                             26 Weeks Ended
                                                  September 28,          September 29,       September 28,        September 29,
                                                      2002                   2001                2002                 2001
                                               ------------------    -----------------    -----------------    -----------------

Net sales                                      $         145,735     $        176,567     $      294,784       $     347,729
Cost of goods sold                                       153,276              139,344            299,425             280,720
                                               ------------------    -----------------    -----------------    -----------------
     Gross profit                                         (7,541)              37,223             (4,641)             67,009

Selling, general and administrative expenses               4,024                5,602              8,973              11,238
Other income                                                (119)                 (80)              (746)               (108)
                                               ------------------    -----------------    -----------------    -----------------
     Operating  (loss) income                            (11,446)              31,701            (12,868)             55,879

Interest expense (income):
   Interest expense                                        5,780                5,203             11,390              12,129
   Interest income                                           (54)                (138)               (91)               (268)
                                               ------------------    -----------------    -----------------    -----------------
Interest expense, net                                      5,726                5,065             11,299              11,861
                                               ------------------    -----------------    -----------------    -----------------
     (Loss) income before income taxes                   (17,172)              26,636            (24,167)             44,018
            and extraordinary items
     Income tax (benefit) expense                         (6,680)              10,694             (9,401)             17,663
                                               ------------------    -----------------    -----------------    -----------------

Net (loss) income before extraordinary items             (10,492)              15,942            (14,766)             26,355

Loss on early extinguishment of debt, net of tax               -                    -                  -               1,315

                                               ------------------    -----------------    -----------------    -----------------
Net (loss) income                              $         (10,492)    $         15,942     $      (14,766)      $      25,040
                                               ==================    =================    =================    =================


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


                                       2`

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`PSF Group Holdings, Inc. and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows
            26 Weeks ended September 28, 2002 and September 29, 2001
                                   (in 000's)
                                   (Unaudited)

                                                                     September 28,          September 29,
                                                                          2002                  2001
                                                                 ------------------------------------------
OPERATING ACTIVITIES:
   Net (loss) income                                             $         (14,766)     $         25,040
 Adjustments to reconcile net (loss) income
 to net cash (used in) provided by operating activities:
   Depreciation and amortization                                            30,742                27,653
   Amortization of deferred financing costs                                    674                   531
   Deferred income taxes                                                    (9,888)               15,568
   Loss (gain) on sale of assets                                               724                (2,980)
   Changes in operating assets and liabilities, net:
     Accounts receivable                                                      (322)               (1,323)
     Inventories                                                           (12,515)              (16,695)
     Prepaid expenses and other assets                                        (582)                6,731
     Accounts payable, accrued expenses and other liabilities               (3,605)               (2,882)
                                                                 -------------------------------------------
Net cash (used in) provided by operating activities                         (9,538)               51,643

INVESTING ACTIVITIES:
  Purchases of property, plant, equipment and breeding stock               (16,251)              (56,198)
  Proceeds from disposal of fixed assets                                     5,219                 7,304
                                                                 -------------------------------------------
Net cash used in investing activities                                      (11,032)              (48,894)

FINANCING ACTIVITIES:
  Checks issued against future deposits                                      3,656                     -
  Proceeds from long-term debt                                                   -               173,591
  Proceeds from (payments on) revolving debt, net                           23,751                  (526)
  Deferred financing costs                                                    (304)               (4,619)
  Repayments on long-term debt                                             (13,715)             (175,902)
                                                                 -------------------------------------------
Net cash provided by (used in) financing activities                         13,388                (7,456)

Net decrease in cash and cash equivalents                                   (7,182)               (4,707)

CASH AND CASH EQUIVALENTS, beginning of period                               7,182                 8,560
                                                                 -------------------------------------------

CASH AND CASH EQUIVALENTS, end of period                         $               -     $           3,853

SUPPLEMENTAL DISCLOSURES:
 Interest paid                                                   $           9,002     $           9,863
 Income tax paid                                                                 5                   600
 Noncash financing activity- Deferred financing costs
      payable for credit amendment                                           1,086                     -

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


                                       3`

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`PSF Group Holdings, Inc. and Subsidiaries
              Notes to Condensed Consolidated Financial Statements

Note 1 - Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the accounting policies described in the
consolidated financial statements and related notes included in PSF Group
Holdings, Inc. and Subsidiaries (the "Company") consolidated financial
statements for the year ended March 30, 2002 filed with the Securities and
Exchange Commission on Form 10-K. It is suggested that this report be read in
conjunction with those consolidated statements. Certain information and note
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. The year-end financial statements presented
were derived from the Company's audited financial statements. In the opinion of
management, the accompanying condensed consolidated financial statements reflect
all adjustments necessary for a fair presentation of the financial position of
the Company and the results of its operations.


Note 2 - New accounting pronouncements

Derivative instruments and hedging activities
On April 1, 2001, the Company adopted Financial Accounting Standards Board
Statement No. 133 (SFAS 133), "Accounting for Derivative Instruments and Hedging
Activities" requiring that every derivative instrument be recorded in the
balance sheet as either an asset or liability at its fair value, and changes in
a derivative's fair value be recognized in current earnings or other
comprehensive income.

The Company believes that its exchange traded commodity contracts serve as
economic hedges, however, as a result of the extensive record keeping
requirements of SFAS 133, management has elected not to designate and account
for these contracts as hedges. Effective as of April 1, 2001, these contracts
were marked to market through earnings. Changes in the fair value of the
existing commodity contracts and those commodity contracts entered into
subsequent to April 1, 2001 have been recorded in the period in which they
occur. Net gains (losses) recognized during the 26 weeks ended September 28,
2002 and September 29, 2001 in gross profit were $1,839,000 and ($10,473,000),
respectively. Net losses recognized during the 13 weeks ended September 28, 2002
and September 29, 2001 in gross profit were ($672,000) and ($1,784,000),
respectively.

During the year ended March 30, 2002 the Company entered into an interest rate
swap agreement in order to effectively convert the benchmark interest rate on
the $75 million term note from variable to fixed rate debt.

The Company's comprehensive (loss) income includes net (loss) income and the
change in the fair market value of the interest rate swap, net of tax.
Comprehensive (loss) income for the 13 weeks ended September 28, 2002 and
September 29, 2001 was ($10,804,000) and $17,644,000, respectively.
Comprehensive (loss) income for the 26 weeks ended September 28, 2002 and
September 29, 2001 was ($15,530,000) and $23,213,000, respectively.

Business combination, goodwill, and intangible assets
On June 30, 2001, the Financial Accounting Standards Board issued its Statements
of Financial Accounting Standards Nos. 141 (SFAS 141), "Business Combinations"
and 142 (SFAS 142), "Goodwill and Intangible Assets," which establish reporting
and accounting standards for business combinations, goodwill and intangible
assets. SFAS 141 requires all business combinations after June 30, 2001 to be
accounted for


                                       4`

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`using the purchase method. Under SFAS 142, companies will no longer amortize
goodwill over the estimated useful life. Goodwill will be assessed each year for
impairment by applying a fair value based test.

The Company elected early adoption of these rules and recognized the effect of
the new pronouncements in fiscal year 2002. Assessment of the fair value of the
relevant reporting units was completed during the second quarter of fiscal year
2003, resulting in no impairment of recorded goodwill. The effect of
discontinuing goodwill amortization increased income before income taxes by
approximately $685,000 for the 13 weeks ended September 28, 2002 and September
29, 2001 and by approximately $1,370,000 for the 26 weeks ended September 28,
2002 and September 29, 2001.


Asset retirement obligations
On June 30, 2001 the Financial Accounting Standards Board issued its Statement
of Financial Accounting Standards No. 143 (SFAS 143), "Accounting for Asset
Retirement Obligations." SFAS 143 applies to legal obligations associated with
the retirement of long-lived assets that result from the acquisition,
construction, development, and the normal operation of long-lived assets. This
statement requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made. The associated asset retirement costs are
capitalized as part of the carrying amount of the long-lived asset. This
statement is effective for financial statements issued for fiscal years
beginning after June 15, 2002. The Company has not determined the impact, if
any, that the adoption of this new standard will have on its financial
statements.

Impairment of long-lived assets
In August 2001, the Financial Accounting Standards Board issued its Statement of
Financial Accounting Standards No. 144 (SFAS 144), "Accounting for the
Impairment of Long-Lived Assets." SFAS 144 supersedes SFAS 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
and the accounting and reporting provisions of APB No. 30, "Reporting the
Results of Operations - Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions." SFAS 144 retains many of the provisions of SFAS 121, but
addresses certain implementation issues associated with that Statement. This
statement is effective for financial statements issued for fiscal years
beginning after December 15, 2001. The statement did not have a material impact
on the financial statements.

Early extinguishment of debt
During April 2002, the Financial Accounting Standards Board issued its Statement
of Financial Accounting Standards No. 145 (SFAS 145), "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." This Statement rescinds SFAS 4, "Reporting Gains and Losses from
Extinguishment of Debt" and SFAS 44, "Accounting for Intangible Assets of Motor
Carriers." This Statement amends SFAS 13, "Accounting for Leases," so that
certain lease modifications that have economic effects that are similar to
sales-leaseback transactions are accounted for the same way as sale-leaseback
transactions. Additionally, SFAS 13 is amended so that the original lessee under
an operating lease agreement that becomes secondarily liable shall recognize the
fair value of the guarantee obligation. SFAS 145 also amends other existing
authoritative pronouncements to make various technical corrections, clarify
meanings, or describe their applicability under changed conditions. The
amendment to SFAS 13 is effective for transactions occurring after May 15, 2002.
The Company has not determined the impact, if any, that the adoption of this new
standard will have on its financial statements.


                                       5`

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`Note 3 - Inventories

Inventories are valued at the lower of cost, determined on a first-in, first-out
(FIFO) basis, or market. Inventories consisted of the following (in thousands):

                                        Sept. 28, 2002            March 30, 2002
                                        --------------            --------------
Hogs                                         $ 140,248                 $ 124,449
Processed pork and pork products                 7,177                    10,704
Packaging and supplies                           2,629                     2,762
Grain, feed additives and other                  3,626                     3,250
                                             ---------                 ---------
                                             $ 153,680                 $ 141,165
                                             =========                 =========

Note 4 - Segment information

The accounting policies for the segments are the same as those described in the
footnotes included in the Company's March 30, 2002 audited financial statements.
The Company operates a vertically integrated business with two operating
segments, Pork Processing and Hog Production. The Pork Processing segment sells
fresh and value-added pork products to food retailers, distributors,
wholesalers, further processors, pharmaceutical and animal feed manufacturers in
both domestic and international markets. The Hog Production segment supplies a
majority of the live hogs used in the Pork Processing segment and sells the
excess production to other hog processing operations. Intersegment live hog
sales are based on market prices. The following table presents specific
financial information about each segment as reviewed by the Company's
management. The Corporate and Other classification in the following table
represents unallocated corporate expenses and assets, deferred and current
taxes, the Company's goodwill, interest expense and intersegment elimination (in
thousands):


                                                Pork               Hog            Corporate
                                             Processing        Production         and Other           Total
                                          ----------------  ----------------  ----------------  ----------------

For the 13 weeks ended September 28, 2002-
   Net sales                                 $ 134,419         $ 85,211         $ (73,895)        $ 145,735
   Intersegment sales                           (1,987)         (71,908)                -                 -
   Operating income (loss)                       5,662          (14,138)           (2,970)          (11,446)

For the 13 weeks ended September 29, 2001-
   Net sales                                   157,551          119,588          (100,572)          176,567
   Intersegment sales                           (1,038)         (99,534)                -                 -
   Operating income (loss)                       6,010           30,226            (4,535)           31,701

For the 26 weeks ended September 28, 2002-
   Net sales                                   269,988          175,319          (150,523)          294,784
   Intersegment sales                           (3,282)        (147,241)                -                 -
   Operating income (loss)                      10,782          (17,513)           (6,137)          (12,868)

For the 26 weeks ended September 29, 2001-
   Net sales                                   317,509          233,363          (203,143)          347,729
   Intersegment sales                           (1,655)        (201,488)                -                 -
   Operating income (loss)                       8,507           56,560            (9,188)           55,879

As of September 28, 2002-
   Assets                                      189,623          515,568            88,203           793,394

As of March 30, 2002-
   Assets                                      199,714          514,787            93,138           807,639


                                       6`

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`Note 5 - Early extinguishment of debt

On June 7, 2001, Premium Standard Farms, Inc., a wholly-owned subsidiary of the
Company, issued $175,000,000 of 9 1/4% senior unsecured notes due 2011 ("9 1/4%
Notes"). A portion of the net proceeds from the private placement debt offering
was used to redeem all $137.9 million principal amount of the 11% senior secured
payment-in-kind notes ("PIK Notes") with the remaining net proceeds used to pay
down the Company's bank credit facility. An extraordinary charge of $2,191,483,
before tax of $876,593, was recorded in the Condensed Consolidated Statement of
Operations for the 13 weeks ended June 30, 2001 resulting from the loss on the
early extinguishment of the PIK Notes. Premium Standard Farms, the Company, and
the Company's other wholly-owned subsidiaries subsequently filed a joint
registration statement on Form S-4 with the Securities and Exchange Commission,
as amended and declared effective on August 14, 2001, to register exchange notes
("Exchange Notes") and the guarantees of the Exchange Notes. The Exchange Notes
have substantially identical terms to the privately placed 9 1/4% Notes, except
that the Exchange Notes are freely tradeable. All of the holders of the
privately placed 9 1/4% Notes tendered their notes for the registered Exchange
Notes.

Note 6 - Amendments to Credit Agreement

Effective June 28, 2002, the Company and its bank group amended the Credit
Agreement to extend the revolving credit facility one year, increase the letter
of credit commitment from $10.0 million to $15.0 million, and amend certain
financial covenants and pricing terms.

Effective September 27, 2002, the Company and its bank group amended the Credit
Agreement to increase the Company's revolving credit facility by $50.0 million
to $150.0 million in total availability subject to a borrowing base calculation,
among other things. The amendment also defers quarterly principal payments on
the Company's term debt for a one year period and amends certain financial
covenants. Obligations under the Credit Agreement are secured by liens on
substantially all of the Company's assets. In addition to customary financial
covenants, the Credit Agreement contains customary restrictions on, among other
things, encumbrance or disposal of assets, acquisitions, additional
indebtedness, capital investment, payment of subordinated debt and construction
of new hog production facilities. In addition to customary fees payable under
credit facilities of this type, amounts borrowed under the Credit Agreement bear
interest at fluctuating rates selected by the Company based on the agent bank's
prime rate, the Federal Funds Rate plus one half of one percent or LIBOR plus,
in each case, an applicable margin, determined by the Company's leverage ratio,
currently ranging from 1.5% to 3.125% depending on the type of borrowing and
fluctuating rate the Company is using. All borrowings under the revolving credit
facility mature on August 21, 2004 and the term debt matures on August 21, 2005.
Financing costs associated with the amendment have been capitalized and are
being amortized over the life of the amended Credit Agreement.

Note 7 - Litigation

The Company has settled two citizens' action suits which sought to enforce
alleged violations of the Clean Air Act, Clean Water Act and CERCLA against the
Company and ContiGroup Companies, Inc. ("ContiGroup"). In 1998, the Company
engaged in a series of transactions with ContiGroup pursuant to which it
purchased from ContiGroup its North Missouri Farms hog production operations and
ContiGroup purchased a 51.0% ownership interest in the Company (the "1998
ContiGroup transaction"). To the extent that ContiGroup incurs any liability in
this litigation, the Company assumed that liability pursuant to the terms of the
1998 ContiGroup transaction. The U.S. Environmental Protection Agency (the
"E.P.A.") had intervened in the same action and filed a separate notice of
violation against the Company under the Clean Air Act. This settlement resolves
all outstanding issues of ContiGroup and the Company with the E.P.A. This
consent decree built upon the 1999 consent decree with the State of Missouri
referenced below. A consent decree entered with the E.P.A. in 2001 (the "2001
Consent Decree") requires the Company and ContiGroup to meet certain performance
standards, such as a 50 percent reduction in nitrogen content concentration of
effluent applied to area fields over a prescribed time period. Other key
elements of the 2001 Consent Decree include: monitoring air emissions from
lagoons and barns; compliance with certain best management practices to reduce
the risk of spills; testing of selective lagoons to ensure integrity, and



                                      7`

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`the payment of a $350,000 civil penalty. The new counsel for the citizens has
submitted a petition for recovery of attorneys' fees in connection with the
lawsuits against both the Company and ContiGroup. The Company believes the
majority of these fees have been previously paid and resolved. The Company
believes the resolution of this matter will not have a material adverse effect
upon its financial position or results of operations.

In 1999, the Company settled a suit filed by the Attorney General of the State
of Missouri against the Company and ContiGroup. The Company assumed ContiGroup's
liability in this action in connection with the 1998 ContiGroup transaction. The
settlement required the Company and ContiGroup to enter into a consent judgment
pursuant to which the Company is obligated to invest $25 million over the course
of five years for researching, installing and operating improved technology to
control wastewater, air and odor emissions from its Missouri farms. The Company
is in the fourth year of that five year period and has spent $11.4 million to
satisfy the settlement. In addition, pursuant to the consent judgment the
Company and ContiGroup were issued a $1 million civil penalty. Of this, $650,000
has been paid and $350,000 is suspended pending certain conditions.

In addition to the suits discussed above, the Company has received notices of
violations from the Missouri Department of Natural Resources alleging releases
of wastewater. The Company has responded to these notices in an effort to
resolve these matters. The State of Missouri has recently filed a lawsuit
seeking penalties and injunctive relief for these violations. The Company is
preparing a response, but is seeking to resolve this matter through a negotiated
settlement.

Two nuisance suits were filed against ContiGroup and the Company during the
second quarter of fiscal year 2003 in the Circuit Court of Jackson County,
Kansas City, Missouri. There are multiple plaintiffs in each suit, who claim to
live near swine farms owned by ContiGroup but under production contracts with
the Company. The primary allegation is that offensive odors from these farms
interfered with the plaintiffs' right to use and have quiet enjoyment of their
respective properties. The Company is obligated by contract to indemnify
ContiGroup for any liabilities arising from this litigation. The Company
believes it has good defenses to these actions, and intends to vigorously defend
these suits.

In addition, the Company is involved from time to time in routine litigation
incidental to its business. Although no assurance can be given as to the outcome
or expense associated with any of these routine proceedings, the Company
believes that none of such proceedings currently pending should, individually or
in the aggregate, have a material adverse effect on its financial statements.



                                      8`

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`Item 2.  Management's Discussion and Analysis of Financial Condition and
Results of Operations

In this report on Form 10-Q, the terms "we," "us," and "our" refer collectively
to PSF Group Holdings, Inc., Premium Standard Farms, Inc. and their
subsidiaries. Premium Standard Farms, Inc. is a wholly-owned subsidiary of PSF
Group Holdings, Inc. The terms "expect," "anticipate," "may," "believe," "will,"
and similar expressions made with respect to our earnings and outlook for the
future contain some forward-looking information. Naturally, all forward-looking
statements involve risk and uncertainty and actual results or events could be
materially different. Although we believe that our expectations are based on
reasonable assumptions, we can give no assurance that our goals will be
achieved. Important factors that could cause actual results to differ include:
economic conditions generally and in our principal markets; competitive
practices and consolidation in the pork production and processing industries;
the impact of current and future laws, governmental regulations and fiscal
policies affecting our industry and operations, including environmental laws and
regulations, trade embargoes and tariffs; domestic and international
transportation disruptions; food safety; the availability of additional capital
to fund future commitments and expansion and the cost and terms of financing;
outbreaks of disease in our herds; feed ingredient costs; fluctuations in live
hog and wholesale pork prices; customer demands and preferences; and the
occurrence of natural disasters and other occurrences beyond our control. In
light of these risks, uncertainties and assumptions, the forward-looking events
discussed might not occur. Please review our Annual Report on Form 10-K for
other important factors that could cause results to differ materially from those
in any such forward-looking statements. Information in these archived materials
may not be current and may be superceded by more recent information published by
us.

Results of Operations

13 Weeks Ended September 28, 2002 Compared to the 13 Weeks Ended September 29, 2001

     The following table presents selected financial information for our
production and processing segments for the 13 weeks ended September 28, 2002 and
September 29, 2001. Net sales, gross profit and operating (loss) income by
segment are also presented as a percentage of their respective totals. The two
columns under quarter-to-quarter change show the dollar and percentage change
from the quarter ended September 28, 2002 to the quarter ended September 29,
2001. Intersegment sales are based on market prices.

                                                  For the 13 Weeks Ended                                     Qtr to Qtr Change
                                ------------------------------------------------------------------     ----------------------------

                                 September 28, 2002        %        September 29, 2001       %           2002 to 2001        %
                                -------------------  ------------   ------------------  -----------     -------------  ------------
                                                                (In millions except percentages)
Net Sales
     Production                             $ 85.2        58.5 %             $ 119.6       67.7 %           $ (34.4)        (28.8)%
     Processing                              134.4        92.2 %               157.6       89.2 %             (23.2)        (14.7)%
     Intersegment                            (73.9)      (50.7)%              (100.6)     (57.0)%              26.7             -
                                -------------------  ------------   ------------------  -----------     -------------  ------------
       Total Net Sales                     $ 145.7       100.0 %             $ 176.6      100.0 %           $ (30.9)        (17.5)%
                                ===================  ============   ==================  ===========     =============  ============

Gross Profit
     Production                            $ (14.3)      190.7 %              $ 30.4       81.7 %           $ (44.7)       (147.0)%
     Processing                                6.8       (90.7)%                 6.8       18.3 %                 -             - %
                                -------------------  ------------   ------------------  -----------     -------------  ------------
       Total Gross Profit                   $ (7.5)      100.0 %              $ 37.2      100.0 %           $ (44.7)       (120.2)%
                                ===================  ============   ==================  ===========     =============  ============

Operating (Loss) Income
     Production                            $ (14.1)      123.7 %              $ 30.2       95.3 %           $ (44.3)       (146.7)%
     Processing                                5.7       (50.0)%                 6.0       18.9 %              (0.3)         (5.0)%
     Corporate                                (3.0)       26.3 %                (4.5)     (14.2)%               1.5          33.3 %
                                -------------------  ------------   ------------------  -----------     -------------  ------------
  Total Operating (Loss) Income            $ (11.4)      100.0 %              $ 31.7      100.0 %           $ (43.1)       (136.0)%
                                ===================  ============   ==================  ===========     =============  ============


                                       9`

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`Consolidated

Net Sales. Net sales decreased by $30.9 million, or 17.5%, to $145.7 million in
the second quarter of fiscal year 2003 from $176.6 million in the comparable
period last year. The decrease was attributed to a decrease in prices of $38.6
million, which was offset by an increase in volume of $7.7 million. Wholesale
pork prices were severely impacted by an increased supply of pork industry-wide
and the lingering impact of the Russian ban on poultry imported from the United
States, which contributed to excess levels of meat protein in the domestic
market. For the quarter there was a 5% increase in industry-wide pork production
compared to the same period last year. This increase caused significant
decreases in market hog and wholesale pork prices during August and early
September. See Segment Analysis below for comments on changes in sales by
business segment.

Gross Profit. Gross profit decreased by $44.7 million, or 120.2%, to a loss of
$7.5 million in the second quarter of fiscal year 2003 from a profit of $37.2
million in the comparable period last year. The current year gross profit
decrease is primarily the result of lower live hog and pork product prices
during the second quarter of fiscal year 2003 compared to the same period last
year.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses were lower as a percentage of net sales at 2.8% in the
second quarter of fiscal year 2003 compared to 3.2% in the comparable period
last year. In dollar terms, selling, general and administrative expenses
decreased by $1.6 million, or 28.2%, to $4.0 million in the second quarter of
fiscal year 2003 from $5.6 million in the comparable period last year. The
majority of the decrease is attributable to legal expenses incurred in the
second quarter of fiscal year 2002 to settle outstanding litigation and
decreased bonus accruals for the current fiscal year.

Operating (Loss) Income. Operating income decreased by $43.1 million, or 136.0%,
to an operating loss of $11.4 million in the second quarter of fiscal year 2003
from an operating income of $31.7 million in the comparable period last year.
The decrease is attributable to the factors mentioned above.

Interest Expense, net. Interest expense, net, increased by $0.7 million, or
13.1%, to $5.7 million in the second quarter of fiscal year 2003 from $5.0
million in the comparable period last year. The increase was caused by an
increase in total interest-bearing debt outstanding offset slightly by a
decrease in interest rates. See Liquidity and Capital Resources below for more
information.

Income Tax Benefit / Expense. Our effective tax rate was a benefit of 38.9% in
the second quarter of fiscal year 2003 compared to an expense of 40.1% in the
comparable period last year. The difference was primarily attributable to the
utilization of state income tax credits.

Segment Analysis

Hog Production. Net sales decreased by $34.4 million, or 28.8%, to $85.2 million
in the second quarter of fiscal year 2003 from $119.6 million in the comparable
period last year. The decrease primarily resulted from a 32.4% decrease in net
market hog sales prices, partially offset by a 5.5% increase in volume
attributable to the effects of our Texas sow herd expansion and additional
contract production. Intersegment sales to our pork processing segment
transferred at market prices are eliminated in the Condensed Consolidated
Statements of Operations.

     Gross profit decreased by $44.7 million, or 147.0%, to a loss of $14.3
million in the second quarter of fiscal year 2003 from a gross profit of $30.4
million in the comparable period last year. The decrease was primarily the
result of a higher volume of hogs produced at a negative margin due to the lower
net market hog sales price mentioned above. Hog production costs per
hundredweight were 5.8% higher during the second quarter of fiscal year 2003
compared to the same period last year mainly due to


                                       10`

---

`higher feed ingredient costs, lower values on culled animals which impact
production costs and a lower weight per animal marketed.

     Operating income decreased by $44.3 million, or 146.7%, to an operating
loss of $14.1 million in the second quarter of fiscal year 2003 from an
operating income of $30.2 million in the comparable period last year. The
decrease is attributed to the factors mentioned above.

Pork Processing. Net sales decreased $23.2 million, or 14.7%, to $134.4 million
in the second quarter of fiscal year 2003 from $157.6 million in the comparable
period last year. The decrease resulted from a 23.0% decrease in pork product
sales prices, partially offset by a 10.9% increase in volume processed compared
to the same period last year. The increase in volume was primarily attributable
to the expansion at the Clinton, North Carolina plant completed in late fiscal
year 2002, which increased capacity from 6,500 hogs per day to 10,000 hogs per
day.

     Gross profit remained flat at $6.8 million in the second quarter of fiscal
years 2003 and 2002. Lower margins on pork products due to lower pork prices
were offset by higher volume through the plants during the second quarter of
fiscal year 2003 compared to the same period last year. Processing costs
increased 3.4% during the second quarter of fiscal year 2003 compared to the
same period last year, primarily the result of increased depreciation expense
related to the Clinton plant expansion and added emphasis on value-added
products which cost more to produce.

     Operating income decreased by $0.3 million, or 5.0%, to $5.7 million in the
second quarter of fiscal year 2003 from $6.0 million in the comparable period
last year. The decrease was attributed to the factors mentioned above.

26 Weeks Ended September 28, 2002 Compared to the 26 Weeks Ended September 29, 2001

     The following table presents selected financial information for our
production and processing segments for the first two quarters ended September
28, 2002 and September 29, 2001. Net sales, gross profit and operating (loss)
income by segment are also presented as a percentage of their respective totals.
The two columns under year-to-year change show the dollar and percentage change
from the first two quarters ended September 28, 2002 to the first two quarters
ended September 29, 2001. Intersegment sales are based on market prices.

                                                          For the 26 Weeks Ended                            Year to Year Change
                                     ------------------------------------------------------------------     ---------------------------

                                     September 28, 2002        %        September 29, 2001      %           2002 to 2001       %
                                     -------------------  ------------  ------------------  -----------     -------------  ------------
                                                                     (In millions except percentages)
Net Sales
     Production                                 $ 175.3        59.5 %             $ 233.4       67.1 %           $ (58.1)       (24.9)%
     Processing                                   270.0        91.6 %               317.5       91.3 %             (47.5)       (15.0)%
     Intersegment                                (150.5)      (51.1)%              (203.2)     (58.4)%              52.7            -
                                     -------------------  ------------  ------------------  -----------     -------------  ------------
       Total Net Sales                          $ 294.8       100.0 %             $ 347.7      100.0 %           $ (52.9)       (15.2)%
                                     ===================  ============  ==================  ===========     =============  ============

Gross Profit
     Production                                 $ (17.8)      378.7 %              $ 57.0       85.1 %           $ (74.8)      (131.2)%
     Processing                                    13.1      (278.7)%                10.0       14.9 %               3.1         31.0 %
                                     -------------------  ------------  ------------------  -----------     -------------  ------------
       Total Gross Profit                        $ (4.7)      100.0 %              $ 67.0      100.0 %           $ (71.7)      (107.0)%
                                     ===================  ============  ==================  ===========     =============  ============

Operating (Loss) Income
     Production                                 $ (17.5)      135.7 %              $ 56.6      101.3 %           $ (74.1)      (130.9)%
     Processing                                    10.8       (83.7)%                 8.5       15.2 %               2.3         27.1 %
     Corporate                                     (6.2)       48.1 %                (9.2)     (16.5)%               3.0         32.6 %
                                     -------------------  ------------  ------------------  -----------     -------------  ------------
       Total Operating (Loss) Income            $ (12.9)      100.0 %              $ 55.9      100.0 %           $ (68.8)      (123.1)%
                                     ===================  ============  ==================  ===========     =============  ============


                                       11`

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`Consolidated

Net Sales. Net sales decreased by $52.9 million, or 15.2%, to $294.8 million in
the first two quarters of fiscal year 2003 from $347.7 million in the comparable
period last year. The decrease was attributed to a decrease in prices of $73.9
million, which was offset by an increase in volume of $21.0 million. Pork prices
were severely impacted by several factors, including, an increased supply of
pork industry wide, compounded by an increased supply of all meat proteins. Much
of the increase in meat proteins was attributed to the Russian ban on poultry
imports from the United States, which has been lifted recently but still has a
lingering effect. See Segment Analysis below for comments on changes in sales by
business segment.

Gross Profit. Gross profit decreased by $71.7 million, or 107.0%, to a loss of
$4.7 million in the first two quarters of fiscal year 2003 from a profit of
$67.0 million in the comparable period last year. The current year gross profit
decrease is primarily the result of lower live hog and pork product prices
during the first two quarters of fiscal year 2003 compared to the same period
last year.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses were lower as a percentage of net sales at 3.0% in the
first two quarters of fiscal year 2003 compared to 3.2% in the comparable period
last year. In dollar terms, selling, general and administrative expenses
decreased by $2.2 million, or 20.1%, to $9.0 million in the first two quarters
of fiscal year 2003 from $11.2 million in the comparable period last year. The
majority of the decrease is attributable to legal expenses incurred in the first
two quarters of fiscal year 2002 to settle outstanding litigation and decreased
bonus accruals for the current fiscal year.

Operating (Loss) Income. Operating income decreased by $68.8 million, or 123.1%,
to an operating loss of $12.9 million in the first two quarters of fiscal year
2003 from an operating income of $55.9 million in the comparable period last
year. The decrease is attributable to the factors mentioned above.

Interest Expense, net. Interest expense, net, decreased by $0.6 million, or
4.7%, to $11.3 million in the first two quarters of fiscal year 2003 from $11.9
million in the comparable period last year. The decrease was attributed to a
decrease in interest rates on our variable rate debt, offset slightly by an
increase in total interest-bearing debt outstanding. See Liquidity and Capital
Resources below for more information.

Income Tax Benefit / Expense. Our effective tax rate was a benefit of 38.9% in
the first two quarters of fiscal year 2003 compared to an expense of 40.1% in
the comparable period last year. The difference was primarily attributable to
the utilization of state income tax credits.

Segment Analysis

Hog Production. Net sales decreased by $58.1 million, or 24.9%, to $175.3
million in the first two quarters of fiscal year 2003 from $233.4 million in the
comparable period last year. The decrease primarily resulted from a 30.2%
decrease in net market hog sales prices, partially offset by a 7.6% increase in
volume attributable to the effects of our Texas sow herd expansion and
additional contract production. Intersegment sales to our pork processing
segment transferred at market prices are eliminated in the Condensed
Consolidated Statements of Operations.

     Gross profit decreased by $74.8 million, or 131.2%, to a loss of $17.8
million in the first two quarters of fiscal year 2003 from a gross profit of
$57.0 million in the comparable period last year. The decrease was primarily the
result of a higher volume of hogs produced at a negative margin due to the lower
net market hog sales price mentioned above. Hog production costs per
hundredweight were 1.8% higher during the first two quarters of fiscal year 2003
compared to the same period last year mainly due to lower values on culled
animals which impact production costs and a lower weight per animal marketed.


                                       12`

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`Operating income decreased by $74.1 million, or 130.9%, to an operating
loss of $17.5 million in the first two quarters of fiscal year 2003 from an
operating income of $56.6 million in the comparable period last year. The
decrease is attributed to the factors mentioned above.

Pork Processing. Net sales decreased $47.5 million, or 15.0%, to $270.0 million
in the first two quarters of fiscal year 2003 from $317.5 million in the
comparable period last year. The decrease resulted from a 22.4% decrease in pork
product sales prices, partially offset by a 9.6% increase in volume processed
compared to the same period last year. The increase in volume was primarily
attributable to the expansion at the Clinton, North Carolina plant completed in
late fiscal year 2002, which increased capacity from 6,500 hogs per day to
10,000 hogs per day.

     Gross profit increased by $3.1 million, or 31.0%, to $13.1 million in the
first two quarters of fiscal year 2003 from $10.0 million in the comparable
period last year. The increase primarily resulted from higher margins on pork
products due to lower market hog prices coupled with higher volume through the
plants. Processing costs increased 7.3% during the second quarter of fiscal year
2003 compared to the same period last year, primarily the result of increased
depreciation expense related to the Clinton plant expansion and added emphasis
on value-added products, which cost more to produce.

     Operating income increased by $2.3 million, or 27.1%, to $10.8 million in
the first two quarters of fiscal year 2003 from $8.5 million in the comparable
period last year. The increase was attributed to the factors mentioned above.

Liquidity and Capital Resources

     Our primary source of financing has been cash flow from operations and bank
borrowings. Our ongoing operations will require the availability of funds to
service debt, fund working capital and make capital expenditures on our
facilities. We expect to finance these activities through cash flow from
operations and from amounts available under our revolving credit facility.

     Net cash flow (used in) and provided by operating activities was ($9.5)
million and $51.6 million for the first two quarters ended in fiscal years 2003
and 2002, respectively. The decrease in the first two quarters of fiscal year
2003 compared to the same period last year was primarily due to a decrease in
net income, the change in deferred taxes and an increase in working capital
requirements partially offset by an increase in non-cash depreciation charges.
Non-cash charges increased in the first two quarters of fiscal year 2003
compared to the same period last year due to incremental depreciation expense of
expansion projects completed and capitalized in fiscal year 2002.

     Net cash flow used in investing activities was $11.0 million and $48.9
million for the first two quarters ended in fiscal years 2003 and 2002,
respectively. Net cash used in investing activities consisted of $16.2 million
and $56.2 million for capital expenditures relating to property, plant and
equipment and breeding stock during the first two quarters ended in fiscal years
2003 and 2002, respectively. The Company received proceeds from disposal of
fixed assets of $5.2 million and $7.3 million during the first two quarters
ended in fiscal years 2003 and 2002, respectively, primarily representing culled
breeding stock. The decrease in capital expenditures is the result of the
completion of expansion projects at our Clinton, North Carolina plant and our
Texas production facilities during fiscal year 2002.

     Net cash flow provided by and (used in) financing activities was $13.4
million and ($7.5) million for the first two quarters ended in fiscal years 2003
and 2002, respectively. In the first quarter of fiscal year 2002, Premium
Standard Farms issued $175 million of 9 1/4% senior unsecured notes due 2011("9
1/4% Notes"), which were used to retire $137.9 million of 11% senior secured
payment-in-kind notes ("PIK Notes") on July 7, 2001. An associated 1% prepayment
penalty on these PIK Notes, which was also paid on July 7, 2001, resulted in an
extraordinary charge of $1.3 million, net of taxes. With the remaining proceeds,
we also prepaid $25 million of bank term debt, made a $6.3 million quarterly
payment on bank term debt and paid down $4.0 million on our revolving credit
facility. The 9 1/4% Notes contain customary covenants and are redeemable by
Premium Standard Farms under certain circumstances.

                                       13`

---

`Working capital is provided under a Credit Agreement that provides for up
to $150 million of revolving credit (with actual credit limit determined monthly
by reference to a borrowing base formula) and a term loan facility with $56.3
million outstanding at September 28, 2002. Effective June 28, 2002, the Credit
Agreement was amended to extend the revolving credit facility one year, increase
the letter of credit commitment from $10 million to $15 million, and amend
certain financial covenants and pricing terms, among other things. Effective
September 27, 2002, the Credit Agreement was amended to increase the revolving
credit facility by $50.0 million to $150.0 million in total availability subject
to a borrowing base calculation, defer quarterly principal payments on the term
debt for one year, and amend certain financial covenants and pricing terms,
among other things. Obligations under the Credit Agreement are secured by liens
on substantially all of our assets. In addition to customary financial
covenants, the Credit Agreement contains customary restrictions on, among other
things, encumbrance or disposal of assets, acquisitions, additional
indebtedness, capital investment, payment of subordinated debt and construction
of new hog production facilities. In addition to customary fees payable under
credit facilities of this type, amounts borrowed under the Credit Agreement bear
interest at fluctuating rates selected by us based on the agent bank's prime
rate, the Federal Funds Rate plus one half of one percent or LIBOR plus, in each
case, an applicable margin, determined by our leverage ratio, currently ranging
from 1.5% to 3.125% depending on the type of borrowing and fluctuating rate we
are using. All borrowings under the revolving credit facility mature on August
21, 2004, and all borrowings under the term debt mature on August 21, 2005.

     Total indebtedness at September 28, 2002 was $282.8 million, as compared to
$265.8 million at September 29, 2001. At September 28, 2002, we had $47.0
million outstanding under our revolving credit facility, $10.0 million in
letters of credit and $76.7 million available for borrowing under our revolving
credit facility.

     In fiscal 2003, we plan to spend approximately $36 million on capital
expenditures, of which we expect to spend approximately:

                $14 million in upgrades and improvements in our processing
                      operations;

                $9 million in upgrades and improvements in our production
                      operations; and

                $13 million in net breedstock purchases.

     Under our consent decree with the Attorney General of the State of Missouri
we are required to invest $13.6 million in research and development over the
next two years.

     We believe that available borrowings under our revolving credit facility
and cash flow from operations will be sufficient to support our working capital,
capital expenditures and debt service requirements for the foreseeable future.
Our ability to generate cash, however, is subject to a certain extent to general
economic, financial, competitive, legislative, regulatory and other factors
beyond our control. We cannot assure you that our business will generate
sufficient cash flow from operations or that future borrowings will be available
under our revolving credit facility in an amount sufficient to enable us to pay
our indebtedness, including the 9 1/4% Notes, or to fund our other liquidity
needs. In addition, it is our long-term intent to add processing capabilities to
our Texas operations when justified by market conditions, customer relationships
and other circumstances. If we consummate any material acquisitions or expand
our Texas operations in this manner, we will need to seek additional sources of
funding, which might potentially come from the issuance of additional equity,
debt or the pursuit of joint ventures to the extent that such options are
available.


                                       14`

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`The following table represents a summary of our contractual cash
obligations as of September 28, 2002:


                                                       Payments due by period
Contractual Cash Obligations              Total     Current    1-3 years  4-5 years  Thereafter
                                                          (in thousands)

Long-Term Debt                          $ 278,271 $       -   $ 103,271     $     -    $175,000
Capital Lease Obligations                   4,547       752       1,657       1,841         297
Operating Leases                           21,809     5,187       8,081       4,062       4,479
Unconditional Purchase Obligations         10,779    10,779           -           -           -
Other Long-Term Obligations                 2,000     1,000       1,000           -           -
                                           ------    ------      ------      ------      ------
Total Contractual Cash Obligations      $ 317,406 $  17,718   $ 114,009     $ 5,903    $179,776
                                       ========== =========   ==========   ========    ========


     Most of our hogs are raised in facilities that we own. Some of our hogs,
however, are raised under farrowing, nursery, or finishing contracts with
individual farmers. In these relationships, we typically own the livestock and
provide the necessary feed, genetics, and veterinary supplies, while the
contract producer provides the land, facilities, labor, utilities, and other
costs of production. These contracts vary from terms of less than one year to up
to 12 years. These payments represented approximately 11 percent of our hog
production segment's cost of goods sold for the first two quarters ended
September 28, 2002. All of these contracts are cancelable by us if the producer
fails to perform to an acceptable level.

Critical Accounting Policies

     In preparing the condensed consolidated financial statements in accordance
with generally accepted accounting principles, we are required to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenues, expenses, and related disclosures at the date of the condensed
consolidated financial statements and during the reporting period. Actual
results may differ from those estimates due to the complexity and subjectivity
of those estimates. Management has identified the accounting policies it
believes to be the most important as inventory valuation of livestock,
contingent liabilities, and accounting for derivative instruments.

     Inventory valuation of livestock is calculated based on a standard cost
model for each geographic hog production region. This model is based on the
budgeted costs and inventory projections at each age and phase of the production
cycle, adjusted to actual costs and reduced to the lower of cost or market when
required. Management believes this method for valuing livestock most accurately
represents actual inventory costs. At each balance sheet date management
compares the projected costs to complete current inventory to projected future
revenues. To the extent the estimated cost exceeds projected future revenue an
impairment is recorded.

     Contingent liabilities, such as self-insured workers' compensation and
health insurance, bonuses, and legal obligations are estimated based on
information received from third parties and management estimates. These
obligations are provided for when the loss is probable and the amount is
reasonably estimable. Actual settlement costs may vary from estimates we made.
Management believes that any difference in the actual results from the estimates
will not have a material adverse effect upon our financial position or results
of operations.

     Derivative instruments are accounted for in accordance with Financial
Standards Board Statement No. 133 (SFAS 133), "Accounting for Derivative
Instruments and Hedging Activities." Because of the complexity involved in
getting hedge treatment for our commodity contracts, we mark these exchange
traded contracts to market with the resulting gain or loss recorded in sales for
lean hog contracts or cost of


                                       15`

---

`sales for all other commodity contracts. This may result in large fluctuations
in our earnings depending on the volume ofcommodity contracts and their
corresponding volatility.





Market Risk

     Our operating results are influenced by fluctuations in the price of our
primary feed components, corn and soybean meal, and by fluctuations in market
hog and wholesale pork sales prices. The cost and supply of feed components and
market hog and wholesale pork sales prices are determined by constantly changing
market forces of supply and demand, which are driven by matters over which we
have no control, including weather, current and projected worldwide grain stocks
and prices, grain export prices and supports, hog production and governmental
agricultural policies. In our hog production segment we use forward contracts,
as well as futures and options contracts, to establish adequate supplies of
future grain requirements, to secure margins and to reduce the risk of market
fluctuations. To secure margins and minimize earnings volatility in our pork
processing segment, we utilize lean hog futures to hedge future pork product
sales. While this may tend to limit our ability to participate in gains from
favorable commodity price fluctuation, it also tends to minimize earnings
volatility and secure future margins. For the first two quarters ended September
28, 2002, we recognized gains under SFAS 133 of $1.3 million in net sales for
gains related to lean hog futures and gains of $0.5 million in costs of goods
sold relating to the hedging of feed components. For open futures contracts, we
use a sensitivity analysis technique to evaluate the effect that changes in the
market value of commodities will have on these commodity derivative instruments.
As of September 28, 2002, the potential change in fair value of open
exchange-traded contracts, assuming a 10% change in the underlying commodity
price, was $5.7 million.

     We are exposed to changes in interest rates. Our term debt and revolving
credit facility have variable interest rates. Interest rate changes generally do
not affect the market value of such debt but do impact the amount of our
interest payments and, therefore, our future earnings and cash flows, assuming
other factors are held constant. Conversely, for fixed rate debt, interest rate
changes do not impact future cash flows and earnings, but do impact the fair
market value of such debt, assuming other factors are held constant. During the
fiscal year ended March 30, 2002, we entered into an interest rate swap
agreement to convert the variable base interest rate of our bank term debt to a
fixed rate of 3.0125% plus its spread (currently 3.125% at September 28, 2002).
The swap is accounted for as a cash flow hedge under SFAS 133. During the first
two quarters ended September 28, 2002, we recognized a $0.8 million loss, net of
tax, into Accumulated other comprehensive loss for the change in the market
value of the swap.

     The 9 1/4% Notes had a fair value of approximately $119.0 million as of
September 28, 2002 based on inter-dealer prices, as compared to the book value
of $175.0 million as of September 28, 2002.


                                       16`

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`Item 3.  Qualitative and Quantitative Disclosures About Market Risk

     Please see "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Market Risk" above.

Item 4.  Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

         Within 90 days prior to the filing date of this report (the "Evaluation
     Date"), the Company carried out an evaluation, under the supervision and
     with the participation of the Company's management, including the Company's
     chief executive officer and its chief financial officer, of the
     effectiveness of the design and operation of the Company's disclosure
     controls and procedures pursuant to Rule 13a-14 of the Securities Exchange
     Act of 1934 (the "Exchange Act"). Based upon that evaluation, the chief
     executive officer and chief financial officer concluded that as of the
     Evaluation Date, the Company's disclosure controls and procedures (as
     defined in Rule 13a-14(c) under the Exchange Act) are effective to ensure
     that information required to be disclosed by the Company in reports that it
     files or submits under the Exchange Act is recorded, processed, summarized
     and reported within the time periods specified in Securities and Exchange
     Commission rules and forms.

(b) Changes in internal controls.

         There were no significant changes in the Company's internal controls or
     in other factors that could significantly affect these controls subsequent
     to the date of their most recent evaluation nor were there any significant
     deficiencies or material weaknesses in the Company's internal controls.


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

     We have settled two citizens' action suits which sought to enforce alleged
violations of the Clean Air Act, Clean Water Act and CERCLA against us and
ContiGroup Companies, Inc. ("ContiGroup"). In 1998, we engaged in a series of
transactions with ContiGroup pursuant to which we purchased from ContiGroup its
North Missouri Farms hog production operations and ContiGroup purchased a 51.0%
ownership interest in us (the "1998 ContiGroup transaction"). To the extent that
ContiGroup incurs any liability in this litigation, we assumed that liability
pursuant to the terms of our 1998 ContiGroup transaction. The U.S. Environmental
Protection Agency (the "E.P.A.") had intervened in our action and filed a
separate notice of violation against us under the Clean Air Act. This settlement
resolves all outstanding issues of ContiGroup and us with the E.P.A. This
consent decree built upon the 1999 consent decree with the State of Missouri
referenced below. A recent consent decree entered with the E.P.A. in 2001 (the
"2001 Consent Decree") requires us and ContiGroup to meet certain performance
standards, such as a 50 percent reduction in nitrogen content concentration of
effluent applied to area fields over a prescribed time period. Other key
elements of the 2001 Consent Decree include: monitoring air emissions from
lagoons and barns; compliance with certain best management practices to reduce
the risk of spills; testing of selective lagoons to ensure integrity, and the
payment of a $350,000 civil penalty. The new counsel for the citizens has
submitted a petition for recovery of attorneys' fees in connection with the
lawsuits against both us and ContiGroup. We believe the majority of these fees
have been previously paid and resolved. We believe the resolution of this matter
will not have a material adverse effect upon our financial position or results
of operations.


                                       17`

---

`In 1999, we settled a suit filed by the Attorney General of the State of
Missouri against us and ContiGroup. We assumed ContiGroup's liability in this
action in connection with the 1998 ContiGroup transaction. The settlement
required us and ContiGroup to enter into a consent judgment pursuant to which we
are obligated to invest $25 million over the course of five years for
researching, installing and operating improved technology to control wastewater,
air and odor emissions from our Missouri farms. We are in the fourth year of
that five year period and have spent $11.4 million to satisfy the settlement. In
addition, pursuant to the consent judgment we and ContiGroup were issued a $1
million civil penalty. Of this, $650,000 has been paid and $350,000 is suspended
pending certain conditions.

     In addition to the suits discussed above, we have received notices of
violations from the Missouri Department of Natural Resources alleging releases
of wastewater. We have responded to these notices in an effort to resolve these
matters. The State of Missouri has recently filed a lawsuit seeking penalties
and injunctive relief for these violations. We are preparing a response, but are
seeking to resolve this matter through a negotiated settlement.

     Two nuisance suits were filed against ContiGroup and us during the second
quarter of fiscal year 2003 in the Circuit Court of Jackson County, Kansas City,
Missouri. There are multiple plaintiffs in each suit, who claim to live near
swine farms owned by ContiGroup but under production contracts with us. The
primary allegation is that offensive odors from these farms interfered with the
plaintiffs' right to use and have quiet enjoyment of their respective
properties. We are obligated by contract to indemnify ContiGroup for any
liabilities arising from this litigation. We believe we have good defenses to
these actions, and intend to vigorously defend these suits.

     In addition, we are involved from time to time in routine litigation
incidental to our business. Although no assurance can be given as to the outcome
or expense associated with any of these routine proceedings, we believe that
none of such proceedings currently pending should, individually or in the
aggregate, have a material adverse effect on our financial statements.

Item 2.  Changes in Securities

         Not applicable

Item 3.  Defaults Upon Senior Securities

         Not applicable

Item 4.   Submission of Matters to a Vote of Security Holders

         The annual meeting of shareholders was held on September 19, 2002 in
         Dalhart, Texas. The only item submitted to a vote of shareholders was
         the election of directors. The table below briefly describes the
         results of the shareholders' vote.

                                                          For         Withheld
                To elect Class A directors:
                Ronald Justice                            77,675          1
                Maurice McGill                            77,675          1
                Dean Mefford                              77,675          1
                Mitch Petrick                             77,675          1
                To elect Class B directors:
                Paul Fribourg                            113,301          0
                John Meyer                               113,301          0
                Vart Adjemian                            113,301          0
                Michael Zimmerman                        113,301          0


                                       18`

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`Item 5.  Other Information

         Not applicable

Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  4.1      Eighth Amendment to Credit Agreement, dated as of
                           September 27, 2002 (incorporated by reference to
                           Exhibit 4.1 to the Company's Current Report on Form
                           8-K filed on October 1, 2002)

                  99.1     Section 906 Certification of John M. Meyer, CEO

                  99.2     Section 906 Certification of Stephen A. Lightstone, CFO

         (b)      Reports on Form 8-K.

                  1.  A Current Report on Form 8-K was filed with the SEC on
                      August 13, 2002, to report, under Item 5, our first
                      quarter earnings. The earnings release, including our
                      Unaudited Condensed Consolidated Statements of Operations
                      for the 13 weeks ended June 29, 2002, and June 30, 2001,
                      was filed as Exhibit 99.1 to the Current Report on Form
                      8-K.


                                       19`

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`SIGNATURES


Pursuant to the requirements 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.

                                       PSF GROUP HOLDINGS, INC.




November 11, 2002                      /s/  Stephen A. Lightstone
-----------------                      -----------------------------------------
Date                                   Stephen A. Lightstone
                                       Executive Vice President, Chief Financial
                                       Officer and Treasurer
                                       (Principal Financial and
                                       Accounting Officer)


                                       20`

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`CERTIFICATIONS


I, John M. Meyer, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of PSF Group
         Holdings, Inc.;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

         c)       presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

Date:  November 11, 2002


                                       /s/ John M. Meyer
                                       -----------------------------------------
                                       John M. Meyer
                                       Chief Executive Officer
                                       (Principal Executive Officer)


                                       21`

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`I, Stephen A. Lightstone, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of PSF Group
         Holdings, Inc.;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

         c)       presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

Date:  November 11, 2002


                                       /s/  Stephen A. Lightstone
                                       -----------------------------------------
                                       Stephen A. Lightstone
                                       Chief Financial Officer
                                       (Principal Financial Officer)


                                       22`