<PAGE>

================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   ----------
                                    Form 10-K
                                   ----------

                                  ANNUAL REPORT
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

(Mark One)

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

                     For the Fiscal Year Ended June 24, 2006

     [ ] 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 0-20539

                            PRO-FAC COOPERATIVE, INC.
             (Exact Name of Registrant as Specified in Its Charter)

              New York                                     16-6036816
     (State or other jurisdiction of                      (IRS Employer
     incorporation or organization)                    Identification Number)

             590 Willow Brook Office Park, Fairport, NY    14450
            (Address of Principal Executive Offices)       (Zip Code)

       Registrant's telephone number, including area code: (585) 218-4210
          Securities Registered Pursuant to Section 12(b) of the Act:

<TABLE>
<S>                                              <C>
          Title of each class                    Name of each exchange on which registered
  Class A Cumulative Preferred Stock                     The Nasdaq Stock Market LLC
  Liquidation Preference $25.00/Share
  Par Value $1.00/Share
</TABLE>

        Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
                                                         YES          NO   X
                                                             --------   --------

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
                                                         YES          NO   X
                                                             --------   --------

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                          YES       X       NO
                                 -------          -------

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

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act (Check
one):

<TABLE>
<S>                              <C>                        <C>
Large accelerated filer          Accelerated filer          Non-accelerated filer   X
                        -----                      -----                          -----
</TABLE>

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
                                                         YES          NO   X
                                                             --------   --------

     Aggregate market value of voting and non-voting common equity held by
            non-affiliates of the registrant as of December 23, 2005

                            Common Stock: $8,855,480

        (Based upon par value of shares since there is no market for the
                           registrant's common stock)

       Number of shares of common stock outstanding at September 15, 2006:
                             Common Stock: 1,769,543


                                 1 of 63 Pages



<PAGE>



                   FORM 10-K ANNUAL REPORT - Fiscal Year 2006
                            PRO-FAC COOPERATIVE, INC.
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                PAGE
<S>         <C>                                                                                                  <C>
Cautionary Statement on Forward-Looking Statements and Risk Factors.........................................      3

                           PART I

ITEM  1.    Description of Business
                General Development of Business.............................................................      5
                Narrative Description of Business...........................................................     10
ITEM 1A.    Risk Factors....................................................................................     12
ITEM 1B.    Unresolved Staff Comments.......................................................................     12
ITEM  2.    Properties......................................................................................     12
ITEM  3.    Legal Proceedings...............................................................................     12
ITEM  4.    Submission of Matters to a Vote of Security Holders.............................................     12

                           PART II

ITEM  5.    Market for Registrant's Common Equity, Related Stockholder Matters
            and Issuer Purchases of Equity Securities.......................................................     12
ITEM  6.    Selected Financial Data.........................................................................     14
ITEM  7.    Management's Discussion and Analysis of Financial Condition and Results of Operations...........     15
ITEM  7A.   Quantitative and Qualitative Disclosures about Market Risk......................................     21
ITEM  8.    Financial Statements and Supplementary Data.....................................................     22
ITEM  9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure............     40
ITEM  9A.   Controls and Procedures.........................................................................     40
ITEM  9B.   Other Information...............................................................................     40

                          PART III

ITEM 10.    Directors and Executive Officers of the Registrant..............................................     41
ITEM 11.    Executive Compensation..........................................................................     43
ITEM 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
            Matters.........................................................................................     45
ITEM 13.    Certain Relationships and Related Transactions..................................................     47
ITEM 14.    Principal Accountant Fees and Services..........................................................     48

                           PART IV

ITEM 15.    Exhibits and Financial Statement Schedules......................................................     49
            Signatures......................................................................................     52
</TABLE>


                                       2



<PAGE>


       CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS AND RISK FACTORS

From time to time, Pro-Fac Cooperative, Inc. ("Pro-Fac" or the "Cooperative") or
persons acting on behalf of Pro-Fac may make oral and written statements that
may constitute "forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995 (the "PSLRA") or by the Securities and Exchange
Commission ("SEC") in its rules, regulations, and releases. The Cooperative
desires to take advantage of the "safe harbor" provisions in the PSLRA for
forward-looking statements made from time to time, including, but not limited
to, the forward-looking information contained in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" section of this
Report and other statements made in this Form 10-K and in other filings with the
SEC.

The Cooperative cautions readers that any such forward-looking statements made
by or on behalf of the Cooperative are based on management's current
expectations and beliefs, all of which could be affected by the uncertainties
and risk factors described below. The Cooperative's actual results could differ
materially from those expressed or implied in the forward-looking statements.
The risk factors that could impact the Cooperative include:

     o    the Cooperative's ability to pay dividends is dependent upon, among
          other factors available cash, capital surplus and its future earnings.
          The Cooperative's principal use of available cash has been the payment
          of dividends on its Class A cumulative preferred stock and its
          non-cumulative preferred stock. The $10.0 million annual receipts
          under the Termination Agreement have been the principal source of cash
          for payment of dividends with the last installment under the
          Termination Agreement payable on April 1, 2007. Pro-Fac and Vestar,
          together with others, including Mr. Wright, Pro-Fac's General Manager,
          Chief Executive Officer and Chief Financial Officer, are parties to a
          limited liability company agreement dated August 19, 2002 (as amended
          from time to time, the "Limited Liability Company Agreement") that
          contains terms and conditions relating to the management of Birds Eye
          Holdings LLC, a Delaware limited liability company ("Holdings LLC"),
          and its subsidiaries (including Birds Eye Foods, Inc., an indirect,
          wholly-owned subsidiary), the distribution of profits and losses and
          the rights and limitations of members of Holdings LLC. Pro-Fac owns
          Class B common units in and is a member of Holdings LLC. The Limited
          Liability Company Agreement of Holdings LLC provides that, subject to
          restrictions contained in any financing arrangements of Holdings LLC
          or its subsidiaries (including Birds Eye Foods), after August 19, 2007
          and prior to a sale (or dissolution) of Holdings LLC, Holdings LLC
          will use commercially reasonable efforts to cause Birds Eye Foods to
          make annual distributions to Holdings LLC, which can in turn be used
          by Holdings LLC to fund distributions to its common unit holders,
          including Pro-Fac. Many factors could affect whether such
          distributions are made in the future and the current financing
          arrangements of Birds Eye Foods with its senior lenders include a
          covenant which precludes such distributions without the permission of
          the senior lenders.

          Holdings LLC has advised Pro-Fac that it will not speculate as to
          whether distributions will be made under the Limited Liability Company
          Agreement. As a minority owner of Holdings LLC, Pro-Fac has no control
          over the determination of whether such distributions will be made.
          Pro-Fac's Board of Directors has developed a business plan that
          assumes distributions will not be made under the Limited Liability
          Company Agreement to replace the $10.0 million annual source of cash
          under the Termination Agreement ending on April 1, 2007.

          On May 5, 2006, the Board determined, subject to all of the facts and
          circumstances at the relevant times, that it expected to declare a
          full quarterly dividend of $.43 per share of Class A cumulative
          preferred stock for payment in July 2006. This dividend was declared
          in June 2006 and paid in July 2006. Thereafter, the Board expects to
          declare dividends of $.21 per share of Class A cumulative stock for
          quarterly payments to be made in October 2006, January 2007, and April
          2007. Beginning with the quarter ending in June 2007, the Board
          expects to suspend in full the declaration and payment of dividends on
          Pro-Fac's Class A cumulative preferred stock. To the extent that
          dividends on the Class A cumulative preferred stock are not paid or
          are not paid in full, the unpaid amounts cumulate and must be paid
          before any dividends may be paid on any other securities of Pro-Fac.

          In June 2006 the Board declared the annual dividend of $1.50 per share
          on the Cooperative's non-cumulative preferred stock (a total of
          approximately $40,000) which was paid in July 2006, and in accordance
          with the Cooperative's Certificate of Incorporation expects to set
          aside the proportionate share of the annual non-cumulative preferred
          stock dividend (expected to be approximately $15,000) for payment in
          July 2007, if, as expected, reduced quarterly dividend declarations
          are made in fiscal 2007 on the Class A cumulative preferred stock.
          Beginning with the quarter ending in June 2007, the Board expects to
          suspend in full the declaration and payment of dividends on its
          non-cumulative preferred stock.

          The Board believes, taking into consideration the reduction and
          ultimate suspension of dividend payments on the Cooperative's
          preferred stock and borrowing capacity under Pro-Fac's Credit
          Agreement with Birds Eye Foods, that Pro-Fac will have sufficient
          sources of cash to fund its operations at least through the end of
          fiscal 2010, which the Board believes will provide time to monitor
          Pro-Fac's investment in Holdings LLC and explore other sources of
          cash. The declaration of any future dividends, including the expected
          declarations outlined above, are subject to Board action in advance of
          any such declaration based upon all of the facts and circumstances at
          each such time.

                                       3



<PAGE>


          While the Cooperative prepares its financial statements using
          generally accepted accounting principles, which are based primarily on
          historical cost, it determines its capital surplus under applicable
          state law. Under New York Law, capital surplus is the amount by which
          the fair value of the Cooperative's assets exceed the total of its
          liabilities and the par value of its capital stock. For the fiscal
          quarter ended June 24, 2006, the Cooperative's Board of Directors
          determined that capital surplus was available based upon evidence of
          the fair market value of the Cooperative's assets, including its
          investment in Holdings LLC. There can, however, be no assurance that
          the value of the Cooperative's assets, including its investment in
          Holdings LLC, will be sufficient to support a determination of capital
          surplus in the future. Absent sufficient capital surplus, the
          Cooperative will be prohibited from paying dividends. Factors that may
          influence the fair market value of the Cooperative's investment in
          Holdings LLC include the financial condition and results of operations
          of Birds Eye Foods.

     o    the value of the Cooperative's investment in Holdings LLC is also
          impacted by the rights and preferences of Holdings LLC's preferred
          units. The holders of Holdings LLC's preferred units have priority
          over the holders of Holdings LLC's common units with respect to, among
          other things, preferred returns on their investment in Holdings LLC.
          The Cooperative owns Class B common units of Holdings LLC. The
          preferred units accrue a preferred return equal to 15 percent per
          annum of the preferred unit holders' preferred capital contributions
          (less distributions, if any, made in respect of such preferred units),
          compounded quarterly. Holdings LLC has the option to redeem all, but
          not less than all, of its preferred units outstanding at a premium. At
          June 24, 2006, Holdings LLC had $244.7 million of preferred units
          issued and outstanding, including approximately $105.9 million of
          payments-in-kind dividends on such preferred units. Based on Holdings
          LLC's outstanding preferred units at June 24, 2006, and assuming that
          the preferred return is not paid and the preferred units are not
          redeemed, the preferred units would have an approximate future
          redemption value, including the compounded preferred return, as of the
          end of fiscal years as follows:

<TABLE>
<CAPTION>
                              (Dollars in Millions)

                            <S>               <C>
                            2007              $ 283.5
                            2008                328.5
                            2009                380.6
                            2010                441.0
</TABLE>

     o    In the first quarter of fiscal 2007, Birds Eye Foods announced its
          intention to sell or close five of its production facilities and to
          close its Watsonsville, California facility as part of its decision to
          exit from the vast majority of its non-branded frozen business. As
          explained in this Report, Pro-Fac records its investment in Holdings
          LLC under the equity method of accounting. See "Management's
          Discussion and Analysis of Financial Condition and Results of
          Operations" included in Part II, Item 7 of this Report, and in "NOTE
          1. Description of Business and Summary of Significant Accounting
          Policies - Investment in Birds Eye Holdings, LLC" in the Notes to
          Financial Statements included in Part II, Item 8 of this Report. Under
          the equity method of accounting, Pro-Fac records its share of the net
          profit or loss of Holdings LLC based on its ownership percentage. At
          June 24, 2006, Pro-Fac owned approximately 40% of the common units of
          Holdings LLC. In its press release dated July 25, 2006, Birds Eye
          Foods indicated that it expected to incur employee termination
          benefits, environmental remediation costs associated with facility
          closures and sales, accelerated depreciation, inventory markdowns,
          contract and lease termination costs and other exit costs, including
          asset impairment charges. In its Form 10-K Equivalent for the fiscal
          year ended June 24, 2006, Birds Eye Foods disclosed that the closure
          of the Watsonville facility will result in Birds Eye Foods incurring
          approximately $3.5 million for employee termination benefits during
          fiscal 2007, a pension withdrawal liability of approximately $1.0
          million to $1.5 million, and a non-cash charge in the first quarter of
          fiscal 2007 of approximately $5.0 million to $6.0 million related to
          tangible personal property at that facility. Birds Eye Foods also
          disclosed that it expects to take additional cash and non-cash
          accounting charges and incur asset impairment charges related to its
          facilities sales and/or closings which Birds Eye Foods is currently
          unable to estimate individually or in the aggregate. Pro-Fac's
          financial condition and results of operations will be directly
          affected by Pro-Fac's recording of its 40% share of the impact of
          Birds Eye Foods' decision to sell or close its facilities on Birds Eye
          Foods' financial condition and results of operations.

                                       4




<PAGE>



          Two of the facilities identified for sale or closure are Birds Eye
          Foods' processing facilities located in Oakfield and Bergen, New York.
          Any facility not sold after its current production season will be
          closed between October 2006 and June 2007. Pro-Fac's New York
          member-growers supply snap beans, corn, peas, carrots, and squash to
          these New York processing facilities. In fiscal year 2006, Pro-Fac
          supplied raw product with a commercial market value of approximately
          $22.0 million to these New York facilities, representing approximately
          34 percent of the total commercial market value ("CMV") of raw product
          sold to all Pro-Fac customers and approximately 44 percent of the
          total CMV of raw product supplied to Birds Eye Foods in fiscal year
          2006. There can be no assurance at this time that the facilities will
          continue to operate or that the Cooperative's members will be able to
          continue supplying raw product to those facilities. The Cooperative
          acts as an agent of its member-growers in the marketing and sale
          transactions with Birds Eye Foods and, therefore, records this
          activity on a net basis. Further, Pro-Fac has typically paid 100
          percent of amounts received from customers, including Birds Eye Foods,
          to its member-growers.


PART I

ITEM 1. DESCRIPTION OF BUSINESS


                         GENERAL DEVELOPMENT OF BUSINESS

Pro-Fac Cooperative, Inc. is an agricultural cooperative corporation formed in
1960 under the Cooperative Corporation Laws of New York to process and market
crops grown by its members. Crops marketed by Pro-Fac include fruits (cherries,
apples, blueberries, and peaches), vegetables (snap beans, beets, cucumbers,
peas, sweet corn, carrots, cabbage, squash, asparagus and potatoes) and popcorn.
Only growers of crops marketed through Pro-Fac (or associations of such growers)
can become members of Pro-Fac. A grower becomes a member of Pro-Fac through the
purchase of common stock. Pro-Fac members deliver raw product for sale and
processing at the facilities of Birds Eye Foods and other Pro-Fac customers.
Birds Eye Foods is a producer and marketer of processed food products and, until
consummation of the Transaction on August 19, 2002 described below, a
wholly-owned subsidiary of Pro-Fac. As of June 24, 2006, there were
approximately 490 Pro-Fac members, consisting of individual growers or
associations of growers, located principally in the states of New York,
Delaware, Pennsylvania, Illinois, Michigan, Washington, Oregon, Iowa, Nebraska
and Florida.

In the fourth quarter of 2006, Pro-Fac's Board of Directors announced the
development of a business plan for the future operations of the Cooperative that
assumes no distributions will be made to Pro-Fac under the Limited Liability
Company Agreement with Holdings LLC. Accordingly, the Board of Directors is not
currently developing or implementing operating strategies for the Cooperative
that assume the $10.0 million annual receipts under the Termination Agreement,
with the last installment of $2.0 million payable on April 1, 2007, will be
replaced. Consistent with the Board's operational assumptions, on May 5, 2006,
the Board determined, subject to all of the facts and circumstances at the
relevant times, that, with respect to the Cooperatives' Series A cumulative
preferred stock it expected to declare a full quarterly dividend of $.43 per
share of Class A cumulative preferred stock for payment in July 2006; that,
thereafter, the Board expected to declare dividends of $.21 per share of Class A
cumulative stock for quarterly payments to be made in October 2006, January
2007, and April 2007; and, beginning with the quarter ending in June 2007, the
Board expected to suspend in full the declaration and payment of dividends on
its Class A cumulative preferred stock; and that, with respect to the
Cooperative's non-cumulative preferred stock; it expected to declare the annual
dividend of $1.50 per share of non-cumulative preferred stock for payment in
July 2006 and, in accordance with the Cooperative's Certificate of
Incorporation, expected to set aside the proportionate share of the annual
non-cumulative preferred stock dividend (expected to be approximately $15,000)
for payment in July 2007, if, as expected, reduced quarterly dividend
declarations are made in fiscal 2007 on the Cooperative's Class A cumulative
preferred stock; and, beginning with the quarter ending in June 2007, the Board
expects to suspend in full the declaration and payment of dividends on its
non-cumulative preferred stock.

In June 2006, the Pro-Fac Board of Directors did declare a dividend of $.43 per
share of Class A cumulative preferred stock and a dividend of $1.50 per share of
non-cumulative preferred stock. These dividends were paid in July 2006.

The Cooperative's Class A cumulative preferred stock began trading on The Nasdaq
Capital Market on June 29, 2006 under the stock symbol: PFACP. Prior to June 29,
2006, the Cooperative's Class A cumulative preferred stock was traded on the
Nasdaq's National Market system. The Cooperative applied to transfer the listing
of its Class A cumulative preferred stock to The Nasdaq Capital Market after
receipt of a letter dated June 5, 2006 from the Listing Qualifications
Department of The Nasdaq Stock Market. The June 5, 2006 letter advised that the
market value of the Cooperative's Class A cumulative preferred stock did not
comply with the minimum $50 million market value of listed securities
requirement for continued listing on the Nasdaq National Market, and further
advised that if the Cooperative did not demonstrate compliance by July 5, 2006,
the Cooperative would no longer qualify for continued listing on the Nasdaq
National Market. Pro-Fac's application to transfer the listing of its Class A
cumulative preferred stock from the Nasdaq National Market System to The Nasdaq
Capital Market was approved on June 27, 2006.

                                       5



<PAGE>



Pro-Fac member-growers are paid their allocable share of the Cooperative's
patronage income for crops delivered by them to Pro-Fac. Pro-Fac's patronage
income equals the Cooperative's gross receipts derived from sources that under
law qualify as patronage income, including income from the sale of raw products
and all income from other patronage sources, less Pro-Fac's expenses
attributable to the production of patronage income. Pro-Fac's expenses
attributable to the production of patronage income, as previously defined,
include overhead, interest, dividends on capital stock, maintenance,
depreciation, obsolescence, bad debts, taxes and other proper costs, all as
determined by the Cooperative's Board of Directors. Each member's pro rata share
of the patronage proceeds is determined annually based upon each member's share
of the year's total commercial market value ("CMV"). Commercial market value is
the weighted average price paid by commercial processors for the same or similar
crops, used for the same or similar purposes, in the same or similar marketing
areas. In any year in which patronage proceeds exceed CMV, the members will be
paid or allocated their pro rata portion of the excess patronage income.
Similarly, if in any year the patronage proceeds are less than CMV, then the CMV
paid to each member as the purchase price for his crop shall be reduced by his
share of the loss for the year. The Cooperative's bylaws require it to pay or
allocate to each member his pro rata share of patronage income within 8 1/2
months after the end of the Cooperative's fiscal year, unless the Cooperative's
Board of Directors takes action in accordance with its bylaws to withhold all or
a portion of patronage income. A portion of the patronage income payable to
Pro-Fac's members may be retained by the Cooperative for use as working capital
or for other general corporate purposes. Retained patronage income is
characterized as qualified retains.

Under the Internal Revenue Code, Pro-Fac is permitted to deduct, for federal
income tax purposes, the entire amount of retained patronage proceeds allocated
(but not yet distributed) to its members, provided certain requirements are met.
If all of these requirements are met, the retained patronage income constitutes
a qualified retain. Retained patronage income not meeting the requirements
constitutes a non-qualified retain and is not deductible for income tax
purposes.

Pro-Fac's bylaws require the Cooperative to pay or account annually to its
members for their crops, on a cooperative basis, in cash and through the
allocation of qualified retains as Pro-Fac's Board of Directors determines.
Historically, patronage proceeds in excess of CMV, after payment of dividends on
our capital stock, have been paid to Pro-Fac members partially in cash and
partially in the form of retains. At its March 2006 meeting, the Pro-Fac board
of directors determined that there would be no payment or allocation of
patronage proceeds for the fiscal year ending June 24, 2006.

Until August 19, 2002, the Cooperative conducted its business on a consolidated
basis with Birds Eye Foods, Pro-Fac's wholly-owned subsidiary prior to
consummation of the Transaction. Accordingly, unless the context otherwise
requires, the terms "Cooperative" and "Pro-Fac" refer to Pro-Fac Cooperative,
Inc. and its subsidiaries during and for the periods discussed in this Report
preceding the Transaction.

Pro-Fac's management believes a summary background of the relationship between
Pro-Fac and Birds Eye Foods prior to the closing of the Transaction is useful in
understanding the impact of the Birds Eye Foods relationship on Pro-Fac's
current business. On November 3, 1994, Pro-Fac acquired Birds Eye Foods and,
upon consummation of that acquisition, Pro-Fac and Birds Eye Foods entered into
a marketing and facilitation agreement (the "Marketing and Facilitation
Agreement"), which governed the crop supply and purchase relationship between
Pro-Fac and Birds Eye Foods. Under that agreement, Pro-Fac provided crops and
financing to Birds Eye Foods, Birds Eye Foods provided marketing and management
to Pro-Fac and Pro-Fac shared in the profits and losses of Birds Eye Foods. The
terms of the Marketing and Facilitation Agreement provided for the payment by
Birds Eye Foods to Pro-Fac of the CMV for all crops supplied by Pro-Fac. CMV is
the weighted average price paid by other commercial processors for similar crops
sold under preseason contracts and in the open market in the same or competing
market area.

The Transaction: On August 19, 2002 (the "Closing Date"), pursuant to the terms
of the Unit Purchase Agreement dated as of June 20, 2002 (the "Unit Purchase
Agreement"), by and among Pro-Fac, Birds Eye Foods, at the time a New York
corporation and a wholly-owned subsidiary of Pro-Fac, and Vestar/Agrilink
Holdings LLC, a Delaware limited liability company, consummated the following
transactions (which are referred to in this Report collectively as the
"Transaction"):

(i) Pro-Fac contributed to the capital of Holdings LLC, all of the shares of
Birds Eye Foods common stock owned by Pro-Fac, constituting 100 percent of the
issued and outstanding shares of Birds Eye Foods capital stock, in consideration
for Class B common units of Holdings LLC, representing a 40.72 percent common
equity ownership at the Closing Date;

(ii) Vestar/Agrilink Holdings LLC and certain co-investors (collectively,
"Vestar") contributed cash in the aggregate amount of $175.0 million to the
capital of Holdings LLC, in consideration for preferred units and Class A common
units and warrants, which warrants were immediately exercised to acquire
additional Class A common units representing 56.24 percent of the common equity
of Holdings LLC at the Closing Date, inclusive of the additional Class A common
units issued to Vestar upon its exercise of the warrants. The co-investors are
either under common control with, or delivered an unconditional voting proxy to,
Vestar. The Class A common units entitle Vestar to two votes for each Class A
common unit held. All other Holdings LLC common units entitle the holder(s)
thereof to one vote for each common unit held. Accordingly, Vestar has a voting
majority of all common units;

                                       6



<PAGE>


(iii) Immediately following Pro-Fac's contribution of its shares of Birds Eye
Foods common stock to Holdings LLC, Holdings LLC contributed those shares to
Birds Eye Holdings Inc., ("Holdings Inc.") a Delaware corporation and a direct,
wholly-owned subsidiary of Holdings LLC. As a result, Birds Eye Foods became an
indirect, wholly-owned subsidiary of Holdings LLC; and

(iv) Certain Birds Eye Foods management members including Stephen R. Wright,
then the General Manager and Secretary of Pro-Fac, entered into subscription
agreements with Holdings LLC to acquire (using a combination of cash and
promissory notes issued to Holdings LLC) an aggregate of approximately $1.3
million of Class C common units and Class D common units of Holdings LLC,
representing approximately 3.04 percent of the common equity ownership at the
Closing Date. Mr. Wright, together with the other members of Birds Eye Foods
management who are owners of Holdings LLC common units, Pro-Fac and Vestar, are
parties to a Securityholders Agreement and a Limited Liability Company Agreement
which agreements are described below in this discussion of the "General
Development of Business".

In connection with the Transaction, certain parties to the Transaction,
including Pro-Fac and/or Birds Eye Foods, entered into several agreements
effective as of the Closing Date, including the following:

(i) Termination Agreement: Pro-Fac and Birds Eye Foods entered into a letter
agreement dated as of the Closing Date (the "Termination Agreement"), pursuant
to which, among other things, the Marketing and Facilitation Agreement was
terminated and, in consideration of such termination, Birds Eye Foods agreed to
pay Pro-Fac a termination fee of $10.0 million per year for five years, provided
that certain ongoing conditions are met, including maintaining grower membership
levels sufficient to generate certain minimum crop supply. The $10.0 million
payment is payable to the Cooperative in quarterly installments as follows: $4.0
million on each July 1, and $2.0 million each October 1, January 1, and April 1
with the last payment due April 1, 2007.

Payments under the Termination Agreement are considered additional consideration
related the Transaction. Accordingly, the portion of the payments received under
the Termination Agreement related to Pro-Fac's continuing ownership percentage
is recorded as a reduction of Pro-Fac's investment in Holdings LLC. The
remaining portion of the payments is recognized as additional gain on the
transaction with Birds Eye Foods in the period it is received. Accordingly, in
each of fiscal 2006 and fiscal 2005, Pro-Fac recognized approximately $6.0
million as gain from transaction with Birds Eye Foods.

(ii) Amended and Restated Marketing and Facilitation Agreement: Pro-Fac and
Birds Eye Foods are parties to an amended and restated marketing and
facilitation agreement dated as of the Closing Date (the "Amended and Restated
Marketing and Facilitation Agreement"). Pursuant to the Amended and Restated
Marketing and Facilitation Agreement, Birds Eye Foods buys crops from Pro-Fac
grown by Pro-Fac's members. Birds Eye Foods pays Pro-Fac the CMV of the crops
supplied in installments corresponding to the dates payment is made by Pro-Fac
to its members for the delivered crops. Birds Eye Foods makes estimated CMV
payments to Pro-Fac for a particular crop year, subject to adjustments to
reflect the actual CMV following the end of such year. Commodity committees of
Pro-Fac meet with Birds Eye Foods management to establish CMV or receivable
guidelines, review calculations, and report to a joint CMV committee of Pro-Fac
and Birds Eye Foods. The Amended and Restated Marketing and Facilitation
Agreement also provides that Birds Eye Foods will provide Pro-Fac services
relating to planning, consulting, sourcing and harvesting crops from Pro-Fac
members in a manner consistent with past practices. In addition, until August
19, 2007, Birds Eye Foods will provide Pro-Fac with services related to the
expansion of the market for the agricultural products of Pro-Fac members (at no
cost to Pro-Fac other than reimbursement of Birds Eye Foods' incremental and
out-of-pocket expenses related to providing such services as agreed to by
Pro-Fac and Birds Eye Foods).

Under the Amended and Restated Marketing and Facilitation Agreement, Birds Eye
Foods determines the amount of crops which it will acquire from Pro-Fac for each
crop year. If the amount to be purchased by Birds Eye Foods during a particular
crop year does not meet (i) a defined crop amount and (ii) a defined target
percentage of Birds Eye Foods' needs for each particular crop, then certain
shortfall payments will be made by Birds Eye Foods to Pro-Fac. The defined crop
amounts and targeted percentages were set based upon the needs of Birds Eye
Foods in the 2002 crop year (fiscal 2003). The shortfall payment provisions of
the agreement include a maximum shortfall payment, determined for each crop,
that can be paid over the term of the Amended and Restated Marketing and
Facilitation Agreement. The aggregate shortfall payment amounts for all crops
covered under the agreement cannot exceed $10.0 million over the term of the
agreement.

Unless terminated earlier, the Amended and Restated Marketing and Facilitation
Agreement will continue in effect until August 19, 2012. Birds Eye Foods may
terminate the Amended and Restated Marketing and Facilitation Agreement prior to
August 19, 2012 upon the occurrence of certain events, including in connection
with a change in control transaction affecting Birds Eye Foods or Holdings Inc.
Birds Eye Foods can terminate the Amended and Restated Marketing and
Facilitation Agreement as a result of a change in control transaction without
payment of a termination fee. Also, Birds Eye Foods can sell portions of its
business and the volumes of crop purchases by Birds Eye Foods with respect to
such transferred business will be disregarded for purposes of determining
shortfall payments.

                                       7



<PAGE>



On July 25, 2006, Birds Eye Foods announced its intention to exit from the vast
majority of its non-branded frozen business. As part of the strategy, the New
York processing facilities of Birds Eye Foods located in Oakfield and Bergen,
which are supplied by Pro-Fac member-growers, will be sold or, if not sold after
the particular facility's current production season, closed between October 2006
and June 2007. Under the Amended and Restated Marketing and Facilitation
Agreement entered into with Birds Eye Foods on August 19, 2002, the Pro-Fac
member-growers supply snap beans, corn, peas, carrots, and squash to these
facilities. For the year ended June 24, 2006, Pro-Fac supplied raw product with
a total CMV of approximately $22.0 million to these processing facilities,
representing approximately 34 percent of total raw product supplied to all
Pro-Fac customers and approximately 44 percent of the CMV of raw product
supplied to Birds Eye Foods. Although the supply agreements for these facilities
are assignable by Birds Eye Foods to a new operator or operators of these
facilities, there can be no assurance that a new operator or operators will be
identified, or that a new operator or operators will choose to assume the
existing agreements or enter into a replacement supply agreement or agreements
with Pro-Fac. As such, it is possible that the Cooperative will no longer have
an outlet to which its member-growers can supply vegetables in New York.

In its Form 10-K Equivalent for the fiscal year ended June 24, 2006, Birds Eye
Foods disclosed that it anticipates that it will not satisfy crop purchase
obligations under the Amended and Restated Marketing and Facilitation Agreement
for the 2007 and 2008 growing seasons, and will therefore be required to make
shortfall payments to Pro-Fac in July 2008 and July 2009.

(iii) Credit Agreement. Birds Eye Foods and Pro-Fac entered into a credit
agreement, dated August 19, 2002 (the "Credit Agreement"), pursuant to which
Birds Eye Foods agreed to make available to Pro-Fac loans in an aggregate
principal amount of up to $5.0 million (the "Credit Facility"). The Credit
Agreement expires on August 19, 2007, and permits Pro-Fac to draw down up to
$1.0 million per year under the Credit Facility, unless Birds Eye Foods is
prohibited from making such advances under the terms of certain third party
indebtedness of Birds Eye Foods. The amount of the Credit Facility will be
reduced, on a dollar-for-dollar basis, to the extent of certain distributions
made by Holdings LLC to Pro-Fac in respect of its ownership in Holdings LLC.
Pro-Fac has pledged all of its Class B common units in Holdings LLC as security
for advances under the Credit Facility. Amounts borrowed under the Credit
Facility bear interest at 10 percent per annum. For additional information about
the Credit Agreement and the terms of the Credit Facility, see "NOTE 3.
Long-Term Debt" under "Notes to Financial Statements" in Part II, Item 8 of this
Report.

(iv) Limited Liability Company Agreement of Holdings LLC. Pro-Fac and Vestar,
together with others, including Mr. Wright, Pro-Fac's General Manager, Chief
Executive Officer and Chief Financial Officer, are parties to a limited
liability company agreement dated August 19, 2002 (as amended from time to time,
the "Limited Liability Company Agreement") that contains terms and conditions
relating to the management of Holdings LLC and its subsidiaries (including Birds
Eye Foods), the distribution of profits and losses and the rights and
limitations of members of Holdings LLC.

The Limited Liability Company Agreement provides, among other things, that
Holdings LLC's distributable assets, which include cash receipts from
operations, investing and financing, net of expenses, will be distributed to
Holdings LLC's members as determined by Holdings LLC's management committee. In
general, those distributable assets are distributable as follows:

     o    first, 100 percent to the holders of preferred units, pro rata, until
          each preferred unit holder's current (non-compounded) preferred return
          has been reduced to zero;

     o    second, 100 percent to the holders of preferred units, pro rata, until
          each preferred unit holder's unpaid preferred return has been reduced
          to zero and then, pro rata among the preferred unit holders until each
          preferred unit holder's unreturned preferred capital contribution has
          been reduced to zero;

     o    third, 100 percent to the holders of Class A common units, Class B
          common units, Class C common units, and Class E common units, pro
          rata, until each such unit holder's unreturned common capital
          contribution has been reduced to zero; and

     o    fourth, after the holders of Class A common units, Class B common
          units, Class C common units and Class E common units have been paid
          their unreturned common capital contributions, the balance of
          distributable assets, if any, will be distributed to the holders of
          Class A common units, Class B common units, Class C common units,
          Class D common units and Class E common units. The amount
          distributable to such holders is determined based upon the number of
          Class C common units and Class D common units outstanding and upon
          whether certain performance hurdles have been satisfied. As the
          various performance hurdles are satisfied, the percentage of any
          remaining distributable assets distributable to the holders of Class A
          common units, Class B common units and Class E common units decreases
          from approximately 95 percent to approximately 87 percent, the
          percentage of remaining distributable assets distributable to the
          holders of Class C common units decreases from approximately 2.3
          percent to 2.1 percent and the percentage of remaining distributable
          assets distributable to the holders of Class D common units increases
          from approximately 2.6 percent to approximately 10.54 percent.

                                       8



<PAGE>



A preferred unit holder's preferred return is equal to 15 percent per annum of
the preferred unit holder's preferred capital contributions, less distributions
made in respect of such preferred units. The preferred return accrues on a daily
basis and compounds quarterly (3.75 percent quarterly). In the event of a
dissolution, Holdings LLC's assets (after payment of debts and obligations) will
be distributed to its members in accordance with the above distribution
schedule.

The Limited Liability Company Agreement further provides that, subject to
restrictions contained in any financing arrangements of Holdings LLC or its
subsidiaries (including Birds Eye Foods), after August 19, 2007 and prior to a
sale (or dissolution) of Holdings LLC, Holdings LLC will use commercially
reasonable efforts to cause Birds Eye Foods to distribute annually to Holdings
LLC up to $24.8 million of cash flow from the operations of Birds Eye Foods,
which Holdings LLC will then distribute, notwithstanding the "first", "second"
and "third" tier distribution preferences described above, to the holders of its
Class A common units, Class B common units, Class C common units, Class D common
units and Class E common units in accordance with the "fourth" distribution tier
as if no performance hurdle has been satisfied. Further, upon the occurrence of
certain specified events, including the sale of Holdings LLC, and at any time
after August 19, 2010, the holders of preferred units are entitled, at their
option, to have their preferred units redeemed and, further, Holdings LLC may,
at its option, at any time redeem the preferred units.

Further, under the Limited Liability Company Agreement, the management committee
of Holdings LLC is authorized to issue up to 16,000 Class C common units and up
to 16,000 Class D common units. The Limited Liability Company Agreement further
provides that the holders of a majority of the total voting power of the
outstanding Class A, Class B and Class E common units can cause Holdings LLC to
create and issue additional units, provided no such issuance would adversely
affect the relative economic rights of the holders of Class A, Class B, Class C
and Class D common units and further subject to the amendment provisions of the
Limited Liability Company Agreement. The Limited Liability Company Agreement
provides, in part, that the management committee of Holdings LLC can amend the
Limited Liability Company Agreement to provide for the issuance of any other
type of preferred unit, whether of an existing or new class, with the consent of
the preferred unit holders, and to provide for the issuance of any other class
of units or other securities, with the consent of each unit holder, if any, who
would be adversely affected by such issuance as to any such unit holder's
limited liability or as to the alteration of any such unit holder's rights to
receive allocations or distributions unless such alterations of rights are in
connection with a debt or equity financing, a restructuring, a recapitalization
or other transaction in which Holdings LLC will receive an investment or
contribution to its capital or in connection with the issuance of equity to
employees or directors of Holdings LLC, its subsidiaries or to third party
lenders. The issuance of additional common units will reduce the percentage
ownership of the current holders of common units in Holdings LLC, including
Pro-Fac. As of June 24, 2006, Pro-Fac owned 40.0 percent of the common equity of
Holdings LLC through its ownership of 321,429 Class B common units.

(v) Securityholders Agreement: Holdings LLC, Pro-Fac and Vestar, together with
others, including officers of Birds Eye Foods (the "Management Investors"),
entered into a securityholders agreement dated August 19, 2002 (and as amended
from time to time, the "Securityholders Agreement") containing terms and
conditions relating to the transfer of membership interests in and the
management of Holdings LLC. Among other things, the Securityholders Agreement
includes a voting agreement pursuant to which the holders of common units agree
to vote their common units to elect or cause to be elected to the respective
management committees or boards of directors of Holdings LLC, Holdings, Inc. and
Birds Eye Foods: (i) those individuals designated by Vestar to serve as
members/directors, which shall represent the majority of such individuals to
serve in such capacities, and by Pro-Fac, which shall designate two
members/directors, and (ii) the chief executive officer of Birds Eye Foods who
shall serve as a member/director.

The voting agreement further provides that the holders of common units shall
vote their common units as directed by Vestar with respect to the approval of
any amendment(s) to the Limited Liability Company Agreement, the merger, unit
exchange, combination or consolidation of Holdings LLC, the sale, lease or
exchange of all or substantially all of the property and assets of Holdings LLC
and its subsidiaries, including Birds Eye Foods, and the reorganization,
recapitalization, liquidation, dissolution or winding-up of Holdings LLC,
provided such action is not inconsistent with the Limited Liability Company
Agreement or the Securityholders Agreement, and further provided such action
shall not have a material adverse effect on a unit holder that would be borne
disproportionately by such unit holder.

                                       9



<PAGE>



The Securityholders Agreement also provides:

     o    Pro-Fac and the Management Investors with "tag-along" rights in
          connection with certain transfers of Holdings LLC units by Vestar;

     o    Vestar with "take-along" rights to require Pro-Fac and the Management
          Investors to consent to a proposed sale of Holdings LLC; and

     o    Pro-Fac and Vestar with demand registration rights in securities of a
          subsidiary of Holdings LLC, including Birds Eye Foods, which are
          acquired by them through a distribution by Holdings LLC of such
          securities in exchange for their respective units in Holdings LLC,
          such distributed securities being "Registrable Securities", and other
          unit holders, including the Management Investors with incidental
          registration rights in the Registrable Securities owned by such unit
          holders.

The Securityholders Agreement provides Pro-Fac and the Management Investors
certain pre-emptive rights with respect to new securities of Holdings LLC or any
of its subsidiaries proposed to be issued to Vestar or any affiliate of Vestar.
Further, Vestar has the right to amend or modify the Securityholders Agreement
without the consent of Pro-Fac, the Management Investors or any other unit
holder if the amendment cannot reasonably be expected to have a material adverse
effect on a unit holder that would be borne disproportionately by such unit
holder or the amendment does not adversely affect any unit holder or Holdings
LLC in any material respect and it is in connection with a change that cures any
ambiguity or corrects or supplements a provision of the Securityholders
Agreement.

(vi) Transitional Services Agreement. Pro-Fac and Birds Eye Foods entered into a
transitional services agreement (the "Transitional Services Agreement") dated as
of the Closing Date, pursuant to which Birds Eye Foods provided Pro-Fac certain
administrative and other services for a period of 24 months from the Closing
Date. Pursuant to its terms, the Transitional Services Agreement terminated on
August 19, 2004. During the term of the Transitional Services Agreement, Mr.
Wright, who served as the General Manager and Secretary of Pro-Fac, was employed
by Birds Eye Foods, serving as executive vice president - investor relations of
Birds Eye Foods. As an employee of Birds Eye Foods, Mr. Wright's salary was paid
by Birds Eye Foods. Effective August 19, 2004, Mr. Wright and two other
individuals previously employed by Birds Eye Foods became employees of Pro-Fac
and ceased to be employed by Birds Eye Foods.

The foregoing description of agreements is only a summary and reference is made
to those agreements, copies of which are filed as exhibits to this Report or,
although included in the Exhibit Index to this Report have been previously filed
by Pro-Fac with the SEC. Each statement is qualified in its entirety by such
reference.

Pro-Fac accounts for its investment in Holdings LLC under the equity method of
accounting.

                  Financial Information About Industry Segments

Pro-Fac conducts its business in only one business segment, the marketing of its
members' crops, including raw fruits and vegetables. See Statements of
Operations, Allocation of Net Income/(Loss), and Comprehensive Income/(Loss) in
Part II, Item 8 of this Report.

                        NARRATIVE DESCRIPTION OF BUSINESS

Pro-Fac is an agricultural cooperative that markets and sells its members' crops
to food processors.

                               Pro-Fac's Business

Pro-Fac's principal products are discussed above in "General Development of
Business".

                           Packaging and Distribution

The distribution activities of Pro-Fac are limited to the delivery of raw fruits
and vegetables to its customers.

                              Raw Material Sources

Pro-Fac's primary source of crops for delivery to Birds Eye Foods and to other
Pro-Fac customers is through Pro-Fac members.

                                       10



<PAGE>



                             Seasonality of Business

Pro-Fac's primary sources of income are derived from payments received under the
terms of the Termination Agreement with Birds Eye Foods and income it recognizes
from its investment in Holdings LLC, using the equity method of accounting. As
previously described above under the heading "Description of Business -
Termination Agreement", termination payments are not received ratably during the
year, but are paid in quarterly installments as follows: $4.0 million on each
July 1, and $2.0 million each October 1, January 1 and April 1. Any recognition
of income by the Cooperative from its investment in Holdings LLC is dependent on
the financial condition and results of operations of Holdings LLC and,
indirectly, on the results of operations of Birds Eye Foods, Holdings LLC's
indirect, wholly-owed subsidiary.

Under the terms of the Amended and Restated Marketing Facilitation Agreement,
Birds Eye Foods pays Pro-Fac CMV for its members' crops sold to Birds Eye Foods
in installments corresponding to the payment by Pro-Fac to its members of CMV
for the crops delivered. The timing of cash receipts from Pro-Fac's customers,
other than Birds Eye Foods, does not always coincide with the related payment to
growers and may require the Cooperative to use its working capital or short-term
borrowings until payments are received from these customers.

                              Significant Customers

The CMV of crops delivered by Pro-Fac was approximately $65.2 million, $65.1
million and $66.0 million for the fiscal years ended June 24, 2006, June 25,
2005 and June 26, 2004, respectively. For the fiscal years ended June 24, 2006,
June 25, 2005 and June 26, 2004, approximately 77 percent, 72 percent and 75
percent, respectively, of the crops purchased by Pro-Fac from its members were
sold to Birds Eye Foods pursuant to the Amended and Restated Marketing and
Facilitation Agreement. On July 25, 2006, Birds Eye Foods announced its
intention to exit from the vast majority of its non-branded frozen business. As
part of the strategy, the New York processing facilities of Birds Eye Foods
located in Oakfield and Bergen, which are supplied by Pro-Fac member-growers,
will be sold or, if not sold after the particular facility's current production
season, closed between October 2006 and June 2007. For the year ended June 24,
2006, Pro-Fac supplied raw product with a total CMV of approximately $22.0
million to these processing facilities, representing approximately 34 percent of
total raw product supplied to all Pro-Fac customers and approximately 44 percent
of the CMV of raw product supplied to Birds Eye Foods.

                             Competitive Conditions

Pro-Fac's largest customer is Birds Eye Foods to which it supplies raw product
under the Amended and Restated Marketing and Facilitation Agreement. The
Cooperative competes with other cooperatives and individual growers for other
customers with respect to the marketing and sale of its members' crops.

                                    Employees

At June 24, 2006, Pro-Fac had three full-time employees.

                      Practices Concerning Working Capital

Pro-Fac's principal working capital requirement is to fund payments to its
member growers for crops delivered to Birds Eye Foods and other customers of
Pro-Fac. Payments to growers for crops delivered to Birds Eye Foods are funded
using payments received from Birds Eye Foods. These receipts and payments are
generally simultaneous. Receipts from other customers do not always coincide
with related payments to growers and may require the Cooperative to use its
working capital or short-term borrowings until payments are received from these
customers.

In connection with the Transaction, Pro-Fac and Birds Eye Foods entered into the
Credit Agreement pursuant to which Birds Eye Foods agreed to make available to
Pro-Fac loans in an aggregate principal amount of up to $5.0 million. Pro-Fac is
permitted to draw down up to $1.0 million per year under the $5.0 million Credit
Agreement, unless Birds Eye Foods is prohibited from making such advances under
the terms of certain third-party indebtedness of Birds Eye Foods. At June 24,
2006, no amount was outstanding under the Credit Facility. Subsequent to June
24, 2006, Pro-Fac borrowed $1.0 million under the terms of the Credit Agreement.
Due to the passage of time, Pro-Fac may borrow only an additional $1.0 million
prior to August 19, 2007. For additional information about the Credit Agreement
see the discussions under the heading "Liquidity and Capital Resources" in Part
II, Item 7 of this Report and "NOTE 3. Long-Term Debt" under "Notes to Financial
Statements" in Part II, Item 8 of this Report.

The Cooperative may borrow up to $2.0 million under the terms of a line of
credit (the "M&T Line of Credit") with Manufacturers and Traders Trust Company
("M&T Bank"). As of June 24, 2006, no amount was outstanding under the M&T Line
of Credit. For additional information about the M&T Line of Credit see the
discussions under the heading "Liquidity and Capital Resources" in Part II, Item
7 of this Report and "NOTE 3. Long-Term Debt" under "Notes to Financial
Statements" in Part II, Item 8 of this Report.

                                       11



<PAGE>



                                  Environmental

As part of the Transaction, Pro-Fac agreed to indemnify Birds Eye Foods for
certain environmental liabilities exceeding $200,000. This obligation, however,
is only triggered once the aggregate of all liabilities subject to
indemnification under the Unit Purchase Agreement (including those unrelated to
environmental matters) exceeds $10 million.


ITEM 1A. RISK FACTORS

Risks that could affect Pro-Fac's business are outlined above under "Cautionary
Statement on Forward-Looking Statements and Risk Factors, such risks being
incorporated by reference into and in response to this Item 1A. Any of the risks
in this Report or the Cooperative's other filings with the Securities and
Exchange Commission could materially adversely affect the Cooperative's
business, financial condition and results of operations. Additional risks and
uncertainties not presently known to Pro-Fac or that are currently believed to
be immaterial also may adversely affect Pro-Fac's business, financial condition
and results of operations in the future.


ITEM 1B. UNRESOLVED STAFF COMMENTS

None


ITEM 2. PROPERTIES

At June 24, 2006, Pro-Fac leases its principal offices which are located at 590
Willow Brook Office Park, Fairport, New York and consist of 1,195 square feet of
office space through June 2007 at an annual rate of $18,288 ($1,524 per month).
Pro-Fac has the option to renew the lease for a one year period at a rent to be
negotiated.


ITEM 3. LEGAL PROCEEDINGS

The Cooperative is party to various legal proceedings from time to time in the
normal course of its business. In the opinion of management, any liability that
might be incurred upon the resolution of these proceedings will not, in the
aggregate, have a material adverse effect on the Cooperative's business,
financial condition or results of operations. Further, no such proceedings are
known to be contemplated by any governmental authorities. The Cooperative
maintains general liability insurance coverage in amounts deemed to be adequate
by the Board of Directors.


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

No matters were submitted to a vote of security holders during the fourth
quarter of fiscal 2006.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
        ISSUER PURCHASES OF EQUITY SECURITIES

There is no public trading market for the Cooperative's common stock. Only
member-growers of the Cooperative can own shares of the Cooperative's common
stock. As of June 24, 2006, there were 490 members of Pro-Fac holding shares of
Pro-Fac common stock. At its January 2003 Board meeting, in an action aimed at
improving the Cooperative's short-term liquidity, the Board of Directors of
Pro-Fac determined to suspend the payment of annual dividends on the
Cooperative's common stock for an indefinite period of time. Further, the New
York Cooperative Law restricts the amount of annual dividends that Pro-Fac may
pay on its shares of common stock to 12 percent per annum.

                                       12



<PAGE>



During fiscal 2006, the Cooperative issued shares of its Class A cumulative
preferred stock in exchange for shares of its non-cumulative preferred stock, on
a share-for-share basis. Such exchanges are exempt from registration under
section 3(a)(9) of the Securities Act of 1933 because the transaction involved
an exchange with existing security holders in which no commission or other
remuneration was paid or given for soliciting the exchange. The dates and
amounts of the exchanges are set forth below:

<TABLE>
<CAPTION>
                              Number of Shares
      Date                    (share-for-share)        Value of Shares (1)
      ----                    -----------------        -------------------
<S>                                <C>                      <C>
January 9, 2006                    1,463                    $35,575
April 7, 2006                        187                      4,675
                                   -----                    -------
      Total                        1,650                    $40,250
                                   =====                    =======
</TABLE>

[1] Based on liquidation preference of $25 per share

Additional information concerning dividends and related stockholder matters may
be found in the following sections of this Report: "Cautionary Statements on
Forward-Looking Statements and Risk Factors', "Selected Financial Data" in Part
II, Item 6 of this Report, and "Liquidity and Capital Resources" in Part II,
Item 7 of this Report, "Statements of Cash Flows", "Statements of Changes in
Shareholders' and Members Capitalization and Redeemable Stock", in Part II, Item
8 of this Report and in "NOTE 5. Common Stock and Capitalization" under "Notes
to Financial Statements" in Part II, Item 8 of this Report.

                                       13



<PAGE>


ITEM 6.   SELECTED FINANCIAL DATA

The following table should be read in conjunction with Pro-Fac's financial
statements, including notes thereto, included in Part II, Item 8 of this Report,
and the section "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included in Part II, Item 7 of this Report.

Pro-Fac's results of operations and financial condition for fiscal 2006, 2005,
2004 and 2003 are not comparable with those of fiscal 2002. Subsequent to August
18, 2002, Pro-Fac no longer reports its financial information on a consolidated
basis with Birds Eye Foods. Fiscal 2006, 2005 and 2004 represent complete fiscal
years without consolidation and fiscal 2003 reflects a period of approximately
forty-five weeks (August 19, 2002 through June 28, 2003) on an unconsolidated
basis with Birds Eye Foods. The financial data below for fiscal 2002 reflect
Pro-Fac's operations on a consolidated basis with Birds Eye Foods.

(Dollars in Thousands, Except Capital Stock Data)

<TABLE>
<CAPTION>
                                                                                            Fiscal Year Ended June
                                                                      -----------------------------------------------------------
                                                                         2006        2005        2004        2003         2002
                                                                         ----        ----        ----        ----         ----
<S>                                                                   <C>         <C>         <C>         <C>         <C>
Consolidated Statement of Operations:
------------------------------------
Net sales (f)                                                         $      36   $       0   $       0   $ 103,726   $1,010,540
Cost of sales                                                               (37)          0           0     (80,644)    (795,297)
                                                                      ---------   ---------   ---------   ---------    ---------
Gross profit/(loss)                                                          (1)          0           0      23,082      215,243
Equity income/(loss) from Holdings LLC                                   (7,186)     (3,393)      3,872       2,134            0
Gain from Transaction with Birds Eye Foods, Inc. and related
  agreements                                                              5,962       5,950       6,060      10,361            0
Margin on delivered product                                                 410         153           0           0            0
Commercial market value adjustment                                            0           0         660         568            0
Selling, administrative, and general expense (post Transaction)          (1,057)     (1,086)     (1,139)     (1,433)           0
Selling, administrative, and general expense (pre Transaction)                0           0           0     (15,468)    (117,450)
Legal matters and settlement expenses                                      (100)       (144)       (273)     (3,720)           0
Other income                                                                 35         168           0           0            0
Income from joint venture                                                     0           0           0         277        2,457
Gain from pension curtailment                                                 0           0           0           0        2,472
Restructuring                                                                 0           0           0           0       (2,622)
Goodwill impairment charge                                                    0           0           0           0     (179,025)
                                                                      ---------   ---------   ---------   ---------    ----------
Operating income/(loss)                                                  (1,937)      1,648       9,180      15,801      (78,925)
Interest income                                                             109          53          23          10            0
Interest expense                                                            (26)        (62)        (99)     (7,762)     (66,420)
                                                                      ---------   ---------   ---------   ---------    ---------
Pretax income/(loss) before extraordinary item, dividends,
  and allocation of net income/(loss)                                    (1,854)      1,639       9,104       8,049     (145,345)
Tax (provision)/benefit                                                    (330)          0           0         (59)      28,561
                                                                      ---------   ---------   ---------   ----------   ---------
Net surplus/(deficit)                                                 $  (2,184)  $   1,639   $   9,104   $   7,990    $(116,784)
                                                                      =========   =========   =========   =========    =========
Allocation of net income/(loss):
-------------------------------
   Net income/(loss)                                                  $  (2,184)  $   1,639   $   9,104   $   7,990    $(116,784)
   Dividends on common and preferred stock (a)                           (8,400)     (8,292)     (8,134)     (8,368)      (8,370)
                                                                      ---------   ---------   ---------   ----------   ---------
   Net surplus/(deficit)                                                (10,584)     (6,653)        970        (378)    (125,154)
   Allocation (to)/from earned surplus/(accumulated deficit)             10,584       7,179        (970)        378      133,622
                                                                      ---------   ---------   ---------   ---------    ---------
   Net income/(loss) available to members                             $       0   $     526   $       0   $       0    $   8,468
                                                                      =========   =========   =========   =========    =========
Allocation of net income/(loss) available to Class A members:
------------------------------------------------------------
   Payable to Class A members currently (20% of qualified net
   income/(loss) available
      to Class A members in fiscal 2005 and 25% in fiscal 2002)       $       0   $     105   $       0   $       0    $   2,117

Allocated to Class A members but retained by the Cooperative:
------------------------------------------------------------
   Qualified retains                                                          0         421           0           0        6,351
                                                                      ---------   ---------   ---------   ---------    ---------
   Net income/(loss) available to Class A members                     $       0   $     526   $       0   $       0    $   8,468
                                                                      =========   =========   =========   =========    =========
   CMV related to Class A members                                     $  65,220   $  65,139   $  66,029   $  56,784    $  71,733
                                                                      =========   =========   =========   =========    =========
   CMV related to Class B members                                           N/A         N/A         N/A         N/A          N/A
   Total income/(loss) allocated to Class A members as a percent
     of CMV(b)                                                             0.00%       0.80%       0.00%       0.00%        11.8%
                                                                      ==========  =========   =========   =========    =========
   Total income/(loss) allocated to Class B members at a percent
     of CMV(c)                                                              N/A         N/A         N/A         N/A          N/A
                                                                      =========   =========   =========   =========    =========
Balance Sheet Data:
------------------
   Working (deficit) capital                                          $    (972)  $  (1,499)  $    (852)  $    (612)   $ 272,042
   Total assets                                                       $  14,005   $  23,899   $  34,320   $  31,463    $ 836,175
   Class A common stock                                               $   8,848   $   8,855   $   9,169   $   9,636    $  10,193
   Class B cumulative redeemable Preferred Stock                      $       0   $       0   $     108   $     122    $     206
   Shareholders' and members' capitalization/(deficit), redeemable
     and common stock                                                 $     914   $  11,229   $  19,645   $  19,408    $  24,505
   Long-term debt and senior subordinated notes (excludes current
     portion)                                                         $       0   $       0   $   1,000   $   1,200    $ 623,057
   Capital Stock Data:
     Cash dividends paid per share:
       Class A Common                                                 $       0   $       0   $    0.00   $     .25    $     .25
       Non-Cumulative Preferred stock                                 $    1.50   $    1.50   $    1.50   $    1.50    $    1.50
       Class A Cumulative Preferred stock                             $    1.72   $    1.72   $    1.72   $    1.72    $    1.72
       Class B Cumulative Preferred stock (d)                         $       0   $    1.00   $    1.00   $    1.00    $    1.00
     Average Class A Common stock investment per Class A member       $  18,057   $  17,890   $  17,565   $  17,584    $  18,072
     Number of Class A Common stock members                                 490         495         522         548          564
     Number of Class B Common stock members(e)                                0           0           0           0            0
</TABLE>



                                       14





<PAGE>


ITEM 6.   SELECTED FINANCIAL DATA (Continued)

(a)  On March 28, 2002, Pro-Fac amended and restated its certificate of
     incorporation to eliminate its Class B common stock, and to rename its
     Class A common stock "common stock" and its Class A members "common
     members".
(b)  Payment to Class A members for CMV was 100 percent of deliveries in fiscal
     2001.
(c)  Payment to Class B members for CMV was 63.50 percent of deliveries in
     fiscal 2001.
(d)  On April 1, 2005, Pro-Fac repurchased all Class B Cumulative preferred
     stock.
(e)  On July 19, 2001, Pro-Fac repurchased all Class B common stock.
(f)  After the Transaction, under the provisions of Emerging Issues Task Force
     Issue No. 99-19, "Reporting Revenue Gross Versus Net as an Agent," the
     Cooperative records activity among Birds Eye Foods and other customers,
     itself and its members on a net basis. For transactions in which the
     Cooperative acts as a principal rather than an agent, sales and cost of
     sales are reported.


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

The following section should be read in conjunction with Part I, Item 1:
Business; Part II, Item 6: Selected Financial Data; and Part II, Item 8:
Financial Statements and Supplementary Data of this Report.

The purpose of this discussion is to outline the significant reasons for changes
in the Statement of Operations from fiscal 2004 through fiscal 2006.

                CHANGES FROM FISCAL YEAR 2005 TO FISCAL YEAR 2006

Equity in Income from Birds Eye Holdings LLC: For fiscal 2006 and 2005, the
Cooperative recognized loss, under the equity method, of approximately $7.2
million and $3.4 million, respectively, from Holdings LLC. The change results
primarily from a decrease in the net income of Holdings LLC and an increase in
the preferred return on Holdings LLC preferred units due to compounding of
accrued payment-in-kind preferred dividends. Holdings LLC's operations are
substantially comprised of the operations of Birds Eye Foods, its indirect,
wholly-owned subsidiary. Birds Eye Foods is a voluntary filer with the
Securities and Exchange Commission. Birds Eye Foods' periodic report equivalents
are available at the SEC's website: www.sec.gov.

During fiscal year 2006, Pro-Fac's recorded investment in Holdings LLC decreased
by $10.9 million due to recording Pro-Fac's equity in the loss for common
interests of Holdings LLC ($7.2 million), elimination of the portion of
termination payments related to Pro-Fac's continuing indirect ownership of Birds
Eye Foods ($4.0 million) and recording Pro-Fac's share of other comprehensive
loss items of Holdings LLC ($0.3 million).

During fiscal year 2005, Pro-Fac's recorded investment in Holdings LLC decreased
by $8.7 million due to recording Pro-Fac's equity in the loss for common
interests of Holdings LLC ($3.4 million), elimination of the portion of
termination payments related to Pro-Fac's continuing indirect ownership of Birds
Eye Foods ($4.0 million) and recording Pro-Fac's share of other comprehensive
loss items of Holdings LLC ($1.3 million).

The application of the equity method of accounting is further described in "NOTE
1. Description of Business and Summary of Significant Accounting Policies" under
"Notes to Financial Statements," in Part II, Item 8 of this Report.

Gain from Transaction with Birds Eye Foods, Inc. and Related Agreements: Pro-Fac
and Birds Eye Foods entered into the Termination Agreement, pursuant to which,
among other things, the Marketing and Facilitation Agreement was terminated, and
in consideration of such termination, Pro-Fac is entitled to the payment of a
termination fee of $10.0 million per year for five years, provided that certain
ongoing conditions are met, including maintaining grower membership levels
sufficient to generate certain minimum crop supply. The $10.0 million payment is
payable in quarterly installments to the Cooperative as follows: $4.0 million on
each July 1, and $2.0 million on each October 1, January 1, and April 1.
Pursuant to the Termination Agreement, in fiscal 2006 and fiscal 2005, the
Cooperative received all payments as scheduled.

In part, payments under the Termination Agreement are considered additional
consideration related to the Transaction. Accordingly, the portion of the
payments received under the Termination Agreement representing Pro-Fac's
continuing ownership percentage is recorded as an adjustment to Pro-Fac's
investment in Holdings LLC. The remaining portion of the payments is recognized
as additional gain on the Transaction with Birds Eye Foods in the period
received. Accordingly, in each of fiscal 2006 and 2005, Pro-Fac recognized
approximately $6.0 million as additional gain from the receipt of termination
payments.

Margin on delivered product: The Cooperative negotiates certain sales
transactions on behalf of its members which result in margin being earned by the
Cooperative. The Cooperative earned $0.4 million and $0.2 million in margin
during fiscal 2006 and 2005, respectively.



                                       15





<PAGE>


Selling, administrative, and general expense: Selling, administrative, and
general expenses totaled $1.1 million for each of fiscal 2006 and 2005.

Income taxes: The Cooperative qualifies for tax exempt status as a farmers'
cooperative under Section 521 of the Internal Revenue Code. Exempt cooperatives
are permitted to reduce or eliminate taxable income through the use of special
deductions such as dividends paid on its common and preferred stock and
distributions of patronage income.

The Cooperative uses these special deductions and distributions of patronage
income to reduce the Cooperative's taxable income for periods after August 19,
2002. At its March 2006 meeting, the Pro-Fac Board of Directors determined that
there would be no payment or allocation of patronage proceeds for the fiscal
year ended June 24, 2006. As a result, the Cooperative recorded a tax provision
of $0.3 million in fiscal 2006.


                CHANGES FROM FISCAL YEAR 2004 TO FISCAL YEAR 2005

Equity in Income from Birds Eye Holdings LLC: For fiscal 2005 and 2004, the
Cooperative recognized income/(loss), under the equity method, of approximately
($3.4) and $3.9 million, respectively, from Holdings LLC. The change results
primarily from a decrease in the net income of Holdings LLC and an increase in
the preferred return on Holdings LLC preferred units due to compounding of
accrued payment-in-kind preferred dividends.

During fiscal year 2005, Pro-Fac's recorded investment in Holdings LLC decreased
by $8.7 million due to recording Pro-Fac's equity in the loss for common
interests of Holdings LLC ($3.4 million), elimination of the portion of
termination payments related to Pro-Fac's continuing indirect ownership of Birds
Eye Foods ($4.0 million) and recording Pro-Fac's share of other comprehensive
loss items of Holdings LLC ($1.3 million).

The application of the equity method of accounting is further described in "NOTE
1. Description of Business and Summary of Significant Accounting Policies" under
"Notes to Financial Statements," in Part II, Item 8 of this Report.

Gain from Transaction with Birds Eye Foods, Inc. and Related Agreements: Pro-Fac
and Birds Eye Foods entered into the Termination Agreement, pursuant to which,
among other things, the Marketing and Facilitation Agreement was terminated, and
in consideration of such termination, Pro-Fac is entitled to the payment of a
termination fee of $10.0 million per year for five years, provided that certain
ongoing conditions are met, including maintaining grower membership levels
sufficient to generate certain minimum crop supply. The $10.0 million payment is
payable in quarterly installments to the Cooperative as follows: $4.0 million on
each July 1, and $2.0 million on each October 1, January 1, and April 1.
Pursuant to the Termination Agreement, in fiscal year 2005 and fiscal year 2004,
the Cooperative received all payments as scheduled.

In part, payments under the Termination Agreement are considered additional
consideration related to the Transaction. Accordingly, the portion of the
payments received under the Termination Agreement representing Pro-Fac's
continuing ownership percentage is recorded as an adjustment to Pro-Fac's
investment in Holdings LLC. The remaining portion of the payments is recognized
as additional gain on the Transaction with Birds Eye Foods in the period
received. Accordingly, in fiscal 2005 and 2004, Pro-Fac recognized approximately
$6.0 million and $6.1 million, respectively, as additional gain from the receipt
of termination payments.

Margin on delivered product: The Cooperative negotiates certain sales
transactions on behalf of its members which result in margin being earned by the
Cooperative. The Cooperative earned $0.2 million in margin during fiscal 2005.
No amount was earned in fiscal 2004.

Commercial market value adjustment ("CMV"): At its January 2003 Board meeting,
in an action aimed at improving the Cooperative's short-term liquidity, the
Board of Directors of Pro-Fac determined to deduct 1 percent of the CMV
otherwise payable to Pro-Fac's member-growers for the 2003 growing season. The 1
percent CMV deduction related to the 2003 growing season was withheld from the
July 2004 CMV payment. The Board of Directors of Pro-Fac resolved to review this
recommendation annually. The 1 percent deduction for the 2003 growing season
resulted in approximately $0.7 million in income for fiscal 2004. There was no
CMV deduction in fiscal 2005.

Selling, administrative, and general expense: Selling, administrative, and
general expenses totaled $1.1 million for each of fiscal 2005 and 2004.



                                       16





<PAGE>


                          CRITICAL ACCOUNTING POLICIES

"NOTE 1. Description of Business and Summary of Accounting Policies" under
"Notes to Financial Statements" included in Part II, Item 8 of this Report
discusses the significant accounting policies of Pro-Fac. Pro-Fac's discussion
and analysis of its financial condition and results of operations are based upon
its financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
financial statements requires Pro-Fac's management to make estimates, judgments
and assumptions that affect the reported amount of assets, liabilities, revenues
and expenses. On an ongoing basis, Pro-Fac evaluates its estimates.

Pro-Fac's estimates affecting the financial statements relate primarily to
contingencies. Certain accounting policies deemed critical to Pro-Fac's results
of operations or financial position are discussed below.

The Cooperative accounts for its ownership interest in Holdings LLC under the
equity method of accounting. Accordingly, the portion of payments received as a
result of the Transaction related to Pro-Fac's continuing ownership percentage
is recorded as an adjustment to Pro-Fac's investment in Holdings LLC. The
remaining portion is recorded as a gain. Pro-Fac also records its share of the
earnings of Holdings LLC under the equity method of accounting. Pro-Fac's share
of the earnings is after the preferred return on Holdings LLC's preferred units
and accretion recorded by Holdings LLC.

Pro-Fac markets and sells its members' crops to food processors, including Birds
Eye Foods. Under the provisions of Emerging Issues Task Force Issue No. 99-19,
"Reporting Revenue Gross Versus Net as an Agent", the Cooperative records
activity between Birds Eye Foods and other customers, itself and its members on
a net basis. For transactions in which Pro-Fac acts a principal rather than an
agent, sales and cost of sales are reported. This type of transaction is not
significant.


                         LIQUIDITY AND CAPITAL RESOURCES

As discussed under "NOTE 1. Description of Business and Summary of Significant
Accounting Policies" under "Notes to Financial Statements" included in Part II,
Item 8 of this Report, Pro-Fac's balance sheet reflects Pro-Fac's ownership
interest in Holdings LLC, which is accounted for under the equity method.

Pro-Fac has four sources or potential sources of available cash to fund its
operating expenses and the payment of its quarterly dividends: (i) cash from its
sale of raw products to its customers, (ii) payments received under the
Termination Agreement with Birds Eye Foods, (iii) cash distributions related to
its investment in Birds Eye Holdings LLC, and (iv) borrowings.

Net cash available to Pro-Fac, after payment of CMV to Pro-Fac's member-growers,
has been used to pay Pro-Fac's operating expenses as well as its quarterly
dividends on its preferred stock and to fund repurchases of its common stock.
Dividends on Pro-Fac's preferred stock were $8.4 million and $8.3 million in
fiscal 2006 and 2005, respectively.

The final installment payment of $2.0 million to Pro-Fac under the Termination
Agreement is scheduled to be received on April 1, 2007. Pro-Fac's primary source
of cash through and including August 19, 2007 is the $10.0 million payable
annually to Pro-Fac by Birds Eye Foods pursuant to the Termination Agreement.
Pro-Fac's other principal source of cash is the CMV payments made to it by Birds
Eye Foods and other customers for crops sold pursuant to the Amended and
Restated Marketing and Facilitation Agreement and other supply agreements.
Although CMV payments are considered a potential source of cash to Pro-Fac, with
the exception of the Board's decision to deduct 1 percent of CMV otherwise
payable to its grower-members for crops delivered in fiscal years 2003 and 2004,
Pro-Fac has typically paid 100 percent of CMV to its member-growers for crops
delivered and did so in fiscal 2005. Since such CMV payments are approximately
equal to the cash Pro-Fac receives from its customers for its raw products, CMV
payments are not a significant source of available cash from which Pro-Fac can
pay operating expenses and quarterly dividends.

As stated above, Pro-Fac's current primary source of cash is its receipts under
the Termination Agreement. The $10.0 million is paid annually to Pro-Fac in
quarterly installments as follows: $4.0 million on July 1 and $2.0 million each
on October 1, January 1, and April 1. The final installment under the
Termination Agreement is scheduled to be paid on April 1, 2007. Subsequent to
August 19, 2007 and prior to any sale (or dissolution) of Holdings LLC, the
Limited Liability Company Agreement of Holdings LLC provides that, subject to
the restrictions contained in any financing arrangements of Holdings LLC or its
subsidiaries (including Birds Eye Foods), Holdings LLC will use commercially
reasonable efforts to cause Birds Eye Foods to distribute annually to Holdings
LLC up to $24.8 million of cash flow from operations of Birds Eye Foods, which
Holdings LLC will then distribute to the holders of its common units, including
Pro-Fac. Many factors could affect whether such distributions are made in the
future and the current financing arrangements of Birds Eye Foods with its senior
lenders include a covenant which precludes such distributions from Birds Eye
Foods to Holdings, LLC without the permission of the senior lenders.



                                       17





<PAGE>


Holdings LLC has advised Pro-Fac that it will not speculate as to whether
distributions will be made under the Limited Liability Company Agreement.
Because Pro-Fac has no control over the determination of whether such
distributions will be made, Pro-Fac's Board of Directors has developed a
business plan that assumes distributions will not be made under the Limited
Liability Company Agreement to replace the $10.0 million annual source of cash
under the Termination Agreement ending on April 1, 2007.

On May 5, 2006, the Board determined, subject to all of the facts and
circumstances at the relevant times, that it expected to declare a full
quarterly dividend of $.43 per share of Class A cumulative preferred stock for
payment in July 2006. This dividend was declared in June 2006 and paid in July
2006. Thereafter, the Board expects to declare dividends of $.21 per share of
Class A cumulative stock for quarterly payments to be made in October 2006,
January 2007, and April 2007. Beginning with the quarter ending in June 2007,
the Board expects to suspend in full the declaration and payment of dividends on
its Class A cumulative preferred stock. To the extent that dividends on the
Class A cumulative preferred stock are not paid or are not paid in full, the
unpaid amounts cumulate and must be paid before any dividends may be paid on any
other securities of Pro-Fac.

In June 2006, the Board declared the annual dividend of $1.50 per share on the
Cooperative's non-cumulative preferred stock (a total of approximately $40,000)
which was paid in July 2006, and in accordance with the Cooperative's
Certificate of Incorporation expects to set aside the proportionate share of the
annual non-cumulative preferred stock dividend (expected to be approximately
$15,000) for payment in July 2007, if, as expected, reduced quarterly dividend
declarations are made in fiscal 2007 on the Class A cumulative preferred stock.
Beginning with the quarter ending in June 2007, the Board expects to suspend in
full the declaration and payment of dividends on its non-cumulative preferred
stock.

Although Pro-Fac is attempting to increase revenue through expanding its
customer base and the types of products and/or services it offers, the actual
amount of available cash that may be generated from Pro-Fac's expanded
operations depends upon how successful Pro-Fac is in this effort, including
controlling any associated costs. For fiscal 2006 and fiscal 2005, Pro-Fac
generated $0.3 million and $0.2 million, respectively, in margin from sales of
product to customers other than Birds Eye Foods. Any available cash generated
from expanded products and/or services offerings by Pro-Fac is currently
anticipated to be a secondary source of cash, and is not expected to provide a
significant amount of available cash to fund Pro-Fac's operating expenses or
dividend payments.

In addition to the cash payments to Pro-Fac pursuant to the Termination
Agreement, Pro-Fac has available up to $1.0 million per year, until August 19,
2007, under the Credit Agreement with Birds Eye Foods, and up to $2.0 million
under an annually renewable line of credit from M&T Bank, as discussed below.
The current agreement with M&T Bank expires on September 30, 2006. Subsequent to
June 24, 2006, Pro-Fac borrowed $1.0 million under the Credit Agreement.

The Cooperative may borrow up to $2.0 million under the M&T Line of Credit.
Principal amounts borrowed under the M&T Line of Credit bear interest at 75
basis points above the prime rate in effect on the day proceeds are disbursed,
as announced by M&T Bank as its prime rate of interest. Interest is payable
monthly. Amounts extended under the M&T Line of Credit are required to be repaid
in full during each year by July 15, with further borrowings prohibited for a
minimum of 60 consecutive days after such repayment. Pro-Fac's obligations under
the M&T Line of Credit are secured by a security interest granted to M&T in
substantially all of Pro-Fac's assets, excluding Pro-Fac's Class B common units
owned in Holdings LLC. The collateral does include any distributions made to
Pro-Fac by Holdings LLC in respect of Pro-Fac's Class B common units and cash
payments made by Birds Eye Foods to the Cooperative. At June 24, 2006 and June
25, 2005, there was no balance outstanding under the M&T Line of Credit.

Under the Transitional Services Agreement, Birds Eye Foods provided Pro-Fac
certain administrative and other services until August 19, 2004. Since the
termination of the Transition Services Agreement, Pro-Fac pays for the services
previously provided under the Transition Services Agreement, including salary,
administrative and other expenses.

Through June 24, 2006, net cash available to Pro-Fac, after payment of CMV to
Pro-Fac's member-growers, has been used to pay Pro-Fac's operating expenses as
well as to pay dividends on its capital stock and fund repurchases of its common
stock.

A discussion of "Statement of Cash Flows" for the year ended June 24, 2006
follows:

Net cash used in operating activities of $0.3 million for fiscal 2006 primarily
represents net cash operations and the timing of cash receipts from customers
other than Birds Eye Foods and related cash payments to member growers. In
fiscal 2006 Pro-Fac delivered crops having a CMV of approximately $15.1 million
to customers other than Birds Eye Foods.



                                       18





<PAGE>


Net cash provided by investing activities for fiscal 2006 was $10.0 million
related to the receipt by the Cooperative of $10.0 million from Birds Eye Foods
under the Termination Agreement.

Net cash used in financing activities includes dividends paid ($8.4 million) by
the Cooperative during fiscal 2006.

In January 2003, in an action aimed at improving the Cooperative's short-term
liquidity, the Board of Directors of Pro-Fac authorized the suspension of annual
dividends on the Cooperative's common stock for an indefinite period of time and
the deduction of one (1) percent of the CMV otherwise payable to Pro-Fac's
member-growers for crops supplied by Pro-Fac member-growers through the
Cooperative for the 2002 and 2003 growing seasons. The one (1) percent CMV
deduction was withheld from the July 2003 ($0.6 million) and the July 2004 ($0.7
million) CMV payments. There was no CMV deduction in fiscal 2006 or 2005. The
Board of Directors of Pro-Fac will consider, at least annually, whether similar
action should be taken with respect to CMV payable to Pro-Fac's member-growers
for subsequent growing seasons based on Pro-Fac's operations and anticipated
cash flow needs.

The Pro-Fac Board of Directors adopted a moratorium on Pro-Fac exercising its
right to repurchase shares of common stock from its member-growers, except for
approximately $9,000 of common stock repurchased in April 2006 under policies in
effect prior to the January 2006 change. In the future, Pro-Fac will not
repurchase shares of Pro-Fac common stock unless approved by the Board of
Directors on a case-by-case basis.

Pro-Fac believes that its sources of cash described above should be sufficient
to fund its operations and meet its cash requirements at least through June
2010. Pro-Fac's ability to fund these requirements will depend on Pro-Fac's
future operations, performance and cash flow and is subject to prevailing
economic conditions and financial, business and other factors, some of which are
beyond Pro-Fac's control. For a discussion of factors that could impact
Pro-Fac's future operations, performance, cash flow, including its decision to
reduce and ultimately suspend the payment of dividends, see "Cautionary
Statement on Forward-Looking Statements and Risk Factors" and "Risk Factors" in
Part I, Item 1A of this Report.

Pro-Fac guarantees certain obligations of Birds Eye Foods. Set forth below is a
schedule of the obligations guaranteed by Pro-Fac at June 24, 2006:

(Dollars in Millions)

Contractual Obligations Guaranteed                                Expiration
----------------------------------                                ----------

Senior Subordinated Notes - 11 7/8 Percent     $ 50.9 million     November 2008
Subordinated Promissory Note                   $ 39.7 million     November 2008


                                BUSINESS OUTLOOK

The following is a summary of Pro-Fac's business outlook for fiscal 2007 and
should be read in conjunction with the related current year discussions in the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" section of this Report.

Since 1960, Pro-Fac has operated as an agricultural cooperative, owned and
controlled by its members, to purchase, market, and sell crops grown by its
member-growers, for the mutual benefit of its members. The Cooperative's core
business focus has not changed in 46 years and its current strategy is to
continue its business of purchasing, marketing, and selling its member-grower
crops to its customers, including Birds Eye Foods. Consistent with this
strategy, Pro-Fac delivered crops grown by its member-growers having a
commercial market value of approximately $65.2 million in fiscal 2006,
approximately 77 percent of which was sold to Birds Eye Foods pursuant to the
Amended and Restated Marketing Facilitation Agreement. On July 25, 2006, Birds
Eye Foods announced its intention to exit from the vast majority of its
non-branded frozen business. As part of the strategy, the New York processing
facilities of Birds Eye Foods located in Oakfield and Bergen, which are supplied
by Pro-Fac member-growers, will be sold or, if not sold after the particular
facility's current production season, closed between October 2006 and June 2007.
For the year ended June 24, 2006, Pro-Fac supplied raw product with a total CMV
of approximately $22.0 million to these processing facilities, representing
approximately 34 percent of total raw product supplied to all Pro-Fac customers
and approximately 44 percent of the CMV of raw product supplied to Birds Eye
Foods.

One of the challenges Pro-Fac faces, which is discussed above under "Liquidity
and Capital Resources", is the Cooperative's source of available cash to fund
its operations and pay its dividends. Currently, Pro-Fac's primary source of
cash to fund its operations and pay dividends is the $10.0 million in payments
it receives annually under the Termination Agreement, the last installment of
$2.0 million being payable on April 1, 2007. Thereafter, Pro-Fac's primary
source of cash would be annual distributions, if any, that may be made by
Holdings LLC to Pro-Fac pursuant to the Limited Liability Company Agreement.



                                       19





<PAGE>


However, Holdings LLC has advised Pro-Fac that it will not speculate as to
whether distributions will be made under the Limited Liability Company
Agreement. Because Pro-Fac has no control over the determination of whether such
distributions will be made, Pro-Fac's Board of Directors has developed a
business plan that assumes distributions will not be made under the Limited
Liability Company Agreement to replace the $10.0 million annual source of cash
under the Termination Agreement ending on April 1, 2007.

On May 5, 2006, the Board determined, subject to all of the facts and
circumstances at the relevant times, that it expected to declare a full
quarterly dividend of $.43 per share of Class A cumulative preferred stock for
payment in July 2006. This dividend was declared in June 2006 and paid in July
2006. Thereafter, the Board expects to declare dividends of $.21 per share of
Class A cumulative stock for quarterly payments to be made in October 2006,
January 2007, and April 2007. Beginning with the quarter ending in June 2007,
the Board expects to suspend in full the declaration and payment of dividends on
its Class A cumulative preferred stock. To the extent that dividends on the
Class A cumulative preferred stock are not paid or are not paid in full, the
unpaid amounts cumulate and must be paid before any dividends may be paid on any
other securities of Pro-Fac.

Pro-Fac believes that its sources of cash should be sufficient to fund its
operations and meet its cash requirements at least through June 2010. During
fiscal 2007, Pro-Fac will continue to market and sell its member-grower crops to
Birds Eye Foods and its other customers and will explore and evaluate various
business opportunities and initiatives and potential relationships and business
alliances in an effort to expand its customer base and increase its revenues.

The foregoing information may contain "forward looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Forward looking
statements may include estimates, projections and statements of the
Cooperative's beliefs concerning future events, business plans, objectives,
expected operating results, and the assumptions upon which those statements are
based. Please refer to the "Cautionary Statement on Forward-Looking Statements
and Risk Factors" section of this Report for a detailed discussion regarding
words used to identify such statements and factors that could cause actual
results to differ materially from those expressed or implied by such statements.


                                  OTHER MATTERS

Guarantees and Indemnifications: Pro-Fac is a guarantor, under an Indenture
dated November 18, 1998, between Birds Eye Foods, the Guarantors named therein
and IBJ Schroder Bank & Trust Company, Inc., as trustee. The Indenture was
amended by a First Supplemental Indenture dated July 22, 2002, among Birds Eye
Foods, the Guarantors named therein and The Bank of New York (as successor
trustee to IBJ Schroder Bank & Trust Company), as trustee, and was further
amended by a Second Supplemental Indenture dated March 1, 2003. The Indenture
governs Birds Eye Foods' obligations for its 11 7/8 percent Senior Subordinated
Notes issued in fiscal 1999 in the original aggregate principal amount of $200.0
million. On November 24, 2003, Birds Eye Foods repaid $150.0 million of these
notes. The remaining principal amount is due November 1, 2008. Interest on the
Notes accrues at the rate of 11 7/8 percent per annum and is payable
semi-annually in arrears on May 1 and November 1. Pro-Fac guarantees Birds Eye
Foods' obligations under the 11 7/8 percent Senior Subordinated Notes, including
the payment in full when due of all principal and interest on the 11 7/8 percent
Senior Subordinated Notes at maturity or otherwise and, in the event of any
extension of time of payment or renewal of any of the 11 7/8 percent Senior
Subordinated Notes, that the Notes will be promptly paid in full when due
pursuant to the terms of any such extension or renewal. In the event of such
shortfall, Pro-Fac would be required to pay any interest payments due as well as
any unpaid principal balance due on the 11 7/8 percent Senior Subordinated
Notes. As of June 24, 2006, the outstanding loan amount, including accrued
interest, was $50.9 million.

As partial consideration for the acquisition in fiscal 1999 of Dean Foods
Vegetable Company, Birds Eye Foods issued to Dean Foods Vegetable Company a
Subordinated Promissory Note for $30.0 million due November 22, 2008. The
Subordinated Promissory Note is currently owned by GLK, LLC, a New York limited
liability company, whose members are Birds Eye Foods and GLK Holdings, Inc.,
which is a wholly owned subsidiary of Birds Eye Foods. Pro-Fac guarantees Birds
Eye Foods' obligations under that Note. Interest on the Subordinated Promissory
Note accrued quarterly in arrears, commencing December 31, 1998, at a rate per
annum of 5 percent until November 22, 2003, and at a rate of 10 percent
thereafter. Interest accrued through November 22, 2003 was paid in kind through
the issuance by Birds Eye Foods of additional subordinated promissory notes
identical to the Subordinated Promissory Note. Interest accruing after November
22, 2003 is payable in cash. Pro-Fac guarantees Birds Eye Foods' obligations
under the Subordinated Promissory Notes, including the payment in full when due
of all principal and interest on the Notes. In the event of such a shortfall,
Pro-Fac would be required to pay any interest payments due as well as any unpaid
principal balance due on the Notes. As of June 24, 2006, the outstanding loan
amount subject to the Cooperative's guarantee included principal of $30.0
million and interest of $9.7 million.



                                       20





<PAGE>


Historically, when Pro-Fac has sold assets, it may have retained certain
liabilities for known exposures and provided indemnification to the buyer(s)
with respect to future claims for certain unknown liabilities existing, or
arising from events occurring, prior to the sale date, including liabilities for
taxes, legal matters, environmental exposures, labor contingencies, product
liability, and other obligations. Pro-Fac may enter into similar arrangements in
the future. Agreements to provide indemnifications may vary in duration,
generally for two years for certain types of indemnities, to terms for tax
indemnifications that are generally aligned to the applicable statute of
limitations for the jurisdiction in which the tax is imposed, and to terms for
certain liabilities (i.e., warranties of title and environmental liabilities)
that typically do not expire. The maximum potential future payments that the
Cooperative could be required to make under agreements of indemnification are
(or may be) either contractually limited to a specified amount or unlimited. The
maximum potential future payments that the Cooperative could be required to make
under agreements of indemnification are not determinable at this time, as any
future payments would be dependent on the type and extent of the related claims,
and all relevant defenses, which are not estimable. Historically, costs incurred
to resolve claims related to agreements of indemnification have not been
material to the Cooperative's financial position, results of operations or cash
flows.

From time to time, in the ordinary course of its business, Pro-Fac has, or may,
enter into agreements with its customers, suppliers, service providers and
business partners which contain indemnification provisions. Generally, such
indemnification provisions require the Cooperative to indemnify and hold
harmless the indemnified party(ies) and to reimburse the indemnified party(ies)
for claims, actions, liabilities, losses and expenses in connection with any
personal injuries or property damage resulting from any Pro-Fac products sold or
services provided. Additionally, the Cooperative may from time to time agree to
indemnify and hold harmless its providers of services from claims, actions,
liabilities, losses and expenses relating to their services to Pro-Fac, except
to the extent finally determined to have resulted from the fault of the provider
of services relating to such services. The level of conduct constituting fault
of the service provider will vary from agreement to agreement and may include
conduct which is defined in terms of negligence, gross negligence, willful
misconduct, omissions or other culpable behavior. The terms of these
indemnification provisions are generally not limited. The maximum potential
future payments that the Cooperative could be required to make under these
indemnification provisions are unlimited and are not determinable at this time,
as any future payments would be dependent on the type and extent of the related
claims, and all relevant defenses to the claims, which are not estimable.
Historically, costs incurred to resolve claims related to these indemnification
provisions have not been material to the Cooperative's financial position,
results of operations or cash flows.

The Cooperative has by-laws, policies, and agreements under which it indemnifies
its directors and officers from liability for certain events or occurrences
while the directors or officers are, or were, serving at Pro-Fac's request in
such capacities. Pro-Fac indemnifies its officers and directors to the fullest
extent allowed by law. The maximum potential amount of future payments that the
Cooperative could be required to make under these indemnification provisions is
unlimited, but would be affected by all relevant defenses to the claims.

As part of the Transaction, Pro-Fac agreed to indemnify Birds Eye Foods for
certain environmental liabilities exceeding $200,000. This obligation, however,
is only triggered once the aggregate of all liabilities subject to
indemnification under the Unit Purchase Agreement (including those unrelated to
environmental matters) exceeds $10.0 million.

As of the date of this Report, Pro-Fac does not expect to be required to perform
under the guarantees and indemnifications described above.

Capital Expenditures: The Cooperative does not expect to have any material
capital expenditures for the foreseeable future.

Supplemental Information on Inflation: The changes in costs and prices within
the Cooperative's business due to inflation were not significantly different
from inflation in the United States economy as a whole. Levels of capital
investment, pricing and inventory investment were not materially affected by
changes caused by inflation.

Contractual Obligations

At June 24, 2006, Pro-Fac rents office space through June 2007 at an annual rate
of approximately $18,300. Pro-Fac has the option to renew the lease for a one
year period at a rent to be negotiated.


ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Pro-Fac is subject to interest rate fluctuations related to borrowings under the
M&T Line of Credit. Amounts borrowed bear interest at the prime rate plus 75
basis points. See "NOTE 3. Long-Term Debt" in the Notes to Financial Statements
included in Part II, Item 8 of this Report.



                                       21





<PAGE>


ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial Statements, Supplementary Data and Financial Statement Schedules
consist of the Financial Statements as indexed and presented below and the
Quarterly Financial Data (unaudited) included as Note 7 under "Notes to
Financial Statements" in Part II, Item 8 of this Report and the Financial
Statement Schedules included in Part III, Item 15 of this Report.


                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

    ITEM                                                                                                                  Page
<S>                                                                                                                        <C>
Pro-Fac Cooperative, Inc.
   Report of Independent Registered Public Accounting Firm...............................................................  23
   Financial Statements:
     Statements of Operations, Allocation of Net Income/(Loss) and Comprehensive Income/(Loss)
       for the years ended June 24, 2006, June 25, 2005 and June 26, 2004................................................  24
     Balance Sheets as of June 24, 2006 and June 25, 2005................................................................  25
     Statements of Cash Flows for the years ended June 24, 2006, June 25, 2005 and June 26, 2004.........................  26
     Statements of Changes in Shareholders' and Members' Capitalization/(Deficit) and Redeemable and Common Stock
       for the years ended June 24, 2006, June 25, 2005 and June 26, 2004................................................  27
     Notes to Financial Statements.......................................................................................  28
</TABLE>





                                       22





<PAGE>


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders of
Pro-Fac Cooperative, Inc.
Rochester, New York

We have audited the accompanying balance sheets of Pro-Fac Cooperative, Inc.
(the "Cooperative") as of June 24, 2006 and June 25, 2005, and the related
statements of operations, allocation of net income/(loss), and comprehensive
income/(loss), of cash flows, and of changes in shareholders' and members'
capitalization/(deficit), and redeemable and common stock for each of the three
years in the period ended June 24, 2006. Our audits also included the financial
statement schedule listed in the Index at Item 15. These financial statements
and financial statement schedule are the responsibility of the Cooperative's
management. Our responsibility is to express an opinion on the financial
statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Cooperative is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Cooperative's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Cooperative as of June 24, 2006 and June
25, 2005, and the results of its operations and its cash flows for each of the
three years in the period ended June 24, 2006, in conformity with accounting
principles generally accepted in the United States of America. Also, in our
opinion, such financial statement schedule, when considered in relation to the
basic financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.

The Cooperative expects to receive its final termination payment in connection
with the Termination Agreement on April 1, 2007, as discussed in Notes 1 and 5
of the financial statements.

/s/ Deloitte & Touche LLP
Rochester, New York
September 20, 2006




                                       23



<PAGE>


Pro-Fac Cooperative, Inc.

Statements of Operations, Allocation of Net Income/(Loss) and Comprehensive
Income/(Loss)
(Dollars in Thousands)

<TABLE>
<CAPTION>

                                                                                Fiscal Years Ended
                                                                       ------------------------------------------
                                                                         June 24,       June 25,    June 26,
                                                                           2006           2005        2004
                                                                           ----           ----        ----
<S>                                                                       <C>         <C>         <C>
Net sales                                                                 $     36    $      0    $      0
Cost of sales                                                                  (37)          0           0
                                                                          --------    --------    --------
Gross profit/(loss)                                                             (1)          0           0
Equity income/(loss) from Birds Eye Holdings LLC                            (7,186)     (3,393)      3,872
Gain from transaction with Birds Eye Foods, Inc. and related agreements      5,962       5,950       6,060
Margin on delivered product                                                    410         153           0
Commercial market value adjustment                                               0           0         660
Selling, administrative, and general expenses                               (1,057)     (1,086)     (1,139)
Legal matters and settlement expenses                                         (100)       (144)       (273)
Other income                                                                    35         168           0
                                                                          --------    --------    --------
Operating income/(loss)                                                     (1,937)      1,648       9,180
Interest income                                                                109          53          23
Interest expense                                                               (26)        (62)        (99)
                                                                          --------    --------    --------
Pretax income/(loss) before dividends and allocation of income/(loss)       (1,854)      1,639       9,104
Tax provision                                                                 (330)          0           0
                                                                          --------    --------    --------
Net income/(loss)                                                         $ (2,184)   $  1,639    $  9,104
                                                                          ========    ========    ========

Allocation of net income/(loss):
   Net income/(loss)                                                      $ (2,184)   $  1,639    $  9,104
   Dividends on preferred stock                                             (8,400)     (8,292)     (8,134)
                                                                          --------    --------    --------
   Net surplus/(deficit)                                                   (10,584)     (6,653)        970
   Allocation (to)/from accumulated deficit                                 10,584       7,179        (970)
                                                                          --------    --------    --------
   Net income available to members                                        $      0    $    526    $      0
                                                                          ========    ========    ========

Allocation of net income available to members:
   Payable to members currently                                           $      0    $    105    $      0

Allocated to members but retained by the Cooperative:
   Qualified retains                                                             0         421           0
                                                                          --------    --------    --------
   Net income available to members                                        $      0    $    526    $      0
                                                                          ========    ========    ========

Net income/(loss)                                                         $ (2,184)   $  1,639    $  9,104
Other comprehensive income/(loss):
   Unrealized (loss)/gain on hedging activity of equity investee               134         (44)        (53)
   Minimum pension liability of equity investee                                214      (1,192)       (199)
                                                                          --------    --------    --------
Comprehensive income/(loss)                                               $ (1,836)   $    403    $  8,852
                                                                          ========    ========    ========

</TABLE>


The accompanying notes are an integral part of these financial statements.





                                       24





<PAGE>



Pro-Fac Cooperative, Inc.
Balance Sheets
(Dollars in Thousands except per share information)

<TABLE>
<CAPTION>

                                     ASSETS

                                                                                   June 24,      June 25,
                                                                                     2006          2005
                                                                                     ----          ----

<S>                                                                                <C>          <C>
Current assets:
   Cash and cash equivalents                                                       $   2,391    $   1,103
   Accounts receivable, trade                                                          1,733        1,555
   Accounts receivable from Birds Eye Foods, Inc.                                      7,668        8,395
   Inventory                                                                             228            3
   Prepaid expenses and other current assets                                              27           10
                                                                                   ---------    ---------
       Total current assets                                                           12,047       11,066

Fixed assets, net                                                                         16           15
Investment in  Birds Eye Holdings LLC                                                  1,942       12,818
                                                                                   ---------    ---------
       Total assets                                                                $  14,005    $  23,899
                                                                                   =========    =========

          LIABILITIES AND SHAREHOLDERS' AND MEMBERS' CAPITALIZATION/(DEFICIT)

Current liabilities:
   Accounts payable                                                                $     112    $     104
   Income taxes payable                                                                  330            0
   Other accrued expenses                                                                  6           66
   Amounts due members                                                                12,571       12,500
                                                                                   ---------    ---------
       Total current liabilities                                                      13,019       12,670
                                                                                   ---------    ---------

Commitments and contingencies (Note 6)

Common stock, par value $5, authorized 5,000,000 shares;
  issued and outstanding 1,769,543 and 1,771,096, respectively                         8,848        8,855
                                                                                   ---------    ---------

Shareholders' and members' capitalization/(deficit):
   Retained earnings allocated to members                                              6,771       10,214
   Non-cumulative preferred stock, par value $25 per share, authorized 5,000,000
     shares; issued and outstanding 26,312 and 27,962 shares, respectively               658          700
   Class A cumulative preferred stock, liquidation preference $25 per share;
     authorized 10,000,000 shares; issued and outstanding 4,929,272
     and 4,789,910 shares, respectively                                              123,233      119,748
   Accumulated deficit                                                              (154,675)    (144,091)
   Special membership interests                                                       21,733       21,733
   Accumulated other comprehensive (loss)/income:
     Unrealized gain on hedging activity of equity investee                              179           45
     Minimum pension liability adjustment of equity investee                          (5,761)      (5,975)
                                                                                   ---------    ---------
       Total shareholders' and members' capitalization/(deficit)                      (7,862)       2,374
                                                                                   ---------    ---------
       Total liabilities and capitalization                                        $  14,005    $  23,899
                                                                                   =========    =========

</TABLE>

The accompanying notes are an integral part of these financial statements.



                                       25




<PAGE>



Pro-Fac Cooperative, Inc.
Statements of Cash Flows
(Dollars in Thousands)

<TABLE>
<CAPTION>

                                                                                                   Fiscal Years Ended
                                                                                         ---------------------------------------
                                                                                           June 24,     June 25,    June 26,
                                                                                             2006         2005        2004
                                                                                             ----         ----        ----
<S>                                                                                       <C>          <C>         <C>
Cash Flows from Operating Activities:
   Net income/(loss)                                                                      $  (2,184)   $   1,639   $    9,104
   Adjustments to reconcile net income/(loss) to net cash provided by/(used in)
     operating activities:
    Amortization                                                                                  0           71          525
    Depreciation                                                                                  4            4            0
    Gain from transaction with Birds Eye Foods, Inc. and related agreements                  (5,962)      (5,950)      (6,060)
    Equity (income)/loss from Birds Eye Holdings LLC                                          7,186        3,393       (3,872)
    Change in assets and liabilities:
      Accounts receivable                                                                       549         (824)        (501)
      Income taxes payable                                                                      330            0            0
      Accounts payable and accrued expenses                                                     (52)      (1,206)      (1,604)
      Amounts due Class A members                                                                71          318        4,201
      Other assets and liabilities                                                             (242)          (3)           5
                                                                                         ----------   ----------   ----------
Net cash provided by/(used in) operating activities                                            (300)      (2,558)       1,798
                                                                                         ----------   ----------   ----------

Cash Flows from Investing Activities:
   Proceeds from Termination Agreement with Birds Eye Foods, Inc.                            10,000       10,000       10,000
   Purchase of property, plant and equipment                                                     (5)         (19)           0
   Proceeds from investment in CoBank                                                             0            0           44
                                                                                         ----------   ----------   ----------
Net cash provided by investing activities                                                     9,995        9,981       10,044
                                                                                         ----------   ----------   ----------

Cash Flows from Financing Activities:
   Net proceeds from Credit Facility with Birds Eye Foods, Inc.                                   0       (1,000)         300
   Net proceeds from M&T line of credit                                                           0            0         (500)
   Repurchase of stock, net                                                                      (7)        (422)        (481)
   Cash dividends paid                                                                       (8,400)      (8,292)      (8,134)
                                                                                         ----------   ----------   ----------
Net cash used in financing activities                                                        (8,407)      (9,714)      (8,815)
                                                                                         ----------   ----------   ----------

Net change in cash and cash equivalents                                                       1,288       (2,291)       3,027
Cash and cash equivalents at beginning of period                                              1,103        3,394          367
                                                                                         ----------   ----------   ----------
Cash and cash equivalents at end of period                                                $   2,391    $   1,103   $    3,394
                                                                                          =========    =========   ==========

Supplemental disclosure of cash flow information:
  Cash paid during the year for:
    Interest                                                                              $      26    $     148   $       27
                                                                                          =========    =========   ==========
    Income taxes, net                                                                     $       0    $       0   $        0
                                                                                          =========    =========   ==========

Non-cash investing and financing activities:
   Conversion of retains to preferred stock                                               $   3,443    $       0   $    4,611
                                                                                          =========    =========   ==========
   Conversion of non-cumulative to Class A cumulative preferred stock                     $      42    $       7   $       26
                                                                                          =========    =========   ==========
   Net income allocated to members but retained by the Cooperative                        $       0    $     421   $        0
                                                                                          =========    =========   ==========
</TABLE>


The accompanying notes are an integral part of these financial statements.



                                       26




<PAGE>



Pro-Fac Cooperative, Inc.
Statements of Changes in Shareholders' and Members' Capitalization/(Deficit) and
Redeemable and Common Stock
(Dollars in Thousands)

<TABLE>
<CAPTION>

                                                                          Fiscal Years Ended
                                                               -----------------------------------------

                                                                    June 24,    June 25,     June 26,
                                                                      2006        2005         2004
                                                                      ----        ----         ----

<S>                                                                <C>          <C>          <C>
Retained earnings allocated to members:
Qualified retains:
   Balance at beginning of period                                  $  10,214    $   9,793    $  14,404
   Net proceeds allocated to members                                      --          421            0
   Converted to Class A cumulative preferred stock                    (3,443)           0       (4,611)
   Other                                                                   0            0            0
                                                                   ---------    ---------    ---------
   Balance at end of period                                        $   6,771    $  10,214    $   9,793
                                                                   ---------    ---------    ---------

Non-cumulative preferred stock:
   Balance at beginning of period                                  $     700    $     707    $     733
   Conversion to Class A cumulative preferred stock                      (42)          (7)         (26)
                                                                   ---------    ---------    ---------
   Balance at end of period                                        $     658    $     700    $     707
                                                                   ---------    ---------    ---------

Class A cumulative preferred stock:
   Balance at beginning of period                                  $ 119,748    $ 119,741    $ 115,104
   Converted from non-cumulative preferred stock                          42            7           26
   Converted from qualified retains                                    3,443            0        4,611
                                                                   ---------    ---------    ---------
   Balance at end of period                                        $ 123,233    $ 119,748    $ 119,741
                                                                   ---------    ---------    ---------

Accumulated deficit:
   Balance at beginning of period                                  $(144,091)   $(136,912)   $(137,882)
   Conversion to special membership interests                                           0            0
   Allocation to/(from) accumulated deficit                          (10,584)      (7,179)         970
                                                                   ---------    ---------    ---------
   Balance at end of period                                        $(154,675)   $(144,091)   $(136,912)
                                                                   ---------    ---------    ---------

Special membership interests:
   Balance at beginning of period                                  $  21,733    $  21,733    $  21,733
   Conversion from earned surplus                                          0            0            0
                                                                   ---------    ---------    ---------
   Balance at end of period                                        $  21,733    $  21,733    $  21,733
                                                                   ---------    ---------    ---------

Accumulated other comprehensive (loss)/income:
   Balance at beginning of period                                  $  (5,930)   $  (4,694)   $  (4,442)
   Unrealized (loss)/gain on hedging activity of equity investee         134          (44)         (53)
   Minimum pension liability of equity investee                          214       (1,192)        (199)
                                                                   ---------    ---------    ---------
Balance at end of period                                           $  (5,582)   $  (5,930)   $  (4,694)
                                                                   ---------    ---------    ---------

Total shareholders' and members' capitalization/(deficit)          $  (7,862)   $   2,374    $  10,368
                                                                   =========    =========    =========

Redeemable Class B cumulative preferred stock:
   Balance at beginning of period                                  $       0    $     108    $     122
   Repurchased                                                             0         (108)         (14)
                                                                   ---------    ---------    ---------
   Balance at end of period                                        $       0    $       0    $     108
                                                                   =========    =========    =========

Common stock:
   Balance at beginning of period                                  $   8,855    $   9,169    $   9,636
   Repurchased                                                            (7)        (314)        (467)
                                                                   ---------    ---------    ---------
   Balance at end of period                                        $   8,848    $   8,855    $   9,169
                                                                   =========    =========    =========

</TABLE>

The accompanying notes are an integral part of these financial statements.



                                       27



<PAGE>


                            PRO-FAC COOPERATIVE, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Pro-Fac Cooperative, Inc. ("Pro-Fac" or the "Cooperative"), is a New York
agricultural cooperative which markets crops grown by its members. Birds Eye
Foods, Inc. ("Birds Eye Foods"), until August 19, 2002, was a wholly-owned
subsidiary of Pro-Fac. Birds Eye Foods remains Pro-Fac's major customer.

The commercial market value ("CMV") of crops delivered by Pro-Fac was
approximately $65.2 million, $65.1 million and $66.0 million for the fiscal
years ended June 24, 2006, June 25, 2005 and June 26, 2004, respectively. For
the fiscal years ended June 24, 2006, June 25, 2005 and June 26, 2004,
approximately 77 percent, 72 percent and 75 percent, respectively, of the crops
purchased by Pro-Fac from its members were sold to Birds Eye Foods. On July 25,
2006, Birds Eye Foods announced its intention to exit from the vast majority of
its non-branded frozen business. As part of the strategy, the New York
processing facilities of Birds Eye Foods located in Oakfield and Bergen, which
are supplied by Pro-Fac member-growers, will be sold or, if not sold after the
particular facility's current production season, closed between October 2006 and
June 2007. For the year ended June 24, 2006, Pro-Fac supplied raw product with a
total CMV of approximately $22.0 million to these processing facilities,
representing approximately 34 percent of total raw product supplied to all
Pro-Fac customers and approximately 44 percent of the CMV of raw product
supplied to Birds Eye Foods.

The Transaction: On August 19, 2002 (the "Closing Date"), pursuant to the terms
of the Unit Purchase Agreement dated as of June 20, 2002 (the "Unit Purchase
Agreement"), by and among Pro-Fac, Birds Eye Foods, at the time a New York
corporation and a wholly-owned subsidiary of Pro-Fac, and Vestar/Agrilink
Holdings LLC, a Delaware limited liability company consummated the following
transactions (which are referred to collectively as "the Transaction"):

     (i)   Pro-Fac contributed to the capital of Birds Eye Holdings LLC
           ("Holdings, LLC"), a Delaware limited liability company, all of the
           shares of Birds Eye Foods common stock owned by Pro-Fac, constituting
           100 percent of the issued and outstanding shares of Birds Eye Foods
           capital stock, in consideration for Class B common units of Holdings
           LLC, representing a 40.72 percent common equity ownership at the
           closing date; and

     (ii)  Vestar/Agrilink Holdings, LLC and certain co-investors (collectively,
           "Vestar") contributed cash in the aggregate amount of $175.0 million
           to the capital of Holdings LLC, in consideration for preferred units
           and Class A common units and warrants, which warrants were
           immediately exercised to acquire additional Class A common units,
           representing, 56.24 percent of the common equity of Holdings LLC at
           the Closing Date, inclusive of the additional Class A common units
           issued to Vestar upon exercise of the warrants. The co-investors are
           either under common control with, or delivered an unconditional
           voting proxy to, Vestar. The Class A common units entitle the owner
           thereof - Vestar - to two votes for each Class A common unit held.
           All other Holdings LLC common units entitle the holder(s) thereof to
           one vote for each common unit held. Accordingly, Vestar has a voting
           majority of all common units.

     (iii) Immediately following Pro-Fac's contribution of its shares of Birds
           Eye Foods common stock to Holdings LLC, Holdings LLC contributed
           those shares to Birds Eye Holdings Inc. ("Holdings Inc."), a Delaware
           corporation and a direct, wholly-owned subsidiary of Holdings LLC. As
           a result, Birds Eye Foods became an indirect, wholly-owned subsidiary
           of Holdings LLC.

     (iv)  Certain Birds Eye Foods management members, including Stephen R.
           Wright, then the General Manager and Secretary of Pro-Fac, entered
           into subscription agreements with Holdings LLC to acquire (using a
           combination of cash and promissory notes issued to Holdings LLC) an
           aggregate of approximately $1.3 million of Class C common units and
           Class D common units of Holdings LLC, representing approximately 3.04
           percent of the common equity ownership at the Closing Date.

As outlined above, Pro-Fac owns Class B common units of Holdings LLC. Pro-Fac
accounts for its investment in Holdings LLC under the equity method of
accounting.

For additional information about the transactions consummated, including
resulting agreements, see "NOTE 3. Agreements with Birds Eye Foods " under these
"Notes to Financial Statements".




                                       28





<PAGE>



Limited Liability Company Agreement of Holdings LLC: Pro-Fac and Vestar,
together with others, including Mr. Wright, are parties to a limited liability
company agreement dated August 19, 2002 (as amended from time to time, the
"Limited Liability Company Agreement") that contains terms and conditions
relating to the management of Holdings LLC and its subsidiaries (including Birds
Eye Foods), the distribution of profits and losses and the rights and
limitations of members of Holdings LLC. As of June 24, 2006, Pro-Fac owned 40.0
percent of the common equity of Holdings LLC through its ownership of 321,429
Class B common units.

The Limited Liability Company Agreement provides, among other things, that
Holdings LLC's distributable assets, which include cash receipts from
operations, investing and financing, net of expenses, will be distributed to
Holdings LLC's members as determined by Holdings LLC's management committee. In
general, those distributable assets are distributable as follows:

     o    first, 100 percent to the holders of preferred units, pro rata, until
          each preferred unit holder's current (non-compounded) preferred return
          has been reduced to zero;

     o    second, 100 percent to the holders of preferred units, pro rata, until
          each preferred unit holder's unpaid preferred return has been reduced
          to zero and then, pro rata among the preferred unit holders until each
          preferred unit holder's unreturned preferred capital contribution has
          been reduced to zero;

     o    third, 100 percent to the holders of Class A common units, Class B
          common units, Class C common units, and Class E common units, pro
          rata, until each such unit holder's unreturned common capital
          contribution has been reduced to zero; and

     o    fourth, after the holders of Class A common units, Class B common
          units, Class C common units and Class E common units have been paid
          their unreturned common capital contributions, the balance of
          distributable assets, if any, will be distributed to the holders of
          Class A common units, Class B common units, Class C common units,
          Class D common units and Class E common units. The amount
          distributable to such holders is determined based upon the number of
          Class C common units and Class D common units outstanding and upon
          whether certain performance hurdles have been satisfied. As the
          various performance hurdles are satisfied, the percentage of any
          remaining distributable assets distributable to the holders of Class A
          common units, Class B common units and Class E common units decreases
          from approximately 95 percent to approximately 87 percent, the
          percentage of remaining distributable assets distributable to the
          holders of Class C common units decreases from approximately 2.3
          percent to 2.1 percent and the percentage of remaining distributable
          assets distributable to the holders of Class D common units increases
          from approximately 2.6 percent to approximately 10.54 percent.

A preferred unit holder's preferred return is equal to 15 percent per annum of
the preferred unit holder's preferred capital contributions, less distributions
made in respect of such preferred units. The preferred return accrues on a daily
basis and compounds quarterly (3.75 percent quarterly). In the event of a
dissolution, Holdings LLC's assets (after payment of debts and obligations) will
be distributed to its members in accordance with the above distribution
schedule.

The Limited Liability Company Agreement further provides that, subject to
restrictions contained in any financing arrangements of Holdings LLC or its
subsidiaries (including Birds Eye Foods), after August 19, 2007 and prior to a
sale (or dissolution) of Holdings LLC, Holdings LLC will use commercially
reasonable efforts to cause Birds Eye Foods to distribute annually to Holdings
LLC up to $24.8 million of cash flow from the operations of Birds Eye Foods,
which Holdings LLC will then distribute, notwithstanding the "first", "second"
and "third" tier distribution preferences described above, to the holders of its
Class A common units, Class B common units, Class C common units, Class D common
units and Class E common units in accordance with the "fourth" distribution tier
as if no performance hurdle has been satisfied. Further, upon the occurrence of
certain specified events, including the sale of Holdings LLC, and at any time
after August 19, 2010, the holders of preferred units are entitled, at their
option, to have their preferred units redeemed and, further, Holdings LLC may,
at its option, at any time redeem the preferred units.

Further, under the Limited Liability Company Agreement, the management committee
of Holdings LLC is authorized to issue up to 16,000 Class C common units and up
to 16,000 Class D common units. The Limited Liability Company Agreement further
provides that the holders of a majority of the total voting power of the
outstanding Class A, Class B and Class E common units can cause Holdings LLC to
create and issue additional units, provided no such issuance would adversely
affect the relative economic rights of the holders of Class A, Class B, Class C
and Class D common units and further subject to the amendment provisions of the
Limited Liability Company Agreement. The Limited Liability Company Agreement
provides, in part, that the management committee of Holdings LLC can amend the
Limited Liability Company Agreement to provide for the issuance of any other
type of preferred unit, whether of an existing or new class, with the consent of
the preferred unit holders, and to provide for the issuance of any other class
of units or other securities, with the consent of each unit holder, if any, who
would be adversely affected by such issuance as to any such unit holder's
limited liability or as to the alteration of any such unit holder's rights to
receive allocations or distributions unless such alterations of rights are in
connection with a debt or equity financing, a restructuring, a recapitalization
or other transaction in which Holdings LLC will receive an investment or
contribution to its capital or in connection with the issuance of equity to
employees or directors of Holdings LLC, its subsidiaries or to third party
lenders. The issuance of additional common units will reduce the percentage
ownership of the current holders of common units in Holdings LLC, including
Pro-Fac.



                                       29




<PAGE>


Securityholders Agreement: Holdings LLC, Pro-Fac and Vestar, together with
others, including officers of Birds Eye Foods (the "Management Investors"),
entered into a securityholders agreement dated August 19, 2002 (as amended from
time to time, the "Securityholders Agreement") containing terms and conditions
relating to the transfer of membership interests in and the management of
Holdings LLC. Among other things, the Securityholders Agreement includes a
voting agreement pursuant to which the holders of common units agree to vote
their common units to elect or cause to be elected to the respective management
committees or boards of directors of Holdings LLC, Holdings, Inc. and Birds Eye
Foods: (i) those individuals designated by Vestar to serve as members/directors,
which shall represent the majority of such individuals to serve in such
capacities, and by Pro-Fac, which shall designate two members/directors, and
(ii) the chief executive officer of Birds Eye Foods who shall serve as a
member/director.

The voting agreement further provides that the holders of common units shall
vote their common units as directed by Vestar with respect to the approval of
any amendment(s) to the Limited Liability Company Agreement, the merger, unit
exchange, combination or consolidation of Holdings LLC, the sale, lease or
exchange of all or substantially all of the property and assets of Holdings LLC
and its subsidiaries, including Birds Eye Foods, and the reorganization,
recapitalization, liquidation, dissolution or winding-up of Holdings LLC,
provided such action is not inconsistent with the Limited Liability Company
Agreement or the Securityholders Agreement, and further provided such action
shall not have a material adverse effect on a unit holder that would be borne
disproportionately by such unit holder.

The Securityholders Agreement also provides:

     o    Pro-Fac and the Management Investors with "tag-along" rights in
          connection with certain transfers of Holdings LLC units by Vestar;

     o    Vestar with "take-along" rights to require Pro-Fac and the Management
          Investors to consent to a proposed sale of Holdings LLC; and

     o    Pro-Fac and Vestar with demand registration rights in securities of a
          subsidiary of Holdings LLC, including Birds Eye Foods, which are
          acquired by them through a distribution by Holdings LLC of such
          securities in exchange for their respective units in Holdings LLC,
          such distributed securities being "Registrable Securities", and other
          unit holders, including the Management Investors with incidental
          registration rights in the Registrable Securities owned by such unit
          holders.

The Securityholders Agreement provides Pro-Fac and the Management Investors
certain pre-emptive rights with respect to new securities of Holdings LLC or any
of its subsidiaries proposed to be issued to Vestar or any affiliate of Vestar.
Further, Vestar has the right to amend or modify the Securityholders Agreement
without the consent of Pro-Fac, the Management Investors or any other unit
holder if the amendment cannot reasonably be expected to have a material adverse
effect on a unit holder that would be borne disproportionately by such unit
holder or the amendment does not adversely affect any unit holder or Holdings
LLC in any material respect and it is in connection with a change that cures any
ambiguity or corrects or supplements a provision of the Securityholders
Agreement.

Basis of Presentation: The accompanying financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America ("GAAP") which requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.

Reclassification: Prior year information is reclassified whenever necessary to
conform to the current year's presentation.

Fiscal Year: The fiscal year of Pro-Fac ends on the last Saturday in June.
Fiscal years 2006, 2005 and 2004 each comprised 52 weeks.



                                       30





<PAGE>



Cash and Cash Equivalents: Cash and cash equivalents include short-term
investments with original maturities of three months or less. There were no such
short-term investments at June 24, 2006 or June 25, 2005.

Accounts Receivable, Trade: The Cooperative provides credit in the normal course
of business to the majority of its third-party customers. The Cooperative
performs periodic credit evaluations of its customers' financial condition and
generally does not require collateral. When necessary, the Cooperative maintains
allowances for doubtful customer accounts for estimated losses resulting from
the inability of its customers to make required payments based on prior
experience. There was no allowance for doubtful accounts at June 24, 2006.

Inventory: Beginning in fiscal year 2005, the Cooperative supplied cherries to
another cooperative which markets the cherries. Title remains with the
Cooperative until the inventory is sold to third parties. Inventory and an equal
amount due member-growers is recorded at estimated cost.

Fixed Assets, Net: Fixed assets, which consist of office and computer equipment,
are recorded at cost. Depreciation is provided using the straight-line method
over the estimated useful lives of the related assets, which range from five to
seven years.

Investment in Birds Eye Holdings, LLC: Pro-Fac accounts for its investment in
Holdings LLC under the equity method of accounting. The Cooperative includes its
share, based on ownership, of the change in Holdings LLC's minimum pension
liabilities and unrealized holding gains and losses on hedging transactions in
the Cooperative's other comprehensive income (loss).

The following schedule sets forth summarized financial information of Holdings
LLC as of June 24, 2006 and June 25, 2005 and for the fiscal years then ended
(dollars in thousands):

<TABLE>
<CAPTION>

                                                June 24, 2006    June 25, 2005
                                                -------------    -------------
<S>                                                <C>              <C>
Current assets                                     $355,845         $329,737
Non-current assets                                  451,611          474,885
                                                   --------         --------
Total assets                                       $807,456         $804,622
                                                   ========         ========

Current liabilities                                $157,103         $155,805
Non-current liabilities                             374,806          389,338
Preferred LLC units                                 242,454          208,093
Total members' capital                               33,093           51,386
                                                   --------         --------
Total liabilities and members' capital             $807,256         $804,622
                                                   ========         ========

</TABLE>


<TABLE>
<CAPTION>

                                                           Fiscal Year Ended
                                       --------------------------------------------------------------

                                           June 24, 2006      June 25, 2005     June 26, 2004
                                           -------------      -------------     -------------
<S>                                           <C>               <C>               <C>
Net sales                                     $927,797          $858,669          $843,398
Gross profit                                  $180,048          $180,963          $190,535
Income from continuing operations             $ 15,021          $ 20,197          $ 27,580
Net income                                    $ 14,740          $ 18,645          $ 31,902
</TABLE>



                                       31





<PAGE>


At June 24, 2006, Holdings LLC had $244.7 million of preferred units issued and
outstanding which accrue a preferred return at the rate of 15 percent per annum
compounded quarterly, based on a 360 day year. At June 24, 2006, the preferred
units had accrued payment-in-kind dividends since issuance of approximately
$105.9 million, which amount is included in the total preferred units
outstanding.

Based on Holdings LLC's outstanding preferred units at June 24, 2006, and
assuming that the preferred return is not paid and the preferred units are not
redeemed, the preferred units would have an approximate future redemption value,
including the compounded preferred return, as of the end of fiscal years as
follows:

<TABLE>
<S>                                                  <C>
                         2007                            $283.5
                         2008                             328.5
                         2009                             380.6
                         2010                             441.0
</TABLE>

The preferred units are subject to redemption at the option of at least a
majority of the preferred unitholders upon an initial public offering of
Holdings LLC or any subsidiary, upon the sale of Holdings LLC or after August
19, 2010. The preferred units may also be redeemed at the option of Holdings LLC
at a premium. Holdings LLC is accreting the preferred units up to their
redemption value through transfers from retained earnings using the effective
interest method to the date of earliest redemption. At June 24, 2006, Pro-Fac
owned 40.0 percent of the remaining common equity interest in Holdings LLC.
Pro-Fac's share of the earnings of Holdings LLC under the equity method of
accounting is determined as follows:

<TABLE>
<CAPTION>

                                                                                Fiscal Year Ended
                                                          -------------------------------------------------------------

                                                                June 24, 2006     June 25, 2005       June 26, 2004
                                                                -------------     -------------       -------------
                                                                                 (In millions)
<S>                                                                   <C>               <C>                <C>
Net income of Holdings LLC                                            $  14.7           $ 18.7             $ 31.9
Less:
       Preferred return on Holdings LLC's preferred units               (33.5)           (28.9)             (24.9)
       Accretion of preferred units                                      (0.5)            (0.5)              (0.4)
Plus:
       Interest on termination payments recorded by Holdings LLC          1.4              2.3                3.1
                                                                    ---------         --------           --------
Loss for common interests                                               (17.9)            (8.4)               9.7
Pro-Fac's share of common interest                                      40.27%           40.46%             40.49%
                                                                    ---------         --------           --------
Equity loss from Holdings LLC                                         $  (7.2)          $ (3.4)            $  3.9
                                                                      =======           ======             ======

</TABLE>

At June 24, 2006, cumulative equity loss from Holdings LLC was approximately
$4.6 million.

In the first quarter of fiscal 2007, Birds Eye Foods announced its intention to
sell or close five of its production facilities and to close its Watsonsville,
California facility as part of its decision to exit from the vast majority of
its non-branded frozen business. In its press release dated July 25, 2006, Birds
Eye Foods indicated that it expected to incur employee termination benefits,
environmental remediation costs associated with facility closures and sales,
accelerated depreciation, inventory markdowns, contract and lease termination
costs and other exit costs, including asset impairment charges. In its Form 10-K
Equivalent for the fiscal year ended June 24, 2006, Birds Eye Foods disclosed
that the closure of the Watsonville facility will result in Birds Eye Foods
incurring approximately $3.5 million for employee termination benefits during
fiscal 2007, a pension withdrawal liability of approximately $1.0 million to
$1.5 million, and a non-cash charge in the first quarter of fiscal 2007 of
approximately $5.0 million to $6.0 million related to tangible personal property
at that facility. Birds Eye Foods also disclosed that it expects to take
additional cash and non-cash accounting charges and incur asset impairment
charges related to its facilities sales and/or closings which Birds Eye Foods is
currently unable to estimate individually or in the aggregate. Pro-Fac's
financial condition and results of operations will be directly affected by
Pro-Fac's recording of its 40% share of the impact of Birds Eye Foods' decision
to sell or close its facilities on Birds Eye Foods' financial condition and
results of operations.

Revenue Recognition: Under the provisions of Emerging Issues Task Force Issue
No. 99-19, "Reporting Revenue Gross as a Principal Versus Net as an Agent,"
subsequent to the Transaction, the Cooperative records activity among Birds Eye
Foods and other customers, itself, and its members on a net basis. For
transactions in which the Cooperative acts as a principal rather than an agent,
sales and cost of sales are reported.

Margin on Delivered Product: The Cooperative negotiates certain sales
transactions on behalf of its members which result in margin being earned by the
Cooperative.



                                       32





<PAGE>



Commercial Market Value Adjustment: Pro-Fac's by-laws permit its Board of
Directors to reduce amounts paid to its members for product delivered by its
members through Pro-Fac as necessary for the operations of Pro-Fac and for the
establishment of such reserves as the Board of Directors deems fair and
reasonable. Amounts equal to 1% of the value of delivered product were withheld
in fiscal years 2004 and 2003. No amount was withheld in fiscal year 2006 or
2005.

Gain from Transaction with Birds Eye Foods, Inc and Related Agreements: On
August 19, 2002, the Cooperative contributed to the capital of Holdings LLC all
of the shares of Birds Eye Foods common stock owned by Pro-Fac in exchange for
Class B common units of Holdings LLC representing a 40.72 percent interest as at
the Closing Date. Pro-Fac's net investment in Birds Eye Foods prior to the
Transaction was approximately $24.9 million. This amount reflects the
forgiveness by Birds Eye Foods of approximately $36.5 million which represented
both borrowings for the working capital needs of Pro-Fac and a $9.4 million
demand payable. The value of the Cooperative's 40.72 percent common equity
ownership in Holdings LLC was estimated at $31.4 million at the Closing Date of
the Transaction.

Pro-Fac and Birds Eye Foods also entered into the Termination Agreement,
pursuant to which, among other things, the Marketing and Facilitation Agreement
was terminated, and in consideration of such termination, Pro-Fac is entitled to
the payment of a termination fee of $10.0 million per year for five years with
the last installment payable on April 1, 2007, provided that certain ongoing
conditions are met, including maintaining grower membership levels sufficient
to generate certain minimum crop supply. The $10.0 million payment is payable
in quarterly installments to the Cooperative as follows: $4.0 million on each
July 1, and $2.0 million each October 1, January 1, and April 1. The Cooperative
received $10.0 million of scheduled payments in each of fiscal years 2006, 2005
and 2004 under the Termination Agreement.

Payments under the Termination Agreement are considered additional consideration
related to the Transaction. Accordingly, the portion of the payments received
under the Termination Agreement representing Pro-Fac's continuing ownership
percentage is recorded as an adjustment to Pro-Fac's investment in Holdings LLC.
The remaining portion of the payments is recognized as additional gain on the
Transaction with Birds Eye Foods in the period it is received. Accordingly, in
fiscal 2006, 2005 and 2004, Pro-Fac recognized approximately $6.0 million, $6.0
million and $6.1 million, respectively, as additional gain from the receipt of
the termination payments.

As a result of the agreements described above, based on its common equity
ownership, the Cooperative recognized a total gain, in fiscal 2006, 2005 and
2004, of approximately $6.0 million, $6.0 million and $6.1 million,
respectively.

Distributions of Patronage Income: The Cooperative's bylaws require it to pay or
allocate each member's pro rata share of patronage income within 8 1/2 months
after the end of the Cooperative's fiscal year unless the Cooperative's Board of
Directors takes action in accordance with its bylaws to withhold all or a
portion of patronage income.

Patronage income equals gross receipts derived from sources that, under law,
qualify as patronage income less expenses attributable to the production of
patronage income including operating expenses and dividends on capital stock,
all as determined for federal income tax purposes.

At its March 2006 meeting, the Pro-Fac board of directors determined that there
would be no payment of allocation of patronage proceeds for fiscal year 2006.
For fiscal year 2005, the Cooperative recorded a distribution of patronage
income of $0.5 million; 20 percent payable in cash and the balance in qualified
retains. There was no distribution of patronage income in fiscal year 2004.

Income Taxes: The Cooperative qualifies for tax exempt status as a farmers'
cooperative under Section 521 of the Internal Revenue Code. Exempt cooperatives
are permitted to reduce or eliminate taxable income through the use of special
deductions such as dividends paid on its common and preferred stock and
distributions of patronage income.

The Cooperative uses these special deductions and distributions of patronage
income to reduce the Cooperative's taxable income for periods after August 19,
2002. At its March 2006 meeting, the Pro-Fac Board of Directors determined that
there would be no payment or allocation of patronage income for the fiscal year
ended June 24, 2006. As a result, the Cooperative recorded a tax provision of
$0.3 million in fiscal 2006. For the year ended June 25, 2005, the Cooperative
recorded a distribution of patronage income of $0.5 million; 20 percent payable
in cash and the balance in qualified retains. This distribution reduced taxable
income to zero for fiscal year 2005.

A deferred income tax asset has not been recognized on the excess of the tax
basis over the investment in Holdings LLC. This asset would only be realized
upon the sale of the investment based on the proceeds received.

Earnings Per Share Data Omitted: Earnings per share amounts are not presented
because earnings are not distributed to members in proportion to their common
stock holdings. Earnings (representing those earnings derived from
patronage-sourced business) are distributed to members in proportion to the
dollar value of deliveries under Pro-Fac contracts rather than based on the
number of shares of common stock held.


                                       33





<PAGE>



Comprehensive Income: Under SFAS No. 130, the Cooperative is required to display
comprehensive income and its components as part of the financial statements.
Comprehensive income is comprised of net income and other comprehensive income
(loss), which includes certain changes in equity that are excluded from net
income. In fiscal 2006, the Cooperative included adjustments of its equity
investee, Holdings LLC, for minimum pension liabilities ($0.2 million) and
unrealized holding gains on hedging transactions ($0.1 million) in other
comprehensive income/(loss). In fiscal 2005, the Cooperative included
adjustments of its equity investee, Holdings LLC, for minimum pension
liabilities ($1.2 million) and unrealized holding losses on hedging transactions
($0.1 million) in other comprehensive income/(loss). In fiscal 2004, the
Cooperative included adjustments of its equity investee, Holdings, LLC, for
minimum pension liabilities ($0.2 million) and unrealized holding losses on
hedging transactions ($0.1 million) in other comprehensive income/(loss).

Disclosures About Fair Value of Financial Instruments: The following methods and
assumptions were used by the Cooperative in estimating its fair value
disclosures for financial instruments:

         Cash and Cash Equivalents and Accounts Receivable: The carrying amount
         approximates fair value because of the short maturity of these
         instruments.

NOTE 2. AGREEMENTS WITH BIRDS EYE FOODS

In connection with the Transaction, Birds Eye Foods and Pro-Fac entered into
several agreements effective as of the Closing Date, including the following:

Termination Agreement: Pro-Fac and Birds Eye Foods entered into the Termination
Agreement, pursuant to which, among other things, the Marketing and Facilitation
Agreement was terminated and, in consideration of such termination, Birds Eye
Foods agreed to pay Pro-Fac a termination fee of $10.0 million per year for five
years, provided that certain ongoing conditions are met, including maintaining
grower membership levels sufficient to generate certain minimum crop supply.

Amended and Restated Marketing and Facilitation Agreement. Pro-Fac and Birds Eye
Foods are parties to an amended and restated marketing and facilitation
agreement dated as of the Closing Date (the "Amended and Restated Marketing and
Facilitation Agreement"). Pursuant to the Amended and Restated Marketing and
Facilitation Agreement, Birds Eye Foods buys crops from Pro-Fac grown by
Pro-Fac's members. Birds Eye Foods pays Pro-Fac the CMV of the crops supplied in
installments corresponding to the dates payment is made by Pro-Fac to its
members for the delivered crops. Birds Eye Foods makes estimated CMV payments to
Pro-Fac for a particular crop year, subject to adjustments to reflect the actual
CMV following the end of such year. Commodity committees of Pro-Fac meet with
Birds Eye Foods management to establish CMV or receivable guidelines, review
calculations, and report to a joint CMV committee of Pro-Fac and Birds Eye
Foods. The Amended and Restated Marketing and Facilitation Agreement also
provides that Birds Eye Foods will provide Pro-Fac services relating to
planning, consulting, sourcing and harvesting crops from Pro-Fac members in a
manner consistent with past practices. In addition, until August 19, 2007, Birds
Eye Foods will provide Pro-Fac with services related to the expansion of the
market for the agricultural products of Pro-Fac members (at no cost to Pro-Fac
other than reimbursement of Birds Eye Foods' incremental and out-of-pocket
expenses related to providing such services as agreed to by Pro-Fac and Birds
Eye Foods).

Under the Amended and Restated Marketing and Facilitation Agreement, Birds Eye
Foods determines the amount of crops which it will acquire from Pro-Fac for each
crop year. If the amount to be purchased by Birds Eye Foods during a particular
crop year does not meet (i) a defined crop amount and (ii) a defined target
percentage of Birds Eye Foods' needs for each particular crop, then certain
shortfall payments will be made by Birds Eye Foods to Pro-Fac. The defined crop
amounts and targeted percentages were set based upon the needs of Birds Eye
Foods in the 2002 crop year (fiscal 2003). The shortfall payment provisions of
the agreement include a maximum shortfall payment, determined for each crop,
that can be paid over the term of the Amended and Restated Marketing and
Facilitation Agreement. The aggregate shortfall payment amounts for all crops
covered under the agreement cannot exceed $10.0 million over the term of the
agreement.

Unless terminated earlier, the Amended and Restated Marketing and Facilitation
Agreement will continue in effect until August 19, 2012. Birds Eye Foods may
terminate the Amended and Restated Marketing and Facilitation Agreement prior to
August 19, 2012 upon the occurrence of certain events, including in connection
with a change in control transaction affecting Birds Eye Foods or Holdings Inc.
Birds Eye Foods can terminate the Amended and Restated Marketing and
Facilitation Agreement as a result of a change in control transaction with
payment of a termination fee. Also, Birds Eye Foods can sell portions of its
business and the volumes of crop purchases by Birds Eye Foods with respect to
such transferred business will be disregarded for purposes of determining
shortfall payments.



                                       34





<PAGE>



On July 25, 2006, Birds Eye Foods announced its intention to exit from the vast
majority of its non-branded frozen business. As part of the strategy, the New
York processing facilities of Birds Eye Foods located in Oakfield and Bergen,
which are supplied by Pro-Fac member-growers, will be sold or, if not sold after
the particular facility's current production season, closed between October 2006
and June 2007. Under the Amended and Restated Marketing and Facilitation
Agreement entered into with Birds Eye Foods on August 19, 2002, the Pro-Fac
member-growers supply snap beans, corn, peas, carrots, and squash to these
facilities. For the year ended June 24, 2006, Pro-Fac supplied raw product with
a total CMV of approximately $22.0 million to these processing facilities,
representing approximately 34 percent of total raw product supplied to all
Pro-Fac customers and approximately 44 percent of the CMV of raw product
supplied to Birds Eye Foods. Although the supply agreements for these facilities
are assignable by Birds Eye Foods to a new operator or operators of these
facilities, there can be no assurance that a new operator or operators will be
identified, or that a new operator or operators will choose to assume the
existing agreements or enter into a replacement supply agreement or agreements
with Pro-Fac. As such, it is possible that the Cooperative will no longer have
an outlet to which its member-growers can supply vegetables in New York.

In its Form 10-K Equivalent for the fiscal year ended June 24, 2006, Birds Eye
Foods disclosed that it anticipates that it will not satisfy crop purchase
obligations under the Amended and Restated Marketing and Facilitation Agreement
for the 2007 and 2008 growing seasons, and will therefore be required to make
shortfall payments to Pro-Fac in July 2008 and July 2009.

Transitional Services Agreement: Pro-Fac and Birds Eye Foods entered into a
transitional services agreement (the "Transitional Services Agreement") dated as
of the Closing Date, pursuant to which Birds Eye Foods provided Pro-Fac certain
administrative and other services for a period of 24 months from the Closing
Date. Pursuant to its terms, the Transitional Services Agreement terminated on
August 19, 2004. During the term of the Transitional Services Agreement, Mr.
Wright, who served as the General Manager and Secretary of Pro-Fac, was employed
by Birds Eye Foods, serving as executive vice president - investor relations of
Birds Eye Foods. As an employee of Birds Eye Foods, Mr. Wright's salary was paid
by Birds Eye Foods. Effective August 19, 2004, Mr. Wright and two other
individuals previously employed by Birds Eye Foods became employees of Pro-Fac
and ceased to be employed by Birds Eye Foods.

NOTE 3. LONG-TERM DEBT

Credit Agreement: Birds Eye Foods and Pro-Fac have entered into a credit
agreement, dated August 19, 2002 (the "Credit Agreement"), pursuant to which
Birds Eye Foods has agreed to make available to Pro-Fac loans in an aggregate
principal amount of up to $5.0 million (the "Credit Facility"). Pro-Fac is
permitted to draw down up to $1.0 million per year under the Credit Facility,
unless Birds Eye Foods is prohibited from making such advances under the terms
of certain third party indebtedness of Birds Eye Foods. The amount of the Credit
Facility will be reduced, on a dollar-for-dollar basis, to the extent of certain
distributions made by Holdings LLC to Pro-Fac in respect of its ownership in
Holdings LLC. Pro-Fac has pledged all of its Class B common units in Holdings
LLC as security for advances under the Credit Facility. Advances outstanding
under the Credit Agreement bear interest at 10 percent per annum. Amounts
borrowed and interest are required to be paid only upon sale of Pro-Fac's
ownership interest in Holdings LLC or receipt of a distribution from Holdings
LLC in connection with the sale or liquidation of all or substantially all of
the assets of Holdings LLC or one or more of its subsidiaries. Pro-Fac may
voluntarily repay amounts borrowed and interest at any time. As of June 24, 2006
and June 25, 2005, there was no amount outstanding under the Credit Facility.
Subsequent to June 24, 2006, Pro-Fac borrowed $1.0 million under the Credit
Facility.

Line of Credit: The Cooperative may borrow up to $2.0 million from M&T Bank
under the terms of the M&T Line of Credit. The current agreement with M&T Bank
expires on September 30, 2006. As of June 24, 2006 and June 25, 2005, no amount
was outstanding under the M&T Line of Credit. Principal amounts borrowed bear
interest at 75 basis points above the prime rate (prime rate was 8.0% at June
24, 2006) in effect on the day proceeds are disbursed, as announced by M&T Bank,
as its prime rate of interest. Interest is payable monthly. Amounts extended
under the M&T Line of Credit are required to be repaid in full during each year
by July 15, with further borrowings prohibited for a minimum of 60 consecutive
days after such repayment. The Cooperative's obligations under the M&T Line of
Credit are secured by a security interest granted to M&T Bank in substantially
all of the assets of the Cooperative, excluding its Class B common units owned
in Holdings LLC. However, the collateral does include any distributions made in
respect of the Class B common units and cash payments made by Birds Eye Foods to
the Cooperative.

NOTE 4. INCOME TAXES

The Cooperative qualifies for tax exempt status as a farmers' cooperative under
Section 521 of the Internal Revenue Code. Exempt cooperatives are permitted to
reduce or eliminate taxable income through the use of special deductions such as
dividends paid on its common and preferred stock and distributions of patronage
income.

The Cooperative uses these special deductions and distributions of patronage
income to reduce the Cooperative's taxable income for periods after August 19,
2002. At its March 2006 meeting, the Pro-Fac Board of Directors determined that
there would be no payment or allocation of patronage proceeds for the fiscal
year ended June 24, 2006. As a result, the Cooperative recorded a tax provision
of $0.3 million in fiscal 2006. For the fiscal year ended June 25, 2005, the
Cooperative recorded a distribution of patronage income of $0.5 million; 20
percent payable in cash and the balance in qualified retains. This distribution
reduced taxable income to zero for fiscal year 2005.



                                       35




<PAGE>



NOTE 5. COMMON STOCK AND CAPITALIZATION

The following table illustrates the Cooperative's shares authorized, issued, and
outstanding at June 24, 2006 and June 25, 2005.


<TABLE>
<CAPTION>

                                                                                                 Shares Issued and Outstanding
                                                                  Par             Shares      ---------------------------------
                                                                 Value          Authorized      June 24, 2006    June 25, 2005
                                                                 -----          ----------      -------------    -------------
<S>                                                             <C>                <C>               <C>              <C>
Common Stock                                                    $    5.00          5,000,000         1,769,543        1,771,096
Non-Cumulative Preferred Stock                                  $   25.00          5,000,000            26,312           27,962
Class A Cumulative Preferred Stock                              $    1.00         10,000,000         4,929,272        4,789,910
Class B Cumulative Preferred Stock                              $    1.00          9,500,000                 0                0
Class C Cumulative Preferred Stock                              $    1.00         10,000,000                 0                0
Class D Cumulative Preferred Stock                              $    1.00         10,000,000                 0                0
Class E Cumulative Preferred Stock                              $    1.00         10,000,000                 0                0
Class B, Series I 10% Cumulative Redeemable
         Preferred Stock                                        $    1.00            500,000                 0                0

</TABLE>

In the event of liquidation, the relative preference of Pro-Fac's outstanding
securities is as follows: first retains, then all classes of preferred stock,
pari passu, then common stock and, finally, special membership interests.

While the Cooperative has no plans to liquidate, if liquidation were to occur,
the order of redemption and the amount required to fully redeem each class
outstanding, at June 24, 2006, is as follows:

<TABLE>
<CAPTION>

                                                                           Amount Required
(Dollars in Thousands)                                                     to Fully Redeem
                                                                           ---------------
<S>                                                                         <C>
Retains                                                                            $  6,771
Non-Cumulative Preferred Stock                                                          658  (1)
                AND
Class A Cumulative Preferred Stock                                                  123,233  (1)
Common Stock                                                                          8,848
Special Membership Interests                                                         21,733
                                                                                -----------

                                                                                   $161,243
                                                                                ===========
</TABLE>

(1) Pari passu

Qualified Retained Earnings Allocated to Members ("Retains"): Retains arise from
patronage income and are allocated to the accounts of members within 8 1/2
months of the end of each fiscal year. No patronage proceeds were retained for
the year ended June 24, 2006. For the year ended June 25, 2005, the Cooperative
retained $0.4 million of patronage proceeds. At the discretion of the Board of
Directors qualified retains may mature into preferred stock in December of the
fifth year after allocation. Qualified retains are taxable income to the member
in the year the allocation is made.

When and if determined by the Board of Directors, retains convert into shares of
Class A cumulative preferred stock. The Board of Directors, however, has
tentatively decided that, as of November 2002, conversion of matured retains
into Class A cumulative preferred stock will not be considered by the Board of
Directors as a possible treatment of the retains issued for fiscal year 2002
and thereafter. During fiscal 2006, $3.4 million of retains were converted
into shares of Class A cumulative preferred stock at the rate of $25 of retains
for one share of Class A cumulative preferred stock.

Preferred Stock: All preferred stock outstanding originated, directly or
indirectly, from the conversion at par value of retains at the discretion of
Pro-Fac's Board of Directors. Preferred Stock is generally non-voting, except
that the holders of preferred stock are entitled to vote on those matters
specifically required by law.

On August 23, 1995, the Cooperative commenced an offer to exchange one share of
its Class A cumulative preferred stock (liquidation preference $25 per share)
for each share of its outstanding non-cumulative preferred stock (liquidation
preference $25 per share). The Pro-Fac Board of Directors has determined that,
as of March 2006, Pro-Fac will no longer accept offers from holders of shares
of Pro-Fac non-cumulative preferred stock to exchange their shares of
non-cumulative preferred stock for shares of Pro-Fac Class A cumulative
preferred stock. Pro-Fac's Class A cumulative preferred stock is listed under
the symbol PFACP on the Nasdaq Capital Market system. As of June 24, 2006, the
number of Class A cumulative preferred stock record holders was 1,676.




                                       36




<PAGE>



The dividend rates for the preferred stock outstanding are as follows:

<TABLE>
<S>                                                    <C>
          Non-Cumulative Preferred Stock               $1.50 per share payable annually at the discretion of the Board.

          Class A Cumulative Preferred Stock           $1.72 per share annually, payable in four quarterly installments
                                                       of $0.43 per share; cumulative, if not paid

</TABLE>

In June 2006, the Cooperative declared a cash dividend of $1.50 per share on the
non-cumulative preferred stock and $.43 per share on the Class A cumulative
preferred stock. These dividends amounted to approximately $2.1 million and were
paid in July 2006.

The Cooperative's ability to pay dividends is dependent upon, among other
factors, its available cash, capital surplus and its future earnings. The
Cooperative's principal use of available cash has been the payment of dividends
on its Class A cumulative preferred stock and its non-cumulative preferred
stock. The $10.0 million annual receipts under the Termination Agreement have
been the principal source of cash for payment of dividends with the last
installment under the Termination Agreement payable on April 1, 2007. The
Limited Liability Company Agreement of Holdings LLC provides that, subject to
restrictions contained in any financing arrangements of Holdings LLC or its
subsidiaries (including Birds Eye Foods), after August 19, 2007 and prior to a
sale (or dissolution) of Holdings LLC, Holdings LLC will use commercially
reasonable efforts to cause Birds Eye Foods to make annual distributions to
Holdings LLC, which can in turn be used by Holdings LLC to fund distributions to
its common unit holders, including Pro-Fac. Many factors could affect whether
such distributions are made in the future and the current financing arrangements
of Birds Eye Foods with its senior lenders include a covenant which precludes
such distributions without the permission of the senior lenders.

Holdings LLC has advised Pro-Fac that it will not speculate as to whether
distributions will be made under the Limited Liability Company Agreement.
Because Pro-Fac has no control over the determination of whether such
distributions will be made, Pro-Fac's Board of Directors has developed a
business plan that assumes distributions will not be made under the Limited
Liability Company Agreement to replace the $10.0 million annual source of cash
under the Termination Agreement ending on April 1, 2007.

On May 5, 2006, the Board determined, subject to all of the facts and
circumstances at the relevant times, that it expected to declare a full
quarterly dividend of $.43 per share of Class A cumulative preferred stock for
payment in July 2006. This dividend was declared in June 2006 and paid in July
2006. Thereafter, the Board expects to declare dividends of $.21 per share of
Class A cumulative stock for quarterly payments to be made in October 2006,
January 2007, and April 2007. Beginning with the quarter ending in June 2007,
the Board expects to suspend in full the declaration and payment of dividends on
Pro-Fac's Class A cumulative preferred stock. To the extent that dividends on
the Class A cumulative preferred stock are not paid or are not paid in full, the
unpaid amounts cumulate and must be paid before any dividends may be paid on any
other securities of Pro-Fac.

In June 2006 the Board declared the annual dividend of $1.50 per share on the
Cooperative's non-cumulative preferred stock which was paid in July 2006, and in
accordance with the Cooperative's Certificate of Incorporation expects to set
aside the proportionate share of the annual non-cumulative preferred stock
dividend (expected to be approximately $15,000) for payment in July 2007, if, as
expected, reduced quarterly dividend declarations are made in fiscal 2007 on the
Class A cumulative preferred stock. Beginning with the quarter ending in June
2007, the Board expects to suspend in full the declaration and payment of
dividends on its non-cumulative preferred stock.

The Board believes, taking into consideration the reduction and ultimate
suspension of dividend payments on the Cooperative's preferred stock and
borrowing capacity under Pro-Fac's Credit Agreement with Birds Eye Foods, that
Pro-Fac should have sufficient sources of cash to fund its operations at least
through the end of fiscal 2010, which the Board believes will provide time for
the Board to monitor Pro-Fac's investment in Holdings LLC and explore other
sources of cash. The declaration of any future dividends, including the expected
declarations outlined above, are subject to Board action in advance of any such
declaration based upon all of the facts and circumstances at each such time.

While the Cooperative prepares its financial statements using generally accepted
accounting principles, which are based primarily on historical cost, it
determines its capital surplus under applicable state law. Under New York Law,
capital surplus is the amount by which the fair value of the Cooperative's
assets exceed the total of its liabilities and the par value of its capital
stock. For the fiscal quarter ended June 24, 2006, the Cooperative's Board of
Directors determined that capital surplus was available based upon evidence of
the fair market value of the Cooperative's assets, including its investment in
Holdings LLC. There can, however, be no assurance that the value of the
Cooperative's assets, including its investment in Holdings LLC, will be
sufficient to support a determination of capital surplus in the future. Absent
sufficient capital surplus, the Cooperative will be prohibited from paying
dividends. Factors that may influence the fair market value of the Cooperative's
investment in Holdings LLC include the financial condition and results of
operations of Birds Eye Foods.



                                       37




<PAGE>


Common Stock: The Cooperative's common stock is owned by its members. The number
of shares of common stock owned by a Pro-Fac member-grower is based upon the
quantity and type of crops to be marketed through Pro-Fac by the member-grower.
If a member-grower ceases to be a producer of agricultural products that are
marketed through the Cooperative, then the member-grower must sell its shares of
Pro-Fac common stock to another grower that is acceptable to the Cooperative.
Additionally, member-growers desiring to adjust quantities of crops marketed
through Pro-Fac may either offer to sell or purchase shares of Pro-Fac common
stock.

If the selling member-grower is unable to find a qualified grower to purchase
its shares of Pro-Fac common stock, the member-grower must, upon notification
from the Cooperative, sell its shares of common stock to the Cooperative for
cash at the par value, plus any dividends thereon which have been declared but
remain unpaid.

At its January 2006 board meeting, the Pro-Fac Board of Directors extended the
moratorium on Pro-Fac's repurchase of shares of common stock from member-growers
to apply to all potential repurchases except for approximately $9,000 of common
stock repurchased in April 2006 under policies in effect prior to the January
2006 change. In the future, Pro-Fac will not repurchase shares of Pro-Fac common
stock unless approved by the Board of Directors on a case-by-case basis.

At its January 2003 Board meeting, the Board of Directors of Pro-Fac determined
to suspend the payment of annual dividends on the Cooperative's common stock for
an indefinite period of time. In fiscal 2006, 2005 and 2004, no cash dividends
were paid on common stock.

Special Membership Interests: In conjunction with the Transaction, special
membership interests were allocated to the then current and former members of
Pro-Fac who had made patronage deliveries to or on behalf of Pro-Fac in the six
fiscal years ended June 29, 2002, in proportion to the patronage deliveries made
by those members in each case during that six fiscal year period.

Accumulated Deficit: Accumulated deficit consists of accumulated (losses)/income
after distribution of earnings allocated to members and dividends.

NOTE 6.   OTHER MATTERS

Legal Matters: The Cooperative is party to various legal proceedings from time
to time in the normal course of its business. In the opinion of management, any
liability that might be incurred upon the resolution of these proceedings will
not, in the aggregate, have a material adverse effect on the Cooperative's
business, financial condition, and results of operations. Further, no such
proceedings are known to be contemplated by any governmental authorities. The
Cooperative maintains general liability insurance coverage in amounts deemed to
be adequate by the Board of Directors.

Guarantees and Indemnifications: Pro-Fac is a guarantor, under an Indenture
dated November 18, 1998, between Birds Eye Foods, the Guarantors named therein
and IBJ Schroder Bank & Trust Company, Inc., as trustee, which Indenture was
amended by a First Supplemental Indenture dated July 22, 2002, among Birds Eye
Foods, the Guarantors named therein and The Bank of New York (as successor
trustee to IBJ Schroder Bank & Trust Company), as trustee, and as further
amended by a Second Supplemental Indenture dated March 1, 2003, of Birds Eye
Foods' obligations under its 11 7/8 percent Senior Subordinated Notes issued in
fiscal 1999 in the original aggregate principal amount of $200.0 million. On
November 24, 2003, Birds Eye Foods repaid $150.0 million of these notes. The
principal amount is due November 1, 2008. Interest on the Notes accrues at the
rate of 11 7/8 percent per annum and is payable semi-annually in arrears on May
1 and November 1. Pro-Fac, jointly and severally, guarantees Birds Eye Foods'
obligations under the 11 7/8 percent Senior Subordinated Notes, including the
payment in full when due of all principal and interest on the 11 7/8 percent
Senior Subordinated Notes at maturity or otherwise and, in the event of any
extension of time of payment or renewal of any of the 11 7/8 percent Senior
Subordinated Notes, that the Notes will be promptly paid in full when due
pursuant to the terms of any such extension or renewal. In the event of such
shortfall, Pro-Fac would be required to pay any interest payments due as well as
any unpaid principal balance due on the 11 7/8 percent Senior Subordinated
Notes. As of June 24, 2006, the outstanding loan amount, including accrued
interest, was $50.9 million.

As partial consideration for the acquisition in fiscal 1999 of the frozen and
canned vegetable business of Dean Foods Company, Birds Eye Foods issued to Dean
Foods a Subordinated Promissory Note for $30.0 million due November 22, 2008.
The Subordinated Promissory Note is currently owned by GLK, LLC, a New York
limited liability company, whose members are Birds Eye Foods and GLK Holdings,
Inc., which is a wholly owned subsidiary of Birds Eye Foods. Pro-Fac guarantees
Birds Eye Foods' obligations under that Note. Interest on the Subordinated
Promissory Note accrued quarterly in arrears, commencing December 31, 1998, at a
rate per annum of 5 percent until November 22, 2003, and at a rate of 10 percent
thereafter. Interest accrued through November 22, 2003 was paid in kind through
the issuance by Birds Eye Foods of additional subordinated promissory notes
identical to the Subordinated Promissory Note. Birds Eye Foods satisfied this
requirement through the issuance of additional promissory notes. Interest
accruing after November 22, 2003 is payable in cash. Pro-Fac, jointly and
severally, guarantees Birds Eye Foods' obligations under the Subordinated
Promissory Notes, including the payment in full when due of all principal and
interest on the Notes. In the event of such shortfall, Pro-Fac would be required
to pay any interest payments due as well as any unpaid principal balance due on
the Notes. As of June 24, 2006, the outstanding loan amount subject to the
Cooperative's guarantee included principal of $30.0 million and interest of $9.7
million.



                                       38





<PAGE>


Historically, when Pro-Fac has sold assets, it may have retained certain
liabilities for known exposures and provided indemnification to the buyer(s)
with respect to future claims for certain unknown liabilities existing, or
arising from events occurring, prior to the sale date, including liabilities for
taxes, legal matters, environmental exposures, labor contingencies, product
liability, and other obligations. Pro-Fac may enter into similar arrangements in
the future. Agreements to provide indemnifications may vary in duration,
generally for two years for certain types of indemnities, to terms for tax
indemnifications that are generally aligned to the applicable statute of
limitations for the jurisdiction in which the tax is imposed, and to terms for
certain liabilities (i.e., warranties of title and environmental liabilities)
that typically do not expire. The maximum potential future payments that the
Cooperative could be required to make under agreements of indemnification are
(or may be) either contractually limited to a specified amount or unlimited. The
maximum potential future payments that the Cooperative could be required to make
under agreements of indemnification are not determinable at this time, as any
future payments would be dependent on the type and extent of the related claims,
and all relevant defenses, which are not estimable. Historically, costs incurred
to resolve claims related to agreements of indemnification have not been
material to the Cooperative's financial position, results of operations or cash
flows.

From time to time, in the ordinary course of its business, Pro-Fac has, or may,
enter into agreements with its customers, suppliers, service providers and
business partners which contain indemnification provisions. Generally, such
indemnification provisions require the Cooperative to indemnify and hold
harmless the indemnified party(ies) and to reimburse the indemnified party(ies)
for claims, actions, liabilities, losses and expenses in connection with any
personal injuries or property damage resulting from any Pro-Fac products sold or
services provided. Additionally, the Cooperative may from time to time agree to
indemnify and hold harmless its providers of services from claims, actions,
liabilities, losses and expenses relating to their services to Pro-Fac, except
to the extent finally determined to have resulted from the fault of the provider
of services relating to such services. The level of conduct constituting fault
of the service provider will vary from agreement to agreement and may include
conduct which is defined in terms of negligence, gross negligence, willful
misconduct, omissions or other culpable behavior. The terms of these
indemnification provisions are generally not limited. The maximum potential
future payments that the Cooperative could be required to make under these
indemnification provisions are unlimited and are not determinable at this time,
as any future payments would be dependent on the type and extent of the related
claims, and all relevant defenses to the claims, which are not estimable.
Historically, costs incurred to resolve claims related to these indemnification
provisions have not been material to the Cooperative's financial position,
results of operations or cash flows.

The Cooperative has by-laws, policies, and agreements under which it indemnifies
its directors and officers from liability for certain events or occurrences
while the directors or officers are, or were, serving at Pro-Fac's request in
such capacities. Pro-Fac indemnifies its officers and directors to the fullest
extent allowed by law. The maximum potential amount of future payments that the
Cooperative could be required to make under these indemnification provisions is
unlimited, but would be affected by all relevant defenses to the claims.

As part of the Transaction, Pro-Fac agreed to indemnify Birds Eye Foods for
certain environmental liabilities exceeding $200,000. This obligation, however,
is only triggered once the aggregate of all liabilities subject to
indemnification under the Unit Purchase Agreement (including those unrelated to
environmental matters) exceeds $10.0 million.

As of the date of this Report, Pro-Fac does not expect to be required to perform
under the guarantees and indemnifications described above.

Rent commitment: Pro-Fac rents office space through June 2007 at an annual rent
of approximately $18,300 (approximately $1,524 per month). Pro-Fac has the
option to renew the lease for a one year period at a rent to be negotiated.

Benefit plan: Pro-Fac sponsors a 401(k) profit-sharing plan under which its
employees may defer a portion of their salary. Pro-Fac contributes an amount
equal to 3 percent of each employee's salary. Pro-Fac may also make additional
contributions at Pro-Fac's sole discretion.

Related party transactions: Substantially all purchases are from member-growers
of the Cooperative. For fiscal years 2006, 2005 and 2004, approximately 77
percent, 72 percent and 75 percent, respectively, of all crops purchased by
Pro-Fac from its members were sold to its indirect equity investee, Birds Eye
Foods.

On July 25, 2006, Birds Eye Foods announced its intention to exit from the vast
majority of its non-branded frozen business. As part of the strategy, the New
York processing facilities of Birds Eye Foods located in Oakfield and Bergen,
which are supplied by Pro-Fac member-growers, will be sold or, if not sold after
the particular facility's current production season, closed between October 2006
and June 2007. For the year ended June 24, 2006, Pro-Fac supplied raw product
with a total CMV of approximately $22.0 million to these processing facilities,
representing approximately 34 percent of total raw product supplied to all
Pro-Fac customers and approximately 44 percent of the CMV of raw product
supplied to Birds Eye Foods.



                                       39





<PAGE>


NOTE 7.  QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly financial information for the fiscal years ended June 24, 2006 and
June 25, 2005 appears in the following table.

In the opinion of management, all adjustments necessary for a fair presentation
of the unaudited quarterly data have been made.

(Dollars in Thousands Except Per Share)

<TABLE>
<CAPTION>
                                                                       Quarters
                                              ---------------------------------------------------------
Fiscal 2006                                         1              2              3              4         Total Year
                                              ------------   ------------   ------------   ------------    ----------

<S>                                              <C>            <C>            <C>            <C>            <C>
Net sales                                        $     0        $     0        $    13        $    23        $    36
Gross profit/(loss)                                    0              0              1             (2)            (1)
Pretax income/(loss) before dividends,
  and allocation of net income/(loss)             (2,090)         3,790         (2,470)        (1,084)        (1,854)
Net income/(loss)                                 (2,090)         3,790         (2,879)        (1,005)        (2,184)
</TABLE>

<TABLE>
<CAPTION>
                                                                       Quarters
                                              ---------------------------------------------------------
Fiscal 2006                                         1              2              3              4         Total Year
                                              ------------   ------------   ------------   ------------    ----------

<S>                                              <C>            <C>            <C>            <C>            <C>
Net sales                                        $     0        $     0        $     0        $     0        $     0
Gross profit                                           0              0              0              0              0
Pretax income before dividends,
  and allocation of net proceeds                    (545)         5,229           (890)        (2,155)         1,639
Net income                                          (545)         5,229           (890)        (2,155)         1,639
</TABLE>


ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.   CONTROLS AND PROCEDURES

Disclosure Controls and Procedures: Pro-Fac's Principal Executive Officer and
Principal Financial Officer evaluated the effectiveness of the design and
operation of Pro-Fac's disclosure controls and procedures (as defined in Rule
13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")). Based on that evaluation, Pro-Fac's Principal Executive and Principal
Financial Officer concluded that Pro-Fac's disclosure controls and procedures as
of June 24, 2006 (the end of the period covered by this Report) have been
designed and are functioning effectively to provide reasonable assurance that
the information required to be disclosed by Pro-Fac in reports filed or
submitted under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms.

There were no changes in Pro-Fac's internal control over financial reporting
identified during the fourth quarter ended June 24, 2006, that materially
affected, or are reasonably likely to materially affect, Pro-Fac's internal
control over financial reporting.

ITEM 9B.   OTHER INFORMATION

Not applicable.



                                       40





<PAGE>


                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Set forth below is certain information about the individuals that currently
serve as directors and executive officers of Pro-Fac.

                       MANAGEMENT AND DIRECTORS OF PRO-FAC

<TABLE>
<CAPTION>
                                               Date
                     Name                    of Birth                      Positions
           ------------------------          --------           --------------------------------
<S>                                            <C>              <C>
           Bruce R. Fox                        1947             Director
           Steven D. Koinzan                   1948             Director  and Second Vice President
           Charles R. Altemus                  1931             Director
           Stephen R. Wright                   1947             General Manager, Chief Executive Officer,
                                                                Chief Financial Officer and Secretary
           Dale W. Burmeister                  1940             Director
           Peter R. Call (1)                   1956             Director and President
           Kenneth A. Dahlstedt                1954             Director
           Robert DeBadts                      1957             Director
           Kenneth A. Mattingly                1948             Director
           Allan W. Overhiser (1)              1960             Director, First Vice President and Treasurer
           Paul E. Roe                         1939             Director
           Darell Sarff                        1949             Director
           James Vincent                       1944             Director
           Cornelius D. Harrington, Jr.(2)     1927             Director
           William J. Lipinski (2)             1957             Director
           Frank M. Stotz (2)                  1930             Director
</TABLE>

(1) Mr. Allen W. Overhiser and Mr. Peter R. Call serve as directors of both
Birds Eye Foods and Pro-Fac. Messrs. Overhiser and Call serve as the "Pro-Fac
Directors" on Birds Eye Foods' Board of Directors pursuant to the
Securityholders Agreement

(2) Members of Pro-Fac's Audit Committee, which is a separately-designated
standing Audit Committee established by and among Pro-Fac's Board of Directors
for the purposes of, among other duties, overseeing the accounting and financial
reporting processes of Pro-Fac and audits of Pro-Fac's financial statements. The
charter of the Audit Committee is available on the Cooperative's Investor
Relations website www.profaccoop.com/aboutProfac/investor.asp. Mr. Harrington
is the Chairman of the Audit Committee. The Board of Directors has determined
that Messrs. Harrington, Lipinski and Stotz each qualify as an "audit committee
financial expert" as defined in Item 401(h) of Regulation S-K and that each of
the members of the Audit Committee satisfies the independence standards in
Section 4200(a)(15) of the NASD listing standards and Rule 10A-3 under the
Securities Exchange Act of 1934, as amended.

Bruce R. Fox has been a Director of Pro-Fac since 1973. He was Treasurer of
Pro-Fac from 1984 until March 1995, when he was elected President. He served as
President of Pro-Fac until March 2004. Mr. Fox also served as a Director of
Birds Eye Foods from 1994 to May 2004; serving as Vice Chairman from 2000 to
2002. He has been a member of Pro-Fac since 1974. Mr. Fox is a fruit and
vegetable grower (N.J. Fox & Sons, Inc. and AEBIG Apple LLC, Shelby, MI).

Steven D. Koinzan has been a Director of Pro-Fac since 1982. He was Secretary of
Pro-Fac from March 1993 until March 1995, Treasurer from March 1995 until 2000
and from March 2004 until March 2005 and Vice-President from 2000 until March
2004. Mr. Koinzan was elected to serve as a Second Vice President of Pro-Fac in
March 2005. From 1994 to August 29, 2002, Mr. Koinzan served as a director of
Birds Eye Foods; serving as Vice Chairman from 2001 to 2002. He has been a
member of Pro-Fac since 1979. Mr. Koinzan is a popcorn, field corn and soybean
farmer (Koinzan Farms; Norden, Nebraska).

Charles R. Altemus has been a Director of Pro-Fac since March 2004. He has been
a member of Pro-Fac since 1978. Mr. Altemus is a potato grower (Altemus Farms;
Penn Run, Pennsylvania).

Stephen R. Wright has been the General Manager of Pro-Fac since March 1995 and
was elected as Secretary in June 1999. He became Chief Executive Officer and
Chief Financial Officer of Pro-Fac on August 19, 2004. Mr. Wright previously
served as Assistant General Manager. Mr. Wright also served as Executive Vice
President - Investor Relations of Birds Eye Foods from November 6, 1996 to
August 19, 2004. He was Secretary of Birds Eye Foods from March 2000 to August
2002. He was Senior Vice President - Procurement of Birds Eye Foods from
November 1994 to November 1996 and Vice President - Procurement for Birds Eye
Foods from 1990 to November 1994, having served as Director of Commodities and
Administration Services for Birds Eye Foods from 1988 to 1990.

Dale W. Burmeister has been a Director of Pro-Fac since 1992 and a member of
Pro-Fac since 1974. Mr. Burmeister is a fruit and vegetable grower (Lakeshore
Farms, Inc.; Shelby, Michigan).



                                       41





<PAGE>


Peter R. Call has been a Director of Pro-Fac since February 2000. He has been a
member of Pro-Fac since 1979. He was elected to serve as President of Pro-Fac in
March 2004. Mr. Call also serves as a Director of Birds Eye Foods and has served
in this capacity since August 2002. Mr. Call is a vegetable and grain farmer
(My-T Acres, Inc. and Call Farms, Inc., Batavia, New York).

Kenneth A. Dahlstedt has been a Director of Pro-Fac since February 1998 and has
been a member of Pro-Fac since 1983. Mr. Dahlstedt is a vegetable grower (Ag.
Pro, Inc.; Mount Vernon, WA).

Robert DeBadts has been a Director of Pro-Fac since January 1997 and has been a
member of Pro-Fac since 1978. Mr. DeBadts is a fruit grower (Lake Breeze Fruit
Farms, Inc.; Sodus, New York).

Kenneth A. Mattingly has been a Director of Pro-Fac since 1993 and a member of
Pro-Fac since 1978. Mr. Mattingly is a vegetable and grain farmer (M-B Farms
Inc.; LeRoy, New York).

Allan W. Overhiser has been a Director of Pro-Fac since March 1994, a Vice
President since March 2004, and First Vice President and Treasurer since March
2005 and a member of Pro-Fac since 1984. Mr. Overhiser also serves as a Director
of Birds Eye Foods and has served in this capacity since May, 2004. Mr.
Overhiser is a fruit farmer (A.W. Overhiser Orchards; South Haven, Michigan).

Paul E. Roe has been a Director of Pro-Fac since 1986 and a member of Pro-Fac
since 1961. From 2000 to August 19, 2002, Mr. Roe served as a Director of Birds
Eye Foods. Mr. Roe is a vegetable, grain and dry bean farmer (Roe Acres, Inc.;
Bellona, New York).

Darell Sarff has been a Director of Pro-Fac since February 1997 and has been a
member of Pro-Fac since 1988. Mr. Sarff is a grain and vegetable farmer (Sarff
Farms; Chandlerville, Illinois).

James Vincent was elected as a Director of Pro-Fac in February 2005 and has been
a member of Pro-Fac since 1967. Mr. Vincent is a vegetable grower (L-Brooke
Farms; Byron, New York).

Cornelius D. Harrington Jr. has been a Director of Pro-Fac since August 2002.
Mr. Harrington also served as Director of Birds Eye Foods from 1999 to August
19, 2002. Prior to his retirement, he was President of the Bank of New
England-West in Springfield, MA a predecessor to the Bank of New England-West
from 1978 to December 1990. He was Chief Executive Officer of the Bank of New
England-West from 1984 to December 1990. Until 1987, he served as Chairman of
the Board of Directors of BayState Medical Center in Springfield, Massachusetts.
He is a former Director of the Farm Credit Bank of Springfield.

William J. Lipinski has been a Director of Pro-Fac since March 2006. Mr.
Lipinski currently is the President and Chief Executive Officer of First Pioneer
Farm Credit, ACA and has served in these offices since June 1994. Mr. Lipinski
also serves as Chairman of the Board of Directors for Farm Credit Financial
Partners, Inc., and has served as Chairman since 1998. Mr. Lipinski also served
as Director of Farm Credit Leasing Services Corporation from 1998 to 2003 and as
Chairman of Farm Credit System's Presidents Planning Committee from 2000 to
2003. Mr. Lipinski has also held various positions with Farm Credit Bank of
Springfield, Springfield Bank for Cooperatives, and Southern New England
Production Credit and Federal Land Bank Associations.

Frank M. Stotz has been a Director of Pro-Fac since August 2002. Mr. Stotz also
served as Director of Birds Eye Foods from 1994 to August 19, 2002. Mr. Stotz
retired in 1994 from his position as Senior Vice President - Finance of Bausch &
Lomb Incorporated. Before joining Bausch & Lomb in that capacity in 1991, Mr.
Stotz was a partner for 25 years with Price Waterhouse (now
PricewaterhouseCoopers LLP).

Term of Office: Pro-Fac's Board of Directors is currently divided into three
classes, with the classes of directors serving for staggered three-year terms
that expire in successive years. Except for those directors serving on Pro-Fac's
Audit Committee, approximately one-third of the directors are elected annually
by the members. Those directors serving on Pro-Fac's Audit Committee are
appointed by Pro-Fac's Board of Directors. Officers of Pro-Fac are elected for
one-year terms.

Section 16(a) Beneficial Ownership Reporting Compliance: Section 16(a) of the
Securities Exchange Act of 1934 requires Pro-Fac's directors and officers, and
persons who own more than 10% of a registered class of Pro-Fac's equity
securities, to file reports of ownership and changes in ownership of the
securities of Pro-Fac with the Securities and Exchange Commission (the "SEC").
Pro-Fac officers and directors and beneficial owners of more than 10% of any
registered class of Pro-Fac's equity securities are required by SEC regulation
to furnish Pro-Fac with copies of all Section 16(a) reports they file.

Based upon a review of the copies of such reports, all filing requirements under
Section 16(a) applicable to its officers, directors and greater than 10%
beneficial owners were complied with, except a late report on Form 4 for each
of: Messrs. Burmeister, Call, Dahlstedt, DeBadts, Fox, Koinzan, Mattingly,
Overhiser, Roe, Sarff and Vincent was filed on February 16, 2006 to report the
issuance of shares of Series A preferred stock upon conversion of membership
allocation certificates, retains, on January 3, 2006.

Code of Ethics: The Board of Directors has adopted the "Pro-Fac Cooperative,
Inc. Principal Executive Officer/Senior Financial Officer Code of Ethics" that
applies to the Company's principal executive officer and principal financial
officer. A copy of the Code of Ethics is available at the Cooperative's Investor
Relations website - "About Pro-Fac"
(www.profaccoop.com/aboutProfac/investor.asp). The Cooperative intends to
post amendments to or waivers from the Code of Ethics for its principal
executive officer and its principal financial officer at this location on that
website.



                                       42





<PAGE>


Involvement in Certain Legal Proceedings: Mr. Stephen Wright was previously an
executive officer of PF Acquisition II, Inc. a former subsidiary of Pro-Fac. On
June 27, 2001, PF Acquisition II, Inc. filed a petition under the federal
bankruptcy laws.

ITEM 11.   EXECUTIVE COMPENSATION

Mr. Stephen Wright serves as Pro-Fac's General Manager, Chief Executive Officer,
Chief Financial Officer and Secretary. From August 19, 2002 through August 19,
2004, during the term of the Transitional Services Agreement, Mr. Wright served
as Pro-Fac's General Manager and Secretary, but during this period he was a full
time employee of Birds Eye Foods and his compensation was paid by Birds Eye
Foods. Prior to August 19, 2002, Mr. Wright allocated his time and
responsibilities between Pro-Fac and Birds Eye Foods pursuant to the Marketing
and Facilitation Agreement.

The following table sets forth information concerning the compensation paid for
each of the fiscal years ended June 24, 2006, June 25, 2005 and June 26, 2004 to
Mr. Wright, Pro-Fac's only "Named Executive Officer" during fiscal 2006.

Executive Compensation
Summary Compensation Table (1)

<TABLE>
<CAPTION>
                                                               Annual
                                                           Compensation (3)
                                           Fiscal      -----------------------         All Other
Name and Principal Position                 Year       Salary(4)      Bonus(5)      Compensation (6)
---------------------------                 ----       ---------      --------      ----------------
<S>                                         <C>        <C>             <C>               <C>
Stephen R. Wright (2)                       2006       $ 129,423       $     0           $ 3,766
                                            2005         149,804             0             2,885
                                            2004         234,000        19,000             7,532
</TABLE>

(1) As is indicated above, Pro-Fac had no executive officers who were employees
    of Pro-Fac until August 19, 2004. All compensation described prior to that
    date was paid to Mr. Wright by Birds Eye Foods.

(2) Mr. Wright remained an employee of Birds Eye Foods and rendered services to
    Pro-Fac pursuant to the Transitional Services Agreement until August 19,
    2004. Effective August 19, 2004, Mr. Wright became an employee of Pro-Fac.

(3) In accordance with the rules of the Securities and Exchange Commission, the
    compensation described in this table does not include group life, health and
    medical insurance or other benefits received by Mr. Wright that are
    available generally to all salaried employees of Pro-Fac or Birds Eye Foods,
    and, except as expressly noted, certain perquisites and other personal
    benefits, securities or property received by Mr. Wright that do not exceed
    (in the aggregate) the lesser of $50,000 or 10% of Mr. Wright's total salary
    and bonus disclosed in this table.

(4) In fiscal 2005, Mr. Wright's salary included $44,035 paid by Birds Eye Foods
    through August 19, 2004 and $105,769 paid by Pro-Fac thereafter through June
    25, 2005.

(5) Bonuses paid by Pro-Fac are at the sole discretion of Pro-Fac's board of
    directors. Pursuant to the Birds Eye Foods Management Incentive Plan, until
    August 19, 2004, additional compensation was paid if justified by the
    activities of the officers and employees eligible under the Management
    Incentive Plan and by the earnings of Birds Eye Foods.

(6) Consisting of matching contributions under Pro-Fac's 401(k) Plan in fiscal
    year 2006 and 2005 and matching contributions under Birds Eye Foods' 401(k)
    plan for fiscal year 2004.

Directors' Compensation: During fiscal 2006, Pro-Fac Directors were each paid an
annual retainer. Messrs. Altemus, Burmeister, Dahlstedt, Debadts, Fox, Koinzan,
Mattingly, Overhiser, Roe and Vincent, were paid an annual retainer of $8,000.
Mr. Call, who also serves as Chairman of the Board of Directors of Pro-Fac, was
paid an annual retainer of $12,000. All non-member-grower directors of Pro-Fac,
consisting of Messrs. Harrington, Lipinski, Stotz and Mr. James A. Pierson, who
served as a director until March 2006, received retainers at an annual rate of
$20,000. Directors are not paid additional compensation for serving on a
standing committee of the Board of Directors or for their participation in
special assignments in their capacity as directors. All directors receive
reimbursement for reasonable out-of-pocket expenses incurred in connection with
meetings of the Board. There is no change in director compensation in fiscal
2007 from fiscal 2006.

Employment Contracts, Termination of Employment and Change-in-Control
Arrangements: Pursuant to an employment agreement entered into on July 30, 2004
and extended on March 23, 2006, beginning August 19, 2004, Mr. Wright is
employed as the General Manager, Chief Executive Officer and Chief Financial
Officer of Pro-Fac, reporting to Pro-Fac's Board of Directors. The agreement
extends until (and including) August 19, 2008 and provides for an annualized
salary of $185,000 beginning August 19, 2006. Mr. Wright is entitled to
participate in employee benefits and perquisites generally made available to
employees of Pro-Fac. Pro-Fac has also agreed to maintain a 401(k) plan (or
similar arrangement) pursuant to which Pro-Fac will contribute up to 3% of Mr.
Wright's earned compensation, to provide Mr. Wright with term life insurance,
short-term and long-term disability insurance, personal accident insurance and
accidental death and dismemberment insurance.



                                       43





<PAGE>


Either Mr. Wright or Pro-Fac, subject to the rights and obligations set forth in
the employment agreement, including proper notice, may terminate Mr. Wright's
employment. Pro-Fac is obligated to pay Mr. Wright his salary plus benefits for
the remainder of the month in which such termination becomes effective and for a
period of six (6) months thereafter in the event Mr. Wright's employment is
terminated for any reason other than "for cause" (as such term is defined in the
employment agreement, other than, for death, disability, merger, consolidation,
dissolution or cessation of business). Mr. Wright's employment agreement
contains provisions relating to non-competition and non-solicitation of
customers during the term of his employment and for a period of 12 months
thereafter (except if Mr. Wright's employment is terminated without cause), and
non-solicitation of Pro-Fac's employees for 12 months following termination of
employment. Mr. Wright's employment agreement further provides that, if Mr.
Wright's employment is terminated as a result of the dissolution of Pro-Fac or
the cessation of Pro-Fac's business, or in the event of the merger or
consolidation of Pro-Fac, the Cooperative will have no future or continuing
obligations to Mr. Wright, other than the payment of his salary plus benefits
for the remainder of the month in which such termination became effective or the
merger or consolidation occurred, and for a period of six (6) months thereafter.

Compensation Committee Interlocks and Insider Participation: The members of the
Cooperative's Compensation Committee of the Board of Directors during fiscal
2006 were: Mr. Steven Koinzan, Mr. Allan Overhiser, Mr. Kenneth Mattingly, Mr.
William Lipinski beginning March 2006, Mr. James Pierson until March 2006, and
Mr. Peter Call.

Mr. Peter Call serves as the Cooperative's President, Mr. Overhiser serves as
its Vice President and Treasurer and Mr. Koinzan serves as its Vice President.
Mr. Koinzan served as Pro-Fac's Secretary from 1993 to 1995, as its Vice
President from 2000 to March 2004 and as its Treasurer from March 1995 to March
2000 and from March 2004 until March 2005. Mr. Koinzan was, again, elected to
serve as Vice President of Pro-Fac in March 2005. However, Messrs. Call,
Overhiser and Koinzan do not serve (and have not served) as employee-officers of
the Cooperative.

Mr. Koinzan, Mr. Overhiser, Mr. Mattingly and Mr. Call are member-growers of
Pro-Fac. Accordingly, as member-growers of the Cooperative, during fiscal 2006
they received payments from Pro-Fac for crops delivered by them directly or
indirectly through entities owned or controlled by them. During fiscal year
2006, the aggregate amount of payments received by Messrs. Koinzan, Overhiser,
Mattingly and Call, directly or indirectly through entities owned or controlled
by them, for their crops was approximately $389,000, $110,000, $701,000 and
$2,086,000, respectively.

No interlocking relationships exist between members of the Pro-Fac Board or
Compensation Committee and the board of directors or compensation committee of
another company.



                                       44





<PAGE>


ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership,
as of June 24, 2006, by (i) each person or entity (including any group) who is
known by Pro-Fac to own beneficially more than 5 percent of Pro-Fac's common
stock (voting securities) and (ii) each Pro-Fac director, each Named Executive
Officer included in the Summary Compensation Table, and all directors and
current executive officers as a group, as to each class of securities of
Pro-Fac.

<TABLE>
<CAPTION>
                                                                           Amount and Nature of        Percent of
           Name                                Title of Class             Beneficial Ownership(a)       Class(b)
---------------------------------       ----------------------------      -----------------------      ----------

<S>                                     <C>                                     <C>                       <C>
Charles R. Altemus                      Common                                  21,007 (v)                1.19%
                                        Class A Cumulative Preferred             2,441 (v)                0.05%

Dale W. Burmeister                      Common                                  10,450 (c)                0.59%
                                        Class A Cumulative Preferred               657 (c)                0.01%
                                        Class A Cumulative Preferred               720                    0.01%

Peter R. Call                           Common                                  40,536 (d)                2.29%
                                        Class A Cumulative Preferred            27,177 (d)                0.55%
                                        Class A Cumulative Preferred            14,194 (e)                0.29%
                                        Class A Cumulative Preferred             5,361 (f)                0.11%
                                        Class A Cumulative Preferred            10,146                    0.21%
                                        Class A Cumulative Preferred             1,700 (g)                0.03%
                                        Class A Cumulative Preferred             1,795 (h)                0.04%

Kenneth A. Dahlstedt                    Common                                   7,375                    0.42%
                                        Common                                   1,833 (i)                0.10%
                                        Class A Cumulative Preferred               884                    0.02%
                                        Class A Cumulative Preferred               211 (i)                0.00%

Robert DeBadts                          Common                                  12,737 (j)                0.72%
                                        Class A Cumulative Preferred            13,483 (j)                0.27%
                                        Class A Cumulative Preferred               307 (k)                0.01%

Bruce R. Fox                            Common                                  11,315 (l)                0.64%
                                        Common                                     240 (m)                0.01%
                                        Class A Cumulative Preferred             9,316 (l)                0.19%
                                        Class A Cumulative Preferred             9,032 (n)                0.18%
                                        Class A Cumulative Preferred             1,085                    0.02%
                                        Class A Cumulative Preferred               955 (o)                0.02%

Cornelius D. Harrington, Jr.            None

Steven D. Koinzan                       Common                                  11,184                    0.63%
                                        Class A Cumulative Preferred             6,935                    0.14%
                                        Class A Cumulative Preferred               250 (p)                0.01%

William J. Lipinski                     None

Kenneth A. Mattingly                    Common                                  12,758 (q)                0.72%
                                        Class A Cumulative Preferred            13,517 (q)                0.27%

Allan W. Overhiser                      Common                                   3,258 (r)                0.18%
                                        Class A Cumulative Preferred             2,262 (r)                0.05%

Paul E. Roe                             Common                                  24,907 (s)                1.41%
                                        Class A Cumulative Preferred             9,354 (s)                0.19%

Darell Sarff                            Common                                   2,616                    0.15%
                                        Class A Cumulative Preferred             2,171                    0.04%

Frank M. Stotz                          None

</TABLE>


                                       45





<PAGE>


<TABLE>
<S>                                     <C>                                     <C>                       <C>
James Vincent                           Common                                  23,419 (t)                1.32%
                                        Common                                   1,496 (u)                0.08%
                                        Class A Cumulative Preferred             7,810 (u)                0.16%

Stephen R. Wright                       Class A Cumulative Preferred             1,640                    0.03%

All directors and current executive
 officers as a group (16)               Common                                 183,635                   10.38%
                                        Class A Cumulative Preferred           143,403                    2.91%
</TABLE>

(a)  Certain of the directors named above may have the opportunity, along with
     the other Pro-Fac members producing a specific crop, to acquire beneficial
     ownership of additional shares of the common stock of Pro-Fac within a
     period of approximately 60 days, commencing each year on February 1, if
     Pro-Fac determines that a permanent change is required in the total
     quantity of that particular crop.
(b)  Based on 1,769,543 shares of common stock and 4,929,272 shares of Class A
     Cumulative Preferred stock outstanding as of June 24, 2006. In the above
     table, each director who has direct beneficial ownership of common or
     preferred shares by reason of being the record owner of such shares has
     sole voting and investment power with respect to such shares, while each
     director who has direct beneficial ownership of common or preferred shares
     as a result of owning such shares as a joint tenant has shared voting and
     investment power regarding such shares. Each director who has indirect
     beneficial ownership of common or preferred shares resulting from his
     status as a shareholder or a partner of a corporation or partnership which
     is the record owner of such shares has sole voting and investment power if
     he controls such corporation or partnership. If he does not control such
     corporation or partnership, he has shared voting and investment power.
     Pro-Fac does not believe that the percentage ownership of any such
     corporation or partnership by a director is material, since in the
     aggregate no director beneficially owns in excess of 5 percent of either
     the common or preferred shares of Pro-Fac. Moreover, Pro-Fac members are
     only entitled to one vote regardless of the number of shares of common
     stock owned.
(c)  Record ownership by Lakeshore Farms, Inc.
(d)  Record ownership by My-T Acres, Inc.
(e)  Record ownership by My-T Acres, Inc. Employee Profit Sharing Plan
(f)  Record ownership by Call Farms, Inc.
(g)  Record ownership by Julie Call, Mr. Call's spouse
(h)  Record ownership by Casey Call, minor child of Peter R. Call
(i)  Record ownership by Ag-Pro, Inc.
(j)  Record ownership by Lake Breeze Fruit Farm, Inc.
(k)  Record ownership jointly with spouse
(l)  Record ownership by N.J. Fox & Sons, Inc.
(m)  Record ownership by AEBIG Apple LLC
(n)  Record ownership by Kathleen Fox, Mr. Fox's spouse
(o)  Record ownership by Bruce Fox IRA
(p)  Record ownership by Steven and Lois Koinzan, jointly
(q)  Record ownership by M-B Farms, Inc.
(r)  Record ownership by A.W. Overhiser Orchards
(s)  Record ownership by Roe Acres, Inc.
(t)  Record ownership by L-Brooke Farms, LLC
(u)  Record ownership by L-Brooke Farms, Inc.
(v)  Record ownership by Charles and Mildred Altemus, jointly



                                       46


<PAGE>


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Securityholders Agreement and Limited Liability Company Agreement: Pro-Fac,
Stephen R. Wright, the Chief Executive Officer, Chief Financial Officer, General
Manager and Secretary of Pro-Fac and others are parties to the Securityholders
Agreement and Limited Liability Company Agreement because of their ownership of
common units of Holdings LLC. Both the Securityholders Agreement and the Limited
Liability Company Agreement are described in this Report under the heading
"Description of Business - General Development of Business" in Part I, Item 1,
and such descriptions are incorporated by reference into this Item 13. As of
June 24, 2006, Mr. Wright owned approximately 553 Class C common units,
representing approximately 4.3 percent of the issued and outstanding Class C
common units and approximately 379 Class D common units, representing
approximately 2.8 percent of the issued and outstanding Class D common units of
Holdings LLC.

Purchase of Crops by Pro-Fac and Crops and Agricultural Services by Birds Eye
Foods: Pro-Fac members sell crops grown by them to Pro-Fac pursuant to general
marketing agreements between Pro-Fac and its members. Pro-Fac, in turn, markets
and sells its members' crops to food processors, including Birds Eye Foods. The
Directors of Pro-Fac, other than James A. Pierson, who served as a director of
the Cooperative until March 2006, Cornelius D. Harrington, Frank M. Stotz and
William J. Lipinski, who began his service as a director of Pro-Fac in March
2006, are grower-members of Pro-Fac. Accordingly, during fiscal year 2006, as
member-growers of the Cooperative, they received payments from Pro-Fac for crops
delivered by them directly or indirectly through entities owned or controlled by
them. Certain directors also receive payments from Birds Eye Foods for crops
delivered and agricultural services provided by them directly or indirectly
through entities owned or controlled by them.

During fiscal 2006, the following directors, directly or indirectly through
entities owned or controlled by them, received payments from Pro-Fac for crops
and Birds Eye Foods for crops and agricultural services as follows:

<TABLE>
<CAPTION>

(Dollars in Thousands)
                                                         RELATIONSHIP                                 PAYMENTS RECEIVED
        NAME                                              TO PRO-FAC                                     FISCAL 2006
---------------------------------------------    -------------------------------------         ------------------------------

                                                                                                  Pro-Fac     Birds Eye Foods
                                                                                                  -------     ---------------
<S>                                              <C>                                              <C>            <C>
Charles R. Altemus...........................    Director                                          $  339         $    0
Dale W. Burmeister...........................    Director                                          $  552         $    0
Peter R. Call................................    Director and President                            $2,086         $1,527
Kenneth A. Dahlstedt.........................    Director                                          $  385         $    0
Robert DeBadts...............................    Director                                          $  424         $  109
Bruce R. Fox.................................    Director                                          $  272         $  315
Steven D. Koinzan ...........................    Director and Vice President                       $  389         $   96
Kenneth A. Mattingly.........................    Director                                          $  701         $  974
Allan W. Overhiser...........................    Director, Vice President and Treasurer            $  110         $    0
Paul E. Roe .................................    Director                                          $  578         $  197
Darell Sarff.................................    Director                                          $   40         $    0
James Vincent................................    Director                                          $1,328         $  405

</TABLE>

Directors' and Officers' Liability Insurance: As authorized by New York law and
in accordance with the policy of that state, the Cooperative has obtained
insurance from Cincinnati Insurance Companies and U.S. Specialty insuring the
Cooperative against any obligation it incurs as a result of its indemnification
of its officers and directors, and insuring such officers and directors for
liability against which they may not be indemnified by the Cooperative. This
insurance has terms expiring on August 19, 2007, at an annual cost of
approximately $180,000. Additionally, the Cooperative has obtained insurance
from St. Paul Mercury Insurance Company and Great American Insurance Company,
insuring the Cooperative against any obligation it incurs as a result of its
indemnification of its officers and directors, and insuring such officers and
directors for liability against which they may not be indemnified by the
Cooperative for events occurring prior to August 19, 2002 where claims are
submitted prior to August 19, 2008. This insurance has a term expiring on August
19, 2008, at a cost of approximately $463,000. As of the date of this Report, no
sums have been paid to any officers or directors of the Cooperative under either
of these indemnification insurance policies.



                                       47





<PAGE>



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Fees to Independent Auditor for Fiscal 2006 and 2005: The following table shows
the aggregate fees billed for audit and other services provided by Deloitte &
Touche LLP ("D&T") for fiscal years 2006 and 2005.

<TABLE>
<CAPTION>

                                                       2006                 2005
                                                       ----                 ----
<S>                                                   <C>                <C>
Audit Fees                                            $47,800            $60,472
Audit-Related Fees                                          0                  0
Tax Fees                                                    0                  0
All Other Fees                                              0                  0
                                                      -------            -------
Total                                                 $47,800            $60,472
                                                      =======            =======

</TABLE>

Audit Fees: This category includes the audit of Pro-Fac's annual financial
statements, review of financial statements included in Pro-Fac's Form 10-Q
quarterly reports, and services that are normally provided by the independent
auditors in connection with statutory and regulatory filings or engagements for
those fiscal years.

Audit-Related Fees: This category consists of assurance and related services
provided by Pro-Fac's independent auditors that are reasonably related to the
performance of the audit or review of Pro-Fac's financial statements and are not
reported above under "Audit Fees."

Tax Fees: This category consists of professional services rendered by Pro-Fac's
independent auditors in connection with tax compliance, tax advice and tax
planning activities.

All Other Fees: This category consists of fees for services and products
provided to Pro-Fac by its independent auditors and not reported under "Audit
Fees", "Audit-Related Fees" or "Tax Fees" above.

Audit Committee Pre-Approval Policy: The Audit Committee pre-approves all
auditing services and permitted non-auditing services (including the fees and
terms of such services).



                                       48





<PAGE>



                                    PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this Report:

     1.  Financial Statements. The following Financial Statements and
         Supplementary Data of Pro-Fac and the Report of Independent Registered
         Public Accounting Firm included in Part II, Item 8:

<TABLE>
<CAPTION>

                                                                                                                         Page
                                                                                                                         ----
<S>                                                                                                                     <C>
Pro-Fac Cooperative, Inc.:
   Report of Independent Registered Public Accounting Firm..............................................................   23
   Financial Statements:
     Statements of Operations, Allocation of Net Income/(Loss) and Comprehensive Income/(Loss)
       for the years ended June 24, 2006, June 25, 2005 and June 26, 2004...............................................   24
     Balance Sheets at June 24, 2006 and June 25, 2005..................................................................   25
     Statements of Cash Flows for the years ended June 24, 2006, June 25, 2005 and June 26, 2004........................   26
     Statements of Changes in Shareholders' and Members' Capitalization/(Deficit) and Redeemable and Common Stock
       for the years ended June 24, 2006, June 25, 2005 and June 26, 2004...............................................   27
     Notes to Financial Statements......................................................................................   28

</TABLE>

     2.  Financial Statement Schedules:

         Separate Financial Statements of Fifty-Percent or Less Owned Persons:
         Exhibit 99 to this Report, Birds Eye Holdings LLC consolidated
         financial statements and financial statement schedule for the fiscal
         years ended June 24, 2006 and June 25, 2005, is incorporated by
         reference into this Report as the "Separate Financial Statements of
         Fifty-Percent or Less Owned Persons", a Financial Statement schedule
         required as part of this Report.

         Schedules other than those listed above are omitted because they are
         either not applicable or not required, or the required information is
         shown in the Financial Statements or the notes thereto.




                                       49





<PAGE>



3. Exhibits. The following exhibits are filed herein or have been previously
filed with the Securities and Exchange Commission:

<TABLE>
<CAPTION>

     Exhibit
     Number                              Description
     ------     ----------------------------------------------------------------
<S>             <C>
        2.1     Unit Purchase Agreement (filed as Exhibit 2.1 to Pro-Fac's Form
                8-K filed June 21, 2002 and incorporated herein by reference).

        3.1     Restated Certificate of Incorporation of Pro-Fac, dated August
                19, 2002 (filed as Exhibit 3.1 to Pro-Fac Form 10-K for the
                fiscal year ended June 29, 2002 and incorporate herein by
                reference).

        3.2     Bylaws of Pro-Fac Cooperative, Inc. as amended August 19, 2002,
                (filed as Exhibit 3.2 to Pro-Fac's Form 10-K for the fiscal year
                ended June 29, 2002 and incorporated herein by reference).

        4.1     Indenture, dated as of November 18, 1998, between Birds Eye
                Foods, the Guarantors named therein and IBJ Schroder Bank &
                Trust Company, Inc., as Trustee (filed as Exhibit 4.1 to Birds
                Eye Foods, Inc.'s Registration Statement on Form S-4 filed
                January 5, 1999 (Registration No. 333-70143) and incorporated
                herein by reference).

        4.2     Form of 11 7/8% Senior Subordinated Notes due 2008 (filed as
                Exhibit B to Exhibit 4.1 to Birds Eye Foods' Registration
                Statement on Form S-4 filed January 5, 1999 (Registration No.
                333-70143) and incorporated herein by reference).

        4.3     First Supplemental Indenture (amending the Indenture referenced
                in Exhibit 4.1 herein) dated July 22, 2002 (filed as Exhibit 4.3
                to Pro-Fac's Form 10-K for the fiscal year ended June 29, 2002
                and incorporated herein by reference).

        4.4     Second Supplemental Indenture (amending the Indenture referenced
                in Exhibit 4.1 herein) dated as of March 1, 2003 (filed as
                Exhibit 4.1 to Birds Eye Foods' Quarterly Report on Form 10-Q
                for the third fiscal quarter ended March 19, 2003 and
                incorporated herein by reference).

        4.5     Amended and Restated Marketing and Facilitation Agreement dated
                August 19, 2002 between Pro-Fac and Birds Eye Foods (filed as
                Exhibit 99.4 to Pro-Fac's Current Report on Form 8-K filed
                September 3, 2002 and incorporated herein by reference).

        10.1    Termination Agreement dated August 19, 2002 between Pro-Fac and
                Birds Eye Foods (filed as Exhibit 99.3 to Pro-Fac's Current
                Report on Form 8-K filed September 3, 2002 and incorporated
                herein by reference).

        10.2    Raw Product Supply Agreement with Seneca Foods Corporation
                (filed as Exhibit 10.22 to Pro-Fac's Annual Report on Form 10-K
                for the fiscal year ended June 28, 1997 and incorporated herein
                by reference).

        10.3    Subordinated Promissory Note of Birds Eye Foods, Inc. to Dean
                Foods Company, dated as of September 23, 1998 (filed as Exhibit
                10.3 to Pro-Fac's Quarterly Report on Form 10-Q for the first
                fiscal quarter ended September 26, 1998 and incorporated herein
                by reference).

        10.4    Transitional Services Agreement dated August 19, 2002 between
                Pro-Fac and Birds Eye Foods (filed as Exhibit 99.5 to Pro-Fac's
                Current Report on Form 8-K filed September 3, 2002 and
                incorporated herein by reference).

        10.5    Credit Agreement dated August 19, 2002 between Pro-Fac as
                borrower, and Birds Eye Foods as lender (filed as Exhibit 99.6
                to Pro-Fac's Current Report on Form 8-K filed September 3, 2002
                and incorporated herein by reference).

        10.6    Securityholders Agreement dated August 19, 2002 among Birds Eye
                Holdings LLC, Pro-Fac, Vestar/Agrilink Holdings LLC and others
                (filed as Exhibit 99.7 to Pro-Fac's Current Report on Form 8-K
                filed September 3, 2002 and incorporated herein by reference).

        10.7    Amendment No. 1 to the Securityholders Agreement dated August
                30, 2003 among Birds Eye Holdings, LLC, Pro-Fac Cooperative,
                Inc., Vestar/Agrilink Holdings, LLC, and others (filed as
                Exhibit 10.7 to Pro-Fac's Annual Report on Form 10-K for the
                fiscal year ended June 28, 2003 and incorporated herein by
                reference).

        10.8    Amended and Restated Limited Liability Company Agreement of
                Birds Eye Holdings LLC dated August 19, 2002 among Birds Eye
                Holdings LLC, Pro-Fac, Vestar/Agrilink Holdings and others
                (filed as Exhibit 99.8 to Pro-Fac's Current Report on Form 8-K
                filed September 3, 2002 and incorporated herein by reference).

</TABLE>



                                       50





<PAGE>


<TABLE>
<S>             <C>
        10.9    Amendment No. 1 to Amended and Restated Limited Liability
                Company Agreement of Birds Eye Holdings LLC (filed as Exhibit
                10.10 to Pro-Fac's Annual Report on Form 10-K for the fiscal
                year ended June 28, 2003 and incorporated herein by reference).

        10.10   Amendment No. 2 to Amended and Restated Limited Liability
                Company Agreement of Holdings LLC (filed as Exhibit 10.10 to
                Pro-Fac's Annual Report on Form 10-K for the fiscal year ended
                June 26, 2004 and incorporated herein by reference).

        10.11   Amendment No. 3 to Amended and Restated Limited Liability
                Company Agreement of Birds Eye Holdings LLC (filed herewith).

        10.12   Amendment No. 4 to Amended and Restated Limited Liability
                Company Agreement of Birds Eye Holdings LLC (filed herewith).

        10.13   Form of Management Unit Subscription Agreement dated as of
                August 19, 2002 between Holdings LLC and each executive officer
                of Birds Eye Foods party thereto (filed as Exhibit 99.1 to
                Pro-Fac's Current Report on Form 8-K filed September 3, 2002 and
                incorporated herein by reference).

       *10.14   Employment Agreement between Pro-Fac and Stephen R. Wright dated
                July 30, 2004 (filed as Exhibit 10.12 to Pro-Fac's Annual Report
                on Form 10-K for the fiscal year ended June 26, 2004 and
                incorporated herein by reference).

       *10.15   Extension and Amendment to Employment Agreement between Pro-Fac
                and Stephen R. Wright dated March 23, 2006 (filed as Exhibit
                10.2 to Pro-Fac's Quarterly Report on Form 10-Q for the third
                fiscal quarter ended March 25, 2006 and incorporated herein by
                reference).

       *10.16   Summary of Compensation Arrangements for the Cooperative's Named
                Executive Officer and Directors (filed herewith).

        31      Section 302 Certification of the Principal Executive Officer and
                Principal Financial Officer (filed herewith).

        32      Certification of Principal Executive Officer and Principal
                Financial Officer pursuant to 18 USC, Section 1350, as adopted
                pursuant to Section 906 (filed herewith).

        99      Birds Eye Holdings LLC consolidated financial statements and
                financial statement schedule for the fiscal years ended June 24,
                2006 and June 25, 2005 (filed herewith).

</TABLE>

*Management contracts or compensatory plans or arrangements.

 (b)     See Item 15(a)(3) above.
 (c)     See Item 15(a)(2) above.



                                       51





<PAGE>

                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to
be signed on its behalf by the undersigned, thereunto duly authorized.



                                         PRO-FAC COOPERATIVE, INC.


<TABLE>
<S>                             <C>
Date: September 20, 2006        BY: /s/   Stephen R. Wright
                                    -----------------------------
                                          Stephen R. Wright
                                    General Manager, Chief Executive Officer,
                                    Chief Financial Officer and Secretary
                                    (Principal Executive Officer,
                                    Principal Financial Officer, and
                                    Principal Accounting Officer)

</TABLE>


                                POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Stephen R. Wright as his true and lawful
attorney-in-fact and agent, with full power of substitution, for him, and in his
name, place and stead, in any and all capacities, to sign any amendments to this
Report on Form 10-K, and to file the same, with Exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite or necessary to be done as fully
to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent, or his substitutes, may
lawfully do or cause to be done by virtue hereof.

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



                                       52





<PAGE>


<TABLE>
<CAPTION>

                              SIGNATURE                            TITLE                                   Date
                              ---------                   --------------------------                -------------------
<S>                                                       <C>                                       <C>

/s/     Peter R. Call                                     President and Director                    September 20, 2006
        -------------------------------------------
        (PETER R. CALL)

/s/     Allan W. Overhiser                                Vice President, Treasurer and             September 20, 2006
        -------------------------------------------       Director
        (ALLAN W. OVERHISER)

/s/     Steven D. Koinzan                                 Vice President and Director               September 20, 2006
        -------------------------------------------
        (STEVEN D. KOINZAN)

/s/     Bruce R. Fox                                      Director                                  September 20, 2006
        -------------------------------------------
        (BRUCE R. FOX)

/s/     Charles R. Altemus                                Director                                  September 20, 2006
        -------------------------------------------
        (CHARLES R. ALTEMUS)

/s/     Dale W. Burmeister                                Director                                  September 20, 2006
        -------------------------------------------
        (DALE W. BURMEISTER)

/s/     Kenneth A. Dahlstedt                              Director                                  September 20, 2006
        -------------------------------------------
        (KENNETH A. DAHLSTEDT)

/s/     Robert DeBadts                                    Director                                  September 20, 2006
        -------------------------------------------
        (ROBERT DeBADTS)

/s/     Cornelius D. Harrington, Jr.                      Director                                  September 20, 2006
        -------------------------------------------
        (CORNELIUS D. HARRINGTON, JR.)

/s/     William J. Lipinski                               Director                                  September 20, 2006
        -------------------------------------------
        (WILLIAM J. LIPINSKI)

/s/     Kenneth A. Mattingly                              Director                                  September 20, 2006
        -------------------------------------------
        (KENNETH A. MATTINGLY)

/s/     Paul E. Roe                                       Director                                  September 20, 2006
        -------------------------------------------
        (PAUL E. ROE)

/s/     Darell Sarff                                      Director                                  September 20, 2006
        -------------------------------------------
        (DARELL SARFF)

/s/     Frank M. Stotz                                    Director                                  September 20, 2006
        -------------------------------------------
        (FRANK M. STOTZ)

/s/     James Vincent                                     Director                                  September 20, 2006
        -------------------------------------------
        (JAMES VINCENT)

/s/     Stephen R. Wright                                 General Manager, Chief Executive          September 20, 2006
        -------------------------------------------       Officer, Chief Financial Officer
        (STEPHEN R. WRIGHT)                               and Secretary
                                                          (Principal Executive Officer,
                                                          Principal Financial Officer, and
                                                          Principal Accounting Officer)

</TABLE>



                                       53





<PAGE>



                                  Exhibit Index

<TABLE>
<CAPTION>

     Exhibit
     Number                               Description
     ------     ----------------------------------------------------------------
<S>             <C>
        2.1     Unit Purchase Agreement (filed as Exhibit 2.1 to Pro-Fac's Form
                8-K filed June 21, 2002 and incorporated herein by reference).

        3.1     Restated Certificate of Incorporation of Pro-Fac, dated August
                19, 2002 (filed as Exhibit 3.1 to Pro-Fac Form 10-K for the
                fiscal year ended June 29, 2002 and incorporate herein by
                reference).

        3.2     Bylaws of Pro-Fac Cooperative, Inc. as amended August 19, 2002,
                (filed as Exhibit 3.2 to Pro-Fac's Form 10-K for the fiscal year
                ended June 29, 2002 and incorporated herein by reference).

        4.1     Indenture, dated as of November 18, 1998, between Birds Eye
                Foods, the Guarantors named therein and IBJ Schroder Bank &
                Trust Company, Inc., as Trustee (filed as Exhibit 4.1 to Birds
                Eye Foods, Inc.'s Registration Statement on Form S-4 filed
                January 5, 1999 (Registration No. 333-70143) and incorporated
                herein by reference).

        4.2     Form of 11 7/8% Senior Subordinated Notes due 2008 (filed as
                Exhibit B to Exhibit 4.1 to Birds Eye Foods' Registration
                Statement on Form S-4 filed January 5, 1999 (Registration No.
                333-70143) and incorporated herein by reference).

        4.3     First Supplemental Indenture (amending the Indenture referenced
                in Exhibit 4.1 herein) dated July 22, 2002 (filed as Exhibit 4.3
                to Pro-Fac's Form 10-K for the fiscal year ended June 29, 2002
                and incorporated herein by reference).

        4.4     Second Supplemental Indenture (amending the Indenture referenced
                in Exhibit 4.1 herein) dated as of March 1, 2003 (filed as
                Exhibit 4.1 to Birds Eye Foods' Quarterly Report on Form 10-Q
                for the third fiscal quarter ended March 19, 2003 and
                incorporated herein by reference).

        4.5     Amended and Restated Marketing and Facilitation Agreement dated
                August 19, 2002 between Pro-Fac and Birds Eye Foods (filed as
                Exhibit 99.4 to Pro-Fac's Current Report on Form 8-K filed
                September 3, 2002 and incorporated herein by reference).

        10.1    Termination Agreement dated August 19, 2002 between Pro-Fac and
                Birds Eye Foods (filed as Exhibit 99.3 to Pro-Fac's Current
                Report on Form 8-K filed September 3, 2002 and incorporated
                herein by reference).

        10.2    Raw Product Supply Agreement with Seneca Foods Corporation
                (filed as Exhibit 10.22 to Pro-Fac's Annual Report on Form 10-K
                for the fiscal year ended June 28, 1997 and incorporated herein
                by reference).

        10.3    Subordinated Promissory Note of Birds Eye Foods, Inc. to Dean
                Foods Company, dated as of September 23, 1998 (filed as Exhibit
                10.3 to Pro-Fac's Quarterly Report on Form 10-Q for the first
                fiscal quarter ended September 26, 1998 and incorporated herein
                by reference).

        10.4    Transitional Services Agreement dated August 19, 2002 between
                Pro-Fac and Birds Eye Foods (filed as Exhibit 99.5 to Pro-Fac's
                Current Report on Form 8-K filed September 3, 2002 and
                incorporated herein by reference).

        10.5    Credit Agreement dated August 19, 2002 between Pro-Fac as
                borrower, and Birds Eye Foods as lender (filed as Exhibit 99.6
                to Pro-Fac's Current Report on Form 8-K filed September 3, 2002
                and incorporated herein by reference).

        10.6    Securityholders Agreement dated August 19, 2002 among Birds Eye
                Holdings LLC, Pro-Fac, Vestar/Birds Eye Holdings LLC and others
                (filed as Exhibit 99.7 to Pro-Fac's Current Report on Form 8-K
                filed September 3, 2002 and incorporated herein by reference).

        10.7    Amendment No. 1 to the Securityholders Agreement dated August
                30, 2003 among Agrilink Holdings, LLC, Pro-Fac Cooperative,
                Inc., Vestar/Agrilink Holdings, LLC, and others (filed as
                Exhibit 10.7 to Pro-Fac's Annual Report on Form 10-K for the
                fiscal year ended June 28, 2003 and incorporated herein by
                reference).

        10.8    Amended and Restated Limited Liability Company Agreement of
                Birds Eye Holdings LLC dated August 19, 2002 among Birds Eye
                Holdings LLC, Pro-Fac, Vestar/Agrilink Holdings and others
                (filed as Exhibit 99.8 to Pro-Fac's Current Report on Form 8-K
                filed September 3, 2002 and incorporated herein by reference).

</TABLE>



                                       54





<PAGE>

<TABLE>
<S>             <C>
        10.9    Amendment No. 1 to Amended and Restated Limited Liability
                Company Agreement of Birds Eye Holdings LLC (filed as Exhibit
                10.10 to Pro-Fac's Annual Report on Form 10-K for the fiscal
                year ended June 28, 2003 and incorporated herein by reference).

        10.10   Amendment No. 2 to Amended and Restated Limited Liability
                Company Agreement of Holdings LLC (filed as Exhibit 10.10 to
                Pro-Fac's Annual Report on Form 10-K for the fiscal year ended
                June 26, 2004 and incorporated herein by reference).

        10.11   Amendment No. 3 to Amended and Restated Limited Liability
                Company Agreement of Birds Eye Holdings LLC (filed herewith).

        10.12   Amendment No. 4 to Amended and Restated Limited Liability
                Company Agreement of Birds Eye Holdings LLC (filed herewith).

        10.13   Form of Management Unit Subscription Agreement dated as of
                August 19, 2002 between Holdings LLC and each executive officer
                of Birds Eye Foods party thereto (filed as Exhibit 99.1 to
                Pro-Fac's Current Report on Form 8-K filed September 3, 2002 and
                incorporated herein by reference).

       *10.14   Employment Agreement between Pro-Fac and Stephen R. Wright dated
                July 30, 2004 (filed as Exhibit 10.12 to Pro-Fac's Annual Report
                on Form 10-K for the fiscal year ended June 26, 2004 and
                incorporated herein by reference).

       *10.15   Extension and Amendment to Employment Agreement between Pro-Fac
                and Stephen R. Wright dated March 23, 2006 (filed as Exhibit
                10.2 to Pro-Fac's Quarterly Report on Form 10-Q for the third
                fiscal quarter ended March 25, 2006 and incorporated herein by
                reference).

       *10.16   Summary of Compensation Arrangements for the Cooperative's Named
                Executive Officer and Directors (filed herewith).

        31      Section 302 Certification of the Principal Executive Officer and
                Principal Financial Officer (filed herewith).

        32      Certification of Principal Executive Officer and Principal
                Financial Officer pursuant to 18 USC, Section 1350, as adopted
                pursuant to Section 906 (filed herewith).

        99      Birds Eye Holdings LLC consolidated financial statements and
                financial statement schedule for the fiscal years ended June 24,
                2006 and June 25, 2005 (filed herewith).

</TABLE>

                *Management contracts or compensatory plans or arrangements.



                                       55