13

                               Page 1 of 13 Pages




                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    Form 10-Q


          Quarterly Report under Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

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

                For the quarterly period ended December 28, 1996

                                       OR

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

                        For the transition period from to

                Registration Statement (Form S-1) Number 33-60273

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

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

       90 Linden Place, PO Box 682, Rochester, NY       14603
         (Address of Principal Executive Offices)     (Zip Code)

 Registrant's Telephone Number, Including Area Code (716) 383-1850

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  twelve  months (or 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 the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of January 15, 1996.

                            Common Stock - 1,800,371







<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS

<TABLE>
Pro-Fac Cooperative, Inc.
Consolidated Statement of Operations and Net Proceeds

<CAPTION>
(Dollars in Thousands)

                                                                 Three Months Ended                     Six Months Ended
                                                             December 28,     December 23,       December 28,         December 23,
                                                                 1996             1995               1996                 1995
                                                             ------------     ------------       ------------         ------------

<S>                                                            <C>              <C>                 <C>                 <C>     
Net sales                                                      $208,186         $208,186            $382,186            $373,364
Cost of sales                                                   148,630          156,495             280,939             279,141
                                                               --------         --------            --------            --------
Gross profit                                                     59,556           51,691             101,247              94,223
Gain on sale of Finger Lakes Packaging                            3,565                0               3,565                   0
Selling, administrative, and general expense                    (41,881)         (46,308)            (74,797)            (83,023)
                                                               --------         --------            --------            --------
Operating income                                                 21,240            5,383              30,015              11,200
Interest expense                                                 (9,561)         (10,959)            (19,442)            (21,005)
                                                               --------         --------            --------            --------
Income/(loss) before taxes, dividends, allocation of net
   proceeds, and cumulative effect of an accounting change       11,679           (5,576)             10,573              (9,805)
Tax (provision)/benefit                                          (3,126)             915              (3,653)              2,711
                                                               --------         --------            --------            --------
Income/(loss) before cumulative effect of an accounting
   change, dividends, and allocation of net proceeds              8,553           (4,661)              6,920              (7,094)
Cumulative effect of an accounting change                             0                0               4,516                   0
                                                               --------         --------            --------            --------
Net income/(loss)                                              $  8,553         $ (4,661)           $ 11,436            $ (7,094)
                                                               ========         ========            ========            ========

Allocation of Net Proceeds:
   Net income/(loss)                                           $  8,553         $ (4,661)           $ 11,436          $   (7,094)
   Dividends on common and preferred stock                       (1,343)          (1,312)             (2,678)             (6,347)
                                                               --------         --------            --------         -----------
   Net proceeds/(deficit)                                         7,210           (5,973)              8,758             (13,441)
   Allocation (to)/from earned surplus                           (3,247)           5,973              (4,282)             13,441
                                                               --------         --------            --------          ----------
   Net proceeds available to members                           $  3,963         $      0            $  4,476       $           0
                                                               ========         ========            ========       =============

Net Proceeds Available to Members:
   Estimated cash payment                                      $    792                             $    895
   Qualified retains                                              3,171                                3,581
                                                               --------                             --------
   Net proceeds available to members                           $  3,963                             $  4,476
                                                               ========                             ========
<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>


<PAGE>


<TABLE>
Pro-Fac Cooperative, Inc.
Consolidated Balance Sheet

(Dollars in Thousands)
<CAPTION>
                                                                                        December 28,     June 29,     December 23,
                                                                                            1996           1996           1995
                                                                                        ------------    ---------     ------------

<S>                                                <C>          <C>         <C>          <C>            <C>             <C>  
Assets
Current assets:
   Cash and cash equivalents                                                             $  7,653       $  8,873        $  6,188
   Accounts receivable, trade, net                                                         57,633         47,259          62,094
   Accounts receivable, other                                                               4,857          6,814           9,880
   Income taxes refundable                                                                      0              0          11,987
   Current deferred tax assets                                                              9,995         13,731           3,954
   Inventories -
     Finished goods                                                                       142,545         97,018         165,009
     Raw materials and supplies                                                            35,128         33,556          46,581
                                                                                         --------       --------        --------
           Total inventories                                                              177,673        130,574         211,590
                                                                                         --------       --------        --------
   Prepaid manufacturing expense                                                                0         11,339               0
   Prepaid expenses and other current assets                                                9,243          1,066           4,045
                                                                                         --------       --------        --------
           Total current assets                                                           267,054        219,656         309,738
Investment in Bank                                                                         24,439         24,439          22,907
Property, plant, and equipment, net                                                       250,002        271,574         277,035
Assets held for sale                                                                          903          5,368           5,935
Goodwill and other intangible assets, net                                                  99,842        103,760          83,706
Other assets                                                                               11,304         12,500          12,899
                                                                                         --------       --------        --------
           Total assets                                                                  $653,544       $637,297        $712,220
                                                                                         ========       ========        ========
Liabilities and Shareholders' and Members' Capitalization Current liabilities:
   Notes payable                                                                         $ 32,000       $      0        $ 70,000
   Current portion of obligations under capital leases                                        547            547             764
   Current portion of long-term debt                                                        8,075          8,075           8,056
   Accounts payable                                                                        44,582         54,791          49,361
   Income taxes payable                                                                     5,723          2,289               0
   Accrued interest                                                                         9,444          9,447           9,486
   Accrued employee compensation                                                            8,551          8,368           7,945
   Accrued manufacturing expense                                                            2,771              0           2,269
   Other accrued expenses                                                                  30,234         24,775          27,515
   Dividends payable                                                                           40            128             103
   Amounts due members                                                                     21,469          7,875          17,454
                                                                                         --------       --------        --------
           Total current liabilities                                                      163,436        116,295         192,953
Long-term debt                                                                            133,342        167,683         181,420
Senior subordinated notes                                                                 160,000        160,000         160,000
Obligations under capital leases                                                            1,125          1,125           1,620
Deferred income tax liabilities                                                            40,537         44,753          26,244
Other non-current liabilities                                                              20,693         20,741          17,906
                                                                                         --------       --------        --------
           Total liabilities                                                              519,133        510,597         580,143
                                                                                         --------       --------        --------
Commitments and contingencies
Class B cumulative  redeemable  preferred stock  liquidation  preference $10 per
   share, authorized - 500,000 shares; issued and
     outstanding 36,531, 33,364, and 25,478 shares, respectively                              365            334             255
Common stock, par value $5, authorized - 5,000,000 shares
                                                  December 28,   June 29,  December 23,
                                                      1996         1996        1995
                                                  -----------   ---------  ------------
Shares issued                                      1,800,371    1,836,963   1,888,154
Shares subscribed                                     49,422       59,359      58,013
                                                   ---------    ---------   ---------
           Total subscribed and issued             1,849,793    1,896,322   1,946,167
Less subscriptions receivable in installments        (49,422)     (59,359)    (58,013)
                                                   ---------    ---------   ---------
                                                   1,800,371    1,836,963   1,888,154       9,002          9,185           9,441
                                                   =========    =========   =========
Shareholders' and members' capitalization:
   Retained earnings allocated to members                                                  35,899         32,318          34,239
   Non-qualified allocation to members                                                      3,275          3,275           3,851
   Non-cumulative preferred stock, par value $25; authorized - 5,000,000 shares;
     issued and outstanding - 61,597,
       105,788, and 231,147, respectively                                                   1,540          2,645           5,779
   Class A cumulative preferred stock, liquidation preference
     $25 per share; authorized - 49,500,000 shares; issued and
       outstanding 3,076,895, 3,032,704 and 2,812,178 shares,
          respectively                                                                     76,923         75,818          70,304
   Earned surplus                                                                           7,407          3,125           8,208
                                                                                         --------       --------        --------
           Total shareholders' and members' capitalization                                125,044        117,181         122,381
                                                                                         --------       --------        --------
           Total liabilities and capitalization                                          $653,544       $637,297        $712,220
                                                                                         ========       ========        ========

<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>


<PAGE>


<TABLE>
Pro-Fac Cooperative Inc.
Consolidated Statement of Cash Flows

(Dollars in Thousands)
<CAPTION>

                                                                                            Six Months Ended
                                                                                     December 28,      December 23,
                                                                                         1996              1995
                                                                                     ------------      ------------
<S>                                                                                   <C>               <C>      
Cash flows from operating activities:
   Net income/(loss)                                                                  $ 11,436          $ (7,094)

   Adjustments to reconcile net  income/(loss) to net cash provided by operating
activities:
     Cumulative effect of an accounting change                                          (4,516)                0
     Amortization of goodwill, other intangibles, and financing fees                     2,451             2,053
     Depreciation                                                                       11,897            12,772
     Gain on sale of Finger Lakes Packaging                                             (3,565)                0
     Change in assets and liabilities:
       Accounts receivable                                                             (14,572)           (3,877)
       Inventories                                                                     (51,790)          (47,158)
       Accounts payable and accrued expenses                                            10,409              (169)
       Amounts due to members                                                           12,699             3,644
       Federal and state taxes refundable                                                3,620            (1,881)
       Other assets and liabilities                                                     (2,131)           (2,989)
                                                                                      --------          --------
Net cash used in operating activities                                                  (24,062)          (44,699)
                                                                                      --------          --------

Cash flows from investing activities:
   Purchase of property, plant, and equipment                                           (6,466)          (10,189)
   Disposals of property, plant, and equipment                                          34,439             4,019
   Cash paid for acquisition                                                                 0            (5,400)
                                                                                      --------          --------
Net cash provided by/(used in) investing activities                                     27,973           (11,570)
                                                                                      --------          --------

Cash flows from financing activities:
   Proceeds from short-term debt                                                        32,000            70,000
   Proceeds from long-term debt                                                              0             5,400
   Payments on long-term debt                                                          (34,341)          (11,141)
   Repurchases of common stock, net of issuances                                          (152)              301
   Cash paid in lieu of fractional shares                                                    0               (11)
   Cash dividends paid                                                                  (2,638)           (6,244)
                                                                                      --------          --------
Net cash (used in)/provided by financing activities                                     (5,131)           58,305
                                                                                      --------          --------
Net change in cash and cash equivalents                                                 (1,220)            2,036
Cash and cash equivalents at beginning of period                                         8,873)            4,152
                                                                                      --------          --------
Cash and cash equivalents at end of period                                            $  7,653          $  6,188
                                                                                      ========          ========

Fiscal 1996 amounts above exclude the effects of the acquisition of Packer Foods
   as detailed in the Supplemental Disclosure of Cash Flow Information
Supplemental Disclosure of Cash Flow Information Cash paid/(received) during the
   year for:
     Interest                                                                         $ 19,699          $ 25,415
                                                                                      ========          ========
     Income taxes, net                                                                      32          $   (366)
                                                                                      ========          ========

   Acquisition of Packer Foods in July 1995:
     Accounts receivable                                                                                $  1,375
     Inventories                                                                                           4,278
     Prepaid expenses and other current assets                                                               270
     Property, plant and equipment                                                                         5,884
     Goodwill                                                                                                128
     Accounts payable                                                                                     (4,954)
     Accrued expenses                                                                                       (257)
     Deferred income tax                                                                                    (226)
     Other non-current liabilities                                                                        (1,098)
                                                                                                        --------
     Cash paid for acquisition                                                                          $  5,400
                                                                                                        ========

<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>


<PAGE>


                            PRO-FAC COOPERATIVE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.       SUMMARY OF ACCOUNTING POLICIES

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting  principles and, in the opinion
of management,  include all  adjustments  (consisting  only of normal  recurring
adjustments)  necessary for a fair presentation of the results of operations for
these periods.  The following  summarizes the  significant  accounting  policies
applied in the  preparation  of the  accompanying  financial  statements.  These
financial statements should be read in conjunction with the financial statements
and accompanying notes contained in the Pro-Fac  Cooperative,  Inc.  ("Pro-Fac")
Form 10-K for the fiscal year ended June 29, 1996. The results of operations for
the interim periods are not necessarily  indicative of the results of operations
for the full year.

Consolidation: As of all dates after November 3, 1994, and for all periods after
such  date,  the  consolidated  financial  statements  include  Pro-Fac  and its
wholly-owned  subsidiary,  Curtice-Burns  Foods,  Inc.  ("Curtice Burns" or "the
Company") after elimination of intercompany transactions and balances.

Change in Accounting  Principle:  Effective June 30, 1996, accounting procedures
were  changed  to  include  in  prepaid   expenses  and  other  current  assets,
manufacturing spare parts previously charged directly to expense. This change is
preferable because it provides a better matching of costs with related revenues.
In addition, the Company's independent  accountants have agreed that this change
in accounting is preferable.  The Indenture,  which covers the Company's  Senior
Subordinated Notes (the "Notes") provides among other things that, if holders of
greater  than 25 percent of the Notes  object to this  change,  the Company must
return to its previous accounting  practice.  The favorable cumulative effect of
the change (net of income  taxes of $1.2  million) was $4.5  million.  Pro forma
amounts for the cumulative  effect of the accounting change on prior periods are
not  determinable  due to the lack of  physical  inventory  counts  required  to
establish quantities at the respective dates.

Reclassification:  Certain  items for  fiscal  1996 have  been  reclassified  to
conform with fiscal 1997 presentation.


NOTE 2.       AGREEMENTS WITH CURTICE BURNS

The contractual  relationship  between the two parties is defined in the Pro-Fac
Marketing and Facilitation  Agreement  ("Agreement").  Under the Agreement,  the
Company pays Pro-Fac the commercial  market value ("CMV") for all crops supplied
by  Pro-Fac.  CMV is  defined  as 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.  Although CMV is intended
to be no more than the fair  market  value of the  crops  purchased  by  Curtice
Burns, it may be more or less than the price Curtice Burns would pay in the open
market in the  absence of the  Agreement.  Under the  Agreement  the  Company is
required to have on its board of directors some persons who are neither  members
of nor  affiliated  with  Pro-Fac  ("Disinterested  Directors").  The  number of
Disinterested  Directors  must at least  equal the number of  directors  who are
members of  Pro-Fac.  The volume  and type of crops to be  purchased  by Curtice
Burns under the  Agreement  are  determined  pursuant to its annual profit plan,
which  requires the approval of a majority of the  Disinterested  Directors.  In
addition,  in any year in which the Company has earnings on products  which were
processed from crops supplied by Pro-Fac ("Pro-Fac Products"),  the Company pays
to  Pro-Fac  up to 90  percent  of such  earnings,  but in no case  more than 50
percent of all pretax earnings (before dividing with Pro-Fac) of the Company. In
years in which the Company has losses on Pro-Fac  Products,  the Company reduces
the CMV it would  otherwise  pay to Pro-Fac by up to 90 percent of such  losses,
but in no case by more than 50  percent of all pretax  losses  (before  dividing
with Pro-Fac) of the Company. Additional patronage income is paid to Pro-Fac for
services  provided to Curtice  Burns,  including  the  provision of a long term,
stable crop supply,  favorable payment terms for crops and access to cooperative
bank  financing and the sharing of risks of losses of certain  operations of the
business.  Earnings and losses are determined at the end of the fiscal year, but
are accrued on an estimated basis during the year.

Some of the additional  patronage income received by Pro-Fac from the Company is
not paid in cash by Pro-Fac to its  members  but is  instead  allocated  to them
through  notices of allocation  ("Retains").  Funds  represented by Retains have
historically  been  reinvested  by Pro-Fac in the Company.  Under the  Indenture
related to the Notes, Pro-Fac is required to reinvest at least 70 percent of the
additional patronage income in Curtice Burns.

NOTE 3. OTHER MATTERS

Seneca to Purchase  Private  Label Canned  Vegetable  Businesses:  On January 6,
1997, the Company and Seneca Foods Corporation ("Seneca") jointly announced that
they have signed a letter of intent for Seneca to acquire  certain Curtice Burns
assets and to realign

<PAGE>


the sourcing of Seneca's New York State raw vegetable products.  The transaction
calls for Seneca to acquire the Curtice  Burns  Leicester,  New York  production
facility and the LeRoy, New York  distribution  center,  as well as the Blue Boy
brand.

Seneca will produce,  market and sell the Blue Boy brand canned  vegetables  and
private  label  canned  vegetables  and will also  pack  certain  products  on a
contractual  basis for  Curtice  Burns.  The  acquisition  will not  include the
Greenwood and Silver Floss labels, or Curtice Burns  sauerkraut,  beets in glass
containers,  or frozen vegetable business. Terms and conditions of the agreement
are subject to ongoing negotiations and board approval from Seneca and Pro-Fac.

Seneca and the Company will also forge a long-term strategic alliance to combine
their  agricultural  departments  into one organization to be managed by Curtice
Burns.  The  objective is to maximize  sourcing  efficiencies  of New York State
vegetable requirements for both companies.  This agreement will initially have a
minimum ten-year term.

The parties are working towards finalizing the agreement, subject to further due
diligence  by  both  parties,  and  expect  to  close  by the  end of  March.  A
mutually-agreed  goal for both  companies is a continuity  of  employment at the
facilities.

No significant gain or loss is anticipated as a result of this transaction.

Finger Lakes  Packaging:  On October 9, 1996, the Company  completed the sale of
Finger Lakes Packaging,  Inc.  ("Finger Lakes  Packaging"),  a subsidiary of the
Company, to Silgan Containers Corporation, an indirect,  wholly-owned subsidiary
of Silgan Holdings,  Inc., headquartered in Stamford,  Connecticut.  The Company
received proceeds of approximately $30.0 million.  The transaction also included
a  long-term  supply  agreement  between  Silgan and  Curtice  Burns.  A gain of
approximately $3.6 million was recorded. Proceeds from this sale were applied to
the outstanding loans at CoBank, ACB (the "Bank").

Dividends:  Subsequent to quarter end, the Cooperative  declared a cash dividend
of $.43 per share on the Class A Cumulative  Preferred  Stock.  These  dividends
amounted to $1.3 million and will be paid on January 30, 1997.

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

The purpose of this review is to highlight the more  significant  changes in the
major items of Pro-Fac's  statement of operations  and net proceeds in the first
six months and second quarter of fiscal 1997 and 1996.

                         PRO-FAC'S RESULTS OF OPERATIONS

Changes From December 1995 to December  1996: For the three and six months ended
December  28,  1996,  the change in net  proceeds  compared to the prior year is
summarized below in millions of dollars:
<TABLE>

                                                                                    Three        Six
                                                                                    Month       Month
                                                                                    Change      Change

<CAPTION>
<S>                                                                                 <C>         <C>  
Change in gross profit                                                              $ 7.9       $ 7.0
Change in selling, general and administrative expenses                                4.4         8.2
Change in interest expense                                                            1.4         1.6
Gain on sale of Finger Lakes Packaging                                                3.6         3.6
                                                                                    -----       -----
Change in income before taxes, dividends, allocations
   of net proceeds, and cumulative effect of an accounting change                    17.3        20.4
Change in taxes on income                                                            (4.1)       (6.4)
Cumulative effect of an accounting change                                             0.0         4.5
                                                                                    -----       -----
Change in net income                                                                $13.2       $18.5
                                                                                    =====       =====
</TABLE>

Because Curtice Burns is Pro-Fac's principal subsidiary, business conditions and
trends affecting Curtice Burns'  profitability  also affect the profitability of
Pro-Fac.  For these reasons,  management  believes  discussions  relating to the
financial  condition and results of operations of Pro-Fac should primarily focus
on the operations of Curtice Burns.



<PAGE>


                       CURTICE BURNS RESULTS OF OPERATIONS

The following tables  illustrate the Company's results of operations by business
for the three- and six-month  periods  ended  December 28, 1996 and December 23,
1995,  and the  Company's  total  assets by business as of December 28, 1996 and
December 23, 1995.

<TABLE>
Net Sales

(Dollars in Millions)
<CAPTION>

                                                     Three Months Ended                               Six  Months Ended
                                            December 28,           December 23,             December 28,             December 23,
                                                1996                   1995                     1996                     1995
                                        --------------------    ------------------       -------------------     ------------------
                                                      % of                   % of                    % of                     % of
                                           $         Total          $        Total          $        Total          $         Total
                                        -------      -----       ------      -----       ------     --------     ------       -----

<S>                                     <C>          <C>         <C>          <C>        <C>          <C>        <C>          <C>  
Comstock Michigan Fruit ("CMF")         $109.2       52.5%       $104.2       50.0%      $187.3       49.0%      $172.9       46.3%
Nalley Fine Foods                         45.6       21.9          46.5       22.3         89.8       23.5         92.9       24.9
Southern Frozen Foods                     25.0       12.0          26.5       12.7         47.3       12.4         49.4       13.2
Snack Foods Group                         16.3        7.8          15.0        7.2         33.5        8.8         30.4        8.1
Brooks Foods                              12.1        5.8          12.4        6.0         19.2        5.0         19.3        5.2
                                        ------      -----        ------      -----       ------      -----       ------    -------
     Subtotal ongoing operations         208.2      100.0         204.6       98.2        377.1       98.7        364.9       97.7
Finger Lakes Packaging                     0.0        0.0           3.6        1.8          5.1        1.3          8.5        2.3
                                        ------      -----        ------      -----       ------      -----       ------    -------
     Total                              $208.2      100.0%       $208.2      100.0%      $382.2      100.0%      $373.4      100.0%
                                        ======      =====        ======      =====       ======      =====       ======      =====
</TABLE>

<TABLE>
Operating Income1

(Dollars in Millions)

                                                     Three Months Ended                               Six  Months Ended
                                            December 28,           December 23,             December 28,             December 23,
                                                1996                   1995                     1996                     1995
                                        --------------------    ------------------       ------------------     ------------------
                                                     % of                   % of                     % of                    % of
                                            $        Total         $        Total           $        Total          $        Total
                                         ------      -----      ------      ------        -----      ------       ------     -----


<S>                                      <C>         <C>        <C>          <C>          <C>         <C>         <C>        <C>   
CMF                                      $ 9.9       46.7%      $ 8.2        151.9%       $13.6       45.5%       $12.1      108.0%
Nalley Fine Foods                          3.0       14.1        (5.7)      (105.6)         5.1       17.1         (4.7)     (42.0)
Southern Frozen Foods                      2.8       13.2         2.1         38.9          4.6       15.4          3.1       27.7
Snack Foods Group                          1.6        7.5         0.9         16.7          3.1       10.4          1.9       17.0
Brooks Foods                               2.2       10.4         1.8         33.3          2.7        9.0          2.2       19.6
Corporate overhead                        (2.4)     (11.2)       (2.0)       (37.1)        (4.1)     (13.8)        (4.0)     (35.7)
                                         -----      -----       -----        -----        -----      -----        -----     ------
     Subtotal                             17.1       80.7         5.3         98.1         25.0       83.6         10.6       94.6
Business sold and other nonrecurring2      4.1       19.3         0.1          1.9          4.9       16.4          0.6        5.4
                                         -----      -----       -----        -----        -----      -----        -----     ------
     Total                               $21.2      100.0%      $ 5.4        100.0%       $29.9      100.0%       $11.2      100.0%
                                         =====      =====       =====        =====        =====      =====        =====      =====

<FN>
1    Excludes  cumulative effect of an accounting  change. See NOTE 1 - "Summary
     of Accounting Policies - Change in Accounting Principle."

2   Includes  Finger Lakes  Packaging  earnings  and gain on sale.  See NOTE 3 -
    "Other Matters." Also includes strategic plan consulting fees, a loss on the
    disposal of property  held for sale,  and final  settlement  of an insurance
    claim.
</FN>
</TABLE>



<PAGE>


<TABLE>
EBITDA1

(Dollars in Millions)
<CAPTION>
                                                     Three Months Ended                               Six  Months Ended
                                            December 28,           December 23,             December 28,             December 23,
                                                1996                   1995                     1996                     1995
                                        --------------------    ------------------       ------------------     ------------------
                                                     % of                   % of                     % of                    % of
                                            $        Total         $        Total           $        Total          $        Total
                                         ------      -----      ------      ------        -----      ------       ------     -----

<S>                                      <C>         <C>          <C>         <C>         <C>         <C>         <C>         <C>  
CMF                                      $13.4       48.0%        $11.6       92.8%       $20.5       46.7%       $19.0       74.2%
Nalley Fine Foods                          4.5       16.1          (4.3)     (34.4)         8.1       18.4         (2.0)      (7.8)
Southern Frozen Foods                      3.8       13.6           3.4       27.2          6.8       15.5          5.7       22.3
Snack Foods Group                          2.0        7.2           1.3       10.4          4.1        9.3          2.8       10.9
Brooks Foods                               2.4        8.6           2.0       16.0          3.1        7.1          2.6       10.2
Corporate overhead                        (2.4)      (8.6)         (2.0)     (16.0)        (4.1)      (9.3)        (4.0)     (15.7)
                                         -----    -------       -------     ------      -------     ------      -------     ------
     Subtotal                             23.7       84.9          12.0       96.0         38.5       87.7         24.1       94.1
Business sold and other nonrecurring2      4.2       15.1           0.5        4.0          5.4       12.3          1.5        5.9
                                         -----     ------       -------    -------      -------     ------      -------    -------
     Total                               $27.9      100.0%        $12.5      100.0%       $43.9      100.0%       $25.6      100.0%
                                         =====      =====         =====      =====        =====      =====        =====      =====

<FN>
1   EBITDA does not represent  information prepared in accordance with generally
    accepted accounting principles,  nor is such information considered superior
    to information  presented in accordance with generally  accepted  accounting
    principles. Excludes cumulative effect of an accounting change. See NOTE 1 -
    "Summary of Accounting Policies - Change in Accounting Principle."

2   Includes  Finger Lakes  Packaging  earnings  and gain on sale.  See NOTE 3 -
    "Other Matters." Also includes strategic plan consulting fees, a loss on the
    disposal of property  held for sale,  and final  settlement  of an insurance
    claim.
</FN>
</TABLE>

<TABLE>
Total Assets

(Dollars in Millions)
<CAPTION>

                                            December 28,            December 23,
                                                1996                    1995
                                                       % of                   % of
                                           $           Total         $        Total
                                        ------         -----      ------      -----

<S>                                     <C>            <C>        <C>          <C>  
CMF and Brooks Foods1                   $327.1         50.1%      $345.6       48.8%
Nalley Fine Foods                        155.0         23.7        153.9       21.8
Southern Frozen Foods                     87.9         13.4        100.2       14.2
Snack Foods Group                         26.9          4.1         28.1        4.0
Corporate                                 56.7          8.7         47.9        6.8
                                       -------      -------     --------     ------
     Subtotal ongoing operations         653.6        100.0        675.7       95.6
Finger Lakes Packaging                     0.0          0.0         31.6        4.4
                                       -------      -------     --------     ------
     Total                              $653.6        100.0%      $707.3      100.0%
                                        ======        =====       ======      =====

<FN>
1 Effective October 1, 1996, CMF and Brooks operations were consolidated.
</FN>
</TABLE>

      CHANGES FROM SECOND QUARTER FISCAL 1996 TO SECOND QUARTER FISCAL 1997

Net Sales:  The total net sales in the second quarter compared to the prior year
were unchanged at $208.2  million.  The disposition of Finger Lakes Packaging on
October 9, 1996  caused a $3.6  million  decrease in sales which was offset by a
small net increase in sales of the ongoing business.

Gross Profit:  Gross profit of $59.6  million in the quarter ended  December 28,
1996  increased  $7.9 million or 15.3 percent from $51.7  million in the quarter
ended December 23, 1995.  This increase is  attributable  to improvements at CMF
($3.6 million) and Nalley ($4.2 million),  reflecting  higher margins on greater
sales.



<PAGE>


Selling,  Administrative,  and General Expenses:  Selling,  administrative,  and
general  expenses have decreased $4.0 million as compared with the prior year. A
$1.1 million  decrease in selling and advertising  expenses and trade promotions
related  primarily to decreased  spending at the Nalley division.  Reductions in
other  administrative  expenses  accounted  for $3.3 million and were  primarily
attributable  to the reduction of consulting and legal expenses  incurred in the
prior  year,  benefits  from the  restructuring  initiative,  and the  attendant
headcount reduction that began late in fiscal 1996.

Interest  Expense:  The decrease in interest  expense was a benefit of inventory
reduction and cash flow management  programs initiated in fiscal 1996 as well as
the debt reduction attributable to the sale of Finger Lakes Packaging.

Provision for Taxes:  The provision for taxes in the quarter ended  December 28,
1996 of $2.7  million  changed  $3.6 million from the benefit of $0.9 million in
the  quarter  ended  December  23, 1995  resulting  from an increase in earnings
before tax of $9.2 million.  The tax provision was also  negatively  impacted by
the non-deductibility of goodwill.

Gain on Sale of  Finger  Lakes  Packaging:  On  October  9,  1996,  the  Company
completed the sale of Finger Lakes Packaging to Silgan  Containers  Corporation,
an indirect,  wholly-owned subsidiary of Silgan Holdings, Inc., headquartered in
Stamford,  Connecticut.  The  Company  received  proceeds of  approximately  $30
million.  The transaction also included a long-term supply agreement.  A gain of
approximately $3.6 million was recognized.  Proceeds from this sale were applied
to Bank debt.

    CHANGES FROM FIRST SIX MONTHS FISCAL 1996 TO FIRST SIX MONTHS FISCAL 1997

Net Sales:  The net sales increase in the first six months compared to the prior
year of $8.8 million is primarily  attributable to increased volume and improved
pricing at both CMF and the Snack Foods Group.

The vegetable  category at CMF has experienced  improved  pricing due to several
industry factors as well as increasing sales to new customers. Net sales for the
CMF  vegetable  category  increased  $7.2  million.  Higher  product  costs have
increased pricing in the canned fruit and aseptic  categories which,  along with
incremental sales from the Packer Foods acquisition,  have resulted in net sales
increases of approximately $6.4 million.

Increases   at  the  Snack   Foods   Group  are   attributable   to   successful
sales/marketing efforts and the acquisition of Matthews Candy Company during the
fourth quarter of fiscal 1996.

Gross Profit:  Gross profit of $101.2  million in the six months ended  December
28, 1996  increased  $7.0 million or 7.5 percent  from $94.2  million in the six
months ended  December  23,  1995.  This  increase is  attributable  to improved
margins in all  operations  but primarily at CMF and Nalley.  Somewhat  improved
pricing in the  vegetable  and popcorn  categories  at CMF have  helped  improve
profitability from a year ago. Nalley, which experienced extremely high start-up
costs on the new salad  dressing  line a year ago,  has  managed  through  those
issues and has significantly improved margins.

Selling,  Administrative,  and General Expenses:  Selling,  administrative,  and
general  expenses have decreased $8.2 million as compared with the prior year. A
$2.6 million  decrease in selling and advertising  expenses and trade promotions
related  primarily to decreased  spending at the Nalley division.  Reductions in
other  administrative  expenses  accounted  for $5.8 million and were  primarily
attributable  to benefits from the  restructuring  initiative that began late in
fiscal 1996 and the reduction of consulting and legal  expenses  incurred in the
prior year.

Interest  Expense:  The decrease in interest  expense was a benefit of inventory
reduction and cash flow management  programs initiated in fiscal 1996 as well as
the debt reduction attributable to the sale of Finger Lakes Packaging.

Provision for Taxes:  The  provision for taxes in the six months ended  December
28, 1996 of $2.7  million  changed $3.9 million from the benefit of $1.2 million
in the six months ended December 23, 1995 resulting from the increased  earnings
before  tax.   The  tax   provision   was  also   negatively   impacted  by  the
non-deductibility of goodwill.

Cumulative Effect of a Change in Accounting: Effective June 30, 1996, accounting
procedures were changed to include in prepaid expenses and other current assets,
manufacturing  spare parts previously  charged  directly to expense.  Management
believes  this change is  preferable  because it  provides a better  matching of
costs with related revenues. In addition, the Company's independent  accountants
have  agreed  that this  change  in  accounting  is  preferable.  The  favorable
cumulative  effect of the change  (net of  Pro-Fac's  share of $2.6  million and
income  taxes of $1.2  million)  was $1.9  million.  Pro forma  amounts  for the
cumulative effect of the accounting change on prior periods are not determinable
due to the lack of physical inventory counts required to establish quantities at
the respective dates.



<PAGE>


Gain on Sale of  Finger  Lakes  Packaging:  On  October  9,  1996,  the  Company
completed the sale of Finger Lakes Packaging to Silgan  Containers  Corporation,
an indirect,  wholly-owned subsidiary of Silgan Holdings, Inc., headquartered in
Stamford,  Connecticut.  The  Company  received  proceeds of  approximately  $30
million.  The transaction also included a long-term supply agreement.  A gain of
approximately $3.6 million was recognized.  Proceeds from this sale were applied
to Bank debt.

                         LIQUIDITY AND CAPITAL RESOURCES

The following  discussion  highlights the major  variances in the  "Consolidated
Statement  of  Changes in Cash  Flows"  for the first six months of fiscal  1997
compared to the first six months of fiscal 1996.

Net cash used in operating activities improved in the first six months of fiscal
1997  primarily  due to increased  earnings and an  inventory-reduction  program
initiated in fiscal  1996.  The change to amounts  payable to members  increased
primarily due to increased deliveries. Cash flow relating to accounts receivable
in the first six months of fiscal 1997  decreased  from the prior year primarily
due to the receipt of insurance proceeds in the prior year period.

Net cash provided by/(used in) investing  activities varied  significantly  from
year to year,  primarily due to the sale of Finger Lakes Packaging.  Besides the
$30  million  from  the  sale  of  Finger  Lakes,   the  Company  also  received
approximately $4 million for the sale of the Clifton, New Jersey plant which had
been  idle.  Offsetting  items in the prior year  included  the  disposition  of
Nalley's Ltd. and the  acquisition of Packer.  The purchase of property,  plant,
and equipment in both years was for general operating purposes.

Net cash (used  in)/provided  by financing  activities  decreased from the prior
year  primarily  due to  increased  earnings,  the  inventory-reduction  program
initiated in fiscal 1996,  and proceeds from the sale of Finger Lakes  Packaging
and the Clifton property.  This total decrease was offset by the additional debt
incurred in the prior year to finance the Packer  acquisition.  The  decrease in
dividends  resulted from the payment of both the annual fiscal 1995 dividend and
quarterly fiscal 1996 dividend. The change in dividend payment resulted from the
conversion of non-cumulative  preferred stock to cumulative  preferred stock and
the Nasdaq listing requirement of quarterly dividend payments. In addition,  the
prior year  included a common  dividend  of $0.5  million  which was not made in
fiscal 1997.

Borrowings:  Under the Company's New Credit Agreement with the Bank, as amended,
$76.0  million is available  for seasonal  working  capital  purposes  under the
Seasonal  Facility,  subject to a  borrowing  base  limitation,  and up to $13.2
million in  aggregate  face amount of letters of credit  pursuant to a Letter of
Credit  Facility.  The borrowing  base is defined as the lesser of (i) the total
line and (ii) the sum of 60  percent of  eligible  accounts  receivable  plus 50
percent of eligible inventory.

As of December  28, 1996,  (i) cash  borrowings  outstanding  under the Seasonal
Facility were $32.0 million and (ii) additional  availability under the Seasonal
Facility,  after  taking  into  account  the amount of the  borrowing  was $44.0
million.  In addition to its seasonal  financing,  as of December 28, 1996,  the
Company had $15.1 million available for long-term borrowings under the Term Loan
Facility.  Because of the additional  debt as a result of the acquisition of the
Company by Pro-Fac,  the cash flow of the Company is the single,  most important
measure  of  performance.  Pro-Fac  believes  that the cash  flow  generated  by
operations and the amounts available under the Seasonal and Term Loan Facilities
should be sufficient to fund working capital needs,  fund capital  expenditures,
service debt, and pay dividends for the foreseeable future.

Certain  financing  arrangements  require  that  Pro-Fac and Curtice  Burns meet
certain  financial  tests and ratios and comply with certain other  restrictions
and limitations.  As of December 28, 1996, Pro-Fac is in compliance with, or has
obtained waivers for, all such covenants, restrictions and limitations.

Short- and  Long-Term  Trends:  The  vegetable  portion of the  business,  which
includes CMF and Southern Frozen Foods, can be positively or negatively affected
by  weather  conditions  nationally  and the  resulting  impact on crop  yields.
Favorable  weather  conditions  can produce  high crop yields and an  oversupply
situation. This results in depressed selling prices and reduced profitability on
the  inventory  produced  from that  year's  crops.  Excessive  rain or  drought
conditions can produce low crop yields and a shortage situation.  This typically
results in higher selling prices and increased profitability. While the national
supply situation controls the pricing,  the supply can differ regionally because
of variations in weather.

The effect of the 1996 growing  season on fiscal 1997  financial  results so far
has been a moderate  improvement  from the prior year in earnings  on  vegetable
products.  The Company began fiscal 1997 with $29.6 million less in  inventories
than the  beginning  of fiscal  1996 and at the end of the  first six  months of
fiscal  1997  inventories  were  $33.9  million  less than the prior  year.  The
reduction in  inventories  was primarily  accomplished  as a result of decreased
production and increased  sales and was planned to correct the higher  carryover
inventory  situation  from the  previous  year as well as to manage  nonseasonal
inventories  for  shorter  lead times in order to  improve  the  utilization  of
capital.  The spring of 1996  produced  excessive  rain in some of the Company's
growing areas and drought

<PAGE>


conditions in some others.  These adverse weather  conditions delayed or reduced
the  processing  of certain early 1996 crops,  but a  significant  proportion of
these throughputs have been replaced by later production.

Other Matters:

Seneca to Purchase  Private  Label Canned  Vegetable  Businesses:  On January 6,
1997, the Company and Seneca jointly announced that they have signed a letter of
intent for Seneca to acquire  certain  Curtice  Burns  assets and to realign the
sourcing of Seneca's  New York State raw  vegetable  products.  The  transaction
calls for Seneca to acquire the Curtice  Burns  Leicester,  New York  production
facility and the LeRoy, New York  distribution  center,  as well as the Blue Boy
brand.

Seneca will produce,  market and sell the Blue Boy brand canned  vegetables  and
private  label  canned  vegetables  and will also  pack  certain  products  on a
contractual  basis for  Curtice  Burns.  The  acquisition  will not  include the
Greenwood and Silver Floss labels, or Curtice Burns  sauerkraut,  beets in glass
containers,  or frozen vegetable business. Terms and conditions of the agreement
are subject to ongoing negotiations and board approval from Seneca and Pro-Fac.

Seneca and the Company will also forge a long-term strategic alliance to combine
their  agricultural  departments  into one organization to be managed by Curtice
Burns.  The  objective is to maximize  sourcing  efficiencies  of New York State
vegetable requirements for both companies.  This agreement will initially have a
minimum ten-year term.

The parties are working towards finalizing the agreement, subject to further due
diligence  by  both  parties,  and  expect  to  close  by the  end of  March.  A
mutually-agreed  goal for both  companies is a continuity  of  employment at the
facilities.

No significant gain or loss is anticipated as a result of this transaction.

Restructuring: During the fourth quarter of fiscal 1996, the Company initiated a
corporate-wide   restructuring   program.   Approximately   $4  million  of  the
restructuring charge comprised employee termination  benefits.  During the first
six months of fiscal 1997,  approximately  $1.5 million of this reserve has been
liquidated for this purpose.

Deferred  Taxes:  During the first quarter of fiscal 1996 the net deferred taxes
liabilities  of the Company  were  reduced by  approximately  $22  million.  The
adjustment was made in conjunction  with the Company  obtaining its  cooperative
tax status and was applied  against  goodwill,  as it represented an uncertainty
related to income taxes  outstanding  at the date of the  acquisition.  Based on
further guidance from outside counsel, the adjustment was reversed at the end of
fiscal 1996.




<PAGE>


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     (a) EXHIBITS

         EXHIBIT
         NUMBER                        DESCRIPTION

         Exhibit 27            Financial Data Schedule

     (b) No current  report on Form 8-K was filed  during  the fiscal  period to
which this report relates.


<PAGE>










                                   SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                                PRO-FAC COOPERATIVE, INC.




Date      January 28, 1997      BY:/s/       Stephen R. Wright
        ---------------------      ------------------------------------
                                             STEPHEN R. WRIGHT,
                                              GENERAL MANAGER




Date:     January 28 , 1997     BY:/s/        William D. Rice
        ---------------------      ---------------------------------------
                                              WILLIAM D. RICE,
                                          ASSISTANT TREASURER AND
                                    MANAGEMENT CHIEF FINANCIAL OFFICER
                                      (PRINCIPAL ACCOUNTING OFFICER)