14

                               Page 1 of 15 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 March 29, 1997

                                       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
 incorporation 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 April 15, 1997.

                            Common Stock - 1,793,838







<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS

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

(Dollars in Thousands)
<CAPTION>

                                                                    Three Months Ended                 Nine Months Ended
                                                               March 29,         March 23,        March 29,        March 23,
                                                                 1997              1996             1997             1996
                                                               --------          --------         --------         ---------

<S>                                                            <C>              <C>               <C>             <C>      
Net sales                                                      $179,146         $177,849          $561,332        $ 551,213
Cost of sales                                                   131,888          133,619           412,827          412,760
                                                               --------         --------          --------       ----------
Gross profit                                                     47,258           44,230           148,505          138,453
Gain on sale of Finger Lakes Packaging                                0                0             3,565                0
Selling, administrative, and general expense                    (35,613)         (33,249)         (110,410)        (116,272)
                                                               --------         --------          --------       ----------
Operating income                                                 11,645           10,981            41,660           22,181
Interest expense                                                 (8,987)         (10,484)          (28,429)         (31,489)
                                                               --------         --------          --------       ----------
Income/(loss) before taxes, dividends, allocation of net
   proceeds, and cumulative effect of an accounting change        2,658              497            13,231           (9,308)
Tax (provision)/benefit                                            (971)           4,317            (4,714)           7,028
                                                               --------         --------          --------      -----------
Income/(loss) before cumulative effect of an accounting
   change, dividends, and allocation of net proceeds              1,687            4,814             8,517           (2,280)
Cumulative effect of an accounting change                             0                0             4,606                0
                                                               --------         --------          --------   --------------
Net income/(loss)                                              $  1,687         $  4,814          $ 13,123       $   (2,280)
                                                               ========         ========          ========       ==========

Allocation of Net Proceeds:
   Net income/(loss)                                           $  1,687         $  4,814          $ 13,123       $   (2,280)
   Dividends on common and preferred stock                       (1,380)          (1,289)           (4,058)          (7,636)
                                                               --------         --------          --------      -----------
   Net proceeds/(deficit)                                           307            3,525             9,065           (9,916)
   Allocation from/(to) earned surplus                              173           (3,525)           (4,109)           9,916
                                                               --------         --------          --------      -----------
   Net proceeds available to members                           $    480         $      0          $  4,956    $           0
                                                               ========         ========          ========    =============

Net Proceeds Available to Members:
   Estimated cash payment                                      $     96                           $    991
   Qualified retains                                                384                              3,965
                                                               --------                           --------
   Net proceeds available to members                           $    480                           $  4,956
                                                               ========                           ========

<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)                                                                   March 29,      June 29,        March 23,
                                                                                           1997           1996            1996
                                                                                         --------       --------        --------
<S>                                                <C>         <C>         <C>           <C>            <C>             <C>
Assets
Current assets:
   Cash and cash equivalents                                                             $  5,334       $  8,873        $  6,073
   Accounts receivable, trade, net                                                         51,138         47,259          54,184
   Accounts receivable, other                                                               4,060          6,814           8,546
   Income taxes refundable                                                                      0              0           2,679
   Current deferred tax assets                                                              9,995         13,731           3,954
   Inventories -
     Finished goods                                                                       114,140         97,018         130,708
     Raw materials and supplies                                                            34,079         33,556          39,157
                                                                                         --------       --------        --------
           Total inventories                                                              148,219        130,574         169,865
                                                                                         --------       --------        --------
   Investment in Bank, current                                                              1,262              0               0
   Prepaid manufacturing expense                                                            2,002         11,339           4,344
   Prepaid expenses and other current assets                                                9,281          1,066           3,394
                                                                                         --------       --------        --------
           Total current assets                                                           231,291        219,656         253,039
Investment in Bank                                                                         24,320         24,439          24,439
Property, plant, and equipment, net                                                       247,554        271,574         273,663
Assets held for sale                                                                          903          5,368           5,935
Goodwill and other intangible assets, net                                                  98,840        103,760          82,891
Other assets                                                                              11,480          12,500          15,550
                                                                                         --------       --------        --------
           Total assets                                                                  $614,388       $637,297        $655,517
                                                                                         ========       ========        ========
Liabilities and Shareholders' and Members' Capitalization Current liabilities:
   Notes payable                                                                         $ 20,500       $      0        $ 41,000
   Current portion of obligations under capital leases                                        547            547             764
   Current portion of long-term debt                                                        8,075          8,075           8,056
   Accounts payable                                                                        33,139         54,791          38,623
   Income taxes payable                                                                     6,374          2,289               0
   Accrued interest                                                                         4,651          9,447           4,440
   Accrued employee compensation                                                           10,015          8,368           6,733
   Other accrued expenses                                                                  26,291         24,775          21,534
   Dividends payable                                                                           40            128              88
   Amounts due members                                                                     13,672          7,875           9,893
                                                                                         --------       --------        --------
           Total current liabilities                                                      123,304        116,295         131,131
Long-term debt                                                                            133,341        167,683         181,418
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                                                              21,546         20,741          19,599
                                                                                         --------       --------        --------
           Total liabilities                                                              479,853        510,597         520,012
                                                                                         --------       --------        --------
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
                                                    March 29    June 29,    March 23,
                                                      1997        1996        1996
Shares issued                                      1,800,623   1,836,963   1,893,154
Shares subscribed                                     44,387      59,359      42,236
                                                   ---------   ---------   ---------
           Total subscribed and issued             1,845,010   1,896,322   1,935,390
Less subscriptions receivable in installments        (44,387)    (59,359)    (42,236)
                                                   ---------   ---------   ---------
                                                   1,800,623   1,836,963   1,893,154        9,003          9,185           9,466
                                                   =========   =========   =========
Shareholders' and members' capitalization:
   Retained earnings allocated to members                                                  33,235         32,318          32,318
   Non-qualified allocation to members                                                      2,960          3,275           3,275
   Non-cumulative preferred stock, par value $25; authorized - 5,000,000 shares;
     issued and outstanding - 61,597,
       105,788, and 105,788, respectively                                                   1,540          2,645           2,645
   Class A cumulative preferred stock, liquidation preference
     $25 per share; authorized - 49,500,000 shares; issued and
       outstanding 3,207,909, 3,032,704 and 3,032,704 shares,
          respectively                                                                     80,198         75,818          75,817
   Earned surplus                                                                           7,234          3,125          11,729
                                                                                         --------       --------        --------
           Total shareholders' and members' capitalization                                125,167        117,181         125,784
                                                                                         --------       --------        --------
           Total liabilities and capitalization                                          $614,388       $637,297        $655,517
                                                                                         ========       ========        ========

<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

                                                                                          Nine Months Ended
(Dollars in Thousands)                                                                  March 29,    March 23,
<CAPTION>
                                                                                          1997         1996  


<S>                                                                                     <C>            <C>     
Cash flows from operating activities:
   Net income/(loss)                                                                    $13,123        $(2,280)

   Adjustments to reconcile net  income/(loss) to net cash provided by operating
activities:
     Cumulative effect of an accounting change                                           (4,606)             0
     Amortization of goodwill, other intangibles, and financing fees                      3,651          3,114
     Depreciation                                                                        16,883         19,740
     Equity in undistributed earnings of the Bank                                        (1,143)        (1,532)
     Gain on sale of Finger Lakes Packaging                                              (3,565)             0
     Change in assets and liabilities:
       Accounts receivable                                                               (7,280)         5,367
       Inventories                                                                      (22,336)        (5,433)
       Accounts payable and accrued expenses                                            (13,065)       (29,759)
       Amounts due to members                                                             4,806         (3,917)
       Federal and state taxes refundable                                                 4,361          7,427
       Other assets and liabilities                                                      (1,776)        (3,514)
                                                                                        -------        -------
Net cash used in operating activities                                                   (10,947)       (10,787)
                                                                                        -------        -------

Cash flows from investing activities:
   Purchase of property, plant, and equipment                                            (8,880)       (14,116)
   Disposals of property, plant, and equipment                                           34,387          4,322
   Cash paid for acquisition                                                                  0         (5,400)
                                                                                        -------        -------
Net cash provided by/(used in) investing activities                                      25,507        (15,194)
                                                                                        -------        -------

Cash flows from financing activities:
   Proceeds from short-term debt                                                         20,500         41,000
   Proceeds from long-term debt                                                               0          5,400
   Payments on long-term debt                                                           (34,342)       (11,143)
   Repurchases of stock, net of issuances                                                  (151)           326
   Cash portion of nonqualified conversion                                                  (88)          (122)
   Cash paid in lieu of fractional shares                                                     0            (11)
   Cash dividends paid                                                                   (4,018)        (7,548)
                                                                                        -------        -------
Net cash (used in)/provided by financing activities                                     (18,099)        27,902
                                                                                        -------        -------
Net change in cash and cash equivalents                                                  (3,539)         1,921
Cash and cash equivalents at beginning of period                                          8,873          4,152
                                                                                        -------        -------
Cash and cash equivalents at end of period                                              $ 5,334        $ 6,073
                                                                                        =======        =======

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                                                                           $32,976        $36,147
                                                                                        =======        =======
     Income taxes, net                                                                  $   352        $(8,397)
                                                                                        =======        =======

   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
                                                                                                       =======

   Supplemental schedule of non-cash investing and financing activities:
     Conversion of retains to preferred stock                                           $ 3,275        $ 2,379
                                                                                        =======        =======

<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:  The consolidated  financial  statements  include Pro-Fac and its
wholly-owned subsidiaries,  including 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 $1.1  million) was $4.6  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

Pro-Fac's contractual  relationship with Curtice Burns 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,  under the agreement, 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,  as additional  patronage  income,  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 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.



<PAGE>


NOTE 3.       ACQUISITIONS AND DISPOSALS

Nalley's Canada:  In April 1997, the Company  acquired  certain  businesses from
Nalley's  Canada  Ltd.,  a privately  held,  independent  snack food company and
former subsidiary of Curtice Burns. The acquired  Canadian  businesses are a $12
million consumer  products business that includes Nalley's chili and snack dips;
Adams Natural Peanut Butter;  Bernstein's Salad Dressings;  LaRestaurante  Salsa
and other niche  dressing and sauce  products  marketed  throughout  the western
Provinces of Canada.  The purchase price of approximately  $5.0 million was paid
through the forgiveness of various long-term  receivables  issued to the Company
in connection with its sale of the stock of Nalley's Canada Ltd. in 1995.

Curtice  Burns sold its  Canadian  subsidiary  in June 1995,  but  continued  to
produce and supply these  products to the  operation  through its Nalley's  Fine
Foods  business in Tacoma,  Washington.  The  reacquired  business  will operate
through  Nalley's Fine Foods in Tacoma with sales  representation  through local
brokers  and  distributors  in Canada.  Nalley's  Canada Ltd.  will  continue to
distribute  snack dip and salsa products as the exclusive  distributor for these
goods in Canada.

Formation of New  Sauerkraut  Company:  In April 1997,  the Company and Flanagan
Brothers,  Inc.,  of Bear Creek,  Wisconsin,  jointly  announced  that they have
signed a letter of intent to merge all assets involved in sauerkraut  production
into  one  new  sauerkraut  company.  Curtice  Burns  currently  has  sauerkraut
operations  in New York State and Flanagan has  operations  in Wisconsin and New
York State.  This new company,  which has not yet been named,  will operate as a
cooperative,  incorporated  in New York State,  with ownership split between the
two companies.

The new company  will have a joint  board of  directors  to oversee  operations.
Curtice  Burns will  manage all New York State  cabbage  sourcing  and will also
provide accounting and marketing services for the new entity. Flanagan Brothers,
Inc.  will provide the  management  needed to assure that the same  tradition of
excellent  customer service practiced by the founding companies will continue in
the new venture.

The  parties  are  working  toward  completion  of a  definitive  joint  venture
agreement  and creation of the venture which are expected to occur in the fourth
quarter of fiscal 1997.

Management anticipates the alliance will positively impact fiscal 1998 earnings.

Brooks  Foods:  During April 1997,  the Company  entered into an agreement  with
Hoopeston  Foods for Hoopeston to acquire  certain  assets from the Brooks Foods
division  operating  facility and for Hoopeston to pack certain products,  using
raw product  supplied by Curtice  Burns,  on a  contractual  basis.  The parties
expect to close in the fourth  quarter of fiscal 1997. The Brooks  facility,  in
Mt. Summit,  Indiana,  will be closed by July 1997.  Approximately 180 employees
will be affected.

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

Georgia Frozen  Distribution  Center:  On February 25, 1997, the Company and URS
Logistics,  Inc. ("URS")  announced that they have signed a letter of intent for
URS to acquire  Curtice  Burns' frozen foods  distribution  center in Montezuma,
Georgia.  In addition,  the two companies will enter into a long-term  logistics
agreement under which URS will manage all frozen food transportation  operations
of Curtice Burns in Georgia and New York.  Curtice Burns fleet  operation is not
included in the sale.

The parties expect to close by the end of June.

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

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  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.



<PAGE>


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 in the fourth  quarter of fiscal
1997. 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.

For the quarters ended March 27, 1997 and March 23, 1996,  the canned  vegetable
business to be sold to Seneca incurred operating losses of $0.4 million and $0.6
million,  respectively.  For the nine months  ended March 27, 1997 and March 23,
1996, this canned vegetable  business incurred  operating losses of $0.6 million
and $2.6 million, respectively.

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").  For the quarter ended March
23, 1996, the can-making  operation  realized an operating gain of $1.1 million.
For the nine  months  ended March 27, 1997 and March 23,  1996,  the  can-making
operation   realized   operating   gains  of  $4.9  million  and  $2.8  million,
respectively.

NOTE 4.  OTHER MATTERS

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 $1.4 million and will be paid on April 30, 1997.

Product Recall:  In February 1997, the Company issued a nationwide recall of all
"Tropic Isle" brand fresh frozen  coconut  produced in Costa Rica because it has
the potential to be contaminated with Listeria monocytogenes,  an organism which
can cause serious and sometimes  fatal  infections in small  children,  frail or
elderly people, and others with weakened immune systems.

Any material  costs  associated  with this recall are  anticipated to be covered
under the Company's insurance policies.

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
nine months and third quarter of fiscal 1997 and 1996.



<PAGE>


                         PRO-FAC'S RESULTS OF OPERATIONS

Changes From March 1996 to March 1997: For the three and nine months ended March
29, 1997,  the change in net proceeds  compared to the prior year is  summarized
below in millions of dollars:

<TABLE>
                                                                        Favorable/(Unfavorable)
                                                                      Three Month    Nine Month
                                                                         Change        Change

<S>                                                                       <C>           <C>  
Change in gross profit                                                    $ 3.0         $10.0
Change in selling, general and administrative expenses                     (2.4)          5.9
Change in interest expense                                                  1.5           3.1
Gain on sale of Finger Lakes Packaging                                      0.0           3.6
                                                                          -----         -----
Change in income before taxes, dividends, allocations
   of net proceeds, and cumulative effect of an accounting change           2.1          22.6
Change in taxes on income                                                  (5.2)        (11.8)
Cumulative effect of an accounting change                                   0.0           4.6
                                                                          -----         -----
Change in net income                                                      $(3.1)        $15.4
                                                                           =====        =====
</TABLE>

Selling,  administrative,  and general  expense  includes  estimates for various
employee incentive plans and interest income relating to tax refunds.  Excluding
changes in employee incentive plans expense (which increased from the prior year
due to improved earnings) and changes in interest income relating to tax refunds
received in fiscal 1996,  other  expenses  have  decreased  $1.4 million for the
three-month  period and $4.2 million for the nine-month  period  compared to the
respective prior-year periods.

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.

                       CURTICE BURNS RESULTS OF OPERATIONS

The following tables  illustrate the Company's results of operations by business
for the three- and  nine-month  periods ended March 29, 1997 and March 23, 1996,
and the  Company's  total  assets by business as of March 29, 1997 and March 23,
1996.

<TABLE>
Net Sales

(Dollars in Millions)
<CAPTION>

                                                   Three Months Ended                               Nine  Months Ended
                                         March 27, 1997          March 23, 1996           March 27, 1997          March 23, 1996
                                                    % of                     % of                    % of                     % of
                                          $         Total          $         Total         $         Total         $          Total
                                        ------      -----        ------      -----       ------      -----       ------      ------

<S>                                     <C>          <C>         <C>          <C>        <C>          <C>        <C>          <C>  
Comstock Michigan Fruit ("CMF")         $ 75.1       41.9        $ 70.4       39.6%      $240.6       42.9%      $225.3       40.9%
Nalley's Fine Foods                       43.8       24.5          44.4       25.0        133.6       23.8        137.2       24.9
Southern Frozen Foods                     24.5       13.7          23.2       13.1         71.8       12.8         72.6       13.2
Snack Foods Group                         16.2        9.0          14.4        8.1         49.7        8.8         44.9        8.1
Brooks Foods                               9.0        5.0           9.3        5.2         28.2        5.0         28.6        5.2
                                        ------      -----        ------      -----       ------      -----       ------      -----
     Subtotal ongoing operations         168.6       94.1         161.7       91.0        523.9       93.3        508.6       92.3
Businesses sold or to be sold1            10.5        5.9          16.1        9.0         37.4        6.7         42.6        7.7
                                        ------      -----        ------      -----       ------      -----       ------      -----
     Total                              $179.1      100.0%       $177.8      100.0%      $561.3      100.0%      $551.2      100.0%
                                        ======      =====        ======      =====       ======      =====       ======      =====

<FN>
1    Includes Finger Lakes Packaging and canned vegetable business to be sold to
     Seneca Foods. See Note 3 - "Acquisitions and Disposals."
</FN>
</TABLE>



<PAGE>


<TABLE>
Operating Income1

(Dollars in Millions)
<CAPTION>

                                                    Three Months Ended                               Nine  Months Ended
                                          March 27, 1997          March 23, 1996           March 27, 1997          March 23, 1996
                                                    % of                     % of                    % of                    % of
                                           $        Total         $          Total          $        Total          $        Total
                                         -----      -----       -----        ------       -----      -----        -----      ------

<S>                                      <C>         <C>        <C>           <C>         <C>         <C>         <C>         <C>  
CMF                                      $ 7.2       61.6%      $ 5.3         55.3%       $21.0       50.5%       $19.4       93.3%
Nalley's Fine Foods                        3.0       25.6         1.6         16.7          8.1       19.5         (3.1)     (14.9)
Southern Frozen Foods                      2.1       17.9         1.6         16.7          6.7       16.1          4.7       22.6
Snack Foods Group                          1.3       11.1         0.8          8.3          4.4       10.6          2.7       13.0
Brooks Foods                               1.3       11.1         1.1         11.5          4.0        9.6          3.3       15.9
Corporate overhead                        (2.8)     (23.9)       (1.3)       (13.7)        (6.9)     (16.6)        (6.4)     (30.9)
                                         -----      -----       -----        -----        -----      -----        -----      -----
     Subtotal                             12.1      103.4         9.1         94.8         37.3       89.7         20.6       99.0
Business sold and other nonrecurring2     (0.4)      (3.4)        0.5          5.2          4.3       10.3          0.2        1.0
                                         -----      -----       -----        -----        -----      -----        -----      -----
     Total                               $11.7      100.0       $ 9.6        100.0%       $41.6      100.0%       $20.8      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 -
     "Acquisitions   and  Disposals."  Also  includes  final  settlement  of  an
     insurance claim in fiscal 1997,  strategic planning  consulting fees, and a
     loss on the  disposal  of  property  held  for  sale in  fiscal  1996,  and
     operating losses in both years for the canned vegetable business to be sold
     to Seneca Foods.
</FN>
</TABLE>
<TABLE>

EBITDA1

(Dollars in Millions)
<CAPTION>

                                                    Three Months Ended                              Nine  MonthsEnded
                                          March 27, 1997          March 23, 1996          March 27, 1997          March 23, 1996
                                                      % of                   % of                    % of                    % of
                                            $        Total          $        Total          $        Total          $        Total
                                         -----       -----        -----      -----        -----      -----        -----      -----

<S>                                      <C>         <C>          <C>         <C>         <C>         <C>         <C>         <C>  
CMF                                      $10.0       56.8%        $ 8.2       47.1%       $29.4       47.8%       $28.1       65.4%
Nalley's Fine Foods                        4.1       23.3           3.1       17.8         12.2       19.8          1.0        2.3
Southern Frozen Foods                      3.0       17.0           2.9       16.7          9.8       15.9          8.7       20.2
Snack Foods Group                          1.7        9.6           1.3        7.5          5.8        9.4          4.2        9.8
Brooks Foods                               1.5        8.5           1.3        7.5          4.6        7.5          3.9        9.1
Corporate overhead                        (2.8)     (15.8)          0.2        1.1         (6.9)     (11.2)        (4.9)     (11.5)
                                         -----      -----         -----      -----        -----      -----        -----      -----
     Subtotal                             17.5       99.4          17.0       97.7         54.9       89.2         41.0       95.3
Business sold and other nonrecurring2      0.1        0.6           0.4        2.3          6.6       10.8          2.0        4.7
                                         -----      -----         -----      -----        -----      -----        -----      -----
     Total                               $17.6      100.0%        $17.4      100.0%       $61.5      100.0%       $43.0      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 -
    "Acquisitions and Disposals." Also includes final settlement of an insurance
    claim in fiscal 1997,  strategic planning consulting fees, and a loss on the
    disposal of property held for sale in fiscal 1996,  and operating  losses in
    both years for the canned vegetable business to be sold to Seneca Foods.
</FN>
</TABLE>



<PAGE>


<TABLE>
Total Assets

(Dollars in Millions)
<CAPTION>

                                                               March 29, 1997                     March 23, 1996
                                                                             % of                               % of
                                                            $                Total             $                Total
                                                          ------             -----           ------             ----- 

<S>                 <C>                                   <C>                 <C>            <C>                 <C>  
CMF and Brooks Foods1                                     $269.6              43.9%          $280.9              42.3%
Nalley's Fine Foods                                        149.8              24.4            145.4              21.9
Southern Frozen Foods                                       85.5              13.9             95.1              14.3
Snack Foods Group                                           26.0               4.2             26.9               4.1
Corporate                                                   54.5               8.9             58.0               8.7
                                                          ------             -----           ------             -----
     Subtotal ongoing operations                           585.4              95.3            606.3              91.3
Businesses sold or to be sold2                              29.0               4.7             57.7               8.7
                                                          ------             -----           ------             -----
     Total                                                $614.4             100.0%          $664.0             100.0%
                                                          ======             =====           ======             =====

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

2    Includes Finger Lakes Packaging and canned vegetable business to be sold to
     Seneca Foods. See Note 3 - "Other Matters."
</FN>
</TABLE>


       CHANGES FROM THIRD QUARTER FISCAL 1996 TO THIRD QUARTER FISCAL 1997

Net  Sales:  Total net sales in the third  quarter  compared  to the prior  year
increased  modestly.  However,  net sales for ongoing operations  increased $6.9
million or 4.2 percent. The increase was primarily attributable to CMF and Snack
Foods Group improvement in pricing and volume.

Gross Profit:  Gross profit of $47.3 million in the quarter ended March 29, 1997
increased  $3.1 million or 7.0 percent from $44.2  million in the quarter  ended
March 23, 1996.  This  increase is  attributable  to operating  improvements  at
Southern Frozen Foods, CMF and Nalley's and increased sales.

Selling,  Administrative,  and General Expenses:  Selling,  administrative,  and
general  expenses include  estimates for various employee  incentive plans which
are  allocated  primarily to corporate  overhead in the  preceding  tables.  The
increase over the prior year is  attributable  to improved  earnings.  Excluding
such  programs,  expenses have decreased $1.4 million as compared with the prior
year.

Interest Expense: The decrease in interest expense of $1.8 million or 18 percent
is 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 and idle facilities.

Provision for Taxes: The provision for taxes in the quarter ended March 29, 1997
changed  $0.5 million from the quarter  ended March 23, 1996  resulting  from an
increase in earnings.  The tax  provision  was also  negatively  impacted by the
non-deductibility of goodwill.

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

Net Sales:  Total net sales in the first nine  months of fiscal  1997  increased
$10.1  million or 2 percent  compared to the prior year  period.  Net sales from
ongoing  operations  increased  $15.3  million or 3 percent.  This  increase  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 overall demand and increasing sales to new customers.

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 $148.5 million in the nine months ended March 29,
1997  increased  $10.0  million or 7.2 percent  from $138.5  million in the nine
months ended March 23, 1996. This increase is  attributable to improved  margins
in all operations.  Improved pricing in the vegetable and popcorn  categories at
CMF have increased profitability from a year ago. Nalley's, which in the

<PAGE>


prior year  experienced  extremely high start-up costs on the new salad dressing
line, has managed through those issues and has significantly improved margins.

Selling,  Administrative,  and General Expenses:  Selling,  administrative,  and
general  expenses have  decreased  $7.2 million as compared with the prior year,
despite  increased costs under various  employee  incentive plans as a result of
increased earnings.  A $3.0 million decrease in selling and advertising expenses
and trade  promotions  related  primarily to decreased  spending at the Nalley's
division. Reductions in other administrative expenses accounted for $4.2 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.

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.

Interest Expense: The decrease in interest expense of $4.0 million or 13 percent
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 and idle facilities.

Provision for Taxes:  The provision for taxes in the nine months ended March 29,
1997 of $3.3  million  changed  $4.5 million from the benefit of $1.2 million in
the nine months  ended  March 23, 1996  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 $2.9  million and
income  taxes of $1.1  million)  was $1.7  million.  The estimate of the Pro-Fac
share of the  accounting  change  has been  adjusted  to reflect  that  actually
anticipated  for the fiscal  year.  See  further  comments  at NOTE 2. 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.

                         LIQUIDITY AND CAPITAL RESOURCES

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

Net cash used in  operating  activities  improved  in the first  nine  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  was,  however,
positively  impacted  in the first nine months of fiscal 1996 due to the receipt
of  insurance  proceeds and tax refunds in fiscal 1996.  No such  proceeds  were
received in fiscal 1997.

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

Borrowings   decreased   from  the  prior  year  due  to   increased   earnings,
inventory-reduction,  and proceeds  from the sale of Finger Lakes  Packaging and
the Clifton property. The decrease in dividends resulted from the payment in the
prior year period 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.
Overall,  the Company has focused on a major initiative in debt reduction during
the first nine months of fiscal 1997, and these efforts will continue throughout
the remainder of the year. A detailed outline of actions regarding  acquisitions
and disposals is included in NOTE 3.

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 $13.0
million in aggregate face

<PAGE>


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 March  29,  1997,  (i) cash  borrowings  outstanding  under  the  Seasonal
Facility were $20.5 million and (ii) additional  availability under the Seasonal
Facility,  after  taking  into  account  the amount of the  borrowing  was $55.5
million.  In addition  to its  seasonal  financing,  as of March 29,  1997,  the
Company had $0.1 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 March 29, 1997,  Pro-Fac is in compliance  with, or has
obtained waivers for, all such covenants, restrictions and limitations.

Short-  and  Long-Term  Trends:  The  statements  contained  herein are based on
current  expectations.  These  statements are forward looking and actual results
may differ  materially.  Throughout  fiscal  1997,  the  Company has focused its
efforts on the  restructuring  initiatives begun in the fourth quarter of fiscal
1996. These actions have included a focus on its core businesses,  reductions in
general and administrative  expenses, and debt reduction. The benefit from these
efforts are  apparent  in the  increase  in  earnings  over the prior year,  and
management anticipates this trend will continue through the fourth quarter.

In addition,  several other  initiatives  outlined in NOTE 3 to the consolidated
financial  statements,  including the sale of a portion of the canned  vegetable
business and the sale of the Georgia  distribution center, will have a favorable
impact on interest expense in fiscal 1998.

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 nine  months of
fiscal 1997 inventories were $21.6 million less than the fiscal 1996 period. 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  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.

Acquisitions and Disposals: Throughout fiscal 1997 the Company has worked toward
accomplishing the restructuring  initiatives begun in fiscal 1996 which included
debt reduction.  Ongoing  initiatives will include a focus on the Company's core
businesses and growth  opportunities.  A complete description of the acquisition
and  disposal  activities  currently  outlined  is  included  at  NOTE  3 to the
consolidated financial statements.

Other Matters:

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
nine months of fiscal 1997,  approximately $1.8 million of this reserve has been
liquidated for this purpose.

Deferred  Taxes:  During the first quarter of fiscal 1996,  the net deferred tax
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>


Product Recall: In February  1997,.the Company issued a nationwide recall of all
"Tropic Isle" brand fresh frozen  coconut  produced in Costa Rica because it has
the potential to be contaminated with Listeria monocytogenes,  an organism which
can cause serious and sometimes  fatal  infections in small  children,  frail or
elderly  people,  and others with weakened  immune  systems.  Any material costs
associated  with this recall are  anticipated  to be covered under the Company's
insurance policies.

                           PART II. OTHER INFORMATION

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

(a)  The  regional  membership  meetings for the members of Pro-Fac were held as
     follows:

      Date            Region/District             City/State

February 4, 1997            I/3             Berlin, Pennsylvania
January 23, 1997         I/1 and I/2        Rochester, New York
January 28, 1997           II/2             Havana, Illinois
January 29, 1997           II/2             Ridgway, Illinois
January 30, 1997            III             Columbus, Nebraska
February 19, 1997           IV              Mt. Vernon, Washington
February 18, 1997           IV              Portland, Oregon
February 5, 1997             V              Montezuma, Georgia
March 31, 1997             II/1             Holland, Michigan

(b)  Robert V.  Call,  Jr.,  Robert A.  DeBadts,  Steven  D.  Koinzan,  Allan W.
     Overhiser, and Darell D. Sarff were elected directors for a three-year term
     as a result of the  elections  at the  regional  meetings  held in January,
     February and March 1997. The following is a list of the remaining directors
     whose terms of office continued after the regional meetings.

                 Name                  Term Expires

             Tom Croner                     1998
             Dale Burmeister                1998
             Albert Fazio                   1998
             Glen Lee Chase                 1999
             Bruce Fox                      1999
             Kenneth Mattingly              1999
             Paul Roe                       1999


Following are the voting results from the regional meetings:

                           Votes Cast For             Votes Cast Against

 Robert V. Call, Jr.              69                           0
 Robert A. DeBadts                33                          49*
 Steven D. Koinzan                21                           0
 Allan W. Overhiser               90                           0
 Darell D. Sarff                  27                          21**

Other candidates:          Votes Cast For

 *   William DeFisher             25
 *   Robert Coene                 24
 **Joe E. Murphy                  21



<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:    April 29, 1997          BY:/s/           Stephen R. Wright
         --------------             ---------------------------------------
                                                  STEPHEN R. WRIGHT,
                                                   GENERAL MANAGER




Date:    April 29, 1997          BY:/s/            Earl L. Powers
         --------------             ---------------------------------------
                                                   EARL L. POWERS
                                             VICE PRESIDENT, FINANCE AND
                                                 ASSISTANT TREASURER
                                            (PRINCIPAL ACCOUNTING OFFICER)