UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    Form 10-Q

   (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, 2003

                                       OR

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

                   For the transition period from ____ to ____

                         Commission File Number 0-20539

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

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

             90 Linden Place, PO Box 30682, Rochester, NY 14603-0682
               (Address of Principal Executive Offices)   (Zip Code)

        Registrant's Telephone Number, Including Area Code (585) 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 for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

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

Indicate  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date. As of May 13, 2003.

                            Common Stock - 1,927,226





<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS

<TABLE>
Pro-Fac Cooperative, Inc.
Consolidated Statements of Operations, Net Proceeds and Comprehensive Income
(Unaudited)

<CAPTION>
(Dollars in Thousands)
                                                                                  Three Months Ended            Nine Months Ended
                                                                              --------------------------     -----------------------
                                                                               March 29,      March 30,       March 29,    March 30,
                                                                                 2003           2002            2003         2002
                                                                              ----------    ------------     ----------   ----------

<S>                                                                           <C>            <C>             <C>         <C>
Net sales                                                                     $        0     $  244,886      $ 103,726   $  788,667
Cost of sales                                                                          0       (190,937)       (80,644)    (618,185)
                                                                              ----------     ----------      ---------   ----------
Gross profit                                                                           0         53,949         23,082      170,482
Equity (loss)/income from Agrilink Holdings LLC (for the period December 29,
   2002 to March 29, 2003 and the period August 19, 2002 to March 29, 2003,
   respectively)                                                                     (59)             0          3,593            0
Gain from transaction with Birds Eye Foods, Inc. and related agreements            1,186              0          9,176            0

Commercial market value adjustment                                                   560              0            560            0
Selling, administrative, and general expense (for the period December 29, 2002
   to March 29, 2003 and the period August 19, 2002 to March 29, 2003,
   respectively)                                                                    (329)             0         (1,139)           0
Selling, administrative, and general expense                                           0        (31,029)       (15,468)     (94,796)
Legal matters and settlement expenses                                               (422)             0         (2,007)           0
Gain from pension curtailment                                                          0              0              0        2,472
Other income                                                                           0            627            277        1,825
Restructuring                                                                          0              0              0       (2,622)
                                                                              ----------     ----------      ---------    ---------
Operating income                                                                     936         23,547         18,074       77,361
Interest income                                                                        1              0              8            0
Interest expense                                                                       0        (15,951)        (7,747)     (51,643)
                                                                              ----------     ----------      ---------    ---------
Income before taxes                                                                  937          7,596         10,335       25,718
Tax benefit/(provision) (for the period December 29, 2002 to
   March 29, 2003 and the period August 19, 2002 to March 29, 2003,
   respectively)                                                                     417              0         (1,118)           0
Tax provision                                                                          0         (2,163)           (59)      (7,707)
                                                                              ----------     -----------     ----------   ---------
Net income                                                                    $    1,354     $    5,433      $   9,158    $  18,011
                                                                              ==========     ==========      =========    =========
Allocation of net proceeds:
   Net income                                                                 $    1,354     $    5,433      $   9,158    $  18,011
   Dividends on common and preferred stock                                        (1,980)        (1,951)        (6,368)      (6,406)
                                                                              ----------     ----------      ---------    ---------
   Net (deficit)/proceeds                                                           (626)         3,482          2,790       11,605
   Allocation from/(to) accumulated deficit                                          626         (1,633)        (2,790)      (5,153)
                                                                              ----------     ----------      ---------    ---------
   Net proceeds available to members                                          $        0     $    1,849      $       0    $   6,452
                                                                              ==========     ==========      =========    =========


Estimated allocation of net proceeds available to members:
   Payable to members currently                                               $        0     $      462      $       0     $  1,613

   Allocated to members but retained by the Cooperative:
     Qualified retains                                                                 0          1,387              0        4,839
                                                                              ----------     ----------      ---------    ---------
   Net proceeds available to members                                          $        0     $    1,849      $       0     $  6,452
                                                                              ==========     ==========      =========     ========


Net income                                                                    $    1,354     $    5,433      $   9,158    $  18,011

Other comprehensive loss:
   Unrealized loss on hedging activity (net of taxes)                                  0            (16)             0         (390)
                                                                              ----------     ----------      ---------    ---------
Comprehensive income                                                          $    1,354     $    5,417      $   9,158    $  17,621
                                                                              ==========     ==========      =========    =========


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


                                        3
<TABLE>
Pro-Fac Cooperative, Inc.
Consolidated Balance Sheets
(Unaudited)

<CAPTION>
(Dollars in Thousands)                                        ASSETS                     March 29,         June 29,
                                                                                           2003              2002
                                                                                        ----------       -----------

<S>                                                                                     <C>               <C>
Current assets:
   Cash and cash equivalents                                                            $       78        $    14,686
   Accounts receivable, trade and other, net                                                     0             76,000
   Accounts receivable from Birds Eye Foods, Inc.                                           11,424                  0
   Current portion of Transitional Services receivable from Birds Eye Foods, Inc.              525                  0
   Inventories, net                                                                              0            294,315
   Current investment in CoBank                                                                  0              3,347
   Prepaid manufacturing expense                                                                 0             19,168
   Prepaid expenses and other current assets                                                    50             18,770
   Current deferred tax asset                                                                  254              2,923
                                                                                        ----------        -----------
            Total current assets                                                            12,331            429,209
Transitional Services receivable from Birds Eye Foods, Inc.                                    202                  0
Investment in Agrilink Holdings LLC                                                         28,638                  0
Investment in CoBank                                                                            59              6,294
Investment in and advances to joint venture                                                      0             14,586
Property, plant, and equipment, net                                                              0            288,120
Goodwill                                                                                         0             56,210
Other intangible assets, net                                                                     0             11,305
Non-current deferred tax asset                                                                   0              4,837
Other assets                                                                                     0             26,109
                                                                                        ----------        -----------
            Total assets                                                                $   41,230        $   836,670
                                                                                        ==========        ===========

                            Liabilities and Shareholders' and Members' Capitalization
Current liabilities:
   Current portion of long-term debt and
     obligations under capital leases                                                   $        0        $    15,737
   Accounts payable                                                                            541             71,262
   Income taxes payable                                                                          0                879
   Accrued interest                                                                              0              6,255
   Other accrued expenses                                                                    1,250             48,150
   Amounts due members                                                                      10,803             15,379
                                                                                        ----------        -----------
            Total current liabilities                                                       12,594            157,662
Credit Facility with Birds Eye Foods, Inc.                                                     100                  0
Obligations under capital leases                                                                 0              2,528
Long-term debt                                                                                   0            623,057
Non-current deferred tax liability                                                           1,372                  0
Other non-current liabilities                                                                    0             28,918
                                                                                        ----------        -----------
            Total liabilities                                                               14,066            812,165
Commitments and contingencies
Class B cumulative redeemable preferred stock, liquidation
   preference $10 per share; authorized - 500,000 shares; issued and
     outstanding 20,643 shares                                                                 206                206
Common stock, par value $5, authorized - 5,000,000 shares; issued
   and outstanding 1,939,272 and 2,038,553, respectively                                     9,696             10,193

Shareholders' and members' capitalization:
   Retained earnings allocated to members                                                   14,407             17,050
   Non-cumulative preferred stock, par value $25, authorized
     5,000,000 shares; issued and outstanding 29,457 and
       29,847 shares, respectively                                                             736                746
   Class A cumulative preferred stock, liquidation preference
     $25 per share, authorized 10,000,000 shares; issued and
       outstanding 4,604,010 and 4,497,904 shares, respectively                            115,100            112,448
   Special membership interests                                                             21,733                  0
   Accumulated deficit                                                                    (134,714)          (115,771)
   Accumulated other comprehensive income/(loss):
     Unrealized gain on hedging activity                                                         0                206
     Minimum pension liability adjustment                                                        0               (573)
                                                                                        ----------         ----------
            Total shareholders' and members' capitalization                                 17,262             14,106
                                                                                        ----------         ----------

            Total liabilities and shareholders' and members' capitalization             $   41,230         $  836,670
                                                                                        ==========         ==========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>


<PAGE>


                                        4
<TABLE>
Pro-Fac Cooperative, Inc.
Consolidated Statements of Cash Flows
(Dollars in Thousands)
<CAPTION>
(Unaudited)

                                                                                                        Nine Months Ended
                                                                                              -------------------------------------
                                                                                                 March 29,               March 30,
                                                                                                   2003                    2002
                                                                                              --------------         --------------
<S>                                                                                            <C>                    <C>
Cash Flows from Operating Activities:
     Net income                                                                                $     9,158            $    18,011
     Estimated cash payment due to members                                                               0                 (1,613)
     Adjustments to reconcile net income to net cash used in operating activities:
       Amortization of goodwill and other intangible assets                                            144                    862
       Amortization of debt issue costs, amendment costs, and discount on subordinated
         promissory notes                                                                            1,201                  5,098
       Depreciation                                                                                  3,833                 22,887
       Gain from transaction with Birds Eye Foods, Inc. and related agreements                      (9,176)                     0
       Equity income from Agrilink Holdings LLC (for the period August 19, 2002
         to March 29, 2003)                                                                         (3,593)                     0
       Equity in undistributed earnings of joint venture                                              (277)                (1,067)
     Change in assets and liabilities:
         Accounts receivable                                                                         1,818                  3,607
         Inventories and prepaid manufacturing expense                                             (33,170)               (11,863)
         Income taxes                                                                                  (75)                 6,442
         Accounts payable and other accrued expenses                                                (9,242)               (91,633)
         Amounts due members                                                                         8,649                 (2,313)
         Deferred tax asset and liability                                                            1,118                      0
         Other assets and liabilities, net                                                             535                    740
                                                                                               -----------            -----------
Net cash used in operating activities                                                              (29,077)               (50,842)
                                                                                               -----------            -----------

Cash flows from Investing Activities:
     Proceeds from Termination Agreement with Birds Eye Foods, Inc.                                  8,000                      0
     Purchase of property, plant and equipment                                                      (2,187)               (10,537)
     Proceeds from disposals of property, plant, and equipment                                           0                     52
     Proceeds from investment in CoBank                                                              1,115                  3,998
     Advances to joint venture                                                                      (1,512)                     0
     Cash at the date of deconsolidation with Birds Eye Foods, Inc.                                 (5,818)                     0
                                                                                               -----------            -----------
Net cash used in investing activities                                                                 (402)                (6,487)
                                                                                               -----------            -----------

Cash Flows from Financing Activities:
     Net proceeds from issuance of short-term debt                                                  22,000                 75,400
     Net proceeds from Credit Facility with Birds Eye Foods, Inc.                                      100                      0
     Payments on long-term debt                                                                       (292)                (9,072)
     Payments on capital leases                                                                        (38)                  (111)
     Cash paid in conjunction with debt amendment                                                        0                 (1,694)
     Repurchases of common stock, net                                                                 (497)                  (806)
     Cash dividends paid                                                                            (6,402)                (6,406)
                                                                                               -----------            -----------
Net cash provided by financing activities                                                           14,871                 57,311
                                                                                               -----------            -----------

Net change in cash and cash equivalents                                                            (14,608)                   (18)
Cash and cash equivalents at beginning of period                                                    14,686                  7,656
                                                                                               -----------            -----------
Cash and cash equivalents at end of period                                                     $        78            $     7,638
                                                                                               ===========            ===========


Supplemental Schedule of Non-Cash Investing Activities
     Value of Pro-Fac's 40.72 percent common equity ownership in Agrilink Holdings LLC         $    31,400             $        0
                                                                                               ===========            ===========


<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. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description  of  Business:   Pro-Fac   Cooperative,   Inc.   ("Pro-Fac"  or  the
"Cooperative") is a New York agricultural  cooperative corporation which markets
crops grown by its members.  Birds Eye Foods,  Inc. ("Birds Eye Foods," formerly
Agrilink Foods, Inc.) through August 18, 2002, was a wholly-owned  subsidiary of
Pro-Fac.  Prior  to  August  19,  2002,  the  results  of the  Cooperative  were
consolidated  with Birds Eye Foods and  intercompany  transactions  and balances
were eliminated.  Subsequent to August 18, 2002, Pro-Fac no longer  consolidates
Birds Eye Foods but accounts  for its  investment  in Agrilink  Holdings LLC (as
that  entity is  described  below in this NOTE 1 to the  "Notes to  Consolidated
Financial  Statements")  under the equity method of  accounting.  Full financial
statements  as filed by Birds Eye Foods are  included as an Exhibit to this Form
10-Q and are hereby incorporated into this filing. See the detailed  description
of the August 19, 2002 transaction below.

The operating activities of Pro-Fac for periods prior to August 19, 2002 reflect
products sold through Birds Eye Foods' four primary product lines consisting of:
vegetables,  fruits,  snacks,  and canned  meals.  The  majority  of each of the
product lines' net sales was within the United States. In addition, all of Birds
Eye Foods' operating facilities, excluding one in Mexico, were within the United
States.

Prior to August 19, 2002, the boards of directors of Birds Eye Foods and Pro-Fac
conducted joint meetings, coordinated their activities, and acted on a
consolidated basis.

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

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

(ii) Vestar/Agrilink Holdings and certain co-investors (collectively,  "Vestar")
     contributed  cash in the aggregate  amount of $175.0 million to the capital
     of Holdings  LLC, in  consideration  for  preferred  units,  Class A common
     units, and warrants which were immediately  exercised to acquire additional
     Class A common units.  After  exercising  the  warrants,  Vestar owns 56.24
     percent of the common equity of Holdings LLC. The  co-investors  are either
     under common control with, or have delivered an unconditional  voting proxy
     to, Vestar.

The transactions  contemplated in and consummated  pursuant to the Unit Purchase
Agreement, are referred to herein collectively as the "Transaction."

Immediately  following Pro-Fac's  contribution of its shares of Birds Eye Foods'
common stock to Holdings LLC, Holdings LLC contributed those shares to Birds Eye
Holdings Inc.,  (formerly  Agrilink Holdings Inc.) a Delaware  corporation and a
direct,  wholly-owned  subsidiary of Holdings LLC, and Birds Eye Foods became an
indirect,   wholly-owned  subsidiary  of  Holdings  LLC.  As  a  result  of  the
Transaction,  Pro-Fac  owns 40.72  percent and Vestar owns 56.24  percent of the
common  equity  securities of Holdings LLC. The Class A common units entitle the
owner  thereof - Vestar - to two votes for each Class A common  unit  held.  All
other  Holdings LLC common units entitle the  holder(s)  thereof to one vote for
each common unit held.  Accordingly,  Vestar has a voting majority of all common
units.

As part of the Transaction, Stephen R. Wright, the general manager and secretary
of Pro-Fac,  together with  executive  officers of Birds Eye Foods,  and certain
other  members  of  Birds  Eye  Foods'  management,  entered  into  subscription
agreements  with  Holdings  LLC to  acquire  (using  a  combination  of cash and
promissory  notes issued to Holdings  LLC) an aggregate  of  approximately  $1.3
million  of Class C common  units  and  Class D common  units of  Holdings  LLC,
representing approximately 3.04 percent of the common equity ownership.

See NOTE 2 to the "Notes to  Consolidated  Financial  Statements" for additional
disclosures  regarding  agreements  with Birds Eye Foods and  discussion  of the
related gain.
<PAGE>
As a  result  of  the  Transaction,  described  in  NOTE  1  of  the  "Notes  to
Consolidated  Financial  Statements,"  the results of  operations  for the third
quarter and first nine months of fiscal  2003 are not  comparable  with those of
such period of fiscal 2002.

Basis  of  Presentation:   The  accompanying  unaudited  consolidated  financial
statements have been prepared in accordance with accounting principles generally
accepted  in the  United  States  of  America  ("GAAP")  for  interim  financial
information and with the  instructions to Form 10-Q and Article 10 of Regulation
S-X.  Accordingly,  they do not include all of the information  required by GAAP
for complete financial statement presentation. In the opinion of management, all
adjustments  (consisting only of normal recurring  adjustments)  necessary for a
fair  presentation  of the results of operations  have been included.  Operating
results for the period ended March 29, 2003 are not  necessarily  indicative  of
the results to be expected  for other  interim  periods or the full year.  These
financial statements should be read in conjunction with the financial statements
and accompanying notes contained in the Pro-Fac Cooperative,  Inc. Form 10-K for
the fiscal year ended June 29, 2002.

Commercial  Market Value  Adjustment:  At its January 2003 board meeting,  in an
action aimed at improving the Cooperative's  short-term liquidity,  the Board of
Directors of Pro-Fac  determined  to deduct 1 percent of the  commercial  market
value ("CMV") otherwise payable to Pro-Fac's  member-growers  for crops supplied
by Pro-Fac  member-growers through the Cooperative for the 2002 and 2003 growing
seasons.  The 1 percent CMV  deduction  will be withheld  from the July 2003 and
July 2004 CMV  payments.  The 1 percent  deduction  for the 2002 growing  season
resulted in  approximately  $0.6 million of income for the  year-to-date  period
ended March 29, 2003 which was recorded during the third quarter of fiscal 2003.
The  Board of  Directors  of  Pro-Fac  resolved  to review  this  recommendation
annually.

New  Accounting  Pronouncements:   In  August  2001,  the  Financial  Accounting
Standards  Board ("FASB")  issued  Statement of Financial  Accounting  Standards
("SFAS")  No. 144  "Accounting  for the  Impairment  or Disposal  of  Long-Lived
Assets."  Effective  June 30, 2002, the  Cooperative  adopted SFAS No. 144 which
addresses  financial  accounting and reporting for the impairment or disposal of
long-lived  assets.  The statement  requires an impairment loss be recognized if
the  carrying  amount  of  a  long-lived  asset  is  not  recoverable  from  its
undiscounted  cash  flow and  that  the  impairment  loss be  recognized  as the
difference  between the carrying amount and fair value of the asset.  Under SFAS
No. 144, assets held for sale that are a component of an entity will be included
in discontinued operations if the operations and cash flows will be or have been
eliminated  from the ongoing  operations of the entity,  and the entity will not
have any  significant  continuing  involvement  in the  future  operations.  The
adoption of SFAS No. 144 did not have a significant  effect on the operations of
the Cooperative.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities,"  which  addresses  financial  accounting and
reporting for costs  associated with exit or disposal  activities and supersedes
Emerging  Issues Task Force  ("EITF)  Issue  94-3,  "Liability  Recognition  for
Certain  Employee  Termination  Benefits  and  Other  Costs to Exit an  Activity
(including  Certain Costs Incurred in a  Restructuring)".  SFAS No. 146 requires
that a liability  for a cost  associated  with an exit or  disposal  activity be
recognized  when the  liability is incurred.  EITF 94-3 required a liability for
exit costs be recognized at the date of an entity's  commitment to an exit plan.
The  provisions of SFAS No. 146 must be adopted for exit or disposal  activities
that are initiated after December 31, 2002.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Others"  ("FIN  45").  FIN 45  requires  that a  liability  be  recorded  on the
guarantor's  balance  sheet upon  issuance of a guarantee.  In addition,  FIN 45
requires  disclosures  about the  guarantees  that an  entity  has  issued.  The
Cooperative  will apply the recognition  provisions of FIN 45  prospectively  to
guarantees  issued after December 31, 2002. The disclosure  provisions of FIN 45
have  been  adopted  in  this  report.  The  Cooperative  does  not  expect  the
prospective  provisions of FIN 45 to have a material effect on its  consolidated
financial statements.

In January  2003,  the FASB  issued  Interpretation  No. 46,  "Consolidation  of
Variable Interest Entities,  an Interpretation of ARB No. 51" ("FIN 46"). FIN 46
requires  certain variable  interest  entities to be consolidated by the primary
beneficiary of the entity if the equity  investors in the entity do not have the
characteristics  of a controlling  financial  interest or do not have sufficient
equity at risk for the  entity to  finance  its  activities  without  additional
subordinated  financial support from other parties.  FIN 46 is effective for all
new variable  interest  entities created or acquired after January 31, 2003. For
variable  interest  entities  created or acquired prior to February 1, 2003, the
provisions  of FIN 46 must be applied  for the first  interim  or annual  period
beginning after June 15, 2003. The Cooperative  does not expect FIN 46 to have a
material effect on its consolidated financial statements.
<PAGE>
NOTE 2. AGREEMENTS WITH BIRDS EYE FOODS

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

Termination  Agreement:  Pro-Fac  and  Birds  Eye  Foods  entered  into a letter
agreement dated as of the Closing Date (the "Termination  Agreement"),  pursuant
to which, among other things,  the marketing and facilitation  agreement between
Pro-Fac and Birds Eye Foods (the "Marketing and Facilitation  Agreement") which,
until the  Closing  Date,  governed  the crop supply and  purchase  relationship
between Birds Eye Foods and Pro-Fac,  has been  terminated.  In consideration of
such  termination,  Birds Eye Foods will pay Pro-Fac a termination  fee of $10.0
million per year for five years,  provided that certain  ongoing  conditions are
met,  including  maintaining  grower  membership  levels  sufficient to generate
certain minimum crop supply. The $10.0 million payment will be paid in quarterly
installments  to the  Cooperative  as follows:  $4.0 million on each July 1, and
$2.0  million  each on  October  1,  January  1, and  April  1. The  Termination
Agreement  provided  that the first payment in the amount of $4.0 million was to
be paid on the  Closing  Date and the next  payment  made by October 1, 2002 and
quarterly  thereafter as outlined in the agreement.  The  Cooperative  therefore
received  $4.0 million from Birds Eye Foods on August 19, 2002,  $2.0 million on
October 1, 2002,  $2.0 million on January 1, 2003,  and $2.0 million on April 1,
2003.

Payments under the Termination Agreement are considered additional consideration
related to the Transaction.  Accordingly, 40.72 percent of the payments received
under the  Termination  Agreement  are  recorded as an  adjustment  to Pro-Fac's
investment in Holdings LLC. The  remaining  59.28 percent of the annual  payment
will be recognized as additional gain from the transaction  with Birds Eye Foods
in the period  received.  Accordingly,  through  the first nine months of fiscal
2003, Pro-Fac recognized  approximately $4.8 million as additional gain from the
receipt of the termination payments.

Transitional  Services  Agreement:  Pro-Fac and Birds Eye Foods  entered  into a
transitional services agreement (the "Transitional Services Agreement") dated as
of the Closing  Date,  pursuant to which  Birds Eye Foods will  provide  Pro-Fac
certain  administrative  and other  services  for a period of 24 months from the
Closing Date. Birds Eye Foods will generally  provide such services at no charge
to Pro-Fac,  other than reimbursement of the incremental and out-of-pocket costs
associated  with  performing  those  services  for  Pro-Fac.   Pursuant  to  the
Transitional  Services Agreement,  the general manager of Pro-Fac may also be an
employee of Birds Eye Foods, in which case he will report to the Chief Executive
Officer of Birds Eye Foods with  respect to his duties for Birds Eye Foods,  and
to the Pro-Fac  board of directors  with respect to duties  performed by him for
Pro-Fac.  All other  individuals  performing  services  under  the  Transitional
Services   Agreement   report  to  the  Chief   Executive   Officer   (or  other
representatives) of Birds Eye Foods.  Stephen R. Wright, the General Manager and
Secretary of Pro-Fac,  is also an employee of Birds Eye Foods. As an employee of
Birds Eye Foods, Mr. Wright's salary is paid by Birds Eye Foods.

Pro-Fac has recorded the estimated  value of these  services,  $1.0 million,  as
services  receivable and proceeds from the Transaction,  prior to elimination of
40.72  percent of the amount of  Pro-Fac's  investment  in  Holdings  LLC.  This
estimated  value of the  services  to be received  by the  Cooperative  is being
amortized  to  expense  over the term of the  Transitional  Services  Agreement.
Through the first nine months of fiscal 2003, Pro-Fac  recognized  approximately
$0.6 million as additional gain from the Transitional Services Agreement.

Gain from transaction with Birds Eye Foods, Inc. and related  agreements:  Prior
to the  Transaction,  certain  amounts  owed by  Pro-Fac to Birds Eye Foods were
forgiven.  The amounts forgiven were approximately $36.5 million and represented
both  borrowings  for the working  capital  needs of Pro-Fac and a $9.4  million
demand payable.  After adjusting for the amounts forgiven,  Pro-Fac's investment
in Birds Eye Foods prior to the Transaction was approximately $24.9 million. The
value of the Cooperative's 40.72 percent common equity ownership in Holdings LLC
on August 19, 2002 is valued at $31.4 million. The Cooperative recognized a gain
of $3.8 million from this exchange.

As a result of the agreements described above, based on the 40.72 percent common
equity  ownership,  the Cooperative  recognized a total gain,  through the first
nine months of fiscal 2003, of approximately $9.2 million.

Amended and Restated Marketing and Facilitation Agreement: Pro-Fac and Birds Eye
Foods entered into an amended and restated marketing and facilitation  agreement
dated  as  of  the  Closing  Date  (the  "Amended  and  Restated  Marketing  and
Facilitation  Agreement").  The Amended and Restated  Marketing and Facilitation
Agreement  supersedes and replaces the Marketing and Facilitation  Agreement and
provides that,  among other things,  Pro-Fac will be Birds Eye Foods'  preferred
supplier  of crops.  Birds  Eye Foods  will also  continue  to pay  Pro-Fac  the
commercial  market  value  ("CMV")  for  all  crops  supplied  by  Pro-Fac,   in
installments corresponding to the dates of payment by Pro-Fac to its members for
crops  delivered.  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 Birds Eye
Foods,  it may be more or less than the price  Birds Eye Foods  would pay in the
open market in the absence of the  relationship.  The processes for  determining
CMV under the Amended and Restated  Marketing  and  Facilitation  Agreement  are
substantially   the  same  as  the  processes   used  under  the  Marketing  and
<PAGE>
Facilitation  Agreement.  Birds Eye Foods  will make  payments  to Pro-Fac of an
estimated CMV for a particular crop year,  subject to adjustments to reflect the
actual CMV following the end of such year.  Commodity committees of Pro-Fac will
meet  with  Birds Eye Foods  management  to  establish  CMV  guidelines,  review
calculations,  and  report to a joint CMV  committee  of  Pro-Fac  and Birds Eye
Foods.  Amounts  received  by  Pro-Fac  from Birds Eye Foods for the CMV for all
crops delivered for the nine months ended March 29, 2003 and March 30, 2002 were
$56.1  million  and  $70.1  million,  respectively.  As of March 29,  2003,  the
Cooperative owed $10.8 million to its members for crops delivered.  A comparable
amount was owed to the  Cooperative  by Birds Eye Foods.  Under the provision of
EITF 99-19, "Reporting Revenue Gross as a Principal Versus Net as an Agent," the
Cooperative records activity between Birds Eye Foods, itself, and its members on
a net basis.

Unlike the  Marketing  and  Facilitation  Agreement,  the Amended  and  Restated
Marketing and  Facilitation  Agreement does not permit Birds Eye Foods to offset
its losses from products supplied by Pro-Fac or require it to share with Pro-Fac
its profits  and it does not require  Pro-Fac to reinvest in Birds Eye Foods any
part of  Pro-Fac's  patronage  income.  Historically,  under the  Marketing  and
Facilitation  Agreement,  in any year in which  Birds Eye Foods had  earnings on
products  which  were  processed  from  crops  supplied  by  Pro-Fac   ("Pro-Fac
products"),  Birds Eye Foods paid to Pro-Fac, as additional patronage income, 90
percent  of such  earnings,  but in no case more than 50  percent  of all pretax
earnings of Birds Eye Foods (before  dividing with  Pro-Fac).  In years in which
Birds Eye Foods had losses on Pro-Fac products,  Birds Eye Foods reduced 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 of Birds Eye Foods (before dividing
with  Pro-Fac).  Additional  patronage  income was paid to Pro-Fac for  services
provided to Birds Eye Foods, including the provision of a long term, stable crop
supply, favorable payment terms for crops, and the sharing of risks of losses of
certain  operations  of the  business.  Under  the  Marketing  and  Facilitation
Agreement,  earnings and losses were  determined  at the end of the fiscal year,
but were  accrued on an  estimated  basis  during the year.  Pro-Fac's  share of
earnings was $12.9 million for the nine months ended March 30, 2002. Pro-Fac was
also required to reinvest at least 70 percent of the additional patronage income
in Birds Eye Foods.  Subsequent to Pro-Fac's  acquisition  of Birds Eye Foods in
1994 and prior to August 19,  2002,  Pro-Fac had  invested an  additional  $50.8
million in Birds Eye Foods.

The Amended and Restated Marketing and Facilitation Agreement also provides that
Birds Eye Foods  will  continue  to  provide to  Pro-Fac  services  relating  to
planning,  consulting,  sourcing and harvesting  crops from Pro-Fac members in a
manner consistent with past practices.  In addition,  for a period of five years
from the Closing Date, Birds Eye Foods may provide Pro-Fac with services related
to the expansion of the market for the agricultural  products of Pro-Fac members
(at no cost to Pro-Fac other than  reimbursement of Birds Eye Foods' incremental
and  out-of-pocket  expenses  related to providing such services as agreed to by
Pro-Fac and Birds Eye Foods).

Under the Amended and Restated Marketing and Facilitation  Agreement,  Birds Eye
Foods  determines  the amount of crops which Birds Eye Foods will  acquire  from
Pro-Fac  for each crop year.  If the amount to be  purchased  by Birds Eye Foods
during a particular crop year does not meet (i) a defined crop amount and (ii) a
defined target  percentage of Birds Eye Foods' needs for each  particular  crop,
then certain shortfall payments will be made by Birds Eye Foods to Pro-Fac.  The
defined crop amounts and  targeted  percentages  are set based upon the needs of
Birds Eye  Foods in the 2001 crop year  (fiscal  2002).  The  shortfall  payment
provisions of the agreement include a maximum shortfall payment,  determined for
each crop, that can be paid over the term of the Amended and Restated  Marketing
and  Facilitation  Agreement.  The aggregate  shortfall  payment amounts for all
crops covered  under the agreement  cannot exceed $20.0 million over the term of
the agreement.

The Amended and Restated Marketing and Facilitation  Agreement may be terminated
by Birds Eye Foods in  connection  with certain  change in control  transactions
affecting  Birds Eye Foods or Holdings,  Inc.;  provided,  however,  that in the
event that any such change in control  occurs during the first three years after
the Closing Date, Birds Eye Foods must pay to Pro-Fac a termination fee of $20.0
million  (less the total amount of any  shortfall  payments  previously  paid to
Pro-Fac under the Amended and Restated  Marketing and  Facilitation  Agreement).
Also,  if, during the first three years after the Closing Date,  Birds Eye Foods
sells  one or more  portions  of its  business,  and if the  purchaser  does not
continue  to purchase  the crops  previously  purchased  by Birds Eye Foods with
respect  to the  transferred  business,  then such  failure  will be taken  into
consideration  when  determining  if Birds  Eye  Foods is  required  to make any
shortfall payments to Pro-Fac. After such three-year period, Birds Eye Foods may
sell portions of its business and the volumes of crop purchases  previously made
by Birds Eye Foods with respect to such transferred business will be disregarded
for purposes of determining shortfall payments.
<PAGE>
NOTE 3. INVENTORIES

Prior to August 19, 2002, the results of the Cooperative were  consolidated with
its then wholly-owned subsidiary, Birds Eye Foods.

The major  classes of  inventories  of Birds Eye Foods at June 29,  2002 were as
follows:

(Dollars in Thousands)

                                             June 29,
                                              2002
                                           ----------

Finished goods                             $  266,469
Raw materials and supplies                     27,846
                                           ----------
     Total inventories                     $  294,315
                                           ==========

NOTE 4. ACCOUNTING FOR GOODWILL AND INTANGIBLE ASSETS

In June 2001,  the FASB  issued  SFAS No. 142,  "Goodwill  and Other  Intangible
Assets." SFAS No. 142 addressed financial  accounting and reporting for acquired
goodwill  and  other  intangible  assets,  and is  effective  for  fiscal  years
beginning  after December 15, 2001,  with early adoption  permitted for entities
with fiscal years beginning after March 15, 2001.  Effective July 1, 2001, Birds
Eye Foods,  a then  wholly-owned  subsidiary  of Pro-Fac,  adopted SFAS No. 142,
which  requires that  goodwill not be amortized,  but instead be tested at least
annually for  impairment  and expensed  against  earnings  when its implied fair
value is less than its carrying amount.

During the  quarter  ended June 29,  2002,  Birds Eye Foods  identified  certain
indicators  of possible  impairment  of its  goodwill.  The main  indicators  of
impairment  included the recent  deterioration of general  economic  conditions,
lower  valuations  resulting  from  current  market  declines,  modest  category
declines in segments in which Birds Eye Foods  operates,  and the  completion of
the terms of the Transaction with Pro-Fac and  Vestar/Birds Eye Holdings.  These
factors  indicated  an erosion in the market  value of Birds Eye Foods since the
adoption of SFAS No. 142.

As outlined  under SFAS No. 142, the  impairment  test adhered to was a two-step
process.  The first step was a review as to whether there was an indication that
goodwill was  impaired.  To do this,  Birds Eye Foods  identified  its reporting
units and determined  the carrying  value of each by assigning  Birds Eye Foods'
assets  and  liabilities,  including  existing  goodwill.  Birds Eye Foods  then
determined  the fair  value of each  reporting  unit by using a  combination  of
comparable  food  industry  trading and  transaction  multiples,  including  the
implied multiple in the Transaction with Pro-Fac and Vestar/Birds Eye Holdings.

In the second  step,  Birds Eye Foods  compared  the  implied  fair value of the
goodwill to its carrying value to measure the amount of the  impairment.  In the
fourth  quarter of fiscal  2002,  Birds Eye Foods  recorded a one-time,  pretax,
non-cash charge of approximately  $179.0 million to reduce the carrying value of
its  goodwill.  The  tax  benefit  associated  with  this  non-cash  charge  was
approximately $41.5 million.

As outlined in SFAS No. 142, certain  intangibles  with a finite life,  however,
are required to continue to be amortized.  The following schedule sets forth the
major classes of intangible assets of Birds Eye Foods at June 29, 2002:

(Dollars in Thousands)

                                       June 29,
                                         2002
                                     ----------
Amortized intangibles:
Covenants not to compete             $    2,478
Other                                    12,000
Less:  accumulated amortization          (3,173)
                                     ----------
Other intangible assets, net         $   11,305
                                     ==========

The  aggregate  amortization  expense  associated  with  intangible  assets  was
approximately $0.1 million for the period June 30, 2002 through August 18, 2002,
and $0.3  million and $0.9  million for the three  months and nine months  ended
March 30, 2002, respectively.
<PAGE>
NOTE 5. DEBT

Credit  Agreement:  Birds Eye  Foods  and  Pro-Fac  have  entered  into a Credit
Agreement,  dated  August 19, 2002 (the "Credit  Agreement"),  pursuant to which
Birds Eye Foods has agreed to make  available  to Pro-Fac  loans in an aggregate
principal  amount of up to $5.0  million (the  "Credit  Facility ").  Pro-Fac is
permitted to draw up to $1.0 million per year under the Credit Facility,  unless
Birds Eye Foods is  prohibited  from  making  such  advances  under the terms of
certain third party indebtedness of Birds Eye Foods. Amounts not drawn in a year
will not be carried forward.  The amount of the Credit Facility will be reduced,
on a  dollar-for-dollar  basis, to the extent of certain  distributions  made by
Holdings LLC to Pro-Fac in respect of its ownership in Holdings LLC. Pro-Fac has
pledged all of its Class B common units in Holdings LLC as security for advances
under the Credit Facility.  Advances outstanding under the Credit Agreement bear
interest at 10 percent per annum. As of March 29, 2003, there was an outstanding
loan amount of $0.1 million, drawn on March 12, 2003.

Line of Credit : On March 26, 2003, the Cooperative  secured a $0.5 million Line
of  Credit  from  Manufacturers  And  Traders  Trust  Company  (the "M&T Line of
Credit").  As of March 29, 2003, there were no borrowings  outstanding under the
Line of Credit.  Principal  amounts  borrowed  bear  interest at .75 percent per
annum  above the prime  rate in effect on the day  proceeds  are  disbursed,  as
announced  by the Bank,  as its prime  rate of  interest.  Interest  is  payable
monthly.  Amounts  extended under the M&T Line of Credit are required to be paid
down to zero  during  each year by July 15, and  maintained  for a minimum of 90
consecutive   days.   The  first  paydown  will  commence  July  15,  2004.  The
Cooperative's obligations under the M&T Line of Credit are secured by a security
interest granted to Manufacturers and Traders Trust Company in substantially all
of the assets of the  Cooperative,  excluding  its Class B common units owned in
Agrilink Holdings LLC. However,  collateral does include any distributions  from
the common units and cash payments made by Birds Eye Foods to the Cooperative.

Summary  of  Long-Term  Debt at June 29,  2002:  Prior to August 19,  2002,  the
results  of  the  Cooperative  were  consolidated  with  its  then  wholly-owned
subsidiary, Birds Eye Foods.

The  summary  of  long-term  debt of Birds  Eye  Foods  at June 29,  2002 was as
follows:

(Dollars in Thousands)
                                                         June 29,
                                                           2002
                                                       -----------

Term Loan Facility                                     $   400,800
Senior Subordinated Notes                                  200,015
Subordinated Promissory Notes (net of discount)             32,696
Other                                                        4,462
                                                       -----------
     Total debt                                            637,973
Less current portion                                       (14,916)
                                                       -----------
     Total long-term debt                              $   623,057
                                                       ===========

In conjunction with the Transaction,  on August 19, 2002, proceeds received from
Vestar,  along with the net  proceeds  from Birds Eye Foods' new senior  secured
credit  facility,  were utilized to retire all existing  indebtedness  under the
Birds Eye Foods Harris Credit Facility, including the Term Loan Facility.

Pro-Fac  guarantees  certain  obligations  of Birds Eye  Foods.  Following  is a
schedule  of   obligations  at  March  29,  2003  that  are  guaranteed  by  the
Cooperative.

(Dollars in Millions)

                                              Amounts
Contractual Obligations Guaranteed           Committed         Expiration
----------------------------------           ---------       ---------------

Senior Subordinated Notes - 11-7/8 Percent     $  200.0      November 2008
Subordinated Promissory Note                   $   37.6      November 2008

NOTE 6. SPECIAL MEMBERSHIP INTERESTS

In conjunction with the Transaction,  the Pro-Fac board of directors  determined
that it was in the best  interests  of Pro-Fac and its  members to make  certain
changes to the Cooperative's  certificate of incorporation and bylaws.  Included
in these changes was the creation of Pro-Fac special membership  interests.  The
aggregate amount of special membership  interest allocated is equal to Pro-Fac's
earned surplus as of June 29, 2002,  calculated in a manner  consistent with the
past custom and  practice of Pro-Fac and  ignoring  only effects of the non-cash
impairment charge recorded in the fourth quarter of fiscal 2002.
<PAGE>
The special  membership  interests were allocated to the then current and former
members of Pro-Fac that made patronage  deliveries to or on behalf of Pro-Fac in
the six fiscal  years  ended  June 29,  2002,  in  proportion  to the  patronage
deliveries  made by those  members  in each case  during  that six  fiscal  year
period. The purpose of the allocation of the special membership interests was to
preserve for the then current and former  members at the Closing Date,  the book
appreciation in value of their former investment in Birds Eye Foods.

NOTE 7. OPERATING SEGMENTS

Prior to August 19, 2002, the results of the Cooperative were  consolidated with
its then wholly-owned subsidiary, Birds Eye Foods.

Subsequent  to August 19, 2002,  the  Cooperative  operates in one segment,  the
marketing of crops grown by its members.

Birds Eye Foods  accounted for segments using SFAS No. 131,  "Disclosures  about
Segments of an Enterprise" (SFAS 131). SFAS No. 131 establishes requirements for
reporting  information  about operating  segments and established  standards for
related  disclosures  about  products and services,  and  geographic  areas.  As
management of Birds Eye Foods made the majority of its operating decisions based
upon Birds Eye Foods'  significant  product  lines,  Birds Eye Foods  elected to
utilize significant  product lines in determining its operating segments.  Birds
Eye Foods' four primary operating segments were as follows: vegetables,  fruits,
snacks, and canned meals.

The  vegetable  product line  consisted of canned and frozen  vegetables,  chili
beans,  and  various  other  products.  Branded  products  within the  vegetable
category included Birds Eye, Birds Eye Voila!, Birds Eye Simply Grillin',  Birds
Eye Hearty Spoonfuls, Freshlike, Veg-All, McKenzies, and Brooks Chili Beans. The
fruit  product  line  consisted  of canned and  frozen  fruits  including  fruit
fillings and  toppings.  Branded  products  within the fruit  category  included
Comstock  and  Wilderness.  The snack  product line  consisted of potato  chips,
popcorn and other  corn-based  snack items.  Branded  products within the snacks
category included Tim's Cascade Chips, Snyder of Berlin, Husman, La Restaurante,
Erin's, Beehive, Pops-Rite, Super Pop, and Flavor Destinations.  The canned meal
product line included canned meat products such as chilies, stew, and soups, and
various other  ready-to-eat  prepared meals.  Branded products within the canned
meals category  included Nalley.  Other product lines primarily  represent salad
dressings. Branded products within the "other category" included Bernstein's and
Nalley.

The  following  table  illustrates  the  operating  segment  information  of the
Cooperative for the periods indicated:

<TABLE>
(Dollars in Millions)
<CAPTION>

                                                                                Nine Months Ended
                                                                                    March 29,
                                                                                      2003
                           Three Months Ended        Three Months Ended           (Covering the                Nine Months Ended
                                March 29,                 March 30,           Period June 30, 2002 -                March 30,
                                  2003                      2002                 August 18, 2002)                     2002
                           -----------------         ------------------       ----------------------          -------------------
<S>                            <C>                        <C>                       <C>                             <C>
Net Sales:
   Vegetables                  $     0.0                  $  180.8                  $     69.5                      $  568.0
   Fruits                            0.0                      21.2                        13.1                          90.8
   Snacks                            0.0                      20.9                        11.8                          65.1
   Canned Meals                      0.0                      12.7                         4.4                          37.0
   Other                             0.0                       9.3                         4.9                          27.8
                               ---------                  --------                  ----------                     ---------
     Total                     $     0.0                  $  244.9                  $    103.7                     $   788.7
                               =========                  ========                  ==========                     =========
</TABLE>
<PAGE>
<TABLE>
(Dollars in Millions)
<CAPTION>
                                                                                         Nine Months Ended
                                                                                             March 29,
                                                                                               2003
                                      Three Months Ended       Three Months Ended          (Covering the        Nine Months Ended
                                           March 29,                March 30,         Period June 30, 2002 -        March 30,
                                             2003                     2002               August 18, 2002)             2002
                                      ------------------       ------------------     ----------------------    ------------------
<S>                                       <C>                     <C>                        <C>                     <C>
Operating income:
   Vegetables                             $     0.0               $    16.9                  $   3.8                 $  48.6
   Fruits                                       0.0                     2.5                      2.1                    15.4
   Snacks                                       0.0                     1.1                      1.3                     4.3
   Canned Meals                                 0.0                     1.8                      0.3                     6.2
   Other                                        0.0                     1.2                      0.4                     2.9
                                          ---------               ---------                  -------                 -------
     Continuing segments                        0.0                    23.5                      7.9                    77.4
Equity (loss)/income from Agrilink
   Holdings LLC (for the period December 29,
   2002 to March 29, 2003 and the period
   August 19, 2002 to March 29, 2003,
   respectively)                               (0.1)                    0.0                      3.6                     0.0
Gain from transaction with Birds Eye
Foods, Inc. and related agreements              1.2                     0.0                      9.2                     0.0
Commercial market value adjustment              0.5                     0.0                      0.5                     0.0
Selling, administrative, and general
expense (for the period December 29,
   2002 to March 29, 2003 and the
   period August 19, 2002 to
   March 29, 2003, respectively)               (0.3)                    0.0                     (1.2)                    0.0
Legal matters and settlement expenses          (0.4)                    0.0                     (2.0)                    0.0
Gain from pension curtailment                   0.0                     0.0                      0.0                     2.5
Restructuring                                   0.0                     0.0                      0.0                    (2.6)
                                          ---------               ---------                  -------                 -------
Total consolidated operating income             0.9                    23.5                     18.0                    77.3
Interest expense, net                           0.0                   (15.9)                    (7.7)                  (51.6)
                                          ---------               ---------                  -------                 -------
Income before taxes                       $     0.9               $     7.6                  $  10.3                 $  25.7
                                          =========               =========                  =======                 =======
</TABLE>
<PAGE>
NOTE 8. OTHER MATTERS

Prior to August 19, 2002, the results of the Cooperative were  consolidated with
its then wholly-owned subsidiary, Birds Eye Foods.

Gain from Pension  Curtailment:  During September 2001, Birds Eye Foods made the
decision to freeze benefits provided under its Master Salaried  Retirement Plan.
Under  the  provisions  of  SFAS  No.  88,   "Accounting   for  Settlements  and
Curtailments of Defined  Benefit  Pension Plans and for  Termination  Benefits,"
these  benefit  changes  resulted  in  the  recognition  of a $2.5  million  net
curtailment gain.

Restructuring:  On June 23,  2000,  Birds Eye Foods sold its pickle  business to
Dean Pickle and Specialty Product Company. As part of the transaction, Birds Eye
Foods agreed to contract pack Nalley and Farman's  pickle  products for a period
of two years,  ending  June 2002.  In  anticipation  of the  completion  of this
co-pack  contract,  Birds  Eye  Foods  initiated  restructuring  activities  for
approximately 140 employees in its facility located in Tacoma, Washington during
the first quarter of fiscal 2002.  The total  restructuring  charge  amounted to
$1.1 million and was primarily comprised of employee termination benefits.  This
amount was liquidated as of December 28, 2002.

In addition,  on October 12, 2001, Birds Eye Foods announced a further reduction
of  approximately  7  percent  of  its  nationwide  workforce,  for a  total  of
approximately  300 positions.  The  reductions  were part of an ongoing focus on
low-cost  operations  and  included  both  salaried  and  hourly  positions.  In
conjunction  with the  reductions,  Birds Eye Foods  recorded  a charge  against
earnings of  approximately  $1.6  million in the second  quarter of fiscal 2002,
primarily  consisting  of  employee  termination   benefits.   This  amount  was
liquidated as of December 28, 2002.

Legal Matters:  On September 25, 2001, in the circuit court of Multnomah County,
Oregon,  Blue Line  Farms  commenced  a class  action  suit  ("Blue  Line  Farms
litigation")  against the  Cooperative,  Birds Eye Foods,  Mr. Mike Shelby,  and
"Does"  1-50,  representing  directors,  officers,  and agents of the  corporate
defendants,  alleging  various claims related to the operation of PF Acquisition
II, Inc., a former subsidiary of Pro-Fac that conducted  business under the name
AgriFrozen  Foods  ("AgriFrozen").  The  complaint was  subsequently  amended to
eliminate  "Does" 1- 50 as  parties.  The  relief  sought  included a demand for
damages of $50.0 million.  On December 23, 2002,  Pro-Fac,  Birds Eye Foods, and
the other  defendants  reached an  agreement  in  principle as to the terms of a
settlement of the Blue Line Farms litigation, as well as of related claims under
Oregon's grower lien statute pending in the United States  Bankruptcy  Court for
the District of Oregon,  known as the Seifer Trust litigation.  The Seifer Trust
litigation  also named  Pro-Fac  and Birds Eye among its named  defendants.  The
parties in the Blue Line Farms  litigation  negotiated  a  settlement  agreement
which has been approved by the Multnomah County Circuit Court.  Other conditions
of the  settlement  were  satisfied on or before April 14, 2003. In  conjunction
with  the  settlement  of the  Blue  Line  Farms  litigation  and  Seifer  Trust
litigation,  Pro-Fac has recorded a liability for settlement  for  approximately
$1.3 million during the second quarter of fiscal 2003.

The Unit Purchase  Agreement for the Transaction  contains  specific  provisions
concerning the Blue Line Farms matter and other AgriFrozen related litigation of
Birds Eye Foods.  These provisions address the sharing of defense costs, as well
as judgment and  settlement  costs,  between Birds Eye Foods and Pro-Fac.  On an
annual basis,  Birds Eye Foods has agreed to bear  responsibility  for the first
$300,000  of  defense  costs.  In  addition,  Birds  Eye  Foods  agreed  to bear
responsibility  for  one-half  of defense  costs in excess of  $300,000  and for
one-half of judgment and settlement  costs,  subject to an aggregate cap of $3.0
million  after which  Pro-Fac is  responsible  for all costs.  These  provisions
regarding  a  sharing  of  costs  apply  specifically  to the  Blue  Line  Farms
litigation  and the Seifer Trust  litigation.  These  provisions do not apply to
other AgriFrozen  related  litigation,  the responsibility for which is entirely
with Pro-Fac.

GE Capital Matter: On October 17, 2001, in the supreme court of New York County,
New York,  General  Electric  Capital  Corporation  commenced an action  against
Pro-Fac Cooperative,  Inc. and Birds Eye Foods, Inc. The complaint relates to an
equipment   lease   entered  into  between   AgriFrozen   and  the   plaintiff's
predecessor-in-interest,  and  alleges  that  AgriFrozen,  by  failing  to  make
payments  under  the  lease,  breached  its  contract  with the  plaintiff.  The
complaint  further  alleges  that  Pro-Fac and Birds Eye Foods are liable to the
plaintiff  for that breach  because (i) there was an overlap of ownership of the
corporations,  (ii) AgriFrozen was inadequately  capitalized,  and (iii) Pro-Fac
and Birds Eye Foods were guarantors of AgriFrozen's  payment  obligations  under
the Lease.

The relief sought includes $850,000 in compensatory  damages as well as punitive
damages   based  on   Pro-Fac's   and  Birds  Eye  Foods'   alleged   fraudulent
misrepresentations  during  the lease  negotiations.  Management  believes  this
matter is without  merit and  intends to defend  vigorously  its  position  with
respect to this matter.

Kenyon Zero Storage Matter:  On August 27, 2001, in the U.S.  District Court for
the Eastern  District of  Washington,  Kenyon Zero  Storage,  Inc.  commenced an
action  against  Pro-Fac and certain other parties.  The complaint  relates to a
20-year lease of a vegetable  plant located in  Grandview,  Washington,  between
AgriFrozen and the plaintiff,  and alleges breach of the lease. Pro-Fac has been
sued on a theory of corporate disregard.
<PAGE>
The relief sought includes  approximately $11.3 million in compensatory damages,
calculated as the base rental of  approximately  $.8 million per year for the 15
years  remaining  on the lease.  Additionally,  plaintiff  has  asserted  claims
against   American   Casualty  Company  of  Reading,   Pennsylvania   ("American
Casualty"),   the  issuer  of  a  lease  performance  bond,  in  the  amount  of
approximately  $.8  million.  If  American  Casualty  is held  liable  under the
performance bond, it will have a direct right of reimbursement  from Pro-Fac and
Birds Eye Foods.

Pro-Fac has sole  responsibility for costs (including defense,  settlement,  and
judgment  costs)  associated  with the GE Capital  Matter  and the  Kenyon  Zero
Storage Matter both described above.

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

Commitments:  Pro-Fac entered into an agreement to provide a guarantee in fiscal
1999  on  behalf  of  Birds  Eye  Foods'   issuance  of  11-7/8  percent  Senior
Subordinated Notes for $200.0 million aggregate principal amount due November 1,
2008.  Interest on the Notes accrues at the rate of 11-7/8 percent per annum and
is payable  semiannually  in arrears on May 1 and November 1.  Pro-Fac  issued a
guarantee of the loan in an original amount of approximately $200.0 million. The
guarantee  expires in 2008 and requires payment upon the occurrence of Birds Eye
Foods'  failure to satisfy the  semiannual  interest  payments or  inability  to
satisfy the principal  payment at its due date. In the event of such  shortfall,
Pro-Fac  would be required to pay any interest  payments due as well as the loan
balance  due.  As of March 29,  2003,  the  outstanding  loan  amount was $200.0
million.

Pro-Fac  entered  into an  agreement  to provide a  guarantee  in fiscal 1999 on
behalf of Birds Eye Foods' issuance of a Subordinated  Promissory Note for $30.0
million, due November 22, 2008, in partial  consideration for the acquisition of
Dean Foods Vegetable  Company.  Interest on the Subordinated  Promissory Note is
accrued quarterly in arrears  commencing  December 31, 1998, at a rate per annum
of 5 percent until  November 22, 2003,  and at a rate of 10 percent  thereafter.
Interest  accruing  through  November  22,  2003 is  required to be paid in kind
through the issuance by Birds Eye Foods of  additional  subordinated  promissory
notes identical to the  Subordinated  Promissory Note. Birds Eye Foods satisfied
this requirement through the issuance of additional  promissory notes.  Interest
accruing after November 22, 2003 is payable in cash.  Pro-Fac issued a guarantee
of the loan in an original amount of approximately  $30.0 million plus interest.
The guarantee  expires in 2008 and requires payment upon the occurrence of Birds
Eye Foods' failure to satisfy the semiannual  interest  payments or inability to
satisfy the principal  payment at its due date. In the event of such  shortfall,
Pro-Fac  would be required to pay any interest  payments due as well as the loan
balance due. As of March 29, 2003,  the  outstanding  loan amount subject to the
Cooperative's guarantee included principal of $30.0 million and interest of $7.6
million.

In certain  instances when Pro-Fac sells  businesses or assets,  the Cooperative
may retain certain  liabilities for known exposures and provide  indemnification
to the buyer with  respect  to future  claims for  certain  unknown  liabilities
existing,  or arising from events occurring,  prior to the sale date,  including
liabilities   for  taxes,   legal  matters,   environmental   exposures,   labor
contingencies,  product  liability,  and  other  obligations.  The  terms of the
indemnifications  vary in  duration,  generally  two years for certain  types of
indemnities, to terms for tax indemnifications that are generally aligned to the
applicable  statute  of  limitations  for the  jurisdiction  in which the tax is
imposed,  and to terms for certain  liabilities  (i.e.,  warranties of title and
environmental  liabilities) that typically do not expire.  The maximum potential
future  payments  that the  Cooperative  could be  required  to make under these
indemnifications  are  either  contractually  limited to a  specified  amount or
unlimited.  The maximum  potential future payments that the Cooperative could be
required to make under these indemnifications are not determinable at this time,
as any future  payments would be dependent on the type and extent of the related
claims, and all relevant defenses, which are not estimable.  Historically, costs
incurred  to  resolve  claims  related to these  indemnifications  have not been
material to the Cooperative's financial position,  results of operations or cash
flows.
<PAGE>
The Cooperative  enters into agreements with  indemnification  provisions in the
ordinary course of business with its customers, suppliers, service providers and
business partners. In such instances, the Cooperative usually indemnifies, holds
harmless  and agrees to reimburse  the  indemnified  party for claims,  actions,
liabilities,  losses and expenses in  connection  with any personal  injuries or
property damage resulting from any Pro-Fac  products sold or services  provided.
Additionally,  the Cooperative may from time to time agree to indemnify and hold
harmless its providers of services from claims, actions, liabilities, losses and
expenses  relating to their  services to Pro-Fac,  except to the extent  finally
determined to have resulted from the fault of the provider of services  relating
to such  services.  The  level of  conduct  constituting  fault  of the  service
provider will vary from agreement to agreement and may include  conduct which is
defined in terms of negligence, gross negligence, willful misconduct,  omissions
or other culpable  behavior.  The term of these  indemnification  provisions are
generally  not  limited.   The  maximum   potential  future  payments  that  the
Cooperative could be required to make under these indemnification provisions are
unlimited.  The maximum  potential future payments that the Cooperative could be
required to make under these indemnification  provisions are not determinable at
this time, as any future  payments  would be dependent on the type and extent of
the related  claims,  and all  relevant  defenses  to the claims,  which are not
estimable.  Historically,  costs  incurred  to resolve  claims  related to these
indemnification provisions have not been material to the Cooperative's financial
position, results of operations or cash flows.

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

NOTE 9. SUBSEQUENT EVENTS

Dividends:  Subsequent to quarter end, the Cooperative  declared a cash dividend
of $.43 per share on the Class A Cumulative  Preferred  Stock.  These  dividends
approximate $1.9 million and were paid on April 30, 2003.

               CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

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

The Cooperative cautions readers that any such  forward-looking  statements made
by  or  on  behalf  of  the  Cooperative  are  based  on  management's   current
expectations  and beliefs but are not guarantees of future  performance.  Actual
results  could  differ  materially  from  those  expressed  or  implied  in  the
forward-looking statements.  Among the factors that could impact the Cooperative
include:

|X|  the impact of weather on the volume and quality of raw product;

|X|  the  impact  of  strong   competition  in  the  food  industry,   including
     competitive pricing;

|X|  the impact of changes in consumer demand;

|X|  the  continuation  of Birds Eye Foods'  success in  integrating  operations
     (including the  realization of anticipated  synergies in operations and the
     timing of any such  synergies),  success  with new  product  introductions,
     effectiveness   of  marketing  and  shifts  in  market   demand,   and  the
     availability of acquisition and alliance opportunities;

|X|  risks associated with the Cooperative's contractual relationship with Birds
     Eye Foods, including the possibility of a reduced demand for crops produced
     by Pro-Fac members, the availability and sufficiency of shortfall payments,
     and the potential consequences of a termination of that relationship; and

|X|  the ability of the  Cooperative to operate its business using the resources
     made available  under the  Transitional  Services  Agreement with Birds Eye
     Foods and following the expiration of that agreement.

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

The purpose of this discussion is to outline the reasons for significant changes
in  the  Unaudited  Consolidated  Statement  of  Operations,  Net  Proceeds  and
Comprehensive  Income in the third  quarter and first nine months of fiscal 2003
versus such periods in fiscal 2002.

Prior to August  18,  2002,  Birds Eye Foods was a wholly  owned  subsidiary  of
Pro-Fac.   Birds  Eye  Foods  operates  through  four  primary  products  lines,
consisting of vegetable,  fruits,  snacks and canned meals. The majority of each
of the  product  lines' net sales was within the  United  States  and,  with the
exception  of one  facility in Mexico,  all of Birds Eye Foods'  facilities  are
located in the United  States.  Through  August 18, 2002, the results of Pro-Fac
were  consolidated with Birds Eye Foods. The consolidated  financial  statements
were after elimination of intercompany transactions and balances.

As a  result  of  the  Transaction,  described  in  NOTE  1  of  the  "Notes  to
Consolidated  Financial  Statements,"  the results of  operations  for the third
quarter and first nine months of fiscal  2003 are not  comparable  with those of
such period of fiscal 2002.

The  following  is a  discussion  of the  remaining  components  included in the
results of  operations of Pro-Fac for its third quarter and first nine months of
fiscal 2003.  Pro-Fac now operates in one segment,  the marketing of crops grown
by its members.

       CHANGES FROM THIRD QUARTER FISCAL 2002 TO THIRD QUARTER FISCAL 2003

Equity  (loss)/income from Agrilink Holdings LLC: Subsequent to August 18, 2002,
Pro-Fac no longer reports its financial  statements on a consolidated basis with
Birds Eye Foods and accounts for its  investment in Agrilink  Holdings LLC under
the equity  method of  accounting.  For the quarter  ended March 29,  2003,  the
Cooperative  recognized a loss of  approximately  $(0.1)  million from  Agrilink
Holdings LLC.

Gain from transaction with Birds Eye Foods, Inc. and related agreements: Pro-Fac
and Birds Eye Foods entered into a letter agreement dated as of the Closing Date
(the  "Termination  Agreement",  as that agreement is described in NOTE 2 to the
"Notes to Consolidated  Financial  Statements"),  pursuant to which, among other
things,  the  Marketing  and  Facilitation  Agreement  was  terminated,  and  in
consideration  of such  termination,  Pro-Fac will receive a termination  fee of
$10.0 million per year for five years,  provided that certain ongoing conditions
are met,  including  maintaining grower membership levels sufficient to generate
certain minimum crop supply. The $10.0 million payment will be paid in quarterly
installments  to the  Cooperative  as follows:  $4.0 million on each July 1, and
$2.0 million each October 1, January 1, and April 1. During the third quarter of
fiscal 2003, the Cooperative  therefore received $2.0 million on January 1, 2003
from Birds Eye Foods.

Payments under the Termination Agreement are considered additional consideration
related to the Transaction.  Accordingly, 40.72 percent of the payments received
under the  Termination  Agreement  are  recorded as an  adjustment  to Pro-Fac's
investment in Agrilink  Holdings LLC. The remaining  59.28 percent of the annual
payment are recognized as additional  gain from the  transaction  with Birds Eye
Foods in the period  received.  Accordingly,  during the third quarter of fiscal
2003, Pro-Fac recognized  approximately $1.2 million as additional gain from the
receipt of the termination payments.

Commercial  market value  adjustment:  At its January 2003 board meeting,  in an
action aimed at improving the Cooperative's  short-term liquidity,  the Board of
Directors of Pro-Fac  determined  to deduct 1 percent of the  commercial  market
value ("CMV") otherwise payable to Pro-Fac's  member-growers  for crops supplied
by Pro-Fac  member-growers through the Cooperative for the 2002 and 2003 growing
seasons.  The 1 percent CMV  deduction  will be withheld  from the July 2003 and
July 2004 CMV  payments.  The 1 percent  deduction  for the 2002 growing  season
resulted in  approximately  $0.6 million of income for the  year-to-date  period
ended March 29, 2003 which was recorded during the third quarter of fiscal 2003.
The  Board of  Directors  of  Pro-Fac  resolved  to review  this  recommendation
annually.

Selling,  administrative,  and general  expense:  Selling,  administrative,  and
general expenses totaled  approximately $0.3 million for the quarter ended March
29, 2003.  These  expenses for the third quarter of fiscal 2003 were for general
operating purposes of the Cooperative.
<PAGE>
Legal matters and settlement expenses: During the second quarter of fiscal 2003,
the Cooperative  reached an agreement in principle as to the terms of settlement
with  respect to the Blue Line and Seifer Trust  litigations  (see NOTE 8 of the
"Notes  to  Consolidated  Financial  Statements").  In  anticipation  of a final
settlement,  Pro-Fac recorded a liability for approximately  $1.3 million during
the second  quarter of fiscal 2003. In addition,  the  Cooperative  has incurred
approximately  $0.4  million of legal costs  during the third  quarter of fiscal
2003 associated with these and other legal matters as disclosed in NOTE 8 to the
"Notes to Consolidated Financial Statements."

Tax provision: The Cooperative  Bylaws are structured as to allow it to qualify
as  a  cooperative  under  Subchapter  T  of  the  Internal  Revenue  Code.  The
Cooperative  currently  is seeking to  qualify  for exempt  status as a farmers'
cooperative under Section 521 of the Internal Revenue Code. Exempt  cooperatives
are permitted to reduce or avoid taxation through the use of special  deductions
(such as dividends  paid on its common stock and preferred  stock).  The current
provision for income taxes is computed as if the Cooperative is non-exempt.  The
Cooperative  will adjust its  provision  for income taxes when,  and if,  exempt
status is obtained.

 CHANGES FROM FIRST NINE MONTHS FISCAL 2002 TO FIRST NINE MONTHS FISCAL 2003

As outlined above, from June 30, 2002 until August 18, 2002, Birds Eye Foods was
a wholly owned  subsidiary of Pro-Fac.  Through  August 18, 2002, the results of
Pro-Fac  were  consolidated  with Birds Eye Foods.  The  consolidated  financial
statements were after elimination of intercompany transactions and balances. The
following  summarizes  the  activity  of Birds Eye Foods for the period June 30,
2002 through August 18, 2002:

                                                   June 30, 2002 -
(Dollars in Thousands)                             August 18, 2002
                                                   ---------------

Net sales                                            $  103,726
Cost of sales                                           (80,644)
                                                     ----------
Gross profit                                             23,082
Selling, administrative, and general expense            (15,468)
Other income                                                277
                                                     ----------
Operating income                                          7,891
Interest expense                                         (7,747)
                                                     ----------
Pretax income                                               144
Tax provision                                               (59)
                                                     ----------
   Net income                                        $       85
                                                     ==========

As a  result  of  the  Transaction,  described  in  NOTE  1  of  the  "Notes  to
Consolidated   Financial   Statements,"   the  results  of  operations  for  the
approximately  seven weeks outlined  above are not comparable  with those of the
first nine months of fiscal 2002. Accordingly,  the following is a discussion of
the  remaining  components  included in the results of operations of Pro-Fac for
the first nine months of fiscal 2003.

Equity  (loss)/income from Agrilink Holdings LLC: Subsequent to August 18, 2002,
Pro-Fac no longer reports its financial  statements on a consolidated basis with
Birds Eye Foods and accounts for its  investment in Agrilink  Holdings LLC under
the equity method of  accounting.  For the nine months ended March 29, 2003, the
Cooperative  recognized  income of  approximately  $3.6  million  from  Agrilink
Holdings LLC.

Gain from  transaction  with Birds Eye Foods,  Inc and  related  agreements:  On
August 19, 2002, the Cooperative contributed to the capital of Agrilink Holdings
LLC all of the  shares of Birds Eye  Foods'  common  stock  owned by  Pro-Fac in
exchange for Class B common units of Agrilink  Holdings LLC representing a 40.72
percent  interest.  Pro-Fac's  investment  in  Birds  Eye  Foods  prior  to  the
Transaction  was   approximately   $24.9  million.   This  amount  reflects  the
forgiveness by Birds Eye Foods of approximately  $36.5 million which represented
both  borrowings  for the working  capital  needs of Pro-Fac and a $9.4  million
demand  payable.  The value of the  Cooperative's  40.72  percent  common equity
ownership  in  Agrilink  Holdings  LLC  is  estimated  at  $31.4  million.   The
Cooperative recognized a gain of $3.8 million from this exchange.

In  addition,  Pro-Fac  and Birds Eye  entered  into the  Transitional  Services
Agreement  described  in  NOTE  2  to  the  "Notes  to  Consolidated   Financial
Statements." The estimated value of services to be received by Pro-Fac under the
agreement,  of  approximately  $1.0  million,  has been  reflected as additional
proceeds  from the  Transaction.  Accordingly,  through the first nine months of
2003, Pro-Fac  recognized  approximately $.6 million as additional gain from the
Transitional Services Agreement.
<PAGE>
Pro-Fac and Birds Eye Foods also entered into a letter agreement dated as of the
Closing  Date (the  "Termination  Agreement"),  pursuant  to which,  among other
things,  the  Marketing  and  Facilitation  Agreement  was  terminated,  and  in
consideration  of such  termination,  Pro-Fac will receive a termination  fee of
$10.0 million per year for five years,  provided that certain ongoing conditions
are met,  including  maintaining grower membership levels sufficient to generate
certain minimum crop supply. The $10.0 million payment will be paid in quarterly
installments  to the  Cooperative  as follows:  $4.0 million on each July 1, and
$2.0 million each October 1, January 1, and April 1. The  Termination  Agreement
provided  that the first payment in the amount of $4.0 million was to be paid on
the  Closing  Date and the next  payment  made by October 1, 2002 and  quarterly
thereafter  as outlined in the  agreement.  Through the first nine months  ended
March 29, 2003, the Cooperative, therefore, received $4.0 million from Birds Eye
Foods on August 19,  2002,  $2.0  million on October 1, 2002 and $2.0 million on
January 1, 2003.

Payments under the Termination Agreement are considered additional consideration
related to the Transaction.  Accordingly, 40.72 percent of the payments received
under the  Termination  Agreement  are  recorded as an  adjustment  to Pro-Fac's
investment in Holdings LLC. The  remaining  59.28 percent of the annual  payment
will be recognized as additional gain on the transaction with Birds Eye Foods in
the period received. Accordingly,  through the first nine months of fiscal 2003,
Pro-Fac  recognized  approximately  $4.8  million  as  additional  gain from the
receipt of the termination payments.

As a result of the agreements described above, based on the 40.72 percent common
equity  ownership,  the Cooperative  recognized a total gain,  through the first
nine months of fiscal 2003, of approximately $9.2 million.

Commercial  market value  adjustment:  At its January 2003 board meeting,  in an
action aimed at improving the Cooperative's  short-term liquidity,  the Board of
Directors of Pro-Fac  determined  to deduct 1 percent of the  commercial  market
value ("CMV") otherwise payable to Pro-Fac's  member-growers  for crops supplied
by Pro-Fac  member-growers through the Cooperative for the 2002 and 2003 growing
seasons.  The 1 percent CMV  deduction  will be withheld  from the July 2003 and
July 2004 CMV  payments.  The 1 percent  deduction  for the 2002 growing  season
resulted in  approximately  $0.6 million of income for the  year-to-date  period
ended March 29, 2003 which was recorded during the third quarter.

Selling,  administrative,  and general  expense:  Selling,  administrative,  and
general  expenses totaled $1.1 million for the nine months ended March 29, 2003.
During the first nine months of fiscal 2003, the Cooperative paid  approximately
$.4 million to obtain  insurance  from St. Paul  Mercury  Insurance  Company and
Great  American  Insurance  Company,   insuring  the  Cooperative   against  any
obligation  it incurs as a result of its  indemnification  of its  officers  and
directors,  and insuring such officers and directors for liability against which
they may not be indemnified by the  Cooperative  for events  occurring  prior to
August  19,  2002 where  claims are  submitted  prior to August 19,  2008.  This
insurance  has a term  expiring on August 19,  2008.  The Board of  Directors of
Pro-Fac resolved to review this recommendation annually.

The remaining expenses for the first nine months of fiscal 2003 were for general
operating purposes of the Cooperative.

Legal matters and settlement expenses: During the second quarter of fiscal 2003,
the Cooperative  reached an agreement in principle as to the terms of settlement
with  respect to the Blue Line and Seifer Trust  litigations  (see NOTE 8 to the
"Notes  to  Consolidated  Financial  Statements").  In  anticipation  of a final
settlement,  Pro-Fac has  recorded a liability  for  approximately  $1.3 million
during December,  2002. In addition, the Cooperative incurred approximately $0.7
million  of legal  costs  associated  with  these and other  legal  matters,  as
disclosed in NOTE 8 to the "Notes to Consolidated Financial Statements," through
the first nine months of fiscal 2003.

Tax provision:  The Cooperative  Bylaws are structured as to allow it to qualify
as  a  cooperative  under  Subchapter  T  of  the  Internal  Revenue  Code.  The
Cooperative  currently  is seeking to  qualify  for exempt  status as a farmers'
cooperative under Section 521 of the Internal Revenue Code. Exempt  cooperatives
are permitted to reduce or avoid taxation through the use of special  deductions
(such as dividends  paid on its common stock and preferred  stock).  The current
provision for income taxes is computed as if the Cooperative is non-exempt.  The
Cooperative  will adjust its  provision  for income taxes when,  and if,  exempt
status is obtained.
<PAGE>
                         LIQUIDITY AND CAPITAL RESOURCES

As  discussed  above,  as  a  result  of  the  Transaction,  Pro-Fac  no  longer
consolidates  the assets  and  liabilities  of Birds Eye Foods in its  financial
statements. Pro-Fac's balance sheet does, however, reflect Pro-Fac's interest in
Agrilink  Holdings  LLC,  which,  as described in NOTES 1 and 2 to the "Notes to
Consolidated Financial Statements," is accounted for under the equity method.

From and after  August  19,  2002,  Pro-Fac's  primary  sources  of cash are the
payments due to it by Birds Eye Foods under the  Termination  Agreement  and the
Amended and Restated Marketing and Facilitation  Agreement,  which are described
in detail in NOTE 2 to the "Notes to the Consolidated  Financial Statements." In
addition,  pursuant to the Credit  Agreement with Birds Eye Foods,  described in
NOTE 5 of the "Notes to  Consolidated  Financial  Statements,"  Pro-Fac also has
available to it up to $1.0 million per year, for five years. Finally,  Birds Eye
Foods has agreed, pursuant to the Transitional Services Agreement,  described in
NOTE 2 to the  "Notes  to the  Consolidated  Financial  Statements"  to  provide
Pro-Fac  certain  administrative  and other services for a period 24 months from
the Closing Date.

Net cash  available to Pro-Fac is used to pay its operating  expenses as well as
to pay  dividends  on its capital  stock and to fund  repurchases  of its common
stock. In addition,  Pro Fac will,  after  expiration of the 24-month term, need
cash to cover salary,  administrative  and other  expenses  currently  furnished
under the Transitional Services Agreement.

Pro-Fac  believes the sources  described  above will be  sufficient  to meet its
liquidity requirements for the foreseeable future.

A discussion  of "Unaudited  Consolidated  Statement of Cash Flows" for the nine
months ended March 29, 2003 of fiscal 2003 follows:

Net cash used in operating activities of $29.1 million for the first nine months
of fiscal 2003 primarily  represents changes in operating assets and liabilities
of Birds Eye Foods for the period June 29, 2002 through August 19, 2002.  During
this time Pro-Fac consolidated its results with Birds Eye Foods.

Net cash used in investing  activities  for the first nine months of fiscal 2003
was $0.4 million. Of this amount  approximately $5.8 million represents the cash
balance  transferred  at the  date of the  transaction  with  Birds  Eye  Foods.
Offsetting  this amount was the receipt by the  Cooperative of $8.0 million from
Birds Eye Foods under the Termination Agreement.  Other amounts reported as cash
used in investing  activities  relate to the period June 29, 2002 through August
19, 2002 when Pro-Fac consolidated its results with Birds Eye Foods.

Net cash  provided by financing  activities  include the  repurchases  of common
stock and  dividends  paid by the  Cooperative  during the first nine  months of
fiscal 2003. Net proceeds from the issuance of short term debt of $22.0 million,
payments on long term debt of $0.2  million and cash paid for capital  leases of
$.1  million  relate to the period June 29,  2002  through  August 19, 2002 when
Pro-Fac consolidated its results with Birds Eye Foods.

At its  January  2003  board  meeting,  in an  action  aimed  at  improving  the
Cooperative's short-term liquidity, the Board of Directors of Pro-Fac determined
to suspend the payment of annual dividends on the Cooperative's common stock for
an indefinite  period of time and to deduct 1 percent of the  commercial  market
value ("CMV") otherwise payable to Pro-Fac's  member-growers  for crops supplied
by Pro-Fac  member-growers through the Cooperative for the 2002 and 2003 growing
seasons.  The 1 percent CMV deduction  will be taken from the July 2003 and July
2004 CMV  payments.  The Board of Directors  of Pro-Fac  resolved to review this
recommendation annually.

On March 26, 2003,  the  Cooperative  secured a $0.5 million Line of Credit from
Manufacturers And Traders Trust Company (the "M&T Line of Credit").  As of March
29,  2003,  there  were no  borrowings  outstanding  under  the Line of  Credit.
Principal  amounts  borrowed  bear  interest  at .75 percent per annum above the
prime rate in effect on the day  proceeds  are  disbursed,  as  announced by the
Bank,  as its prime  rate of  interest.  Interest  is payable  monthly.  Amounts
extended  under  the M&T Line of  Credit  are  required  to be paid down to zero
during  each year by July 15, and  maintained  for a minimum  of 90  consecutive
days.  The  first  paydown  will  commence  July  15,  2004.  The  Cooperative's
obligations  under the M&T Line of Credit are  secured  by a  security  interest
granted to Manufacturers  and Traders Trust Company in substantially  all of the
assets of the  Cooperative,  excluding its Class B common units owned in Agrlink
Holdings LLC. However, collateral does include any distributions from the common
units and cash payments made by Birds Eye Foods to the Cooperative.
<PAGE>
Pro-Fac  guarantees  certain  obligations  of Birds Eye  Foods.  Following  is a
schedule  of   obligations  at  March  29,  2003  that  are  guaranteed  by  the
Cooperative.

(Dollars in Millions)

                                                Amounts
Contractual Obligations Guaranteed             Committed       Expiration
----------------------------------             ---------      -------------

Senior Subordinated Notes - 11-7/8 Percent     $  200.0       November 2008
Subordinated Promissory Note                   $   37.6       November 2008

                                  OTHER MATTERS

The vegetable and fruit portions of the business 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.  Excessive rain
or drought conditions can produce low crop yields and a shortage situation. This
typically results in higher selling prices.  While the national supply situation
controls the pricing,  the supply can differ regionally because of variations in
weather.

The  cherry  crop  resulting  from  the  fiscal  2002  growing  season  has been
drastically  affected by weather in the prime growing  areas in Michigan.  These
growing regions  experienced early season warm weather followed by a hard freeze
that resulted in an 80 percent reduction in the cherry crop compared to historic
harvest  tonnage.  The CMV for raw cherries  tripled from recent years'  average
prices.

In addition,  dry weather conditions in the New York and Midwest growing regions
in 2002  reduced crop intake.  The  reduction in crop intake did not  negatively
impact the adequacy of levels throughout the industry.

ITEM 4. CONTROLS AND PROCEDURES

The Cooperative maintains disclosure controls and procedures, as defined in Rule
13a-14(c)  promulgated under the Securities  Exchange Act of 1934 (the "Exchange
Act").  Within the 90 days prior to the date of this report,  the  Cooperative's
principal executive and principal financial officer carried out an evaluation of
the  effectiveness of the design and operation of the  Cooperative's  disclosure
controls and procedures.  Based on the evaluation of these  disclosure  controls
and  procedures,   the  principal  executive  and  principal  financial  officer
concluded  that  the  Cooperative's  disclosure  controls  and  procedures  were
effective.

There were no significant changes in the Cooperative's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation.

                                     PART II

ITEM 1. LEGAL PROCEEDINGS

Certain of our legal  proceedings  are reported in our Annual  Report on Form -K
for the year  ended June 29,  2002,  our  Quarterly  Report on Form 10-Q for the
period ended  September 28, 2002, and our Quarterly  Report on Form 10-Q for the
period ended  December 29, 2002 with material  developments  since those reports
described in NOTE 8, "Other  Matters," to the "Notes to  Consolidated  Financial
Statements,"  which  information is  incorporated by reference in answer to this
item.

ITEM 2. CHANGES IN SECURITIES

During  January 2003,  the  Cooperative  issued shares of its Class A Cumulative
Preferred Stock in exchange for shares of its Non-Cumulative Preferred Stock, on
a share-for-share basis. Such exchange is exempt from registration under Section
3(a)(9) of the  Securities  Act of 1933.  The date and amount of the exchange is
set forth below:

      Date                  Number of Shares           Value of Shares
-----------------           ----------------           ---------------

January 10, 2003                  390                      $9,750
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

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

                   Date            Region/District          City/State
              -----------------    ---------------     -----------------------

              February 3, 2003       I/1 and I/2       Rochester, New York
              February 5, 2003          II/2           Springfield, Illinois
              February 14, 2003          III           Lincoln, Nebraska
              February 11, 2003          IV            Wilsonville, Oregon
              February 12, 2003          IV            Mt. Vernon, Washington
              February 6, 2003            V            Perry, Georgia
              March 7, 2003              I/3           Johnstown, Pennsylvania
              March 4, 2003             II/1           Holland, Michigan

     (b)      Peter Call, Robert DeBadts, Steven Koinzan, Allan Overhiser and
              Darell Sarff were re-elected directors for a three-year term as a
              result of the elections at the regional meetings held in February
              and March 2003. The following is a list of the remaining directors
              whose terms of office continued after the regional meetings.

                                 Name                Term Expires
                           -----------------         ------------

                           Tom Croner                     2004
                           Dale Burmeister                2004
                           Kenneth Dahlstedt              2004
                           Glen Lee Chase                 2005
                           Bruce Fox                      2005
                           Kenneth Mattingly              2005
                           Paul Roe                       2005

              Following are the voting results from the regional meetings:

                                       Votes Cast For     Votes Cast Against

                Peter Call                   91                   0
                Robert DeBadts               42                   0
                Steven Koinzan               15                   0
                Allan Overhiser              71                   0
                Darell Sarff                 17                   0

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a) Exhibits

            Exhibit Number                        Description


                10.1             Grid Note between the Cooperative and
                                 Manufacturers and Traders Trust Company, dated
                                 as of March 26, 2003.

                10.2             General Security  Agreement between the
                                 Cooperative and Manufacturers and Traders Trust
                                 Company, dated March 26, 2003

                99.1             Birds Eye  Foods,  Inc.  financial  statements
                                 for the quarter ended March 29, 2003
                                 (filed herewith).

                99.2             Certification  of Principal Executive Officer
                                 pursuant  to 18 USC,  Section 1350, as adopted
                                 pursuant to Section 906 of the Sarbanes-Oxley
                                 Act of 2002.

                99.3             Certification of Principal  Financial Officer
                                 pursuant to 18 USC,  Section 135.0, as adopted
                                 pursuant to Section 906 of the Sarbanes-Oxley
                                 Act of 2002.

        (b)  Reports on Form 8-K:

             On February 11, 2003 the  Cooperative  filed a Report on Form 8-K
             to report that Pro-Fac  Cooperative  Inc.'s  Quarterly  Report on
             Form 10-Q for the fiscal quarter ended December  28,2002 had been
             filed and that the report was accompanied by the  certifications,
             under Section 906 of the  Sarbanes-Oxley  Act of 2002, of Stephen
             R. Wright, as principal executive and principal financial officer
             of Pro-Fac.

             On February 7, 2003 the Cooperative filed a Report on Form 8-K to
             report that Pro-Fac  Cooperative  Inc's Quarterly  Report on Form
             10-Q/A for the fiscal  quarter ended  September  28,2002 had been
             filed and that the report was accompanied by the  certifications,
             under Section 906 of the  Sarbanes-Oxley  Act of 2002, of Stephen
             R. Wright, as principal executive and principal financial officer
             of Pro-Fac.
<PAGE>

             On January 30,2003, the Cooperative filed a Report on Form 8-K to
             report that Pro-Fac  Cooperative  Inc. had discovered  accounting
             errors in the financial  information  previously reported for its
             first fiscal quarter ended September 28, 2002 which resulted in a
             restatement  of  the  Cooperative's   2002  quarterly   financial
             information  for its fiscal  quarter ended  September 28, 2002 to
             correct for these items.
<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:       May 13, 2003            BY:  /s/   Stephen R. Wright
       ---------------------            --------------------------------
                                              STEPHEN R. WRIGHT
                                         General Manager and Secretary
                                       (On Behalf of the Registrant and as
                                          Principal Executive Officer
                                        Principal Financial Officer, and
                                          Principal Accounting Officer)


<PAGE>



                                  CERTIFICATION


I, Stephen R. Wright, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Pro-Fac Cooperative,
     Inc.;

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

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

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

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


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


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




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

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

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

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

Date:       May 13, 2003              /s/        Stephen R. Wright
       ------------------------           -------------------------------
                                                 Stephen R. Wright
                                            General Manager and Secretary
                                            (Principal Executive Officer
                                           and Principal Financial Officer)