7
                               Page 1 of 14 Pages


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    Form 10-Q
                 
          Quarterly Report under Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

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

                  For the quarterly period ended March 28, 1998

                                       OR

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

                        For the transition period from to

                               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 682, Rochester, NY 14603
               (Address of Principal Executive Offices) (Zip Code)

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

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

                                    YES X NO

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of April 12, 1998.

                            Common Stock - 1,785,415

<PAGE>


                                                                 2
                          PART I. FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS


Pro-Fac Cooperative, Inc.
Consolidated Statement of Operations and Net Proceeds
(Unaudited)

<TABLE>
(Dollars in Thousands)
<CAPTION>

                                                                  Three Months Ended            Nine Months Ended
                                                               March 28,       March 29,     March 28,      March 29,
                                                                 1998            1997          1998           1997
                                                               ---------       ---------     ---------      --------

<S>                                                            <C>             <C>           <C>             <C>     
Net sales                                                      $163,150        $179,146      $542,219        $561,332
Cost of sales                                                  (118,238)       (131,888)     (389,078)       (412,827)
                                                               --------        --------      --------        --------
Gross profit                                                     44,912          47,258       153,141         148,505
Selling, administrative, and general expense                    (34,243)        (35,613)     (108,463)       (110,410)
Gain on sale of Finger Lakes Packaging                                0               0             0           3,565
Income from Great Lakes Kraut Company                               512               0         1,472               0
                                                               --------        --------      --------        --------
Operating income                                                 11,181          11,645        46,150          41,660
Interest expense                                                 (7,716)         (8,987)      (23,457)        (28,429)
                                                               --------        --------      --------        --------
Income before taxes, dividends, allocation of net
   proceeds, and cumulative effect of an accounting change        3,465           2,658        22,693          13,231
Tax provision                                                    (1,291)           (971)       (6,794)         (4,714)
                                                               --------        --------      --------        --------
Income before cumulative effect of an accounting
   change, dividends, and allocation of net proceeds              2,174           1,687        15,899           8,517
Cumulative effect of an accounting change                             0               0             0           4,606
                                                               --------        --------      --------        --------
Net income                                                     $  2,174        $  1,687      $ 15,899        $ 13,123
                                                               ========        ========      ========        ========

Allocation of Net Proceeds:
   Net income                                                  $  2,174        $  1,687      $ 15,899        $ 13,123
   Dividends on common and preferred stock                       (1,521)         (1,380)       (4,774)         (4,058)
                                                               --------        --------      --------        --------
   Net proceeds                                                     653             307        11,125           9,065
   Allocation to earned surplus                                    (409)            173        (4,570)         (4,109)
                                                               --------        --------      --------        --------
   Net proceeds available to members                           $    244        $    480      $  6,555        $  4,956
                                                               ========        ========      ========        ========

Net Proceeds Available to Members:
   Estimated cash payment                                      $     61        $     96      $  1,639        $    991
   Qualified retains                                                183             384         4,916           3,965
                                                               --------        --------      --------        --------
   Net proceeds available to members                           $    244        $    480      $  6,555        $  4,956
                                                               ========        ========      ========        ========
<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>
<PAGE>
                                                                3
<TABLE>
Pro-Fac Cooperative, Inc.
Consolidated Balance Sheet
(Unaudited)
<CAPTION>
(Dollars in Thousands)                                        ASSETS
                                                                                          March 28,        June 28,      March 29,
                                                                                            1998             1997          1997
<S>                                               <C>          <C>         <C>           <C>            <C>             <C>  
Current assets:
   Cash and cash equivalents                                                             $  2,859       $  2,838        $  5,334
   Accounts receivable, trade, net                                                         55,012         48,661          51,138
   Accounts receivable, other                                                               1,373          2,795           4,060
   Inventories -
     Finished goods                                                                       119,654         87,904         110,950
     Raw materials and supplies                                                            32,698         27,001          34,079
                                                                                         --------       --------        --------
           Total inventories                                                              152,352        114,905         145,029
                                                                                         --------       --------        --------
   Current investment in Bank                                                               2,502            946           1,262
   Prepaid manufacturing expense                                                            4,676          8,265           5,192
   Prepaid expenses and other current assets                                               12,002          6,323           9,281
   Current deferred tax assets                                                             12,312         12,312           9,995
                                                                                         --------       --------        --------
           Total current assets                                                           243,088        197,045         231,291
Investment in Bank                                                                         22,534         24,321          24,320
Investment in Great Lakes Kraut Company                                                     8,056              0               0
Property, plant, and equipment, net                                                       207,278        217,923         247,554
Assets held for sale, at net realizable value                                               2,582          3,259             903
Goodwill and other intangible assets, net                                                  94,465         96,429          98,840
Other assets                                                                               13,741          7,700          11,480
                                                                                         --------       --------       ---------
           Total assets                                                                  $591,744       $546,677        $614,388
                                                                                         ========       ========        ========
                                    LIABILITIES AND SHAREHOLDERS' AND MEMBERS' CAPITALIZATION
Current liabilities:
   Notes payable                                                                         $ 57,800       $      0        $ 20,500
   Current portion of obligations under capital leases                                        558            558             547
   Current portion of long-term debt                                                        8,070          8,075           8,075
   Accounts payable                                                                        39,997         49,256          33,139
   Income taxes payable                                                                     5,266          5,672           6,374
   Accrued interest                                                                         3,867          8,663           4,651
   Accrued employee compensation                                                           10,041         11,063          10,015
   Other accrued expenses                                                                  18,076         21,956          26,291
   Dividends payable                                                                           37             61              40
   Amounts due members                                                                     15,207         15,791          13,672
                                                                                         --------       --------        --------
           Total current liabilities                                                      158,919        121,095         123,304
Obligations under capital leases                                                              817            817           1,125
Long-term debt                                                                             67,488         69,829         133,341
Senior subordinated notes                                                                 160,000        160,000         160,000
Deferred income tax liabilities                                                            39,591         39,591          40,537
Other non-current liabilities                                                              22,869         22,682          21,546
                                                                                         --------       --------        --------
           Total liabilities                                                              449,684        414,014         479,853
                                                                                         --------       --------        --------
Commitments and contingencies
Class B cumulative  redeemable  preferred stock  liquidation  preference $10 per
   share, authorized - 500,000 shares; issued and
     outstanding 33,053, 31,435, and 36,531 shares, respectively                              331            315             365
Common stock, par value $5, authorized - 5,000,000 shares
                                                   March 28,    June 28,    March 29,
                                                     1998         1997        1997
Shares issued                                     1,786,425    1,788,815   1,800,623
Shares subscribed                                    54,822       54,557      44,387
                                                  ---------    ---------   --------- 
           Total subscribed and issued            1,841,247    1,843,372   1,845,010
Less subscriptions receivable in installments       (54,822)     (54,557)    (44,387)
                                                  ---------    ---------   --------- 
                                                  1,786,425    1,788,815   1,800,623        8,932          8,944           9,003
                                                  =========    =========   =========
Shareholders' and members' capitalization:
   Retained earnings allocated to members                                                  30,076         31,920          33,235
   Non-qualified allocation to members                                                      2,660          2,960           2,960
   Non-cumulative preferred stock, par value $25; authorized - 5,000,000 shares;
     issued and outstanding - 49,310,
       53,797, and 61,597, respectively                                                     1,233          1,345           1,540
   Class A cumulative preferred stock, liquidation preference
     $25 per share; authorized - 49,500,000 shares; issued and
       outstanding 3,498,890, 3,215,709 and 3,207,909 shares,
          respectively                                                                     87,472         80,393          80,198
   Earned surplus                                                                          11,356          6,786           7,234
                                                                                         --------       --------        --------
           Total shareholders' and members' capitalization                                132,797        123,404         125,167
                                                                                         --------       --------        --------
           Total liabilities and capitalization                                          $591,744       $546,677        $614,388
                                                                                         ========       ========        ========
<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>
<PAGE>
                                                                 4
<TABLE>
Pro-Fac Cooperative Inc.
Consolidated Statement of Cash Flows
(Unaudited)
                                                                                                       Nine Months Ended
(Dollars in Thousands)                                                                             March 28,        March 29,
                                                                                                     1998             1997
<CAPTION>
<S>                                                                                               <C>              <C>     
Cash flows from operating activities:
   Net income                                                                                     $ 15,899         $ 13,123
   Amounts payable to members                                                                       (1,639)            (991)
   Adjustments  to  reconcile  net  income  to net cash  provided  by  operating
activities:
     Cumulative effect of an accounting change                                                           0           (4,606)
     Gain on sale of Finger Lakes Packaging                                                              0           (3,565)
     Amortization of goodwill and other intangibles                                                  2,802            3,051
     Amortization of debt issue costs                                                                  600              600
     Depreciation                                                                                   13,673           16,883
     Equity in undistributed earnings from Great Lakes Kraut Company                                (1,472)               0
     Equity in undistributed earnings of the Bank                                                     (715)          (1,143)
     Change in assets and liabilities:
       Accounts receivable                                                                          (4,929)          (7,280)
       Inventories                                                                                 (39,632)         (22,336)
       Accounts payable and accrued expenses                                                       (14,459)         (13,065)
       Amounts due to members                                                                         (584)           5,797
       Income taxes payable                                                                           (406)           4,361
       Other assets and liabilities                                                                (12,738)          (1,776)
                                                                                                  --------         --------
Net cash used in operating activities                                                              (43,600)         (10,947)
                                                                                                  --------         --------

Cash flows from investing activities:
   Purchase of property, plant, and equipment                                                      (10,645)          (8,880)
   Disposals of property, plant, and equipment                                                         511           34,387
   Proceeds from investment in CoBank                                                                  946                0
                                                                                                  --------         --------
Net cash (used in)/provided by investing activities                                                 (9,188)          25,507
                                                                                                  --------         --------

Cash flows from financing activities:
   Proceeds from short-term debt                                                                    57,800           20,500
   Proceeds from long-term debt                                                                      2,200                0
   Proceeds from Great Lakes Kraut Company                                                           1,800                0
   Payments on long-term debt                                                                       (4,146)         (34,342)
   Repurchases of stock, net of issuances                                                                4             (151)
   Cash portion of non-qualified conversion                                                            (75)             (88)
   Cash dividends paid                                                                              (4,774)          (4,018)
                                                                                                  --------         --------
Net cash provided by/(used in) financing activities                                                 52,809          (18,099)
                                                                                                  --------         --------
Net change in cash and cash equivalents                                                                 21           (3,539)
Cash and cash equivalents at beginning of period                                                     2,838            8,873
                                                                                                  --------         --------
Cash and cash equivalents at end of period                                                        $  2,859         $  5,334
                                                                                                  ========         ========

Supplemental Disclosure of Cash Flow Information:

   Acquisition of C&O Distributing Company
     Property, plant, and equipment                                                               $     54
     Goodwill                                                                                          756
                                                                                                  --------
                                                                                                  $    810
Investment in Great Lakes Kraut Company:
     Inventories                                                                                  $  2,175
     Prepaid expenses and other current assets                                                         409
     Property, plant and equipment                                                                   6,966
     Other accrued expenses                                                                            (62)
                                                                                                  --------
                                                                                                  $  9,488
                                                                                                  ========
<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>

<PAGE>
                                                                 5
                            PRO-FAC COOPERATIVE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.       SUMMARY OF ACCOUNTING POLICIES

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting  principles and, in the opinion
of management,  include all  adjustments  (consisting  only of normal  recurring
adjustments)  necessary for a fair presentation of the results of operations for
these periods.  The following  summarizes the  significant  accounting  policies
applied in the  preparation  of the  accompanying  financial  statements.  These
financial statements should be read in conjunction with the financial statements
and accompanying notes contained in the Pro-Fac Cooperative,  Inc. ("Pro-Fac" or
the "Cooperative") Form 10-K/A-1 for the fiscal year ended June 28, 1997.

Consolidation:  The consolidated  financial  statements  include Pro-Fac and its
wholly-owned  subsidiary,  Agrilink  Foods,  Inc.  ("Agrilink" or the "Company")
after elimination of intercompany transactions and balances.

Change in Accounting  Principle:  Effective June 30, 1996, accounting procedures
were  changed  to  include  in  prepaid   expenses  and  other  current  assets,
manufacturing spare parts previously charged directly to expense.  The favorable
cumulative  effect of the change (net of income taxes of $1.1  million) was $4.6
million. Pro forma amounts for the cumulative effect of the accounting change on
prior periods are not determinable due to the lack of physical  inventory counts
required to establish quantities at the respective dates.

Reclassification:  Certain prior-year balances have been reclassified to conform
with the current year presentation.

NOTE 2.       AGREEMENTS WITH AGRILINK

The  contractual  relationship  between  Agrilink  and Pro-Fac is defined in the
Pro-Fac Marketing and Facilitation Agreement ("Agreement"). Under the Agreement,
the Company  pays  Pro-Fac the  commercial  market  value  ("CMV") for all crops
supplied by Pro-Fac.  CMV is defined as the weighted average price paid by other
commercial  processors for similar crops sold under  preseason  contracts and in
the open market in the same or competing  market area.  Although CMV is intended
to be no more than the fair market value of the crops purchased by Agrilink,  it
may be more or less than the price  Agrilink would pay in the open market in the
absence of the Agreement.

Under the Agreement, Agrilink is required to have on its board of directors some
persons who are neither members of nor affiliated  with Pro-Fac  ("Disinterested
Directors").  The  number of  Disinterested  Directors  must at least  equal the
number of directors who are members of Pro-Fac.

Pro-Fac  agrees to sell and  deliver  fruits  and  vegetables  needed to support
anticipated  sales and production  outlined in the Agrilink  annual profit plan.
The profit plan crop  requirements  are determined by the Boards of Directors of
Pro-Fac and  Agrilink.  Approval of the profit plan by the Board of Directors of
Agrilink  requires  the  affirmative  vote of a  majority  of the  Disinterested
Directors.  Subject only to its inability to deliver  because of the vagaries of
weather or other causes  validly  preventing  growing such crops as set forth in
the agreements  between Pro-Fac and its members,  Pro-Fac is required to deliver
to Agrilink  the crops  described in the profit  plan,  and  Agrilink  agrees to
process and market such crops.

In addition,  in any year in which  Agrilink has earnings on products which were
processed from crops supplied by Pro-Fac ("Pro-Fac Products"),  Agrilink pays to
Pro-Fac up to 90 percent of such  earnings,  but in no case more than 50 percent
of all  pretax  earnings  (before  dividing  with  Pro-Fac).  In  years in which
Agrilink has losses on Pro-Fac  Products,  the Company  reduces the CMV it would
otherwise  pay to Pro-Fac by up to 90 percent of such losses,  but in no case by
more than 50  percent of all  pretax  losses  (before  dividing  with  Pro-Fac).
Additional  patronage  income  is paid  to  Pro-Fac  for  services  provided  to
Agrilink,  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.  Earnings and losses are  determined  at the end of the fiscal
year, but are accrued on an estimated basis during the year.  Under the terms of
the Senior  Subordinated  Notes,  Pro-Fac is  required  to  reinvest at least 70
percent of the additional patronage income in Agrilink.
<PAGE>
                                                                 6
NOTE 3.       ACQUISITIONS, DISPOSAL, AND JOINT VENTURE

The following  activities  occurred during the nine-month period ended March 28,
1998:

Formation  of New  Sauerkraut  Company:  Effective  July 1, 1997 the Company and
Flanagan Brothers,  Inc. of Bear Creek,  Wisconsin  contributed all their assets
involved in sauerkraut  production to form a new  sauerkraut  company.  This new
company,  Great Lakes Kraut  Company,  operates as a New York limited  liability
company with ownership and earnings  divided  equally between the two companies.
The joint venture is accounted for using the Equity Method of accounting.

C&O  Distributing  Company:  Effective March 10, 1998, the Company  acquired the
majority of assets and the business of C&O Distributing Company of Canton, Ohio.
C&O  distributes  snack  products  for  Snyder of Berlin,  one of the  Company's
business  units  included  within its snack  foods  unit.  The  acquisition  was
accounted for as a purchase.  The purchase price was approximately $0.8 million.
Intangibles  recorded in conjunction  with this  transaction are being amortized
over 30 years.

The following activities occurred subsequent to the period ended March 28, 1998:

DelAgra Corp.:  Effective  March 30, 1998, the Company  acquired the majority of
assets and the business of DelAgra Corp. of Bridgeville, Delaware. DelAgra Corp.
is a producer of private label frozen vegetables.  The acquisition was accounted
for as a purchase. The purchase price was approximately $6.9 million.

Michigan Distribution Center: Effective March 31, 1998, the Company entered into
a multiyear  logistic  agreement under which GATX Logistics will provide freight
management,  packaging and labeling  services,  and distribution  support to and
from production facilities owned by the Company in and around Coloma,  Michigan.
The  agreement  includes  the  sale  of the  Company's  labeling  equipment  and
distribution  center.  The Company  received  proceeds of $12.6  million for the
equipment and facility.  These proceeds were applied to outstanding  bank loans.
No significant gain or loss occurred as a result of this transaction.

NOTE 4.       OTHER MATTERS

Seyfert Foods,  Inc.: The Company announced on March 26, 1998 that it had signed
a letter of intent to  acquire  all of the assets  and the  business  of Seyfert
Foods,  Inc. of Ft. Wayne,  Indiana.  Seyfert  produces potato chips and various
other  snack  foods.  A final  agreement  is subject to Board  approval  and due
diligence by both parties.

Nutrition Medical: The Company announced on March 19, 1998 that it had signed an
agreement to acquire  Nutrition  Medical's private label adult nutrition formula
business.  Nutrition  Medical  will  be paid  royalty  payments  for two  years.
Nutrition  Medical will also receive  payments for portions of existing  product
and packaging inventories. The transaction is expected to close by May 1, 1998.

Dividends:  Subsequent to quarter end, the Cooperative  declared a cash dividend
of $.43 per share on the Class A Cumulative  Preferred  Stock.  These  dividends
amounted to $1.5 million and will be paid on April 30, 1998.

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

The purpose of this discussion is to outline the significant reasons for changes
in the  Consolidated  Statement  of  Operations  and Net  Proceeds  in the third
quarter and first nine months of fiscal 1998 versus fiscal 1997.

Pro-Fac  Cooperative,  Inc.'s  ("Pro-Fac"  or  the  "Cooperative")  wholly-owned
subsidiary, Agrilink Foods, Inc. ("Agrilink" or the "Company") has three primary
business units:  Curtice Burns Foods ("CBF"),  Nalley Fine Foods,  and its Snack
Food  Group.  Each  business  unit  offers  different  products  and is  managed
separately. The majority of each of the business units' net sales are within the
United States. In addition, all of the Company's operating facilities are within
the United States.

The CBF business unit produces  products in several food  categories,  including
fruit fillings and toppings;  aseptically-produced  products;  canned and frozen
fruits,  vegetables,  and popcorn. The Nalley business unit produces canned meat
products (such as chilies and stews),  pickles, salad dressings,  peanut butter,
salsa, and syrup. The Company's snack foods business unit consists of the Snyder
of Berlin,  Husman Snack Foods, and Tim's Cascade Potato Chip  businesses.  This
business unit produces and markets potato chips and other salty-snack items.

<PAGE>

                                                                 7
The following  tables  illustrate the results of operations by business unit for
the three- and  nine-month  periods ended March 28, 1998 and March 29, 1997, and
the  Company's  total assets by business unit as of March 28, 1998 and March 29,
1997.

<TABLE>
Net Sales

(Dollars in Millions)
<CAPTION>

                                                   Three Months Ended                                 Nine Months Ended
                                            March 28,                March 29,                March 28,              March 29,
                                              1998                     1997                     1998                   1997
                                        -----------------       -----------------        -----------------       ------------------
                                                    % of                     % of                    % of                     % of
                                          $         Total           $        Total         $         Total         $          Total
                                        ------      -----        ------      -----       ------      -----       ------       -----

<S>                                     <C>          <C>         <C>          <C>        <C>          <C>        <C>          <C>  
CBF                                     $103.5       63.4%       $108.6       60.6%      $355.6       65.6%      $340.6       60.7%
Nalley Fine Foods                         43.6       26.7          43.8       24.5        136.1       25.1        133.6       23.8
Snack Food Group                          16.1        9.9          16.2        9.0         50.5        9.3         49.7        8.8
                                        ------      -----        ------      -----       ------      -----       ------      -----
     Subtotal ongoing operations         163.2      100.0         168.6       94.1        542.2      100.0        523.9       93.3
Businesses sold1                           0.0        0.0          10.5        5.9          0.0        0.0         37.4        6.7
                                        ------      -----        ------      -----       ------      -----       ------      -----
     Total                              $163.2      100.0%       $179.1      100.0%      $542.2      100.0%      $561.3      100.0%
                                        ======      =====        ======      =====       ======      =====       ======      =====

<FN>
1    Includes  the  activity of Finger  Lakes  Packaging  and the portion of the
     canned vegetable business sold in fiscal 1997.
</FN>
</TABLE>

<TABLE>
Operating Income

<CAPTION>
(Dollars in Millions)


                                                   Three Months Ended                               Nine Months Ended
                                            March 28,               March 29,                March 28,              March 29,
                                              1998                    1997                     1998                   1997 1
                                        -----------------      -----------------        -----------------       -----------------
                                                    % of                    % of                    % of                    % of
                                           $        Total          $        Total          $        Total         $         Total
                                         -----      -----       ------      -----        -----      -----       ------      -----

<S>                                      <C>         <C>        <C>          <C>         <C>         <C>         <C>         <C>  
CBF                                      $10.5       93.7%      $10.6        90.6%       $39.6       85.7%       $31.7       76.2%
Nalley Fine Foods                          1.9       17.0         3.0        25.6          9.4       20.3          8.1       19.5
Snack Food Group                           1.3       11.6         1.3        11.1          5.4       11.7          4.4       10.6
Corporate overhead                        (2.5)     (22.3)       (2.8)      (23.9)        (8.2)     (17.7)        (6.9)     (16.6)
                                         -----      -----       -----       -----        -----      -----      -------     ------
     Subtotal                             11.2      100.0        12.1       103.4         46.2      100.0         37.3       89.7
Businesses sold and other nonrecurring2    0.0        0.0        (0.4)       (3.4)         0.0        0.0          4.3       10.3
                                         -----      -----       -----       -----        -----      -----      -------     ------
     Total                               $11.2      100.0%      $11.7       100.0%       $46.2      100.0%       $41.6      100.0%
                                         =====      =====       =====       =====        =====      =====        =====      =====

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

2   Includes the earnings and gain on sale related to Finger Lakes Packaging and
    the  activity  from the  portion of the canned  vegetable  business  sold in
    fiscal 1997.  Also, in fiscal 1997,  amounts  include  strategic  consulting
    fees, a loss on the disposal of property held for sale, and final settlement
    of an insurance claim.
</FN>
</TABLE>



<PAGE>


                                                                 8
<TABLE>
EBITDA1

<CAPTION>
(Dollars in Millions)


                                                   Three Months Ended                               Nine Months Ended
                                            March 28,               March 29,                March 28,              March 29,
                                              1998                    1997                     1998                   1997 2
                                        -----------------      -----------------        -----------------        -----------------
                                                    % of                    % of                     % of                    % of
                                           $        Total           $       Total           $        Total         $         Total
                                         -----      -----         -----     -----         -----      -----       ------      -----

<S>                                      <C>         <C>          <C>         <C>         <C>         <C>         <C>         <C>  
CBF                                      $13.9       84.2%        $14.5       82.3%       $50.4       80.6%       $43.8       71.2%
Nalley Fine Foods                          3.3       20.0           4.1       23.3         13.6       21.8         12.2       19.8
Snack Food Group                           1.8       10.9           1.7        9.6          6.7       10.7          5.8        9.4
Corporate overhead                        (2.5)     (15.1)         (2.8)     (15.8)        (8.2)     (13.1)        (6.9)     (11.2)
                                         -----      -----         -----      -----        -----      -----        -----      -----
     Subtotal                             16.5      100.0          17.5       99.4         62.5      100.0         54.9       89.2
Businesses sold and other nonrecurring3    0.0        0.0           0.1        0.6          0.0        0.0          6.6       10.8
                                         -----      -----         -----      -----        -----      -----        -----      -----
     Total                               $16.5      100.0%        $17.6      100.0%       $62.5      100.0%       $61.5      100.0%
                                         =====      =====         =====      =====        =====      =====        =====      =====
<FN>
1    Earnings before interest, taxes, depreciation,  and amortization ("EBITDA")
     does not  represent  information  prepared  in  accordance  with  generally
     accepted accounting principles, nor is such information considered superior
     to information  presented in accordance with generally accepted  accounting
     principles.  The EBITDA calculation begins with Income/(loss) before taxes,
     dividends,  allocation  of  net  proceeds,  and  cumulative  effect  of  an
     accounting change and adds to such amount interest  expense,  depreciation,
     and  amortization of goodwill and other  intangibles.  Management  believes
     EBITDA is a  measurement  that allows the  operations of the business to be
     measured in a consistent manner.

2    The above  information  excludes  the  cumulative  effect of an  accounting
     change. See NOTE 1 - "Summary of Accounting Policies - Change in Accounting
     Principle."

3   Includes the earnings and gain on sale related to Finger Lakes Packaging and
    the  activity  from the  portion of the canned  vegetable  business  sold in
    fiscal 1997.  Also, in fiscal 1997,  amounts  include  strategic  consulting
    fees, a loss on the disposal of property held for sale, and final settlement
    of an insurance claim.
</FN>
</TABLE>
<TABLE>

Total Assets

<CAPTION>
(Dollars in Millions)

                                                      March 28,                         March 29,
                                                         1998                              1997
                                                                % of                               % of
                                                $               Total              $               Total
                                              ------            -----            ------            -----  

<S>                                           <C>                <C>             <C>                <C>  
CBF                                           $370.8             62.7%           $355.1             57.8%
Nalley Fine Foods                              146.4             24.7             149.8             24.4
Snack Food Group                                27.4              4.6              26.0              4.2
Corporate                                       47.1              8.0              54.5              8.9
                                              ------            -----            ------            -----
     Subtotal ongoing operations               591.7            100.0             585.4             95.3
Business sold1                                   0.0              0.0              29.0              4.7
                                              ------            -----            ------            -----
     Total                                    $591.7            100.0%           $614.4            100.0%
                                              ======            =====            ======            =====

<FN>
1 Reflects the portion of the canned vegetable business sold in fiscal 1997.
</FN>
</TABLE>
<PAGE>

                                                                 9
       CHANGES FROM THIRD QUARTER FISCAL 1998 TO THIRD QUARTER FISCAL 1997

Net Sales:  Net sales from ongoing  operations  decreased  in the third  quarter
compared  to the prior  year by $5.4  million  or 3 percent.  The  decrease  was
primarily  noted  within  the CBF  business  unit.  Net sales at both the Nalley
business unit and the Company's  Snack Food Group were  consistent  with that of
the prior year.

The most significant decrease at CBF was noted within the vegetable category and
amounted  to  approximately  $5.2  million.  Approximately  $2.9  million of the
vegetable  decrease  represents  sauerkraut net sales accounted for by the newly
created joint venture.  The net sales of the joint venture are excluded from the
Company's  net sales in fiscal 1998.  See NOTE 3  "Acquisitions,  Disposal,  and
Joint Venture - Formation of New Sauerkraut  Company." The remaining variance is
influenced by the overall  industry  supply of vegetables  which has  negatively
impacted volume and pricing.

Decreases  within the fruit and other categories of CBF amounted to $3.1 million
and are attributable to volume and product mix. This amount was, however, offset
by  increases  within the aseptic  category  of $3.2  million.  The  increase in
aseptic sales results from new business.

Total net  sales  decreased  in the third  quarter  by $15.9  million.  This net
decrease  reflects  both the reduction of  businesses  sold ($10.5  million) and
reductions in ongoing operations ($5.4 million) described above.

Gross Profit: Gross profit of $44.9 million for the quarter ended March 28, 1998
decreased  $2.4  million or 5 percent from $47.3  million for the quarter  ended
March 29, 1997.  Excluding the  businesses  sold in fiscal 1997, the decrease in
gross profit was  approximately  $1.7 million.  This  decrease  results from the
reduction in ongoing net sales  described  above along with variances in pricing
and changes in product mix. The  Company's  gross  margin  percentage,  however,
improved  from 26.4  percent  in the prior year to 27.5  percent in the  current
year.

Selling,  Administrative,  and General Expenses:  Selling,  administrative,  and
general  expenses have  decreased  $1.4 million as compared with the prior year.
This reduction is primarily  comprised of a decrease in selling and  advertising
expenses of $0.6  million and a decrease in trade  promotions  of $1.3  million.
Approximately  $2.0  million and $0.2 million  were  highlighted  at the CBF and
Snack Food Group business units, respectively. The reduction at CBF is primarily
attributable to the sale of the canned vegetable business in the spring of 1997.
The  reduction  within  the Snack Food  Group is  attributable  to the timing of
promotional programs offered. Such reductions were offset by a minor increase of
approximately $0.3 million at Nalley.

Various other administrative expenses accounted for a $0.5 million increase.

Income from Great Lakes Kraut  Company:  Other income is primarily  comprised of
earnings  received from the investment  made in Great Lakes Kraut  Company.  See
NOTE 3 - "Other Matters - Formation of New Sauerkraut Company."

Interest  Expense:  Interest  expense  for the  quarter  ended  March  28,  1998
decreased $1.3 million or 14.1 percent from the prior year. This  improvement is
primarily the result of the focus on debt reduction  which  occurred  throughout
fiscal 1997.  Activities  in fiscal 1997 that reduced debt  included the sale of
Finger Lakes Packaging,  the sale of the canned vegetable business, and the sale
of the Georgia distribution center. Reductions in outstanding debt accounted for
a decrease of $1.2 million  while  changes in rates  accounted for a decrease of
$0.1 million.

Provision for Taxes: The provision for taxes in the quarter ended March 28, 1998
of $1.3 million  increased  $0.3 million from the quarter  ended March 29, 1997.
The  increase  reflects  the  improvement  in  earnings  of  $0.8  million.  The
Cooperative's  effective tax rate is impacted by the net proceeds distributed to
members and non-deductibility of goodwill.

   CHANGES FROM FIRST NINE MONTHS FISCAL 1998 TO FIRST NINE MONTHS FISCAL 1997

Net Sales: Net sales from ongoing operations for the first nine months increased
$18.3 million or 3.4 percent as compared to the prior year.
<PAGE>
                                                                10
The most significant increase was noted within the CBF aseptic product line. Net
sales for the aseptic products increased $22.1 million.  The increase in aseptic
sales results from new business. The fruit category at CBF also showed increases
of $2.6 million resulting from improvements in pricing and product mix.

Offsetting  the above  increases  at CBF was a decrease of  approximately  $10.9
million in  sauerkraut  sales,  which are now accounted for by the newly created
joint venture and are thus excluded from the Company's net sales in fiscal 1998.
See NOTE 3  "Acquisitions,  Disposal,  and  Joint  Venture  -  Formation  of New
Sauerkraut  Company."  The shift of  sauerkraut  sales was  partially  offset by
increases  totaling $5.2 million elsewhere in the vegetable category as a result
of changes in prices,  volume,  and  product  mix.  The  combined  effect of the
sauerkraut  and other  changes was a decrease of $5.7  million in the  vegetable
category at CBF for the first nine months of fiscal 1998.

Nalley experienced  increases in net sales of $2.5 million.  The pickle category
accounted for increases of $3.1 million. This improvement results from increased
sales  volume in the  foodservice  channel.  Increases of $0.5 million were also
identified  within the canned  product line. Net decreases were noted within the
remaining  categories  including  dressings  ($0.9 million  decrease) and peanut
butter ($0.2 million decrease).

Total net sales  decreased in the first nine months by $19.1  million.  This net
decrease  reflects both the reduction of businesses  sold ($37.4 million) offset
by the increase in ongoing operations ($18.3 million) described above.

Gross Profit: Gross profit of $153.1 million for the nine months ended March 28,
1998  increased  $4.6  million or 3.1 percent  from $148.5  million for the nine
months ended March 29, 1997.  Excluding the businesses  sold in fiscal 1997, the
increase in gross profit is  approximately  $9.6 million.  This increase results
from  improvements  in pricing  and  volume,  changes in product  mix,  and cost
efficiencies.  The Company's gross margin percentage  improved from 26.5 percent
in the prior year to 28.2 percent in the current year.

Selling,  Administrative,  and General Expenses:  Selling,  administrative,  and
general expenses have decreased $2.0 million as compared with the prior year.

This reduction was primarily  comprised of a decrease in selling and advertising
of $2.3 million and a decrease in trade  promotions of $1.0  million.  Decreases
within these categories were identified at CBF (approximately  $4.2 million) and
at the Snack Food Group (approximately $0.5 million), while increases were noted
at  Nalley  (approximately  $1.4  million).  The  sale of the  canned  vegetable
business in the spring of 1997  accounted  for $2.2 million of the  reduction at
CBF. The reduction  within the Snack Food Group is attributable to the timing of
promotional  programs offered. The increase at Nalley is attributable to current
competitive pressure.

Various other administrative expenses accounted for a $1.3 million increase.

Gain on Sale of  Finger  Lakes  Packaging:  On  October  9,  1996,  the  Company
completed the sale of Finger Lakes Packaging to Silgan  Containers  Corporation,
an indirect,  wholly-owned subsidiary of Silgan Holdings, Inc., headquartered in
Stamford,  Connecticut. A gain of approximately $3.6 million was recognized. The
Company received  proceeds of approximately  $30.0 million which were applied to
Bank debt. The transaction also included a long-term supply agreement.

Income from Great Lakes Kraut  Company:  Other income is primarily  comprised of
earnings  received from the investment  made in Great Lakes Kraut  Company.  See
NOTE 3 - "Other Matters - Formation of New Sauerkraut Company."

Interest  Expense:  Interest  expense for the nine  months  ended March 28, 1998
decreased  $5.0 million or 17.5 percent  from the prior year.  This  significant
improvement  is  primarily  the  result  of the  focus on debt  reduction  which
occurred  throughout  fiscal 1997.  Activities  in fiscal 1997 that reduced debt
included the sale of Finger Lakes  Packaging,  the sale of the canned  vegetable
business,  and the  sale  of the  Georgia  distribution  center.  Reductions  in
outstanding debt accounted for a decrease of $4.4 million while changes in rates
accounted for a decrease of $0.6 million.

Expenses were reduced in the current year due to the favorable  settlement of an
outstanding tax claim with the state of Washington ($1.4 million).
<PAGE>

                                                                 11
Provision for Taxes: The provision for taxes for the nine months ended March 28,
1998 of $6.8 million  increased  $2.1 million from the prior year resulting from
an increase in earnings before tax of $9.5 million. The Cooperative's  effective
tax  rate is  impacted  by the  net  proceeds  distributed  to  members  and the
non-deductibility of goodwill.

Cumulative Effect of a Change in Accounting: Effective June 30, 1996, accounting
procedures were changed to include in prepaid expenses and other current assets,
manufacturing spare parts previously charged directly to expense.  The favorable
cumulative  effect of the change (net  income  taxes of $1.1  million)  was $4.6
million. Pro forma amounts for the cumulative effect of the accounting change on
prior periods are not determinable due to the lack of physical  inventory counts
required to establish quantities at the respective dates.

                         LIQUIDITY AND CAPITAL RESOURCES

The following  discussion  highlights the major  variances in the  "Consolidated
Statement  of Changes in Cash  Flows" for the first nine  months of fiscal  1998
compared to the first nine months of fiscal 1997.

Net cash used in operating activities increased  approximately $32.7 million due
primarily to several factors. Additional cash proceeds have been used during the
first nine  months of fiscal  1998  versus  the prior year to finance  inventory
levels.  Management intends to reduce inventory during the fourth quarter. Also,
additional  cash  proceeds  were  utilized  in the  current  year to satisfy the
Company's  income  tax  obligations.  In the  prior  year,  net  operating  loss
carryforwards were available for use. In addition, proceeds were utilized in the
first half of fiscal 1998 in conjunction with the obtaining of new business.  In
October of 1997, the Company became the sole supplier of frozen vegetables for a
national club store.  The executed  contract  extends for a two-year  period and
required a $11.0 million prepayment for volume discounts.  Due to the time frame
required to implement  full  distribution,  this contract is not  anticipated to
significantly impact fiscal 1998 earnings.  However, management anticipates this
arrangement will have a favorable impact on fiscal 1999 earnings.

Net cash provided by investing  activities decreased in the first nine months of
fiscal  1998 due to the  disposal  of Finger  Lakes  Packaging  and  other  idle
facilities  in fiscal 1997.  The purchase of property,  plant,  and equipment in
both years was for general operating purposes.

Net cash provided by financing  activities  increased from the prior year due to
the  receipt  of  proceeds  from Great  Lakes  Kraut and  additional  borrowings
incurred in the first nine months of fiscal 1998 for operating needs.

Borrowings:  Under the Company's New Credit Agreement with the Bank, as amended,
Agrilink is able to borrow up to $82.0  million  for  seasonal  working  capital
purposes under the Seasonal  Facility,  subject to a borrowing base  limitation,
and obtain up to $18.0  million in  aggregate  face  amount of letters of credit
pursuant to a Letter of Credit  Facility.  The borrowing  base is defined as the
lesser of (i) the total line and (ii) the sum of 60 percent of eligible accounts
receivable plus 50 percent of eligible inventory.

As of March  28,  1998,  (i) cash  borrowings  outstanding  under  the  Seasonal
Facility were $57.8 million and (ii) additional  availability under the Seasonal
Facility,  after taking into account the amount of borrowing was $24.2  million.
In addition to its seasonal  financing,  as of March 28,  1998,  the Company had
$25.6 million  available for long-term  borrowings under the Term Loan Facility.
The Company  believes that the cash flow generated by operations and the amounts
available  under the Seasonal and Term Loan  Facilities  should be sufficient to
fund working capital needs, fund capital expenditures,  and service debt for the
foreseeable future.

Certain  financing  arrangements  require that Pro-Fac and Agrilink meet certain
financial  tests and ratios and  comply  with  certain  other  restrictions  and
limitations.  As of March 28, 1998, the  Cooperative  is in compliance  with all
such covenants, restrictions, and limitations.

The Senior  Subordinated Notes limit the amount Pro-Fac can borrow from Agrilink
to $20.0  million  and  outline  other  restrictions  which  limit the amount of
dividends and other payments from Agrilink to Pro-Fac. As of March 28, 1998, the
Cooperative is in compliance with all such restrictions and limitations.

Short- and  Long-Term  Trends:  The  vegetable  portion 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 and reduced  profitability  on the  inventory  produced  from that year's
crops.

<PAGE>
                                                                 12
Excessive rain or drought  conditions can produce low crop yields and a shortage
situation.  This  typically  results  in higher  selling  prices  and  increased
profitability.  While the national supply  situation  controls the pricing,  the
supply can differ regionally because of variations in weather.

The crop and yield  resulting  from the 1997  growing  season has resulted in an
increased supply throughout the industry. Accordingly,  pricing and sales volume
have been  negatively  impacted in the third quarter.  Management  believes this
trend will continue during the fourth quarter.

                                  OTHER MATTERS

The Company is  currently  working to resolve the  potential  impact of the year
2000  on  the  processing  of   date-sensitive   information  by  the  Company's
computerized  information systems.  Based on preliminary  information,  costs of
addressing  potential  problems  are not  currently  expected to have a material
adverse impact on the Company's  financial position,  results of operations,  or
cash flows in future periods. However, if the Company, its customers, or vendors
are unable to resolve such processing issues on a timely manner, it could result
in a material  financial  risk.  Accordingly,  the  Company  plans to devote the
necessary  resources  to resolve  all  significant  year 2000 issues in a timely
manner.

               CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

From time to time, the  Cooperative  makes oral and written  statements that may
constitute  "forward-looking  statements"  as defined in the Private  Securities
Litigation  Reform  Act  of  1995  (the  "Act")  or by the  SEC  in  its  rules,
regulations,  and releases.  The  Cooperative  desires to take  advantage of the
"safe harbor"  provisions in the Act 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 (pages 6 to 12 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's ability to achieve its goals are:

     the impact of strong competition in the food industry;

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

     the  inherent  risks  in  the  marketplace   associated  with  new  product
     introductions, including uncertainties about trade and consumer acceptance;

     the continuation of the Cooperative's success in integrating operations and
     the availability of acquisition and alliance opportunities; and

     the  Cooperative's  ability  to  achieve  the  gains  in  productivity  and
     improvements in capacity utilization.

                           PART II - OTHER INFORMATION

ITEM 2 - CHANGES IN SECURITIES

During  January 1998,  the  Cooperative  issued shares of its Class A Cumulative
Preferred Stock in exchange for shares for 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 9, 1998                4,487                  $112,175


<PAGE>

                                                                 13
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     (a) EXHIBITS

         EXHIBIT
         NUMBER                        DESCRIPTION

         Exhibit 27            Financial Data Schedule

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


<PAGE>


                                                                 14








                                   SIGNATURES



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



                                                   PRO-FAC COOPERATIVE, INC.




Date:   April 29, 1998           BY:/s/           Stephen R. Wright
        --------------                ------------------------------------
                                                  STEPHEN R. WRIGHT,
                                                   GENERAL MANAGER




Date:   April 29, 1998           BY:/s/         Earl L. Powers
        --------------                ------------------------------------      
                                                 EARL L. POWERS,
                                           VICE PRESIDENT FINANCE AND
                                                ASSISTANT TREASURER
                                         (Principal Financial Officer and
                                            Principal Accounting Officer)