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 September 26, 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 October 31, 1998.

                            Common Stock - 1,841,555




<PAGE>
                          PART I. FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS

<TABLE>
Pro-Fac Cooperative, Inc.
Consolidated Statement of Operations and Net Proceeds
<CAPTION>
(Dollars in Thousands)

                                                                       Quarter Ended
                                                               September 26,   September 27,
                                                                    1998           1997
<S>                                                              <C>             <C>      
Net sales                                                        $182,579        $176,397
Cost of sales                                                    (135,882)       (130,748)
                                                                 --------        ---------
Gross profit                                                       46,697          45,649
Selling, administrative, and general expense                      (34,883)        (32,922)
Income from Great Lakes Kraut Company                                 636             164
Gain on sale of aseptic operations                                 64,202               0
                                                                 --------        --------
Operating income                                                   76,652          12,891
Interest expense                                                   (8,336)         (7,770)
                                                                 --------        --------
Income before taxes, dividends, allocation of net proceeds, and
   extraordinary item                                              68,316           5,121
Tax provision                                                     (25,007)         (1,822)
                                                                 --------        --------
Income before dividends, allocation of net proceeds, and
   extraordinary item                                              43,309           3,299
Extraordinary item relating to the early extinguishment of debt
   (net of income taxes)                                          (18,024)              0
                                                                 --------        --------
Net income                                                       $ 25,285        $  3,299
                                                                 ========        ========

Allocation of net proceeds:
   Net income                                                    $ 25,285        $  3,299
   Dividends on common and preferred stock                         (1,978)         (1,850)
                                                                 --------        --------
   Net proceeds                                                    23,307           1,449
   Allocation to earned surplus                                   (21,302)           (788)
                                                                 --------        --------
   Net proceeds available to members                             $  2,005        $    661
                                                                 ========        ========

Net proceeds available to members:
   Estimated cash payment                                        $    501        $    165
   Qualified retains                                                1,504             496
                                                                 --------        --------
   Net proceeds available to members                             $  2,005        $    661
                                                                 ========        ========
<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Pro-Fac Cooperative, Inc.
Consolidated Balance Sheet
(Dollars in Thousands) 
<S>                                               <C>          <C>           <C>           <C>             <C>           <C>  
                                                                                           September 26,    June 27,   September 27,
                                                            ASSETS                             1998          1998          1997
Current assets:
   Cash and cash equivalents                                                               $    9,083      $  5,049      $  3,997
   Accounts receivable trade, net                                                              98,911        55,046        65,053
   Accounts receivable, other                                                                  11,053         3,575         3,845
   Current deferred tax assets                                                                 13,336         4,849        12,312
   Inventories -
     Finished goods                                                                           349,451       111,153       140,056
     Raw materials and supplies                                                                45,829        30,433        25,413
                                                                                           ----------      --------      --------
           Total inventories                                                                  395,280       141,586       165,469
                                                                                           ----------      --------      --------
   Current investment in CoBank                                                                 1,330         1,994           631
   Prepaid manufacturing expense                                                                   98         8,404            84
   Prepaid expenses and other current assets                                                   17,288        12,989         8,464
                                                                                           ----------      --------      --------
           Total current assets                                                               546,379       233,492       259,855
Investment in CoBank                                                                           22,377        22,377        24,320
Investment in Great Lakes Kraut Company                                                         7,223         6,584         6,585
Property, plant and equipment, net                                                            317,025       194,615       209,216
Assets held for sale at net realizable value                                                    2,711         2,662         3,259
Goodwill and other intangible assets, net                                                     327,650        94,744        95,503
Other assets                                                                                   24,477        12,234         7,525
                                                                                           ----------      --------      --------
           Total assets                                                                    $1,247,842      $566,708      $606,263
                                                                                           ==========      ========      ========
                                LIABILITIES AND SHAREHOLDERS' AND MEMBERS' CAPITALIZATION
Current liabilities:
   Notes payable                                                                           $   94,000      $      0      $ 64,000
   Current portion of obligations under capital leases                                            256           256           558
   Current portion of long-term debt                                                            1,023         8,071         8,073
   Accounts payable                                                                            84,945        70,158        39,175
   Income taxes payable                                                                        13,212         4,046         5,386
   Accrued interest                                                                               690         8,559         3,960
   Accrued employee compensation                                                               14,329         8,598         7,981
   Other accrued expenses                                                                      89,746        19,013        21,681
   Dividends payable                                                                                0            52             0
   Amount due members                                                                          29,946        20,636        27,808
                                                                                           ----------      --------      --------
          Total current liabilities                                                           328,147       139,389       178,622
Obligations under capital leases                                                                  503           503           817
Long-term debt                                                                                463,700        69,937        70,528
Senior subordinated notes                                                                          15       160,000       160,000
Subordinated bridge facility                                                                  200,000             0             0
Subordinated promissory note                                                                   30,000             0             0
Deferred income tax liabilities                                                                34,644        32,457        39,591
Other non-current liabilities                                                                  26,623        23,053        22,962
                                                                                           ----------      --------      --------
           Total liabilities                                                                1,083,632       425,339       472,520
Commitments and contingencies                                                              ----------      --------      --------
Class B cumulative  redeemable preferred stock;  liquidation  preference $10 per
   share, authorized - 500,000 shares; issued
     and outstanding 27,043, 27,043, and 31,435 shares, respectively                              270           270           314
Common stock, par value $5, authorized - 5,000,000 shares
                                                September 26,   June 27,    September 27,
                                                    1998          1998          1997
Shares issued                                     1,834,805    1,825,863     1,749,580
Shares subscribed                                   737,935      160,629        44,808
                                                  ---------    ---------     ---------
           Total subscribed and issued            2,572,740    1,986,492     1,794,388
Less subscriptions receivable in installments      (737,935)    (160,629)      (44,808)
                                                  ---------    ---------     ---------
           Total issued and outstanding           1,834,805    1,825,863     1,749,580          9,174         9,129         8,748
                                                  =========    =========     =========
Shareholders' and members' capitalization:
   Retained earnings allocated to members                                                      31,264        29,765        32,409
   Non-qualified allocation to members                                                          2,660         2,660         2,960
   Accumulated other comprehensive income:
     Minimum pension liability adjustment                                                        (608)         (608)            0
     Cumulative foreign currency adjustment                                                        (5)            0             0
   Non-cumulative preferred stock, par value $25; authorized - 5,000,000 shares;
     issued and outstanding - 45,001, 45,001, and 53,797, respectively                          1,125         1,125         1,345
   Class A cumulative preferred stock, liquidation preference
     $25 per share; authorized - 49,500,000 shares; issued and
       outstanding 3,503,199, 3,503,199, and 3,215,709 shares, respectively                    87,580        87,580        80,393
   Earned surplus                                                                              32,750        11,448         7,574
                                                                                           ----------      --------      --------
              Total shareholders' and members' capitalization                                 154,766       131,970       124,681
                                                                                           ----------      --------      --------
              Total liabilities and capitalization                                         $1,247,842      $566,708      $606,263
                                                                                           ==========      ========      ========
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Pro-Fac Cooperative Inc.
Consolidated Statement of Cash Flows
<CAPTION>
(Dollars in Thousands)

<S>                                                                                    <C>               <C>    
                                                                                               Quarter Ended
                                                                                     September 26,     September 27,
                                                                                         1998              1997
                                                                                     ------------       -----------
Cash flows from operating activities:
   Net income                                                                          $ 25,285          $ 3,299
   Amounts payable to members                                                              (501)            (165)

   Adjustments to reconcile net income to net cash used in operating activities:
     Gain on the sale of the aseptic operations                                         (64,202)               0
     Extraordinary item relating to the early extinguishment of debt                     18,024                0
     Amortization of goodwill and other intangibles                                         926              990
     Amortization of debt issue costs                                                       200              199
     Depreciation                                                                         4,385            4,597
     Equity in undistributed earnings of Great Lakes Kraut Company                         (636)            (164)
     Change in assets and liabilities:
       Accounts receivable                                                              (22,222)         (17,442)
       Inventories                                                                      (72,038)         (52,739)
       Accounts payable and other accrued expenses                                      (22,938)          (9,959)
       Amounts due to members                                                             9,310           12,017
       Income taxes payable                                                              19,629             (286)
       Other assets and liabilities                                                         (34)          (2,299)
                                                                                       --------          -------
Net cash used in operating activities                                                  (104,812)         (61,952)
                                                                                       --------          -------

Cash flows from investing activities:
   Purchase of property, plant and equipment                                             (4,094)          (3,231)
   Proceeds from disposals                                                               83,000              375
   Proceeds from investment in CoBank                                                       664              316
   Cash paid for acquisitions                                                          (445,918)               0
                                                                                       --------          -------
Net cash used in investing activities                                                  (366,348)          (2,540)
                                                                                       --------          -------

Cash flows from financing activities:
   Proceeds from issuance of short-term debt                                            177,000           64,000
   Payments on short-term debt                                                          (83,000)               0
   Proceeds from issuance of long-term debt                                             677,100            2,000
   Proceeds from Great Lakes Kraut Company                                                    0            3,000
   Payments on long-term debt                                                          (276,450)          (1,303)
   Cash paid for debt issuance costs                                                    (17,523)               0
   Issuances/(repurchases) of common stock                                                   45             (196)
   Cash dividends paid                                                                   (1,978)          (1,850)
                                                                                       --------          -------
Net cash provided by financing activities                                               475,194           65,651
                                                                                       --------          -------
Net change in cash and cash equivalents                                                   4,034            1,159
Cash and cash equivalents at beginning of period                                          5,049            2,838
                                                                                       --------          -------
Cash and cash equivalents at end of period                                             $  9,083          $ 3,997
                                                                                       ========          =======

(Table continued on next page)
</TABLE>
<PAGE>
(Table continued from previous page)


                                                            Quarter Ended
                                                    September 26,  September 27,
                                                        1998           1997
                                                    -------------  ------------
Supplemental disclosure of cash flow information:

   Acquisition of Dean Foods Vegetable Company
     Accounts receivable                               $ 28,701
     Inventories                                        191,619
     Prepaid expenses and other current assets            2,871
     Current deferred tax asset                           6,300
     Property, plant and equipment                      131,648
     Goodwill and other intangible assets               230,609
     Accounts payable                                   (37,802)
     Accrued employee compensation                       (8,437)
     Other accrued expenses                             (66,748)
     Long-term debt                                      (2,752)
     Subordinated promissory note                       (30,000)
     Other assets and liabilities, net                   (2,404)
                                                       --------   
                                                       $443,605
                                                       ========

   Acquisition of J.A. Hopay Distributing Co., Inc.
     Accounts receivable                              $     420
     Inventories                                            153
     Property, plant and equipment                           51
     Goodwill and other intangible assets                 3,303
     Other accrued expenses                                (251)
     Obligation for covenant not to compete              (1,363)
                                                       --------
                                                       $  2,313
                                                       ========

   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
                                                                    ======== 

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


<PAGE>

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

NOTE 1.       SUMMARY OF ACCOUNTING POLICIES

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting  principles and, in the opinion
of management,  include all  adjustments  (consisting  only of normal  recurring
adjustments)  necessary for a fair presentation of the results of operations for
these periods.  The following  summarizes the  significant  accounting  policies
applied in the  preparation  of the  accompanying  financial  statements.  These
financial statements should be read in conjunction with the financial statements
and accompanying notes contained in the Pro-Fac Cooperative,  Inc. ("Pro-Fac" or
the "Cooperative") Form 10-K/A-1 for the fiscal year ended June 27, 1998.

Consolidation: The consolidated financial statements include the Cooperative and
its wholly-owned subsidiary,  Agrilink Foods, Inc. ("Agrilink" or "the Company")
after  elimination of  intercompany  transactions  and balances.  Investments in
affiliates,  owned more than 20  percent  but not in excess of 50  percent,  are
recorded under the equity method of accounting.

Reclassification:  Certain  items for  fiscal  1998 have  been  reclassified  to
conform with the current presentation.

Adoption of SFAS No. 130: Effective June 28, 1998, the Company adopted Statement
of  Financial  Accounting  Standards  (SFAS) No. 130,  "Reporting  Comprehensive
Income."  Comprehensive  income is defined as the change in equity of a business
during a period  from  transactions  and other  events  and  circumstances  from
non-owner sources.  Under SFAS No. 130, the term "comprehensive  income" is used
to describe the total of net earnings plus other comprehensive  income which for
the  Company  includes  foreign  currency  translation  adjustments  and minimum
pension  liability  adjustments.  The  adoption  of SFAS No.  130 did not have a
material effect on the Company's results of operations or financial position.

Adoption of SFAS No. 131:  Effective June 28, 1998 the Company  adopted SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information." SFAS
No. 131 supersedes SFAS No. 14, "Financial  Reporting for Segments of a Business
Enterprise,"  replacing the "industry  segment"  approach with the  "management"
approach.  The management approach designates the internal  organization that is
used by management for making operating  decisions and assessing  performance as
the source of the  Company's  reportable  segments.  SFAS No. 131 also  requires
disclosures about products and services,  geographic areas, and major customers.
The adoption of SFAS No. 131 did not affect the Company's  results of operations
or financial position.

Derivative Financial  Instruments:  The Company does not engage in interest rate
speculation.  Derivative  financial  instruments  are utilized to hedge interest
rate risks and are not held for trading purposes.

The Company  enters into  interest  rate swap  agreements  to limit  exposure to
interest  rate  movements.  Net  payments or receipts  are accrued  into prepaid
expenses and other current assets and/or other accrued expenses and are recorded
as adjustments to interest  expense.  Interest rate instruments are entered into
for periods no greater than the life of the underlying transaction being hedged.
Management  anticipates  that  all  interest  rate  derivatives  will be held to
maturity.   Any  gains  or  losses  on  prematurely   terminated  interest  rate
derivatives  will  be  recognized  over  the  remaining  life,  if  any,  of the
underlying transaction as an adjustment to interest expense.

NOTE 2.       ACQUISITION OF DEAN FOODS VEGETABLE COMPANY

On  September  24, 1998,  Agrilink  acquired  the Dean Foods  Vegetable  Company
("DFVC"),  the frozen and canned vegetable business of Dean Foods Company ("Dean
Foods"),  by acquiring all the outstanding capital stock of Dean Foods Vegetable
Company and Birds Eye de Mexico SA de CV (the "Acquisition"). In connection with
the Acquisition, Agrilink sold its aseptic business to Dean Foods. Agrilink paid
$360  million in cash,  net of the sale of the Aseptic  Business,  and issued to
Dean Foods a $30 million unsecured subordinated promissory note due November 22,
2008 (the "Subordinated Promissory Note"), as consideration for the Acquisition.
The Company has the right,  exercisable  until July 15,  1999,  to require  Dean
Foods,  jointly with the Company,  to treat the Acquisition as an asset sale for
tax purposes under Section  338(h)(10) of the Internal Revenue Code. In order to
exercise that  election,  the Company will pay $13.2 million to Dean Foods.  The
Company intends to exercise that election.

After  the  Acquisition,  DFVC was  merged  into  the  Company,  and Dean  Foods
Vegetable  Company became a business unit of the Company known as Agrilink Foods
Vegetable  Company  ("AFVC").  DFVC has been one of the  leading  processors  of
vegetables in the United  States,  selling its products under  well-known  brand
names, such as Birds Eye, Freshlike and Veg-All, and private labels. The Company
believes  that the  Acquisition  strengthens  its  competitive  position by: (i)
enhancing  its  brand   recognition   and  market   position,   (ii)   providing
opportunities  for cost savings and operating  efficiencies and (iii) increasing
its product and geographic diversification.

<PAGE>

The Acquisition was accounted for under the purchase method of accounting. Under
purchase  accounting,  tangible and identifiable  intangible assets acquired and
liabilities  assumed  will be  recorded at their  respective  fair  values.  The
valuations and other studies which will provide the basis for such an allocation
have not  progressed to a stage where there is sufficient  information to make a
final  allocation in the accompanying  financial  statements.  Accordingly,  the
purchase accounting  adjustments made in the accompanying  financial  statements
are preliminary.  Once an allocation is determined, in accordance with generally
accepted accounting  principles,  any remaining excess of purchase cost over net
assets acquired will be adjusted through goodwill.

Due to  insignificance,  the  results  of  operations  of AFVC  for  the  period
September  24  through  26,  1998  have  not  been  included  in  the  Company's
Consolidated  Statement of Operations  for the three months ended  September 26,
1998.

Concurrently with the Acquisition, Agrilink refinanced its existing indebtedness
(the  "Refinancing"),  including its 12.25 percent Senior Subordinated Notes due
2005 (the "Old  Notes") and its then  existing  bank debt.  On August 24,  1998,
Agrilink commenced a tender offer (the "Tender Offer") for all the Old Notes and
consent solicitation to certain amendments under the indenture governing the Old
Notes to  eliminate  substantially  all the  restrictive  covenants  and certain
events of  default  therein.  Substantially  all of the $160  million  aggregate
principal  amount of the Old Notes were  tendered and  purchased by Agrilink for
aggregate  consideration  of  approximately  $184  million,   including  accrued
interest of $2.9 million.  Agrilink also  terminated  its existing bank facility
(including  seasonal  borrowings)  and  repaid  the  $176.5  million,  excluding
interest owed and breakage fees outstanding thereunder.

In  order to  consummate  the  Acquisition  and the  Refinancing  and to pay the
related fees and expenses, Agrilink: (i) entered into a new credit facility (the
"New Credit  Facility")  providing for $455 million of term loan borrowings (the
"Term Loan Facility") and up to $200 million of revolving credit borrowings (the
"Revolving  Credit  Facility"),  (ii) entered  into a $200  million  bridge loan
facility  (the "Bridge  Facility")  and (iii) issued a $30 million  Subordinated
Promissory Note to Dean Foods.  The Bridge  Facility will be repaid  principally
with the proceeds from a new long-term take-out  financing.  The Bridge Facility
was provided by Warburg Dillon Read LLC, as Arranger and Syndication  Agent; and
UBS AG, Stamford Branch, as  Administrative  Agent; and the Bank of Montreal and
Harris Trust and Savings Bank as additional lenders.

NOTE 3.       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,  the Company is required to have on its board of directors
some  persons  who  are  neither   members  of  nor   affiliated   with  Pro-Fac
("Disinterested Directors"). The number of Disinterested Directors must at least
equal the number of directors who are members of Pro-Fac. The volume and type of
crops to be purchased by Agrilink under the Agreement are determined pursuant to
its annual  profit  plan,  which  requires  the  approval  of a majority  of the
Disinterested  Directors. In addition, under the Agreement, in any year in which
the Company has earnings on products which were processed from crops supplied by
Pro-Fac  ("Pro-Fac  Products"),  the  Company  pays to  Pro-Fac,  as  additional
patronage income, up to 90 percent of such earnings, but in no case more than 50
percent of all pretax earnings (before dividing with Pro-Fac) of the Company. In
years in which the Company has losses on Pro-Fac  Products,  the Company reduces
the CMV it would  otherwise  pay to Pro-Fac by up to 90 percent of such  losses,
but in no case by more than 50  percent of all pretax  losses  (before  dividing
with Pro-Fac) of the Company. Additional patronage income is paid to Pro-Fac for
services  provided to 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 Agreement,  Pro-Fac is required to reinvest at least 70 percent
of the additional Patronage income in Agrilink.

NOTE 4.       DEBT

New Credit Facility: In connection with the Acquisition, the Company has entered
into the New Credit Facility with Harris Bank as  Administrative  Agent and Bank
of  Montreal  as  Syndication  Agent,  and the  lenders  thereunder.  The Credit
Facility  consists of the $200 million  Revolving  Credit  Facility and the $455
million Term Loan  Facility.  The Term Loan  Facility is comprised of the Term A
Facility,  which has a maturity of five years, the Term B Facility,  which has a
maturity of six years,  and the Term C  Facility,  which has a maturity of seven
years. The Revolving Credit Facility has a maturity of five years.

<PAGE>
The  New  Credit  Facility  bears  interest,  at the  Company's  option,  at the
Administrative  Agent's alternate base rate or the London Interbank Offered Rate
("LIBOR")  plus,  in  each  case,  applicable  margins  of:  (i) in the  case of
alternate base rate loans, (x) 1.00 percent for loans under the Revolving Credit
Facility  and the Term A Facility,  (y) 2.25  percent for loans under the Term B
Facility  and (z) 2.50  percent for loans under the Term C Facility  and (ii) in
the case of LIBOR loans,  (x) 2.75 percent for loans under the Revolving  Credit
Facility  and the Term A Facility,  (y) 3.25  percent for loans under the Term B
Facility  and (z)  3.50  percent  for  loans  under  the  Term C  Facility.  The
Administrative  Agent's  "alternate base rate" is defined as the greater of: (i)
the prime commercial rate as announced by the  Administrative  Agent or (ii) the
Federal  Funds rate plus 0.50  percent.  In  addition,  the  Company  will pay a
commitment  fee  calculated  at a rate of 0.50  percent  per  annum on the daily
average unused commitment under the Revolving Credit Facility.

Beginning  with the  reporting  period  ending  March 31, 1999,  the  applicable
margins for the New Credit Facility will be subject to possible reductions based
on  the  ratio  of  consolidated  debt  to  earnings  before  interest,   taxes,
depreciation  and  amortization  ("EBITDA")  (each as  defined in the New Credit
Facility).

Upon  consummation of the  Acquisition,  the Company drew $455 million under the
Term Loan Facility, consisting of $100 million, $175 million and $180 million of
loans  under  the  Term  A  Facility,  Term B  Facility  and  Term  C  Facility,
respectively.  Additionally,  the Company drew $93 million  under the  Revolving
Credit  Facility for seasonal  working capital needs and $14.3 million under the
Revolving Credit Facility was issued for letters of credit.

The Term Loan Facility will be subject to the following amortization schedule.

Fiscal Year    Term Loan A      Term Loan B       Term Loan C     Total
-----------    -----------      -----------       -----------     -----
                           (Dollars in millions)
    1999        $  0.0          $  0.2             $  0.2        $  0.4
    2000          15.0             0.4                0.4          15.8
    2001          20.0             0.4                0.4          20.8
    2002          20.0             0.4                0.4          20.8
    2003          20.0             0.4                0.4          20.8
    2004          25.0             0.4                0.4          25.8
    2005           0.0           172.8                0.4         173.2
    2006           0.0             0.0              177.4         177.4
                ------          ------             ------        ------
                $100.0          $175.0             $180.0        $455.0
                ======          ======             ======        ======

The Term  Loan  Facility  is  subject  to  mandatory  prepayment  under  various
scenarios as defined in the New Credit Facility.

The  Company's  obligations  under the New  Credit  Facility  are  secured  by a
first-priority lien on: (i) substantially all existing or after-acquired assets,
tangible or intangible,  (ii) the capital stock of certain of Pro-Fac's  current
and future  subsidiaries,  and (iii) all of the  Company's  rights  (principally
indemnification  rights)  under the  agreement  to acquire  DFVC and the Pro-Fac
Marketing and Facilitation  Agreement.  The Company's  obligations under the New
Credit  Facility are guaranteed by Pro-Fac and certain of the Company's  current
and future subsidiaries, if any.

The New Credit Facility  contains  customary  covenants and  restrictions on the
Company's ability to engage in certain  activities,  including,  but not limited
to:  (i)  limitations  on  the  incurrence  of  indebtedness  and  liens,   (ii)
limitations on sale-leaseback  transactions,  consolidations,  mergers,  sale of
assets,  transactions  with affiliates and investments and (iii)  limitations on
dividend  and  other  distributions.  The  New  Credit  Facility  also  contains
financial  covenants  requiring Pro-Fac to maintain a minimum level of EBITDA, a
minimum  interest  coverage  ratio,  a minimum fixed charge  coverage  ratio,  a
maximum  leverage  ratio and a minimum  level of net  worth.  The  Company is in
compliance with all covenants,  restrictions and requirements under the terms of
the New Credit Facility.

Interest Rate Protection  Agreements:  The Company has entered into a three-year
interest rate swap agreement with the Bank of Montreal in the notional amount of
$150 million.  The swap agreement  provides for an interest rate of 4.96 percent
over the term of the swap payable by the Company in exchange for payments at the
published  three-month  LIBOR. In addition,  the Company entered into a separate
interest rate swap agreement with the Bank of Montreal in the notional amount of
$100 million for an initial period of three years, which may be extended, at the
Company's  option,  for an  additional  two-year  period.  This  swap  agreement
provides  for an  interest  rate of 5.32  percent  over  the  term of the  swap,
including the two-year extension period if the Company elects to extend, payable
by the Company in exchange for payments at the published  three-month LIBOR. The
Company entered into these  agreements in order to manage its interest rate risk
by  exchanging  its floating  rate  interest  payments  for fixed rate  interest
payments.
<PAGE>
Subordinated  Bridge  Facility:  To complete the  Acquisition,  the Company also
entered into a Subordinated Bridge Facility (the "Bridge Facility").  The Bridge
Facility  was provided by Warburg  Dillon Read LLC, as Arranger and  Syndication
Agent; and UBS AG, Stamford  Branch,  as  Administrative  Agent; and the Bank of
Montreal and Harris Trust and Savings Bank as additional  lenders.  The interest
rate  under the  Bridge  Facility  resets  monthly  on the basis of LIBOR plus a
spread  of 5  percent  for the  first  90 days,  which  spread  increases  by an
additional  1  percent  each  subsequent  90-day  period.  In no event  will the
interest  rate exceed 16 percent per annum.  The  Company  anticipates  that the
Bridge Facility will be repaid  principally with the proceeds of a new long-term
take-out  financing.  Should the  Company be unable to  complete  its  long-term
take-out  financing,  the Bridge  Facility,  if not repaid within one year,  may
thereafter be converted to permanent  financing with  consistent  interest rates
and a maturity of September, 2006.

Subordinated Promissory Note: As partial consideration for the Acquisition,  the
Company  issued to Dean Foods a  Subordinated  Promissory  Note for $30  million
aggregate  principal amount due November 22, 2008.  Interest on the Subordinated
Promissory Note is payable 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 the Company of  additional  subordinated
promissory  notes  identical  to  the  Subordinated  Promissory  Note.  Interest
accruing after November 22, 2003 is payable in cash. The Subordinated Promissory
Note may be prepaid at the Company's option without premium or penalty.

The  Subordinated  Promissory Note is expressly  subordinate to the Subordinated
Bridge Facility,  any long-term take-out financing,  and the New Credit Facility
and  contains  no  financial  covenants.  The  Subordinated  Promissory  Note is
guaranteed by Pro-Fac.

12 1/4 Percent Senior  Subordinated  Notes (due 2005):  In conjunction  with the
Acquisition,  the Company repurchased  $159,985,000  principal amount of its Old
Notes,  of  which  $160  million  aggregate   principal  amount  was  previously
outstanding.  The  Company  paid  a  total  of  approximately  $184  million  to
repurchase the Old Notes,  including  interest  accrued thereon of $2.9 million.
Holders who tendered  consented to certain  amendments to the indenture relating
to the Old Notes, which eliminated or amended  substantially all the restrictive
covenants and certain events of default contained in such indenture. The Company
may   repurchase   the  remaining  Old  Notes  in  the  future  in  open  market
transactions, privately negotiated purchases or otherwise.

NOTE 5.       OTHER MATTERS

J.A. Hopay Distributing Co, Inc.:  Effective July 21, 1998, the Company acquired
J.A. Hopay Distributing Co., Inc. ("Hopay") of Pittsburgh,  Pennsylvania.  Hopay
distributes snack products for Snyder of Berlin,  one of the Company's  business
units within its Snack Foods  Group.  The  acquisition  was  accounted  for as a
purchase. The purchase price (net of liabilities assumed) was approximately $2.3
million.  Intangibles of approximately $3.3 million were recorded in conjunction
with this transaction and are being amortized over 30 years.

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

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 $1.5 million and will be paid on October 30, 1998.

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

The purpose of this review is to highlight the more  significant  changes in the
major items in the Consolidated  Statement of Operations and Net Proceeds in the
first quarter of fiscal 1999 versus the first quarter of 1998.

Pro-Fac  Cooperative,  Inc.'s  ("Pro-Fac"  or  the  "Cooperative")  wholly-owned
subsidiary,  Agrilink Foods, Inc. ("Agrilink" or the "Company") has four primary
business units:  Curtice Burns Foods ("CBF"),  Agrilink Foods Vegetable  Company
("AFVC"), Nalley Fine Foods ("Nalley"), and its Snack Foods 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,  except for one facility in Mexico, are
within the United States.

<PAGE>

The CBF business unit produces  products in several food  categories,  including
fruit  fillings  and  toppings;  canned and frozen  fruits and  vegetables,  and
popcorn.  The AFVC business unit was acquired on September 24, 1998 and produces
canned and frozen  vegetables.  The Nalley  business unit  produces  canned meat
products such as chilies and stews, pickles, salad dressings, peanut butter, and
syrup.  The 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 snack items.

The following  tables  illustrate the results of operations by business unit for
the quarters  ended  September 26, 1998 and  September  27, 1997,  and the total
assets by business  unit as of September 26, 1998 and September 27, 1997. As the
acquisition  of  AFVC  was  completed  on  September  24,  1998,  the  operating
activities of AFVC for the period  September 24 through  September 26, 1998 have
not been included in the results shown below due to insignificance.

Net Sales
(Dollars in Millions)
                                               Quarter Ended
                                     September 26,         September 27,
                                         1998                  1997
                                             % of                 % of
                                     $       Total        $       Total
                                  ------     -----     ------     ------

CBF                               $ 96.7      53.0%    $ 87.7      49.7%
Nalley Fine Foods                   42.8      23.4       46.9      26.6
Snack Foods Group                   18.2      10.0       17.3       9.8
                                  ------     -----     ------     -----
  Subtotal ongoing operations      157.7      86.4      151.9      86.1
Businesses sold1                    24.9      13.6       24.5      13.9
                                  ------     -----     ------     -----
  Total                           $182.6     100.0%    $176.4     100.0%
                                  ======     =====     ======     =====

1    Includes the net sales of the aseptic business. See NOTE 2 to the "Notes to
     Consolidated Financial Statements."

Operating Income1
(Dollars in Millions)
                                               Quarter Ended
                                         September 26,    September 27,
                                                1998          1997
                                             % of                  % of
                                     $       Total        $        Total
                                   -----     -----      -----      -----

CBF                                $ 6.1      48.8%     $ 6.1       47.3%
Nalley Fine Foods                    2.2      17.6        3.7       28.7
Snack Foods Group                    2.3      18.4        2.1       16.2
Corporate                           (1.3)    (10.4)      (1.9)     (14.7)
                                   ------    -----      -----      -----
   Subtotal ongoing operations       9.3      74.4       10.0       77.5
Businesses sold2                     3.2      25.6        2.9       22.5
                                   -----     -----      -----      -----
   Total3                          $12.5     100.0%     $12.9      100.0%
                                   =====     =====      =====      =====

1   Excludes the gain on the sale of the aseptic business.

2   Represents the operating earnings of the aseptic business.

3   Operating income less interest expense of $8.3 million and $7.8 million, for
    the first quarter of fiscal 1999 and 1998,  respectively,  results in income
    before taxes, dividends,  allocation of net proceeds and extraordinary item.
    Interest  expense  allocated to business  units is not considered a critical
    component by management when evaluating success.




<PAGE>


EBITDA1,2
(Dollars in Millions)

                                              Quarter Ended
                                     September 26,     September 27,
                                         1998              1997
                                            % of               % of
                                    $      Total       $       Total
                                  -----    -----     -----     ----- 

CBF                               $ 8.9     50.0%    $ 9.5      51.4%
Nalley Fine Foods                   3.6     20.2       5.1      27.6
Snack Foods Group                   2.8     15.7       2.6      14.1
Corporate                          (1.3)    (7.2)     (1.9)    (10.4)
                                  -----    -----     -----     -----
   Subtotal ongoing operations     14.0     78.7      15.3      82.7
Businesses sold3                    3.8     21.3       3.2      17.3
                                  -----    -----     -----     -----
   Total                          $17.8    100.0%    $18.5     100.0%
                                  =====    =====     =====     =====

1  Earnings before interest, taxes, depreciation,  and amortization ("EBITDA")
   is defined as the sum of income before taxes, dividends,  allocation of net
   proceeds,  extraordinary  item,  and  interest  expense,  depreciation  and
   amortization of goodwill and other intangibles.

   EBITDA should not be considered as an alternative to net income or cash flows
   from operations or any other generally accepted accounting principles measure
   of performance or as a measure of liquidity.

   EBITDA is  included  herein  because  the  Cooperative  believes  EBITDA is a
   financial  indicator  of a  company's  ability  to  service  debt.  EBITDA as
   calculated  by the  Cooperative  may not be  comparable  to  calculations  as
   presented by other companies.

2 Excludes the gain on the sale of the aseptic business.

3 Represents the operating earnings of the aseptic business.

Total Assets
(Dollars in Millions)

                                             Quarter Ended
                                     September 26,     September 27,
                                         1998              1997
                                             % of               % of
                                    $        Total      $       Total
                                 -------     -----    ------    -----

CBF                             $  405.0      32.5%   $346.7     57.1%
AFVC                               592.0      47.4       0.0      0.0
Nalley Fine Foods                  154.9      12.4     155.8     25.7
Snack Foods Group                   32.1       2.6      26.5      4.4
Corporate                           63.8       5.1      49.6      8.2
                                ---------    -----    ------    ----- 
   Subtotal ongoing operations   1,247.8     100.0     578.6     95.4
Businesses sold1                     0.0       0.0      27.7      4.6
                                --------     -----    ------    -----
   Total                        $1,247.8     100.0%   $606.3    100.0%
                                ========     =====    ======    =====


1    Includes  the assets of the aseptic  business.  See NOTE 2 to the "Notes to
     Consolidated Financial Statements."

       CHANGES FROM FIRST QUARTER FISCAL 1999 TO FIRST QUARTER FISCAL 1998

Net income for the first quarter of fiscal 1999 of $25.3  million  represented a
$22.0 million  increase over the first quarter of fiscal 1998 net income of $3.3
million.  Total  EBITDA  for  the  first  quarter  of  fiscal  1999  before  the
extraordinary  charge  relating  to the early  extinguishment  of debt was $82.0
million as compared to $18.5 million in the first fiscal quarter of fiscal 1998.
Excluding the operating  results and gain from businesses  sold,  EBITDA for the
continuing business decreased $1.3 million, or 8.5 percent, to $14.0

<PAGE>


million in the first  quarter of the current  fiscal year from $15.3  million in
the first  quarter of the prior  fiscal  year.  This  decline was  impacted by a
decrease  at CBF of $0.6  million due to changes in product mix within the fruit
category  (approximately $1.1 million);  and increase in advertising  associated
with the  launch  of  Breakfast  Toppers  (approximately  $0.5  million).  These
decreases  were  offset by an  increase  within the  vegetable  category of $1.0
million  attributable to  improvements in volume.  The decline at Nalley of $1.5
million was due primarily to the recognition of a favorably settled  outstanding
tax claim with the state of Washington  for $1.4 million in the first quarter of
the prior fiscal year.  The EBITDA within the Snack Foods Group  increased  $0.2
million due to increases in net sales.

Net  Sales:  Total net sales for the  quarter  increased  $6.2  million,  or 3.5
percent,  to $182.6  million in the first  fiscal  quarter  of fiscal  1999 from
$176.4 million in the first quarter of fiscal 1998.  Excluding  businesses sold,
net sales  increased by $5.8 million,  or 3.8 percent,  to $157.7 million in the
first quarter of fiscal 1999 from $151.9  million in the first quarter of fiscal
1998.

The increase in net sales for ongoing  operations  came  primarily  from the CBF
business  unit which  reported an increase  in net sales of $9.0  million.  This
increase was  attributable  to improvements  in volume  primarily  within frozen
vegetables.  Net  sales  for the  remaining  categories  at CBF were  relatively
consistent with that of the first quarter of the prior fiscal year.

Net sales for Nalley for the first quarter of the current  fiscal year decreased
$4.1  million as  compared  with the first  quarter of the prior  fiscal year as
gains in the pickle  category  were offset by  reductions  in the  dressings and
canned  product  lines.  Within  the  pickle  category,  net sales for the first
quarter of fiscal 1999 increased $0.6 million as a result of increased volume in
the food service channel.  Competitive pressures on volume and price resulted in
a $2.6 million  decrease in net sales for dressings and a $2.0 million  decrease
in the canned category.  Net sales for the peanut butter category were flat with
that of the first quarter of the prior fiscal year.

Net sales for the Snack Foods Group  increased by $0.9 million,  or 5.2 percent,
to $18.2 million in the first quarter of fiscal 1999 as a result of new business
in the  Northwest  and product  line  extensions,  including  Snyder of Berlin's
kettle chips.

Gross Profit:  Gross profit of $46.7 million in the quarter ended  September 26,
1998 increased approximately $1.1 million, or 2.4 percent, from $45.6 million in
the quarter ended September 27, 1997.  Excluding the impact of businesses  sold,
gross profit increased $0.7 million or 1.8 percent.

The  increase in gross profit at the CBF business  unit  (excluding  the aseptic
business) was $1.0 million.  The vegetable category showed  improvements of $2.1
million  resulting from increases in volume,  while the fruit category  showed a
decline of $0.7 million  attributable to product mix and decreases  within other
categories of $0.4 million due to changes in volume.

Overall,  gross profit at Nalley  decreased  $0.8  million due  primarily to the
reductions in net sales outlined above. The Nalley gross margin  percentage has,
however,  improved  over the prior year to 35.9 percent from 34.4 percent in the
first quarter of fiscal 1998.

Increases  in net  sales  within  the  Snack  Foods  Group  resulted  in  margin
improvements of $0.5 million.

Selling,  Administrative,  and General Expenses:  Selling,  administrative,  and
general  expenses have increased $1.9 million as compared with the first quarter
of the prior fiscal year. As a percentage of net sales, selling, administrative,
and general  expenses  increased to 19.1 percent in the first  quarter of fiscal
1999 from 18.7  percent in the first  quarter of fiscal 1998.  This  increase is
primarily due to the impact of a favorably  settled  outstanding  tax claim with
the state of  Washington  for $1.4 million  recognized  in the first  quarter of
fiscal 1998. All remaining  expenses were relatively flat with that of the prior
year.

Income from Great Lakes Kraut Company:  This amount represents earnings received
from the investment in Great Lakes Kraut Company, a joint venture formed between
Agrilink and Flanagan Brothers,  Inc. See NOTE 5 - "Other Matters - Formation of
New  Sauerkraut  Company" to the "Notes to  Consolidated  Financial  Statements"
included herein.

Gain on Sale of Aseptic  Operations:  In conjunction with the  Acquisition,  the
Company sold its aseptic business to Dean Foods. A gain of  approximately  $64.2
million was recognized on this disposal  reflecting a value for this business of
approximately $83 million (based upon an appraised value given to the Company by
an independent  appraiser).  This amount was used to offset borrowings necessary
to complete the Acquisition.

Interest Expense:  Interest expense increased $0.5 million,  or 6.4 percent,  to
$8.3 million in the first  quarter of fiscal 1999 from $7.8 million in the first
quarter of fiscal 1998.  The  increase is impacted by higher  levels of seasonal
borrowings  in the first  quarter of fiscal  1999 due to the  earlier  intake of
crops in the current  year and  therefore  the  resultant  increase in inventory
levels.

<PAGE>
Provision for Taxes:  The provision for taxes  increased  $23.2 million to $25.0
million  in the first  quarter  of fiscal  1999 from $1.8  million  in the first
quarter of fiscal 1998. Of this increase,  $25.0 million is  attributable to the
provision  associated  with the gain on the sale of the  aseptic  business.  The
remaining  variance  is impacted by the change in  earnings.  The  Cooperative's
effective  tax rate is impacted by the net proceeds  distributed  to members and
the non-deductibility of certain amounts of goodwill.

Extraordinary  Item Relating to the Early  Extinguishment of Debt:  Concurrently
with  the  Acquisition,   the  Company  refinanced  its  existing  indebtedness,
including  its 12.25  percent  Senior  Subordinated  Notes due 2005 and its then
existing bank debt. Premiums and breakage fees associated with early redemptions
and other fees  incurred  amounted to $18.0  million (net of  applicable  income
taxes of $10.4 million).

                         LIQUIDITY AND CAPITAL RESOURCES

The following  discussion  highlights the major  variances in the  "Consolidated
Statement  of  Changes  in Cash  Flows"  for the first  quarter  of fiscal  1999
compared to the first quarter of fiscal 1998.

Net cash used in operating  activities  increased  $42.9  million over the first
quarter of the prior fiscal year.  This  increase is primarily  due to variances
within  inventory  including:  (1) an increase of $1.5  million in  inventory to
support  additional  business  regarding the Sam's national club stores;  (2) an
increase of $2.5 million associated with the acquisition of DelAgra; and changes
in growing areas, early harvesting of crops and the size of the crop intake, and
other changes in inventory necessary to support operations  (approximately $15.3
million).

In addition, cash used in operating activities increased over the prior year due
to the  timing of  liquidation  of  outstanding  accounts  payable  and  accrued
expenses.

Net  cash  used  in  investing  activities  increased  significantly  due to the
acquisition of DFVC offset by the subsequent sale of the aseptic  business.  The
purchase of property, plant and equipment increased $0.9 million to $4.1 million
for the quarter ended September 26, 1998 from $3.2 million for the quarter ended
September 27, 1997 and was for general operating purposes.

Net cash provided by financing  activities also increased  significantly  due to
the  acquisition  of DFVC  and the  activities  completed  concurrent  with  the
Acquisition  to  refinance  existing  indebtedness.  See further  discussion  at
"Liquidity and Capital  Resources" below and at NOTE 4 - "Debt" to the "Notes to
Consolidated Financial Statements" included herein.

New Credit  Facility:  In connection with the  Acquisition,  the Company entered
into the New Credit Facility with Harris Bank as  Administrative  Agent and Bank
of  Montreal  as  Syndication  Agent,  and the  lenders  thereunder.  The Credit
Facility  consists of the $200 million  Revolving  Credit  Facility and the $455
million Term Loan  Facility.  The Term Loan  Facility is comprised of the Term A
Facility,  which has a maturity of five years, the Term B Facility,  which has a
maturity of six years,  and the Term C  Facility,  which has a maturity of seven
years. The Revolving Credit Facility has a maturity of five years.

The  New  Credit  Facility  bears  interest,  at the  Company's  option,  at the
Administrative  Agent's  alternate  base  rate or  LIBOR  plus,  in  each  case,
applicable  margins of: (i) in the case of alternate  base rate loans,  (x) 1.00
percent for loans under the Revolving  Credit  Facility and the Term A Facility,
(y) 2.25  percent for loans under the Term B Facility  and (z) 2.50  percent for
loans under the Term C Facility  and (ii) in the case of LIBOR  loans,  (x) 2.75
percent for loans under the Revolving  Credit  Facility and the Term A Facility,
(y) 3.25  percent for loans under the Term B Facility  and (z) 3.50  percent for
loans under the Term C Facility.  The  Administrative  Agent's  "alternate  base
rate" is defined as the greater of: (i) the prime  commercial  rate as announced
by the Administrative Agent or (ii) the Federal Funds rate plus 0.50 percent. In
addition,  the Company will pay a commitment  fee  calculated  at a rate of 0.50
percent per annum on the daily  average  unused  commitment  under the Revolving
Credit Facility.

Beginning  with the  reporting  period  ending  March 31, 1999,  the  applicable
margins for the New Credit Facility will be subject to possible reductions based
on the ratio of  consolidated  debt to EBITDA (each as defined in the New Credit
Facility).

Upon  consummation of the  Acquisition,  the Company drew $455 million under the
Term Loan Facility, consisting of $100 million, $175 million and $180 million of
loans  under  the  Term  A  Facility,  Term B  Facility  and  Term  C  Facility,
respectively.  Additionally,  the Company drew $93 million  under the  Revolving
Credit  Facility for seasonal  working capital needs and $14.3 million under the
Revolving Credit Facility was issued for letters of credit.

<PAGE>
The Term Loan Facility will be subject to the following amortization schedule.

Fiscal Year  Term Loan A      Term Loan B         Term Loan C      Total
-----------  -----------      -----------         -----------      ----- 
                           (Dollars in millions)
    1999       $  0.0           $  0.2              $  0.2         $  0.4
    2000         15.0              0.4                 0.4           15.8
    2001         20.0              0.4                 0.4           20.8
    2002         20.0              0.4                 0.4           20.8
    2003         20.0              0.4                 0.4           20.8
    2004         25.0              0.4                 0.4           25.8
    2005          0.0            172.8                 0.4          173.2
    2006          0.0              0.0               177.4          177.4
               ------           ------              ------         ------
               $100.0           $175.0              $180.0         $455.0
               ======           ======              ======         ====== 

The Term  Loan  Facility  is  subject  to  mandatory  prepayment  under  various
scenarios as defined in the New Credit Facility.

The  Company's  obligations  under the New  Credit  Facility  are  secured  by a
first-priority lien on: (i) substantially all existing or after-acquired assets,
tangible or intangible,  (ii) the capital stock of certain of Pro-Fac's  current
and future  subsidiaries,  and (iii) all of the  Company's  rights  (principally
indemnification  rights)  under the  agreement  to acquire  DFVC and the Pro-Fac
Marketing and Facilitation  Agreement.  The Company's  obligations under the New
Credit  Facility are guaranteed by Pro-Fac and certain of the Company's  current
and future subsidiaries, if any.

The New Credit Facility  contains  customary  covenants and  restrictions on the
Company's ability to engage in certain  activities,  including,  but not limited
to:  (i)  limitations  on  the  incurrence  of  indebtedness  and  liens,   (ii)
limitations on sale-leaseback  transactions,  consolidations,  mergers,  sale of
assets,  transactions  with affiliates and investments and (iii)  limitations on
dividend  and  other  distributions.  The  New  Credit  Facility  also  contains
financial  covenants  requiring Pro-Fac to maintain a minimum level of EBITDA, a
minimum  interest  coverage  ratio,  a minimum fixed charge  coverage  ratio,  a
maximum  leverage  ratio and a minimum  level of net  worth.  The  Company is in
compliance with all covenants,  restrictions and requirements under the terms of
the New Credit Facility.

Subordinated  Bridge  Facility:  To complete the  Acquisition,  the Company also
entered into a Subordinated Bridge Facility (the "Bridge Facility").  The Bridge
Facility  was provided by Warburg  Dillon Read LLC, as Arranger and  Syndication
Agent; and UBS AG, Stamford  Branch,  as  Administrative  Agent; and the Bank of
Montreal and Harris Trust and Savings Bank as additional  lenders.  The interest
rate  under the  Bridge  Facility  resets  monthly  on the basis of LIBOR plus a
spread  of 5  percent  for the  first  90 days,  which  spread  increases  by an
additional  1  percent  each  subsequent  90-day  period.  In no event  will the
interest  rate exceed 16 percent per annum.  The  Company  anticipates  that the
Bridge Facility will be repaid  principally with the proceeds of a new long-term
take-out  financing.  Should the  Company be unable to  complete  its  long-term
take-out  financing,  the Bridge  Facility,  if not repaid within one year,  may
thereafter be converted to permanent  financing with  consistent  interest rates
and a maturity of September, 2006.

Subordinated Promissory Note: As partial consideration for the Acquisition,  the
Company  issued to Dean Foods a  Subordinated  Promissory  Note for $30  million
aggregate  principal amount due November 22, 2008.  Interest on the Subordinated
Promissory Note is payable 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 the Company of  additional  subordinated
promissory  notes  identical  to  the  Subordinated  Promissory  Note.  Interest
accruing after November 22, 2003 is payable in cash. The Subordinated Promissory
Note may be prepaid at the Company's option without premium or penalty.

The  Subordinated  Promissory Note is expressly  subordinate to the Subordinated
Bridge Facility,  any long-term take-out financing,  and the New Credit Facility
and  contains  no  financial  covenants.  The  Subordinated  Promissory  Note is
guaranteed by Pro-Fac.

12 1/4 Percent Senior  Subordinated  Notes (due 2005):  In conjunction  with the
Acquisition,  the Company repurchased  $159,985,000  principal amount of its Old
Notes,  of  which  $160  million  aggregate   principal  amount  was  previously
outstanding.  The  Company  paid  a  total  of  approximately  $184  million  to
repurchase the Old Notes,  including  interest  accrued thereon of $2.9 million.
Holders who tendered  consented to certain  amendments to the indenture relating
to the Old Notes, which eliminated or amended  substantially all the restrictive
covenants and certain events of default contained in such indenture. The Company
may   repurchase   the  remaining  Old  Notes  in  the  future  in  open  market
transactions, privately negotiated purchases or otherwise.

<PAGE>
Interest  Rate Risk  Management:  The  Company is  subject  to market  risk from
exposure to changes in interest  rates based on its  financing  activities.  The
Company has entered into certain financial  instrument  transactions to maintain
the desired level of exposure to the risk of interest rate  fluctuations  and to
minimize interest expense.  More specifically,  the Company has entered into two
interest rate swap agreements with the Bank of Montreal.  The agreements provide
for fixed  interest  rate  payments  by the  Company in  exchange  for  payments
received at the three-month LIBOR rate.

The  following is a summary of the Company's  interest  rate swap  agreements by
major type:

                                       October 5, 1998     Maturities through
Interest Rate Swap:
Variable to Fixed - notional amount     $250,000,000              2001
   Average pay rate                      4.96-5.32%
   Average receive rate                    5.3125%

The  Company  has  the  option  of  extending  one of  the  interest  rate  swap
agreements,  with a  notional  amount of  $100,000,000  and  expiration  date of
October 5, 2001, for an additional two years through October 5, 2003.

While there is potential  that interest  rates will fall, and hence minimize the
benefits of the Company's hedge position, it is the Company's position that on a
long-term  basis,  the  possibility  of interest  rates  increasing  exceeds the
likelihood of interest  rates  decreasing.  The Company will,  however,  monitor
market conditions to adjust its position as it considers necessary.

                                  OTHER MATTERS

Short- and Long-Term  Trends:  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 and reduced  profitability  on the  inventory  produced  from that year's
crops.  Excessive  rain or drought  conditions can produce low crop yields and a
shortage  situation.  This  typically  results  in  higher  selling  prices  and
increased  profitability.  While the  national  supply  situation  controls  the
pricing, the supply can differ regionally because of variations in weather.

The effect of the 1998 growing season on fiscal 1999 financial results cannot be
estimated until late 1998 or early calendar 1999 when harvesting is complete and
national supplies can be determined.

Year 2000 and Information Services Reorganization: A full inventory and analysis
of business  applications  and related  software was  performed  and the Company
determined that it will be required to modify or replace certain portions of its
software  so that  its  computer  systems  will be Year  2000  compliant.  These
modifications  and  replacements  are  being  and  will  continue  to be made in
conjunction with the Company's overall information systems initiatives. No major
delay in these initiatives is anticipated.

In  addition,  the Company is  contacting  non-IT  vendors to ensure that any of
their products that are currently in use can adequately  deal with the change in
century. Areas being addressed include full reviews of manufacturing  equipment,
telephone  and voice  mail  systems,  security  systems,  and other  office/site
support  systems.  Based upon preliminary  information,  the costs of addressing
potential  problems  are not expected to have a material  adverse  impact on the
Company's  financial  position,  results of operations,  or cash flows in future
periods.  Accordingly, the cost of the project is being funded through operating
cash flows.

The Company has initiated formal  communications with significant  suppliers and
customers to determine  the extent to which the Company is  vulnerable  to those
third parties' failure to remediate their own Year 2000 issues.  However,  there
can be no guarantee  that the systems of other  companies on which the Company's
systems rely will be timely  converted,  or that a failure to convert by another
company, or a conversion that is incompatible with the Company's systems,  would
not have material adverse effect on the Company.  Accordingly, the Company plans
to devote the necessary resources to resolve all significant Year 2000 issues in
a timely manner.

The Company  expects to complete the Year 2000 project  during the fall of 1999.
Based on the progress made to date (which  includes  compliant  systems in place
and in  production),  the  Company  does not believe  any  material  exposure to
significant business

<PAGE>
interruption  exists.  In the  event  some  of  the  remaining  elements  of the
Company's  Year  2000  compliance  project  are  delayed,  procedures  have been
addressed to ensure alternative workaround initiatives are completed.

On June 19,  1997,  Systems & Computer  Technology  Corporation  ("SCT") and the
Company announced a major outsourcing  services and software agreement effective
June 30, 1997. The ten-year  agreement,  valued at approximately $50 million, is
for SCT's OnSite  outsourcing  services,  ADAGE ERP software and  implementation
services and assistance in solving the Year 2000 issue.

               CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

From time to time,  the  Company  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  Securities  and  Exchange
Commission ("SEC") in its rules, regulations,  and releases. The Company 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 9 to 15 and other  statements  made in this  Form  10-Q) and in
other filings with the SEC.

The Company cautions readers that any such forward-looking statements made by or
on behalf of the  Company 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 Company'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 Company's success in integrating operations and the
     availability of acquisition and alliance opportunities;


     the Company's ability to achieve the gains in productivity and improvements
     in capacity utilization; and

     the  ability to  integrate  DFVC into the  business  of the Company and the
     extent to which anticipated cost savings in connection with the Acquisition
     will be realized and the timing of any such realization.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits


           Exhibit Number    Description


            10.1        Credit  Agreement  Among Agrilink Foods,  Inc.,  Pro-Fac
                        Cooperative, Inc. and Harris Trust and Savings Bank, and
                        Bank of Montreal,  Chicago  Branch,  and the Lender from
                        Time to Time To Parties  Hereto,  dated as of  September
                        23, 1998


            10.2        $200,000,000  Senior Subordinated Credit Agreement Among
                        Agrilink  Foods,  Inc.,  Pro-Fac  Cooperative,  Inc. and
                        Warburg Dillon Read LLC and UBS AG,  Stamford Branch and
                        the  Lenders  From  Time to  Time  Party  Hereto,  dated
                        September 23, 1998


            10.3        Subordinated  Promissory Note Among Agrilink Foods, Inc.
                        and Dean Foods Company, dated as of September 23, 1998


            27          Financial Data Schedule


     (b) The following reports on Form 8-K were filed during the period to which
this report relates:


            Date                  Item


           July 28, 1998          Item 5 - Other Events

           October 5, 1998        Item 2 - Acquisition or Disposition of Assets

<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:  November 6, 1998           BY:/s/    Stephen R. Wright
       ----------------              -----------------------------------
                                            STEPHEN R. WRIGHT
                                             GENERAL MANAGER




Date: November 6, 1998            BY:/s/    Earl L. Powers
      ----------------               -----------------------------------
                                            EARL L. POWERS
                                        VICE PRESIDENT FINANCE AND
                                            ASSISTANT TREASURER
                                     (Principle Financial Officer and
                                        Principle Accounting Officer)