<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM 10-Q



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

For the quarterly period ended               June 30, 1999
                               -------------------------------------------------

                                       or

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

For the transition period from____________ to___________________________________


Commission File Number: 0-15638
                        --------------------------------------------------------

                              MICHAEL FOODS, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          Minnesota                                     41-0498850
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)



Suite 324, Park National Bank Building
5353 Wayzata Boulevard
Minneapolis, MN,                                                  55416
--------------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip code)


                                 (612) 546-1500
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


     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 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [ X ]Yes [   ]No

     The number of shares outstanding of the registrant's Common Stock, $.01
par value, as of August 6, 1999 was 20,249,624 shares.





                                        1


<PAGE>   2



                         PART I - FINANCIAL INFORMATION

                      MICHAEL FOODS, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                        June 30,     December 31,
ASSETS                                                    1999           1998
------                                               ------------    ------------
<S>                                                  <C>             <C>
CURRENT ASSETS
 Cash and equivalents                                $    699,000    $  2,047,000
 Accounts receivable, less allowances                 101,522,000      97,639,000
 Inventories                                           79,881,000      74,250,000
 Prepaid expenses and other                             4,883,000       3,884,000
                                                     ------------    ------------
   Total current assets                               186,985,000     177,820,000
PROPERTY, PLANT AND EQUIPMENT-AT COST
 Land                                                   4,336,000       4,336,000
 Buildings and improvements                           105,706,000     105,567,000
 Machinery and equipment                              366,557,000     328,067,000
                                                     ------------    ------------
                                                      476,599,000     437,970,000
 Less accumulated depreciation                        204,572,000     187,759,000
                                                     ------------    ------------
                                                      272,027,000     250,211,000
OTHER ASSETS
 Goodwill, net                                        118,450,000     120,172,000
 Investments in Joint Ventures and other assets        23,840,000       3,313,000
                                                     ------------    ------------
                                                      142,290,000     123,485,000
                                                     ------------    ------------
                                                     $601,302,000    $551,516,000
                                                     ============    ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
 Current maturities of long-term debt                $  8,067,000    $ 10,663,000
 Accounts payable                                      47,591,000      44,376,000
 Accrued Liabilities
  Compensation                                          8,414,000      11,034,000
  Insurance                                             7,235,000       7,369,000
  Customer programs                                    20,719,000      19,624,000
  Other                                                26,606,000      23,457,000
                                                     ------------    ------------
   Total current liabilities                          118,632,000     116,523,000

LONG-TERM DEBT, less current maturities               204,466,000     155,444,000
DEFERRED INCOME TAXES                                  34,389,000      35,400,000
COMMITMENTS AND CONTINGENCIES                                   -               -

SHAREHOLDERS' EQUITY
 Common stock                                             202,000         211,000
 Additional paid-in capital                           102,093,000     119,871,000
 Retained earnings                                    141,520,000     124,067,000
                                                     ------------    ------------
                                                      243,815,000     244,149,000
                                                     ------------    ------------
                                                     $601,302,000    $551,516,000
                                                     ============    ============
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                        2


<PAGE>   3



                      MICHAEL FOODS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                    Three Months Ended June 30, (Unaudited)

<TABLE>
<CAPTION>
                                                    1999           1998
                                                ------------    ------------
<S>                                             <C>             <C>
Net sales                                       $258,031,000    $243,685,000
Cost of sales                                    207,892,000     199,231,000
                                                ------------    ------------
 Gross profit                                     50,139,000      44,454,000
Selling, general and administrative expenses      27,432,000      22,371,000
                                                ------------    ------------
 Operating profit                                 22,707,000      22,083,000
Interest expense, net                              2,801,000       2,580,000
                                                ------------    ------------
 Earnings before income taxes                     19,906,000      19,503,000
Income tax expense                                 8,160,000       8,190,000
                                                ------------    ------------
 NET EARNINGS                                   $ 11,746,000    $ 11,313,000
                                                ============    ============
Net Earnings Per Share
 Basic                                          $       0.57    $       0.52
 Diluted                                        $       0.57    $       0.51
                                                ============    ============
Weighted average shares outstanding
 Basic                                            20,463,000      21,939,000
 Diluted                                          20,702,000      22,337,000
                                                ============    ============
</TABLE>


See accompanying notes to condensed consolidated financial statements.



                                        3


<PAGE>   4



                      MICHAEL FOODS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                     Six Months Ended June 30, (Unaudited)

<TABLE>
<CAPTION>
                                                    1999             1998
                                                ------------     ------------
<S>                                             <C>              <C>
Net sales                                       $511,409,000     $489,274,000
Cost of sales                                    419,139,000      404,664,000
                                                ------------     ------------
 Gross profit                                     92,270,000       84,610,000
Selling, general and administrative expenses      52,476,000       45,515,000
                                                ------------     ------------
 Operating profit                                 39,794,000       39,095,000
Interest expense, net                              5,621,000        5,344,000
                                                ------------     ------------
 Earnings before income taxes                     34,173,000       33,751,000
Income tax expense                                14,010,000       14,180,000
                                                ------------     ------------
 NET EARNINGS                                   $ 20,163,000     $ 19,571,000
                                                ============     ============
Net Earnings Per Share
 Basic                                          $       0.97     $       0.89
 Diluted                                        $       0.96     $       0.88
                                                ============     ============
Weighted average shares outstanding
 Basic                                            20,736,000       21,892,000
 Diluted                                          20,966,000       22,273,000
                                                ============     ============
</TABLE>


See accompanying notes to condensed consolidated financial statements.



                                        4


<PAGE>   5



                      MICHAEL FOODS, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Six Months Ended June 30, (Unaudited)

<TABLE>
<CAPTION>
                                                            1999             1998
                                                        ------------     ------------
<S>                                                     <C>              <C>
Net cash provided by operating activities               $ 35,776,000     $ 40,124,000
Cash flows from investing activities:
 Capital expenditures                                    (41,419,000)     (34,560,000)
 Investments in joint ventures and other assets          (21,017,000)         207,000
                                                        ------------     ------------
Net cash used in investing activities                    (62,436,000)     (34,353,000)
 Cash flows from financing activities:
 Payments on long-term debt                              (85,374,000)      (5,033,000)
 Proceeds from long-term debt                            131,800,000          700,000
 Proceeds from issuance of common stock                      523,000        1,817,000
 Repurchase of common stock                              (18,927,000)              --
Dividends                                                 (2,710,000)      (2,406,000)
                                                        ------------     ------------
Net cash provided by (used in) financing activities       25,312,000       (4,922,000)
                                                        ------------     ------------
Net increase (decrease)  in cash and equivalents          (1,348,000)         849,000
Cash and equivalents at beginning of year                  2,047,000        4,038,000
                                                        ------------     ------------
Cash and equivalents at end of period                   $    699,000     $  4,887,000
                                                        ============     ============
</TABLE>



See accompanying notes to condensed consolidated financial statements.



                                        5


<PAGE>   6


                      MICHAEL FOODS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ====================================================
                                   (Unaudited)

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with Regulation S-X pursuant to the rules and
regulations of the Securities and Exchange Commission.  Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although management believes
that the disclosures are adequate to make the information presented not
misleading.

Michael Foods, Inc. (the "Company") utilizes a fiscal year consisting of either
52 or 53 weeks, ending on the Saturday nearest to December 31 each year.  The
quarters ended June 30, 1999 and 1998 each included thirteen weeks of
operations.  For clarity of presentation, the Company has described both
periods presented as if the quarters ended on June 30.

In the opinion of management, the unaudited condensed consolidated financial
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position as of June 30,
1999 and the results of operations for the three and six month periods ended
June 30, 1999 and 1998 and cash flows for the six months ended June 30, 1999
and 1998.  The results of operations for the six months ended June 30, 1999 are
not necessarily indicative of the results for the full year.

The Company's basic net earnings per share is computed by dividing net earnings
by the weighted average number of outstanding common shares.  The Company's
diluted net earnings per share is computed by dividing net earnings by the
weighted average number of outstanding common shares and common share
equivalents relating to stock options, when dilutive.  Options to purchase
852,767 and 826,724 shares of Common Stock, with a weighted average exercise
price of $24.78, which were outstanding during the three and six month periods
ended June 30, 1999, were excluded from the computation of common share
equivalents for that period because they were anti-dilutive.  Options to
purchase 8,000 and 4,000 shares of common stock, with a weighted average
exercise price of $29.75, were outstanding during the three and six month
periods ended June 30, 1998, but were excluded from the computation of common
share equivalents for that period because they were anti-dilutive.

NOTE B - INVENTORIES

Inventories, other than flocks, are stated at the lower of cost (determined on
a first-in, first-out basis) or market.  Flock inventory represents the cost of
purchasing and raising flocks to laying maturity, at which time their cost is
amortized to operations over their expected useful life of generally one to two
years, assuming no salvage value.

Inventories consist of the following:

<TABLE>
<CAPTION>
                                       June 30,    December 31,
                                         1999         1998
                                     -----------   ------------
<S>                                  <C>           <C>
Raw materials and supplies           $19,040,000   $15,389,000
Work in process and finished goods    39,984,000    36,977,000
Flocks                                20,857,000    21,884,000
                                     -----------   -----------
                                     $79,881,000   $74,250,000
                                     ===========   ===========
</TABLE>


                                        6


<PAGE>   7



                      MICHAEL FOODS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ====================================================
                                   (Unaudited)

NOTE C - COMMITMENTS AND CONTINGENCIES

Use of Estimates
Preparation of the Company's consolidated financial statements requires
management to make estimates and assumptions that affect reported amounts of
assets and liabilities and related revenues and expenses.  Actual results could
differ from the estimates used by management.

License Agreement
The Company has an exclusive license agreement for a patented process for the
production and sale of extended shelf-life egg products.  Under the license
agreement, the Company has the right to defend and prosecute infringement of
the licensed patents.  The U.S. Federal Court of Appeals has upheld the
validity of the patents subject to the license agreement, but, subsequently, a
patent examiner at the U.S. Patent and Trademark Office rejected the patents.
The Company is appealing the decision of the examiner and believes the validity
of the patents will ultimately be upheld.  During the appeal process, the
patents remain valid and in full force and effect.  These patents are scheduled
to expire in 2006.

Litigation
The Company is engaged in routine litigation incidental to its business.
Management believes it will not have a material effect upon its consolidated
financial position, liquidity or results of operations.

NOTE D - SHAREHOLDERS' EQUITY

During the three months ended June 30, 1999, the Company repurchased 475,300
shares of Common Stock under a share repurchase program at an average price of
$22.62 per share.  Such repurchases began in July 1998.  Through June 30, 1999,
the Company had repurchased 1,902,800 shares of Common Stock at an average
price of $22.60 per share.

NOTE E - RISKS AND UNCERTAINTIES

The Year 2000 issue relates to limitations in computer systems and applications
that may prevent proper recognition of the year 2000.  The potential effect of
the Year 2000 issue on the Company and its business partners will not be fully
determinable until 2000 and thereafter.  If Year 2000 modifications are not
properly completed either by the Company, or entities the Company conducts
business with, the Company's net sales and financial condition could be
adversely effected.

NOTE F - INTERNATIONAL INVESTMENTS, DAIRY PRODUCTS ACQUISITION AND SUBSEQUENT
EVENT

During the six months ended June 30, 1999, the Company made two investments in
Europe to further its leadership in global egg products processing.  The first
investment was a 25% interest in Belovo, S. A., a specialty egg products
company based in Belgium.  The second investment was a 50/50 joint venture with
the founding shareholders of Belovo forming The Lipid Company, a company
involved in the extraction of phospholipids from egg yolks for use in the field
of nutraceuticals.

In May 1999, the Company's Kohler Mix Specialties, Inc. subsidiary acquired
certain operating assets, a customer list and a long-term lease, of a dairy mix
plant from H. P. Hood Inc., with an option to purchase the building and land at
the lease's termination.  The plant mainly produces ultra-high temperature
pasteurized dairy mixes for foodservice customers in the eastern United States.
The facility generated 1998 net sales of approximately $37 million.



                                        7


<PAGE>   8


                      MICHAEL FOODS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ====================================================
                                   (Unaudited)

NOTE F - INTERNATIONAL INVESTMENTS, DAIRY PRODUCTS ACQUISITION AND SUBSEQUENT
EVENT, CONT.

In July 1999, the Company formed a Canadian joint venture, Trilogy Egg
Products, Inc., with two partners, Canadian Inovatech, Inc. and The Egg
Producers Co-op Ltd.  Trilogy Egg Products, Inc. will sell value-added egg
products in Canada.

NOTE G - BUSINESS SEGMENTS

The Company has adopted Statement of Financial Accounting Standards No. 131,
Disclosures about Segments of an Enterprise and Related Information.  The
Company operates in four reportable segments - Egg Products, Refrigerated
Distribution, Dairy Products and Potato Products.  Certain financial
information on the Company's operating segments is as follows (unaudited, in
thousands):


<TABLE>
<CAPTION>
                           Egg     Refrigerated   Dairy     Potato
                         Products  Distribution  Products  Products  Corporate   Total
                         --------  ------------  --------  --------  ---------  --------
<S>                      <C>       <C>           <C>       <C>       <C>        <C>
THREE MONTHS ENDED
JUNE 30, 1999:
External net sales       $150,488      $ 51,427   $42,091   $14,025        N/A  $258,031
Intersegment sales          3,794            24       310       591        N/A     4,719
Operating profit (loss)    19,712         2,534     2,057     1,367    (2,963)    22,707
THREE MONTHS ENDED
JUNE 30, 1998:
External net sales       $144,373      $ 49,841   $36,719   $12,752        N/A  $243,685
Intersegment sales          4,456            43       480       479        N/A     5,458
Operating profit (loss)    19,463         1,763     2,108       457    (1,708)    22,083
SIX MONTHS ENDED JUNE
30, 1999:
External net sales       $302,638      $110,549   $70,753   $27,469        N/A  $511,409
Intersegment sales          9,488            45       578     1,198        N/A    11,309
Operating profit (loss)    34,694         4,584     2,953     2,559    (4,996)    39,794
SIX MONTHS ENDED JUNE
30, 1998:
External net sales       $296,180      $102,866   $64,867   $25,361        N/A  $489,274
Intersegment sales         10,386            74       935       958        N/A    12,353
Operating profit (loss)    34,793         3,557     3,190     1,082    (3,527)    39,095
</TABLE>

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

THREE MONTHS ENDED JUNE 30, 1999 VS THREE MONTHS ENDED JUNE 30, 1998

RESULTS OF OPERATIONS

Readers are directed to Note G - Business Segments for data on the unaudited
financial results of the Company's four business segments for the three months
ended June 30, 1999 and 1998.




                                        8


<PAGE>   9


                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED
            ========================================================


THREE MONTHS ENDED JUNE 30, 1999 VS THREE MONTHS ENDED JUNE 30, 1998, CONT.

RESULTS OF OPERATIONS, CONT.

Egg Products Division net sales for the 1999 period reflected unit sales
increases, particularly for value-added products, which more than offset
significant deflationary pricing impacts on certain products.  Sales were
particularly strong for precooked frozen omelets, patties and curds.  Egg
prices decreased approximately 12% compared to second quarter 1998 levels, as
reported by Urner Barry Publications - a widely quoted industry pricing
service.  This decrease helped reduce the cost of purchased eggs, while also
reducing selling prices for certain egg products and shell eggs.

Approximately two-thirds of the Division's annual egg needs are purchased under
contracts, or in the spot market.  While a portion of these eggs are secured
under fixed price contracts, a majority are priced according to the cost of
grain inputs or to egg market prices as reported by Urner Barry.  Approximately
one-third of annual egg needs are sourced from internal flocks, where feed
costs typically represent roughly two-thirds of the cost of producing such
eggs.  Feed costs were lower in the 1999 period, compared to the 1998 period,
due to lower prices for both corn and soybean meal.  Decreased egg costs, for
both internally and externally procured eggs, in the 1999 period, compared to
the 1998 period, were more than offset by pricing weakness, creating margin
pressure for certain egg products.

Refrigerated Distribution Division net sales for the 1999 period reflected
strong unit sales increases, with cheese and Mexican items showing particular
strength.  Sales growth resulted from a brand repositioning over the past two
years and a more recent consumer advertising campaign in selected markets,
along with new account activity and new product introductions.  The volume
growth, along with a decline in product costs related to the national butterfat
market, resulted in margin expansion in the 1999 period.

The significant Dairy Products Division net sales increase for the 1999 period
reflected strong unit sales gains for core dairy mix and creamer products and
the effect of two months' of sales from a plant acquired during the quarter.
Sales were weak for certain cartoned specialty dairy products as a result of
the product line having not fully recovered from a recall in 1999's first
quarter. Divisional operating profit declined in the 1999 period as a result of
incremental operating expenses incurred post-recall and due to above average
labor and freight costs.  Labor costs were high due, in part, to training costs
for newer production personnel and overtime incurred to meet orders in a timely
manner during a strong demand period.

Potato Products Division net sales for the 1999 period reflected a strong unit
sales increase, particularly for foodservice mashed items.  New account
activity, same-account sales growth and new product introductions all
contributed to the sales gain.  The strong operating profit increase in the
1999 period resulted primarily from the volume growth, as plant operations at
the main potato processing facility benefited from the increased production
throughput.

The increase in gross profit margin of the Company for the period ended June
30, 1999, as compared to the results of the same period in 1998, reflected the
factors discussed above, particularly the strength in the Refrigerated
Distribution and Potato Products segments.  It is management's strategy to
increase value-added product sales as a percent of total sales over time, while
decreasing commodity-sensitive products' contribution to consolidated sales.
These efforts historically have been beneficial to gross profit margins in most
periods.  Selling, general and administrative expenses increased as a percent
of sales in the period ended June 30, 1999, as compared to the results of the
same period in 1998.  Expenses increased due to amortization of the costs
associated with the



                                        9


<PAGE>   10


                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED
            ========================================================


THREE MONTHS ENDED JUNE 30, 1999 VS THREE MONTHS ENDED JUNE 30, 1998, CONT.

RESULTS OF OPERATIONS, CONT.

Company's information systems upgrade project, amortization of a non-compete
agreement related to a Dairy Products acquisition, and additional sales and
marketing efforts.

SIX MONTHS ENDED JUNE 30, 1999 VS SIX MONTHS ENDED JUNE 30, 1998

RESULTS OF OPERATIONS

Readers are directed to Note G - Business Segments for data on the unaudited
financial results of the Company's four business segments for the six months
ended June 30, 1999 and 1998.

Egg Products Division net sales for the 1999 period reflected unit sales
increases, particularly for value-added products, which more than offset
significant deflationary pricing impacts on certain products.  Sales were
particularly strong for precooked frozen omelets, patties and curds.  Egg
prices decreased approximately 9% compared to first half 1998 levels, as
reported by Urner Barry Publications.  This decrease helped reduce the cost of
purchased eggs, while also reducing selling prices for certain egg products and
shell eggs.  Approximately two-thirds of the Division's annual egg needs are
purchased under contracts, or in the spot market.  While a portion of these
eggs are secured under fixed price contracts, a majority are priced according
to the cost of grain inputs or to egg market prices as reported by Urner Barry.
Approximately one-third of annual egg needs are sourced from internal flocks,
where feed costs typically represent roughly two-thirds of the cost of
producing such eggs.  Feed costs were lower in the 1999 period, compared to the
1998 period, due to lower prices for both corn and soybean meal.  Decreased egg
costs, for both internally and externally procured eggs, in the 1999 period,
compared to the 1998 period, were more than offset by pricing weakness,
creating margin pressure for certain egg products.

Refrigerated Distribution Division net sales for the 1999 period reflected
strong unit sales increases, with cheese and Mexican items showing particular
strength.  Sales growth resulted from a brand repositioning over the past two
years and a more recent consumer advertising campaign in selected markets,
along with new account activity and new product introductions.  The volume
growth, along with a decline in product costs related to the national butterfat
market, resulted in margin expansion in the 1999 period.

The Dairy Products Division net sales increase for the 1999 period reflected
strong unit sales gains for core dairy mix and creamer products and the effect
of two months' of sales from a plant acquired during the first half of 1999.
Sales were weak for cartoned specialty dairy products as a result of a recall
of certain items in 1999's first quarter.  Divisional operating profit declined
in the 1999 period as a result of incremental operating expenses incurred as a
result of the recall and due to above average labor and freight costs.  Labor
costs were high due, in part, to training costs for newer production personnel
and overtime incurred to meet orders in a timely manner.

Potato Products Division net sales for the 1999 period reflected a strong unit
sales increase, particularly for foodservice mashed items.  New account
activity, same-account sales growth and new product introductions all
contributed to the sales gain.  The strong operating profit increase in the
1999 period resulted primarily from the volume growth, as plant operations at
the main potato processing facility benefited from the increased production
throughput.



                                       10


<PAGE>   11


                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED
            ========================================================


SIX MONTHS ENDED JUNE 30, 1999 VS SIX MONTHS ENDED JUNE 30, 1998, CONT.

RESULTS OF OPERATIONS, CONT.

The increase in gross profit margin of the Company for the period ended June
30, 1999, as compared to the results of the same period in 1998, reflected the
factors discussed above, particularly the strength in the Refrigerated
Distribution and Potato Products segments.  It is management's strategy to
increase value-added product sales as a percent of total sales over time, while
decreasing commodity-sensitive products' contribution to consolidated sales.
These efforts historically have been beneficial to gross profit margins in most
periods.

Selling, general and administrative expenses increased as a percent of sales in
the period ended June 30, 1999, as compared to the results of the same period
in 1998.  Expenses increased due to amortization of the costs associated with
the Company's information systems upgrade project, amortization of a
non-compete agreement related to a Dairy Products acquisition, and additional
sales and marketing efforts.

GENERAL

Certain of the Company's products are sensitive to changes in commodity prices.
The Company's Egg Products Division derived less than 5% of the Division's net
sales for the first six months of 1999 from shell eggs, which are sensitive to
commodity price swings.  Value-added extended shelf-life liquid egg products
lines and precooked egg products accounted for approximately 50% of the Egg
Products Division's net sales.  The remainder of Egg Products Division sales is
derived from the sale of other egg products, which vary from being
commodity-sensitive to value-added.  Gross profit from shell eggs is primarily
dependent upon the relationship between shell egg prices and the cost of feed,
both of which can fluctuate significantly.  Shell egg pricing in the 1999
period was approximately 9% below 1998 levels as measured by a widely quoted
pricing service.  Gross profit margins for extended shelf-life liquid eggs, egg
substitutes, and precooked egg products are less sensitive to commodity price
fluctuations than are other egg products or shell eggs.

The Company's Refrigerated Distribution Division derives approximately 70% of
its net sales from refrigerated products produced by others, thereby reducing
the effects of commodity price swings.  The balance of refrigerated
distribution sales are from shell eggs, some of which are produced by the Egg
Products Division and are sold on a distribution, or non-commodity, basis by
the Refrigerated Distribution Division.

The Dairy Products Division sells its products primarily on a cost-plus basis
and, therefore, the Division's earnings are not typically affected greatly by
raw ingredient price fluctuations, except over short time periods.

The Potato Products Division typically purchases 70%-90% of its raw potatoes
from contract producers under annual contracts.  The remainder is purchased at
market prices to satisfy short-term production requirements or to take
advantage of market prices when they are lower than contracted prices.
Moderate variations in the purchase price of raw materials or the selling price
per pound of finished products can have a significant effect on Potato Products
Division operating results.

Inflation is not expected to have a significant impact on the Company's
business.  The Company generally has been able to offset the impact of
inflation through a combination of productivity gains and price increases.



                                       11


<PAGE>   12


                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED
            ========================================================


CAPITAL RESOURCES AND LIQUIDITY

Acquisitions and capital expenditures have been, and will likely continue to
be, a significant capital requirement.  The Company plans to continue to invest
in state-of-the-art production facilities to enhance its competitive position.
Historically, the Company has financed its growth principally from internally
generated funds, bank borrowings, issuance of senior debt and the sale of
Common Stock.  The Company believes that these financing alternatives will
continue to meet its anticipated needs.

During the first half of 1999, the Company made two investments in Europe.  The
first investment was a 25% interest in Belovo, S. A., a specialty egg products
company based in Belgium. The second investment was a 50/50 joint venture with
the founding shareholders of Belovo forming The Lipid Company, a company
involved in the extraction of phospholipids from egg yolks for use in the field
of nutraceuticals.  The cash paid at the time of closing the transactions was
approximately $9.3 million, which was funded through the Company's bank line of
credit.  The investments will expand the Company's leadership position in
global egg products processing.

Also in the first half of 1999, the Company acquired certain operating assets
and the long-term lease of a dairy products plant in Connecticut.  The cash
paid at time of closing was approximately $5.7 million, which was funded
through the Company's bank line of credit.  This transaction greatly expanded
the Company's Dairy Products business in the eastern United States.

The Company invested $41,419,000 in capital expenditures during the six months
ended June 30, 1999.  The Company plans to spend approximately $75,000,000 in
total capital expenditures in 1999, the majority of which is to expand
production capacity for value-added products.

The Company has an unsecured line of credit for $80,000,000 with its principal
banks.  As of June 30, 1999, $70,900,000 was outstanding under this line of
credit.

In July 1998, the Company's Board of Directors authorized the purchase of up to
two million shares of Common Stock on the open market.  Through June 30, 1999,
the Company had repurchased 1,902,800 shares of Common Stock for $43,005,000.

SEASONALITY

Consolidated quarterly operating results are affected by the seasonality of the
Company's net sales and operating profits.  Specifically, shell egg prices
typically rise seasonally in the first and fourth quarters of the year due to
increased demand during holiday periods.  Generally, refrigerated distribution
operations experience higher net sales and operating profits in the fourth
quarter, coinciding with incremental consumer demand during the holiday season.
Net sales and operating profits from dairy operations typically are
significantly higher in the second and third quarters due to increased
consumption of ice milk and ice cream products during the summer months.
Operating profits from potato products are less seasonal, but tend to be higher
in the second half of the year coinciding with the potato harvest.

YEAR 2000

The Company's Year 2000 initiative is separated into several projects: legacy
systems, personal computer components, wide area network components, local area
network components, and non-computer components.  The approach for each of
these projects includes an inventory of 2000




                                       12


<PAGE>   13


                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED
            ========================================================


YEAR 2000, CONT.

components, an assessment of Year 2000 compliance of each component, and
identification and execution of corrective actions for items that fail the
assessment phase.

In 1995, the Company undertook implementation of the SAP Enterprise Resource
Planning system as a means to present a single interface with customers and to
have better information available for management to make more effective
decisions. The SAP system encompasses all significant processes and has been
certified Year 2000 compliant by an outside party.  The SAP system will be
implemented for three of the five operating companies prior to the end of 1999.
The legacy systems of the remaining two operating companies are certified as
Year 2000 compliant.  Beyond the SAP project, several non-critical legacy
systems are being addressed throughout 1999.  The costs to modify and test any
remaining legacy systems, if necessary, would not be material to the
consolidated financial position, liquidity or results of operations of the
Company.

The Company completed corrective actions for all personal computer hardware in
late 1998.  An evaluation and any needed remediation of personal computer
software is expected to be completed by September 1999.  The remaining
information technology systems for wide area networking and local area
networking are currently being assessed for Year 2000 compliance, with
corrective action to be completed by September 1999.  The Company's overall
business risk from these systems is not significant.

The Company's non-computer components have been assessed for Year 2000
compliance.  The assessment of these systems was completed in May 1999.  Any
corrective actions are expected to be completed by September 1999.

The Year 2000 projects also include an evaluation of critical vendors,
suppliers, brokers and customers relative to their Year 2000 readiness.
Information is being solicited from these important business partners and will
be evaluated as it is received.  Electronic data communications with customers
have been tested.

Based upon the assessment completed at this time, the Company does not
anticipate any significant Year 2000 issues.  All Year 2000 projects are
generally proceeding according to management's expectations.  However, if there
are significant delays in their completion, or if major suppliers or customers
experience Year 2000 issues with their systems, such issues could adversely
affect the operations of the Company.  After assessing the information received
from its business partners and evaluating the status of the Year 2000 projects,
the Company will develop an appropriate contingency plan, as required.  It is
anticipated that this plan will be developed during the fourth quarter of 1999.

Achieving Year 2000 compliance for the Company will largely be a by-product of
the SAP system installation.  The costs of achieving Year 2000 compliance for
software not affected by the SAP system, computer components, and non-computer
components is estimated to be less than $3,000,000, of which approximately
$2,500,000 has already been incurred and expensed through June 30, 1999.

FORWARD-LOOKING STATEMENTS

Certain items in this Form 10-Q are forward-looking statements, which are made
in reliance upon the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.  Such forward-looking




                                       13


<PAGE>   14


                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED
            ========================================================


FORWARD-LOOKING STATEMENTS, CONT.

statements are subject to numerous risks and uncertainties, including the
possibility that capital projects and the Year 2000 initiative may not be
completed as rapidly as management expects. Additional risks and uncertainties
include variances in the demand for the Company's products due to consumer
developments and industry developments, as well as variances in the costs to
produce such products, including normal volatility in egg and feed costs.  The
Company's actual financial results could differ materially from the results
estimated by, forecasted by, or implied by the Company in such forward-looking
statements.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

There were no material changes in the Company's market risk during the six
month period ended June 30, 1999.

                          PART II - OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

The 1999 Annual Meeting of Shareholders of Michael Foods, Inc. was held on
April 29, 1999.  The items voted upon and the results of the vote follow:

1.   The election of eleven persons to serve as directors until the next
     annual election and until their successors are duly elected and qualified:

<TABLE>
<CAPTION>
                                        For          Withhold Authority
                                    ----------       ------------------
<S>                                  <C>                   <C>
 Maureen B. Bellantoni              15,390,929              39,909
 Richard A. Coonrod                 15,393,280              37,558
 Daniel P. Dillon                   15,393,460              37,378
 Jerome J. Jenko                    15,392,335              38,503
 Arvid C. Knudtson                  15,383,486              47,352
 Joseph D. Marshburn                15,387,405              43,433
 Jeffrey J. Michael                 15,390,410              40,428
 Margaret D. Moore                  15,391,454              39,384
 Gregg A. Ostrander                 15,392,360              38,478
 Arthur J. Papetti                  15,393,990              36,848
 Stephen T. Papetti                 15,393,990              36,848
</TABLE>

2.   Proposal to ratify an amendment to the 1997 Stock Incentive Plan of
     Michael Foods, Inc. and Affiliated Companies:

     <TABLE>
     <CAPTION>
        For                Against            Abstain
     ----------           ---------           -------
     <S>                  <C>                 <C>
     14,063,827           1,323,290           43,721
     </TABLE>

3.   Proposal to ratify the appointment of Grant Thornton LLP as independent
     auditors for 1999:

     <TABLE>
     <CAPTION>
        For                Against            Abstain
     ----------            -------            -------
     <S>                  <C>                 <C>
     15,371,790           47,645              11,403
     </TABLE>


                                       14


<PAGE>   15


Item 6.  Exhibits and Reports on Form 8-K
(a)  Exhibits

27.1 Financial Data Schedule

(a)  There were no reports on Form 8-K filed during the quarter ended June 30,
     1999.


Signatures

Pursuant to the requirements of Section 13 or 15(d) 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.


                                 MICHAEL FOODS, INC.
                                 ----------------------------------------------
                                 (Registrant)

Date:  August 16, 1999              By:  /s/  Gregg A. Ostrander
                                         --------------------------------------
                                         Gregg A. Ostrander
                                        (President and Chief Executive Officer)


Date:  August 16, 1999              By:  /s/  John D. Reedy
                                         --------------------------------------
                                         John D. Reedy
                                         (Vice President - Finance, Treasurer,
                                         Chief Financial Officer and Principal
                                         Accounting Officer)


                                       15