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The farm cooperative that relies on Birds Eye Foods Inc. for most of its business faces an uncertain future.
Pro-Fac Cooperative Inc. officials believe the organization can operate through 2010 by cutting dividends and stretching out a final payment from Birds Eye next year, part of am agreement Pro-Fac made in selling a majority stake in Birds Eye to a private equity firm in 2002.
Meanwhile, Pro-Fac officials and Western New York farmers were waiting this week for news from Birds Eye on the possible sale of local vegetableprocessing plants.
Birds Eye, now majority owned by New York City-based Vestar Capital Partners Inc., said in July it would sell or close plants in Brockport, Oakfield and Bergen from this October to June 2007. The plant, sales axe part of a major shift in strategy away from private-label products to more profitable branded lines.
"We are at, right now, an absolutely critical time," said Joseph Ryan, vice president of Brighton Securities Corp., who follows Pro-Fac and privately held Birds Eye because of the 40 percent stake Pro-Fac owns.
Pro-Fac sold $22 million in produce to Birds Eye for processing in the Rochester-area plants last year, representing 44 percent of its sales to Birds Eye versus 56 percent that went to Birds Eye plants outside the area, Pro-Fac states in its annual report for 2006.
"It is possible that the cooperative will no longer have an outlet to which its member-growers can supply vegetables in New York," Pro-Fac states.
The cooperative represents 475 growers, including many in Western New York.
A new plant owner would have an option to continue contracting with Pro-Fac but...