March 24, 2008

9:00 a.m. Central time

1. Welcome to our quarterly debtholders' conference call and thank you for joining us again. We appreciate your interest in Michael Foods.
2. Introductions of Mark Witmer, Treasurer, Dave Johnson, President and CEO, and Mark Westphal, CFO. Dave will make some comments later in the call and we'll all do our best to answer your questions later.
3. Review agenda:
   1. Review fourth quarter and annual net sales and EBITDA, and by division
   2. Divisional operating comments
   3. First quarter tone comments
   4. Comments by the C.E.O.
   5. Q & A session
   
   Note: these prepared comments are also available in text on our website should you want to view them there.

A. Review news release - net sales and EBITDA, and by division

Fourth quarter 2007 net sales were $410.8 million versus $332.1 million, an increase of 24%. Fourth quarter 2007 EBITDA was $51.5 million versus $50.8 million, an increase of 1%.

For the full year 2007, net sales were $1,467.8 million versus $1,247.3 million, an increase of 18%. EBITDA for 2007 was $175.9 million, compared to $180.9 million in 2006, down 3%.

Fourth quarter results by division:

Egg Products Division fourth quarter external net sales were $275.4 million versus $221.2 million, an increase of 24%, with EBITDA at $40.7 million versus $36.1 million, an increase of 13%. For the year, Eggs showed sales up 18% and EBITDA up slightly at 4%.

Crystal Farms Division fourth quarter external net sales were $103 million versus $79.9 million, an increase of 31%, with EBITDA at $4.2 million versus $7.5 million, a decrease of 44%. For the year, Crystal Farms showed a 21% sales rise and a 31% EBITDA decline.

Potato Products Division fourth quarter external net sales were $32.4 million versus $32.0 million, an increase of 2%, with EBITDA at $8.2 million versus $7.9 million, an increase of 5%. For the year, Potatoes showed a 4% sales increase and flat EBITDA.

B. Divisional fourth quarter operating comments

Egg Products

Given the very high egg and grain markets we faced, we were again pleased with EBITDA for the Egg Products Division in the fourth quarter. It was pretty much a replay of the third quarter. Foodservice margins were hampered by high costs that could not be fully passed-through due to the rapid run-up in grain and egg costs. Food Ingredients executed well in volatile markets, which allowed for profitability. Retail egg products had a solid quarter. We are pleased that the portfolio of egg products we have, spread over three trade channels, is working as it should, with built-in counter-balances.

On the sales side, the 24% dollar sales gain reflects some notable inflation, caused by a very high egg market. Fourth quarter units sold were up 1%, with good Foodservice volume growth, solid Retail results, but with Food Ingredients volumes down due to certain business being passed on due a to lack of margin opportunity.

Between a robust egg market raising breaking stock prices and high grains, with corn near $5, we had both expensive external and internal eggs in the fourth quarter. However, the Food Ingredient side of Egg Products saw pricing, as quoted mainly in the Urner-Barry daily and weekly markets, rise and this pushed our pricing for dried, frozen and short shelf-life liquid items up significantly. The better pricing reflected market factors, with much more favorable egg products supplies as compared to demand, especially with record low dried inventories. The overall impact of pricing in the Food Ingredients sector rising more rapidly than costs was helpful to the division's margins and EBITDA contribution for the quarter and year. Margin expansion in Food Ingredient egg products was able to more than offset weakness seen in margins for Foodservice items, where price relief happens more slowly. However, we are taking significant pricing actions at Foodservice. We also should mention that we saw notable profitability, for the quarter and year, from our modest shell egg business. These are great times for grading eggs and putting them into cartons.

Crystal Farms

Crystal Farms had a tough EBITDA period in the fourth quarter, much as was the case in the third period, despite it being a strong sales period. On the sales side, sales were up 30%+ in the quarter due to both volume growth and higher market pricing, but mostly due to pricing. Crystal Farms units, excluding shell eggs, rose 8% in 2007's fourth quarter versus the 2006 period and that is strong growth, though it reflects flat branded cheese units and private label units that rose sharply due to the addition of a major national account last spring.

On the inflation side we saw cheese costs rise notably. This was driven by the sharp spike in the cheese market during the quarter. Cheese is typically a $1.20-1.50 per pound market, but it has been either side of $2.00 since spring 2007. Most recently it has settled around $1.80, but it is volatile, having seen $2.00+ just weeks ago. As a result, our cheese costs are up dramatically. We affected, in turn, two mid-year price increases to the retail trade last year and took another increase in early February. As we say around here, as goes the branded cheese business, so goes Crystal Farms and it goes not as well as we'd like. However, recent price increases to the retail trade, coupled with a perhaps settling market, could (COULD) set things up for a return of normal margins over the balance of the year. We continue to watch the markets and our competitors' pricing actions, but spend most of our time adding new accounts, rolling-out new products and line extensions and growing volumes, as we have more control over such things.

Potato Products

Potato Products fourth quarter results were a bit firmer for EBITDA than what we saw earlier in the year, despite rising potato and other commodity costs. The retail refrigerated potato products category continues to grow, but has slowed after strong growth in late 2005 and throughout 2006, showing 3-4% growth in 2007. Our retail market share has now stabilized after a multi-quarter period of declines due to a new market entrant in late 2005.

Other items

We made a small acquisition in early January. Due to non-materiality, we chose to not issue a news release or a Form 8-K. It is a northern Wisconsin-based specialty egg products firm called Abbotsford Egg Products. Annualized sales are about $8 million. They are a leader in organic and cage-free egg products and had become an important co-packer for us. We liked the products so well we decided to buy the company. This deal gives us a more complete line of products for serving our customers. Sales are into the foodservice and retail markets, and demand is strong. We believe Abbotsford will provide a nice, profitable growth opportunity for us.

We also want to make mention of a new officer hire. Tom Jagiela joined us in early March as Senior Vice President - Operations and Supply Chain. Tom has spent most of his career at Pillsbury and General Mills, progressing to the VP of Manufacturing for Pillsbury U.S., Canada & Meals Divisions. Most recently he was the Chief Operating Officer of Nellson Nutraceutical, Inc., a large co-packer in California. He brings a vast amount of experience to MFI. Tom is on-board in anticipation of two retirements later this year: Chuck Bailey plans to retire as VP - Operations and Jim Mohr will be retiring as SVP - Supply Chain and Logistics. Hence, we are in the midst of a multi-month transition.

On the cash flow front, our cash flows remained quite healthy last year. We chose to prepay another $50 million of Term B debt in late December. Our year-end leverage ratio was 3.3x, or 4.1x pro forma for the Holdco debt. Our capex in 2007 was $38 million. We now plan to spend roughly $40 million in 2008. Regarding our December 29th balance sheet, it will be filed in our Form 10-K, which may be available on EDGAR later today.

C. First Quarter Tone

We will now share some thoughts on the tone of business in the first quarter and beyond. Please note that these are clearly forward looking comments. Inherently, making forward-looking comments is fraught with risks and we list those risk factors in our Form 10-K (just to keep our creditors on their toes). Therefore, please note that these comments are clearly governed by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Egg Products

The first quarter should bring roughly more of the same as the last couple quarters have. The higher value-added lines, or our Foodservice business, may improve their margin contribution in the months ahead as price increases are realized and with help from productivity cost savings, but will still be under notable pressure due to high grain and breaking stock costs. The Food Ingredients business should continue to help us on the upside if the egg market holds this high ground. So far that has been the case in early 2008. Our recent sales and marketing initiatives in Egg Products include an Explore Beyond Breakfast program to get foodservice operators thinking about egg opportunities on their menus after 10:00 in the morning.

On the cost side, grains continue to be much higher than our operating plan calls for. We do have hedges in place, which offer some upside protection. We are also seeing the rise in the energy complex affect a number of costs, including diesel, natural gas and packaging. Rising costs are an on-going challenge for us.

Crystal Farms

As alluded to, Crystal Farms still has cheese margin challenges in the first quarter. Cheese costs are up more than is cheese pricing to retailers. The cheese market remains above our forecasted level. We can't see matching year-ago EBITDA for this division in the current quarter. Beyond the first quarter, things could brighten on the branded cheese margin front, given price actions taken and given a cheese market that is off its highs. We'll see. It is also worth mention that the high cheese market has caused a consumer reaction and branded volumes are weaker than expected.

New business activity for Crystal Farms remains impressive. Beyond the SuperTarget private label cheese business added last spring, we have placed five branded items recently in 100 of those stores. We are also now into 54 K-Marts with 25 cheese items.

A number of new items are being introduced by Crystal Farms. We keep expanding the Signature Selections line of specialty cheeses with new SKUs. We also have a new Six Cheese Italian Shred rolling-out, and Single-Serve Shreds, and two new wrap varieties.

One last, but important, item to discuss in the Crystal Farms space is a realignment of our Retail sales and marketing efforts that was affected at the turn of the year. We have moved the management of all Retail brands under Mark Anderson and his team at Crystal Farms. Diane Sparish has become our GM of Innovation as a result. So, Crystal Farms now oversees Simply Potatoes, Diner's Choice, Better 'n Eggs and All-Whites - our national Retail brands. The transition has gone smoothly. Sales personnel have been assigned to their new accounts, but the process will extend into the second quarter. This will give us a more efficient go-to-market for our Retail brands. The combined selling and marketing effort covers nearly $450 million in annual sales.

Potato Products

Potato Products is showing better momentum on the Retail side, which is where we have stronger margins. Part of this is due to a good response to our increased promotional activity, including a new Simply Potatoes advertising campaign. We'd expect higher EBITDA from Potato Products in the current quarter compared to the 2007 period.

D. Comments by C.E.O. Dave Johnson

E. Question and Answer Session

We will now have the operator explain the Q&A process please

After Q & A session:

Thank you for joining us today. We appreciate your interest in Michael Foods. We'll look forward to discussing our first quarter results with you in May. Thank you.