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<SEC-DOCUMENT>0000088948-01-500010.txt : 20010627
<SEC-HEADER>0000088948-01-500010.hdr.sgml : 20010627
ACCESSION NUMBER:		0000088948-01-500010
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20010331
FILED AS OF DATE:		20010626

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SENECA FOODS CORP /NY/
		CENTRAL INDEX KEY:			0000088948
		STANDARD INDUSTRIAL CLASSIFICATION:	CANNED, FRUITS, VEG & PRESERVES, JAMS & JELLIES [2033]
		IRS NUMBER:				160733425
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		
		SEC FILE NUMBER:	000-01989
		FILM NUMBER:		1667527

	BUSINESS ADDRESS:	
		STREET 1:		1162 PITTSFORD VICTOR RD
		CITY:			PITTSFORD
		STATE:			NY
		ZIP:			14534
		BUSINESS PHONE:		7163834608

	MAIL ADDRESS:	
		STREET 1:		1162 PITTSFORD-VICTOR RD
		CITY:			PITTSFORD
		STATE:			NY
		ZIP:			14534

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PIERCE S S COMPANY INC
		DATE OF NAME CHANGE:	19861210

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SENECA FOODS CORP
		DATE OF NAME CHANGE:	19780425

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SENECA GRAPE JUICE CORP
		DATE OF NAME CHANGE:	19710419
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>tenk01.txt
<DESCRIPTION>2001 10-K
<TEXT>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K


                Annual Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

For the fiscal year-ended March 31, 2001           Commission File Number 0-1989

                            SENECA FOODS CORPORATION
             (Exact name of registrant as specified in its charter)

         New York                                            16-0733425
         --------                                            ----------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

1162 Pittsford-Victor Road, Pittsford, New York                  14534
- -----------------------------------------------                  -----
     (Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code           (716) 385-9500

Securities registered pursuant to Section 12(b) of the Act:

                                                       Name of Each Exchange on
Title of Each Class                                         Which Registered

      None                                                       None

Securities registered pursuant to Section 12(g) of the Act:

                         Common Stock Class A, $.25 Par
                         Common Stock Class B, $.25 Par
                                (Title of Class)

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained herein, and
will not be  contained,  to best of the  registrant's  knowledge,  in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to the Form 10-K.  X
                                            -----

Check mark indicates whether registrant has (1) 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  registrant was required to
file such reports),  and (2) has been subject to the filing  requirements for at
least the past 90 days.

Yes    X     No
     -----       ------

The  aggregate  market  value  of the  Registrant's  voting  securities  held by
non-affiliates  based on the  closing  sales  price per  market  reports  by the
National Market System on June 1, 2001 was approximately $73,174,000.

Common shares  outstanding as of June 1, 2001 were Class A: 3,814,345,  Class B:
2,767,357.

Documents Incorporated by Reference:

(1)  Proxy Statement to be issued prior to June 30, 2001 connection with the
     registrant's annual meeting of stockholders (the "Proxy Statement")
     applicable to Part III, Items 10-13 of Form 10-K.

(2)  Portions of the Annual Report to shareholders for fiscal year ended March
     31, 2001 (the "2001 Annual Report") applicable to Part II, Items 5-8 and
     Part IV, Item 14 of Form 10-K.


<PAGE>

<TABLE>

                                TABLE OF CONTENTS
                      FORM 10-K ANNUAL REPORT - FISCAL 2001
                            SENECA FOODS CORPORATION


<CAPTION>

PART I.                                                                                                       Pages
                                                                                                              -----
<S>               <C>                                                                                         <C>

    Item 1.       Business                                                                                      1-3
    Item 2        Properties                                                                                      3
    Item 3.       Legal Proceedings                                                                               4
    Item 4.       Submission of Matters to a Vote of Equity Security Holders                                      4

PART II.

    Item 5.       Market for the Registrant's Common Stock and Related Security Holder Matters                    4
    Item 6.       Selected Financial Data                                                                         4
    Item 7.       Management's Discussion and Analysis of Financial Condition and Results
                  of Operations                                                                                   4
    Item 7A.      Quantitative and Qualitative Disclosures about Market Risk                                      4
    Item 8.       Financial Statements and Supplementary Data                                                     5
    Item 9.       Changes in and Disagreements on Accounting and Financial Disclosure                             5

PART III.

    Item 10.      Directors and Executive Officers of the Registrant                                              7
    Item 11.      Executive Compensation                                                                          7
    Item 12.      Security Ownership of Certain Beneficial Owners and Management                                  7
    Item 13.      Certain Relationships and Related Transactions                                                  7

PART IV.

    Item 14.      Exhibits, Financial Statements Schedules and Reports on Form 8-K                             7-10

SIGNATURES                                                                                                    11-12
</TABLE>



<PAGE>




                                     PART I
                                     Item 1

                                    Business

                         General Development of Business

SENECA FOODS  CORPORATION (the "Company") was organized in 1949 and incorporated
under the laws of the  State of New York.  In the  spring of 1995,  the  Company
began operations under its Alliance Agreement with The Pillsbury Company,  which
created the Company's most significant business relationship. Under the Alliance
Agreement,  the  Company  has  packed  canned  and  frozen  vegetables  carrying
Pillsbury's  Green  Giant brand name.  These  Green Giant  vegetables  have been
produced in vegetable plants,  which the Company acquired from Pillsbury and, to
a lesser extent,  in the Company's  other vegetable  plants,  which also produce
vegetables under the Libby's brand name,  which is licensed to the Company,  and
other brand names owned by the Company or its customers.

Since the onset of the Alliance  Agreement,  vegetable  production  has been the
Company's dominant line of business.  In fiscal 1999, the Company sold its fruit
juice business and its applesauce and industrial  flavors business.  As a result
of these  fiscal  1999  divestitures,  the  Company's  only  non-vegetable  food
products are a line of fruit products.

                  Financial Information about Industry Segments

The Company's  business  activities are conducted in food and non-food segments.
The food segment  constitutes 98% of total sales, of which  approximately 97% is
vegetable processing and 3% is fruit processing.  The non-food segment is an air
charter service,  which represents 2% of the Company's  business.  Consequently,
the financial information related to segments is not material.

                        Narrative Description of Business

                         Principal Products and Markets

Food Processing

The  principal  products  of  this  segment  include  canned  vegetable,  frozen
vegetable and fruit products.  The products are sold to retail and institutional
markets.  The Company has  divided the United  States into four major  marketing
sections:   Eastern,  Southern,   Northwestern,   and  Southwestern.   Vegetable
operations are primarily  supported by plant  locations in New York,  Wisconsin,
Washington,  Idaho,  and Minnesota.  Plant  locations in Kentucky,  Michigan and
Washington  provide ready access to the domestic  sources of fruit  necessary to
support marketing efforts in their respective sections of the country.

The following table summarizes net sales by major product category for the years
ended March 31, 2001, 2000, and 1999:
<TABLE>
<CAPTION>

Classes of similar products/services:                      2001                2000                1999
- -------------------------------------------------------------------------------------------------------
                                                                        (In thousands)
<S>                                                   <C>                 <C>                 <C>

Net Sales:
   Green Giant vegetables                             $ 290,346           $ 263,279           $ 289,946
   Canned vegetables                                    326,224             291,436             250,266
   Frozen vegetables                                     22,052              27,889              20,446
   Fruit and chip products                               20,092              21,075              18,117
   Flight operations                                      5,905               5,105               4,225
   Other                                                  9,681              12,294               5,049
- -------------------------------------------------------------------------------------------------------
                                                      $ 674,300           $ 621,078           $ 588,049
=======================================================================================================
</TABLE>

<PAGE>


Other

Seneca Flight Operations provides air charter service primarily to industries in
upstate New York.


                     Source and Availability of Raw Material

Food Processing

The Company's food processing  plants are located in major  vegetable  producing
states.  Fruits and vegetables  are primarily  obtained  through  contracts with
growers. The Company's sources of supply are considered equal or superior to its
competition for all of its food products.


                                Seasonal Business

Food Processing

While  individual  fruits and vegetables have seasonal cycles of peak production
and sales,  the  different  cycles are usually  offsetting  to some extent.  The
supply of  commodities,  current  pricing,  and expected  new crop  quantity and
quality,  affect the timing of the Company's  sales and earnings.  An Off Season
Allowance  is  established  during the year to  minimize  the effect of seasonal
production on earnings. Off Season Allowance is zero at fiscal year-end.


                                     Backlog

Food Processing

In the food  processing  business,  the end of year sales  order  backlog is not
considered  meaningful.   Traditionally,   larger  customers  provide  tentative
bookings for their expected  purchases for the upcoming  season.  These bookings
are further  developed  as data on the  expected  size of the  related  national
harvests  becomes  available.  In general,  these bookings serve as a yardstick,
rather than as a firm commitment,  since actual harvest results can vary notably
from early estimates.  In actual practice,  the Company has substantially all of
its expected  seasonal  production  identified to potential sales outlets before
the seasonal production is completed.


                            Competition and Customers

Food Processing

Competition  in  the  food  business  is  substantial  with  imaginative   brand
registration,  quality, service, and pricing being the major determinants in the
Company's relative market position. During the past year approximately 9% of the
Company's  processed  foods were packed for retail  customers  under the Company
branded labels of Libby's(R),  Blue Boy(R),  Aunt Nellie's Farm Kitchen(R),  and
Seneca(R).  About 16% of the processed foods were packed for institutional  food
distributors  and 31% of  processed  foods were retail  packed under the private
label of customers.  The remaining 44% is sold under the Alliance Agreement with
Pillsbury (see note 13 of Item 8, Financial  Statements and Supplementary Data).
Termination of the Alliance  Agreement  would have a material  adverse effect on
the Company taken as a whole.  The  customers  represent a full cross section of
the retail,  institutional,  distributor, and industrial markets and the Company
does not consider  itself  dependent on any single sales source other than sales
attributable to the Alliance Agreement.

The principal branded products are Libby's canned vegetable products, which rate
among the top five national brands.  The information under the heading Liquidity
and Capital  Resources  in  Management's  Discussion  and  Analysis of Financial
Condition and Results of Operations in the 2001 Annual Report is incorporated by
reference.


<PAGE>


                            Environmental Protection

Environmental  protection is an area that has been worked on most  diligently at
each food processing facility. In all locations, the Company has cooperated with
federal, state, and local environmental protection authorities in developing and
maintaining suitable  antipollution  facilities.  In general,  pollution control
facilities are equal to or somewhat superior to those of our competitors and are
within  environmental  protection  standards.  The  Company  does not expect any
material capital  expenditures to comply with  environmental  regulations in the
near future. The Company is a potentially  responsible party with respect to two
waste disposal sites owned and operated by others. The Company believes that any
reasonably anticipated liabilities will not exceed $260,000 in the aggregate.


                                                      Employment
                                                      ----------
                  Food processing  -  Full time            2,267
                                    - Seasonal               337
                                                       ---------
                                                           2,604
                                      Other                   94
                                                       ---------
                                                           2,698
                                                       =========

The Company has four  collective  bargaining  agreements with three union locals
covering  approximately  539 of its  full  time  employees.  The  terms of these
agreements  result in wages and benefits,  which are  substantially the same for
comparable  positions for the Company's  non-union  employees.  Three collective
bargaining  agreements expire in calendar 2002. The remaining  agreement expires
in calendar 2003.


                               Foreign Operations

Export sales for the Company are a relatively  small  portion  (about 3%) of the
food processing sales.


                                     Item 2

                                   Properties

The Company has seven food  processing,  packaging,  and warehousing  facilities
located in New York State that provide  approximately  1,653,000  square feet of
food packaging, freezing and freezer storage, and warehouse storage space. These
facilities  process and package fruit and vegetable  products.  The Company is a
lessee under a number of operating  and capital  leases for  equipment  and real
property used for processing and warehousing.

Six  facilities in Minnesota,  two  facilities  in  Washington,  one facility in
Idaho, and six facilities in Wisconsin  provide  approximately  5,606,000 square
feet of food  packaging,  freezing and freezer  storage,  and warehouse  storage
space.  These  facilities  process  and  package  various  vegetable  and  fruit
products. The facilities are owned by the Company.

The Company's air charter  division has a 42,000 square foot facility,  which is
owned by the Company.

All of the  properties are well  maintained and equipped with modern  machinery.
All locations,  although  highly  utilized,  have the ability to expand as sales
requirements justify. Because of the seasonal production cycles the exact extent
of  utilization  is  difficult  to  measure.  In  certain   circumstances,   the
theoretical full efficiency levels are being reached; however,  expansion of the
number of production  days or hours could increase the output by up to 20% for a
season.

Certain of the Company's  facilities are mortgaged to financial  institutions to
secure long-term debt and capital lease  obligations.  See Notes 4 and 5 of Item
8, Financial Statements and Supplementary Data, for additional information about
the Company's long-term debt and lease commitments.



                                     Item 3

                                Legal Proceedings

In the ordinary  course of its business,  the Company is made a party to certain
legal proceedings seeking monetary damages. The Company does not believe that an
adverse  decision  in any of these  proceedings  would have a  material  adverse
impact on its financial position, results of operations or cash flows.


                                     Item 4

           Submission of Matters to a Vote of Equity Security Holders

No matters were submitted to vote of shareholders during the last quarter of the
fiscal period covered by this report.


                                     PART II

                                     Item 5

  Market for the Registrant's Common Stock and Related Security Holder Matters

Each class of preferred  stock  receives  preference as to dividend  payment and
declaration over any common stock. In addition,  refer to the information in the
2001 Annual Report,  "Shareholder  Information and Quarterly Results",  which is
incorporated by reference.


                                     Item 6

                             Selected Financial Data

Refer  to the  information  in the  2001  Annual  Report,  "Five  Year  Selected
Financial Data", which is incorporated by reference.


                                     Item 7

 Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations

Refer to the information in the 2001 Annual Report, "Management's Discussion and
Analysis  of  Financial   Condition  and  Results  of   Operations",   which  is
incorporated by reference.


                                     Item 7A

           Quantitative and Qualitative Disclosures about Market Risk

Refer  to  the  information  in  the  2001  Annual  Report,   "Quantitative  and
Qualitative Disclosures about Market Risk", which is incorporated by reference.


<PAGE>



                                     Item 8

                   Financial Statements and Supplementary Data

Refer to the  information  in the 2001 Annual  Report,  "Consolidated  Financial
Statements and Notes thereto including Independent  Auditors' Report",  which is
incorporated by reference.

                                     Item 9

       Changes in and Disagreements on Accounting and Financial Disclosure

None.


<PAGE>


INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
  Seneca Foods Corporation
Pittsford, New York

We  have  audited  the  consolidated   financial   statements  of  Seneca  Foods
Corporation and  subsidiaries as of March 31, 2001 and 2000, and for each of the
three  years in the period  ended  March 31,  2001,  and have  issued our report
thereon dated May 25, 2001; such  consolidated  financial  statements and report
are included in your 2001 Annual  Report to  Shareholders  and are  incorporated
herein by  reference.  Our  audits  also  included  the  consolidated  financial
statement schedule of Seneca Foods Corporation,  listed in Item 14 (A)(2).  This
consolidated financial statement schedule is the responsibility of the Company's
management.  Our responsibility is to express an opinion based on our audits. In
our opinion, such consolidated financial statement schedule,  when considered in
relation  to the  basic  consolidated  financial  statements  taken  as a whole,
presents fairly in all material respects the information set forth therein.

/s/DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP
Rochester, New York
May 25, 2001

<PAGE>


                                    PART III


                                     Item 10

               Directors and Executive Officers of the Registrant



                                     Item 11

                             Executive Compensation


                                     Item 12

         Security Ownership of Certain Beneficial Owners and Management


                                     Item 13

                 Certain Relationships and Related Transactions

Information  required by Items 10 through 13 will be filed  separately  with the
Commission,  pursuant  to  Regulation  14A,  in  a  definitive  proxy  statement
involving the election of directors, which is incorporated herein by reference.

                                     PART IV


                                     Item 14

        Exhibits, Financial Statement Schedules, and Reports on Form 8-K


A.    Exhibits,  Financial Statements, and Supplemental Schedules

      1.   Financial Statements - the following consolidated financial
           statements of the Registrant, included in the Annual Report for the
           year ended March 31, 2001, are incorporated by reference in Item 8:

           Consolidated Statements of Net Earnings - March 31, 2001, 2000 and
           1999

           Consolidated Balance Sheets - March 31, 2001 and 2000

           Consolidated Statements of Cash Flows - March 31, 2001, 2000 and 1999

           Consolidated Statements of Stockholders' Equity - March 31, 2001,
           2000 and 1999

           Notes to Consolidated Financial Statements - March 31, 2001, 2000 and
           1999

           Independent Auditors' Report


<PAGE>
                                                                           Pages
                                                                           -----
2.     Supplemental Schedule:
       ---------------------

       Schedule II        --        Valuation and Qualifying Accounts        9

Other schedules have not been filed because the conditions requiring the filing
do not exist or the required information is included in the consolidated
financial statements, including the notes thereto.

3.       Exhibits:
         --------

     No. 3 - Articles of  Incorporation  and By-Laws - Incorporated by reference
to the Company's  Form 10-Q/A filed August,  1995; as amended by the  amendments
filed with the Company's  Form 10-K filed June 1996, as amended by the Company's
definitive proxy statement filed July, 1998.

     No. 4 - Articles  defining the rights of security holders - Incorporated by
reference  to the  Company's  Form  10-Q/A  filed  August,  1995 as  amended  by
amendments  filed with the  Company's  Form 10-K  filed  June  1996.  Instrument
defining the rights of any holder of Long-Term Debt - Incorporated  by reference
to  Exhibit  99 to the  Company's  Form 10-Q  filed  January  1995 as amended by
Exhibit No. 4 of the Company's Form 10-K filed June, 1997,  amended by Exhibit 4
of the Company's Form 10-Q and Form 10-Q/A filed  November,  1997, as amended by
amendments filed with the Company's definitive proxy statement filed July, 1998.
The Company  will  furnish,  upon  request to the SEC, a copy of any  instrument
defining the rights of any holder of Long-Term Debt.

     No. 10 - Material  Contracts -  Incorporated  by reference to the Company's
Form 8-K dated  February 24, 1995 for the First  Amended and  Restated  Alliance
Agreement and the First Amended and Restated Asset Purchase  Agreement both with
The Pillsbury Company.

     No. 13 - The material  contained in the 2001 Annual Report to  Shareholders
under the following headings: "Five Year Selected Financial Data", "Management's
Discussion  and  Analysis of  Financial  Condition  and Results of  Operations",
"Consolidated  Financial  Statements  and Notes  thereto  including  Independent
Auditors' Report", "Quantitative and Qualitative Disclosures about Market Risk",
and "Shareholder Information and Quarterly Results".

         No. 21 -   List of Subsidiaries                                    10

         No. 23 -   Consents of Experts and Counsel                         10

B.    Reports on Form 8-K

      None.


<PAGE>
<TABLE>

                                   Schedule II

                        VALUATION AND QUALIFYING ACCOUNTS
                                 (In thousands)
<CAPTION>

                                              Balance at     Charged/     Charged to    Deductions    Balance
                                              Beginning     (Credited)        other         from        at end
                                              of period     to income       accounts       reserve    of period
                                              -------------------------------------------------------------------
<S>                                           <C>           <C>           <C>           <C>           <C>

Year-ended March 31, 2001:
      Allowance for doubtful accounts         $       469   $       188   $   --        $    25 (a)   $       632
                                              ===================================================================

Year-ended March 31, 2000:
      Allowance for doubtful accounts         $       487   $        (5)  $   --        $    13 (a)   $       469
                                              ===================================================================

Year-ended March 31, 1999:
      Allowance for doubtful accounts         $       207   $       425   $   --        $   145 (a)   $       487
                                              ===================================================================

<FN>
(a) Accounts written off, net of recoveries.
</FN>
</TABLE>
<PAGE>


                                   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.

                            SENECA FOODS CORPORATION



                                  By/s/  Jeffrey L. Van Riper     June 12, 2001
                                  ---------------------------------------------
                                         Jeffrey L. Van Riper
                                         Controller and Secretary
                                         (Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
    Signature                                             Title                                       Date
    ---------                                             -----                                       ----
<S>                                               <C>                                              <C>

/s/Arthur S. Wolcott                              Chairman and Director                            June 12, 2001
- --------------------
Arthur S. Wolcott



/s/Kraig H. Kayser                                President, Chief Executive Officer,              June 12, 2001
- ------------------                                and Director
Kraig H. Kayser



/s/Philip G. Paras                                Chief Financial Officer                          June 12, 2001
- ------------------
Philip G. Paras



/s/Jeffrey L. Van Riper                           Controller and Secretary                         June 12, 2001
- -----------------------                           (Principal Accounting Officer)
Jeffrey L. Van Riper



/s/Arthur H. Baer                                 Director                                         June 12, 2001
- -----------------
Arthur H. Baer



/s/Andrew M. Boas                                 Director                                         June 12, 2001
- -----------------
Andrew M. Boas



/s/Robert T. Brady                                Director                                         June 12, 2001
- ------------------
Robert T. Brady


/s/David L. Call                                  Director                                         June 12, 2001
- ----------------
David L. Call



/s/Edward O. Gaylord                              Director                                         June 12, 2001
- --------------------
Edward O. Gaylord



/s/G. Brymer Humphreys                            Director                                         June 12, 2001
- ----------------------
G. Brymer Humphreys



/s/Susan W. Stuart                                Director                                         June 12, 2001
- ------------------
Susan W. Stuart
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>2
<FILENAME>e130301.txt
<DESCRIPTION>2001 ANNUAL REPORT
<TEXT>

<TABLE>
Five Year Selected Financial Data
Summary of Operations and Financial Condition
(In thousands of dollars, except per share data)
<CAPTION>

 Years ended March 31,                                 2001          2000          1999           1998          1997
 -------------------------------------------------------------------------------------------------------------------
 <S>                                              <C>           <C>           <C>          <C>           <C>

 Net sales                                        $ 674,300     $ 621,078     $ 588,049    $   572,039   $   578,257
 -------------------------------------------------------------------------------------------------------------------

 Operating earnings (before Corporate
    interest and administrative expense)          $  23,879     $  27,335     $  27,138    $    22,732     $  43,536
 Earnings (loss) from continuing
    operations before extraordinary item and
    cumulative effect of accounting change              813         4,320         1,420         (3,181)        8,966
 Loss from discontinued operations                        -             -        (6,791)        (1,963)       (1,435)
 Gain on sale of discontinued operations                  -             -        11,756              -             -
 Earnings (loss) before extraordinary item and
    cumulative effect of accounting change              813         4,320         6,385         (5,144)        7,531
 Extraordinary loss                                       -             -        (1,222)             -             -
 Net earnings (loss)                                    813         4,320         5,163         (5,144)        7,531
 -------------------------------------------------------------------------------------------------------------------

 Basic earnings (loss) from continuing
    operations per common share                   $     .12     $     .66     $     .23      $    (.54)    $    1.51
 Basic earnings (loss) per common share before
    extraordinary item and cumulative
    effect of accounting change                         .12           .66          1.05           (.87)         1.27
 Basic earnings (loss) per common share                 .12           .66           .85           (.87)         1.27
 -------------------------------------------------------------------------------------------------------------------

 Working capital                                  $ 163,367     $ 168,972     $ 167,435      $ 112,299     $ 132,351
 Inventories                                        229,170       203,173       152,634        194,044       158,197
 Net property, plant, and equipment                 167,450       179,146       178,658        218,408       207,439
 Total assets                                       444,233       438,540       404,870        474,926       416,023
 Long-term debt and capital lease
    obligations                                     171,346       189,968       187,904        227,858       224,128
 Stockholders' equity                               149,759       148,999       144,588         89,125        93,736
 -------------------------------------------------------------------------------------------------------------------

 Additions to property, plant, and equipment      $  15,395     $  19,875     $   9,494      $  15,693       $11,650
 Interest expense, net                               18,662        16,147        21,594         23,913        25,960
 -------------------------------------------------------------------------------------------------------------------

 Net earnings/average equity                            0.7%          3.6%          4.4%          (5.6)%         8.2%
 Continuing earnings before taxes/sales                 0.2%          1.1%          0.3%          (0.9)%         2.4%
 Net earnings/sales                                     0.1%          0.7%          0.9%          (0.9)%         1.3%
 Long-term debt/equity                                  114%          127%          130%           256%          239%
 Current ratio                                        2.5:1         3.1:1         4.0:1          1.8:1         2.8:1
 -------------------------------------------------------------------------------------------------------------------

 Stockholders' equity per common share            $   16.26     $   16.16     $   15.65      $   14.99     $   15.77
 Class A National Market System
    closing price range                           15 1/4-11   15 1/2-10 1/4  17 1/8-10 3/8  18 3/4-15 3/4 18 3/4-14 3/4
 Class B National Market System
    closing price range                         14 7/8-10 3/4 14 3/4-10      16 3/4-10 3/8  18 1/2-15 1/2     19-14 1/2
 Common cash dividends declared per share                 -             -             -              -             -
 Price earnings ratio                                 110.2          17.1          13.1             NM          13.7x
 -------------------------------------------------------------------------------------------------------------------



<FN>
NM - not meaningful.
</FN>
</TABLE>


<PAGE>




Management's Discussion and Analysis of Financial Condition and Results of
Operations

Liquidity and Capital Resources

Because the Company is primarily engaged in vegetable processing,  the Company's
yearly  business cycle shows large  inventory  growth during the summer and fall
harvest  period.  The inventory peaks in the early fall and drops to its minimum
level  immediately  prior to the next pack  season  (pack  refers to canning and
freezing of vegetables  and certain fruits with each commodity at a certain time
during the year which can vary based on weather conditions among other factors).
These peaks are financed through  seasonal  borrowings whose high and low points
essentially  correspond  with the changes in  inventory,  or by a  reduction  in
short-term investments. Accordingly, inventory management is key to liquidity.

During September 1998, the Company  completed an equity sale, which raised $49.7
million.  The equity sale consisted of a Rights Offering to the Company's common
shareholders and a Stock Purchase Agreement with certain investors.

In December 1998,  the Company sold a significant  portion of its Juice Division
to Northland Cranberries,  Inc. together with an exclusive license to market and
sell Seneca juice  products,  for $28.2  million in cash plus the  assumption of
certain  liabilities.  This sale included plants in Dundee,  New York;  Mountain
Home,  North  Carolina;  Jackson,  Wisconsin;  and a  warehouse  in Eau  Claire,
Michigan.

In January 1999, the Company sold to Tree Top, Inc. its  processing  facility in
Prosser,  Washington  together with its non-branded  specialty fruit concentrate
business and an exclusive license to market and sell Seneca applesauce. Tree Top
paid approximately $29.0 million in cash.

During November 1999, the Company acquired certain assets of the Midwest private
label canned  vegetable  business from Agrilink Foods,  Inc., for  approximately
$48.0 million.  The Company purchased one plant and inventories of the business.
The annual sales of this business are approximately $73.0 million.  The purchase
price was  partially  funded by a  subordinated  note for $5.0 million while the
balance was paid in cash.

As a result of the fiscal  1999  divestitures  and equity  sale,  the  Company's
requirements for working capital financing were substantially reduced during the
fiscal  years  ended  2000  and  1999 as  compared  to  1998  and  prior  years.
Accordingly,  the total  financing  commitment of the  Company's  line of credit
banks was  reduced  in a series of steps  from $130  million  to $75  million on
January 29, 1999, at which date the Company elected to terminate its Amended and
Restated  Credit  Agreement with those banks.  As of March 31, 2001, the Company
maintained a committed  revolving line of credit of $20 million and  uncommitted
lines of credit totaling $81 million.  These credit  arrangements do not require
the Company to pay any  commitment  fees,  whereas the Company paid fees for the
unused  portion of the bank  commitments  under the Amended and Restated  Credit
Agreement, which it terminated in January 1999. The Company had $24.5 million of
short-term  borrowings as of the end of 2001, and no short-term  bank borrowings
throughout  fiscal 2000. The Company believes that the credit facilities will be
sufficient,  with its  other  resources,  for its  anticipated  working  capital
requirements in 2002.

The Company has three major long-term debt instruments:  1) a $44.7 million note
payable to The Prudential Insurance Company of America, with an interest rate of
10.78%,  which is due through 2005; 2) a $61.1 million secured  nonrecourse note
payable to The  Pillsbury  Company,  with an interest  rate of 8%,  which is due
through 2009; and 3) a $42.5 million note payable to John Hancock Life Insurance
Company, with an interest rate of 10.81%, which is due through 2009.

In 2000,  the Company  issued an Industrial  Revenue  Development  Bond for $6.0
million  to  finance  production  equipment  in the  Midwest.  The Other  Assets
category  includes  $1.3  million and $5.3  million as of the fiscal years ended
2001 and 2000, respectively, of yet unspent proceeds of this debt issue.

In the final  quarter of 1999,  the Company made the  following  prepayments  on
long-term  debt (plus  yield-maintenance  payments to the lenders in  accordance
with the terms of the indebtedness):

         (1)      With respect to its outstanding 10.78% Series A Note due
                  February 23, 2005, and in addition to the scheduled payment of
                  a principal installment of $7.5 million due February 23, 1999,
                  the Company prepaid two annual principal installments of $8.4
                  million each due February 23 in 2000 and 2001; and

         (2)      With  respect to its outstanding 9.17%  Senior Notes due 2004,
                  the  Company  prepaid  $15.0  million,  the entire outstanding
                  principal amount of these Notes.

During 1995, the Company  acquired certain assets of the Green Giant Division of
The Pillsbury Company. Under an Alliance Agreement concurrently executed in 1995
by  the  Company,  Pillsbury  and  Grand  Metropolitan  Incorporated,  Pillsbury
continues to be responsible for all of the sales, marketing and customer service
functions  for the Green Giant brand,  while the Company  will handle  vegetable
processing and canning operations.  Pillsbury continues to own all the trademark
rights to the Green Giant brand and its proprietary  seed varieties.  The assets
acquired   included  certain  raw  material  and  supplies   inventory  and  six
manufacturing  facilities  located in the  Midwestern  and  Northwestern  United
States.

The increase in cash and  short-term  investments of $1.3 million over the three
year  period  ended in 2001 was  primarily  due to the  proceeds  of the sale of
assets (primarily the Juice sale) totaling $69.7 million;  proceeds from the new
equity issue from the Stock  Purchase  Agreement  and Rights  Offering  totaling
$49.7  million;  proceeds of the new long-term debt issue totaling $6.0 million;
and net earnings  (before  depreciation  effect,  which is  non-cash).  This was
partially  offset by:  Agrilink  acquisition  of $43.5  million;  long-term debt
repayments  totaling $60.1 million;  repayments of notes payable  totaling $37.8
million;  and  capital  additions  of $15.4  million,  $19.9  million,  and $9.5
million, in 2001, 2000, and 1999, respectively.

In 2001,  accounts  receivable  decreased by $200 thousand to $31.5 million.  In
2000, accounts  receivable  decreased by $4.0 million to $31.7 million. In 1999,
accounts  receivable  decreased  by  $12.9  million  mainly  due  to  the  Juice
divestitures.

In  2001,  inventories  increased  by  $26.0  million  mainly  due to  temporary
disruption in retail canned vegetable sales patterns  resulting from last fiscal
year's Year 2000 stock-up phenomenon.  In 2000,  inventories  increased by $50.5
million  mainly due to the  acquisition  of the  Midwest  private  label  canned
vegetable  business  described  above. In 1999,  inventories  decreased by $41.4
million mainly due to the Juice divestitures.

In 2001, capital expenditures were $15.4 million as compared to $19.9 million in
2000 and $9.5 million in 1999. The largest project in 2001 was an automatic corn
cutter  project in  Minnesota,  which totaled $3.3 million and was financed with
the Industrial  Revenue  Development  Bond  discussed  above.  In 2000,  certain
expenditures  of  approximately  $5.0  million  were  made  to  accommodate  the
additional  volume  acquired from  Agrilink  (since only one of three plants was
purchased).  Another  major  capital  initiative  in  2000  involved  increasing
production capacity in the Northwest.  No major capital expenditures occurred in
1999.



<PAGE>



Results of Operations

Net sales for 2001 were $674.3 million, which includes $290.3 million sold under
the  Alliance  with  Pillsbury.  Net sales for 2000 were $621.1  million,  which
includes  $263.3 million sold under the Alliance with  Pillsbury.  Net sales for
1999 were $588.0 million,  which includes $289.9 million sold under the Alliance
with  Pillsbury.  In 2001,  Non-Alliance  sales increased from $357.8 million to
$384.0  million  reflecting a full year of sales from the  Agrilink  acquisition
partly offset by lower selling  prices.  In 2000,  Non-Alliance  sales increased
from $298.1  million to $357.8  million  reflecting  the  Agrilink  acquisition,
distribution gains in the vegetable non-branded area, and higher selling prices.
This increase was partially offset by a reduction in Alliance sales reflecting a
planned smaller pack than the previous year. In 1999, vegetable unit non-branded
sales  increased over 1998 due to increased  distribution  on the west coast and
high pack levels of the last two years.

The sale of the Juice  business to  Northland  Cranberries,  Inc.  resulted in a
pre-tax gain on the disposal of $6.8 million,  which was  recognized  during the
Company's  fourth  quarter  ended  March  31,  1999.  The sale of the  Company's
processing  facility  in  Prosser,  Washington  together  with  its  non-branded
specialty  fruit  concentrate  business to Tree Top, Inc.  resulted in a pre-tax
gain on the  disposal  of  $10.4  million,  which  was  also  recognized  in the
Company's  fourth quarter ended March 31, 1999. As a result of these sales,  the
Juice Business has been accounted for as discontinued operations.  Net sales for
these businesses were $121.3 million in 1999.

In 2001, the Company sold a facility in Othello, Washington, which resulted in a
gain of $1.2  million  before  income  taxes.  Also in 2001,  the Company sold a
facility in Buckley,  Michigan,  which resulted in a gain of $0.2 million before
income taxes.

In 2000,  the Company sold a distribution  facility in Chicopee,  Massachusetts,
which  resulted in a gain of $1.0 million  before  income  taxes.  In 1999,  the
Company sold a parcel of land in Rochester,  Minnesota, which resulted in a gain
of $6.2 million before income taxes.

In 2001,  earnings decreased  primarily due to the following reasons:  1) a $2.5
million  increase  in  interest  expense  as a result of the  higher  short-term
borrowings  in support of an increase in average  inventories;  2) lower selling
prices on vegetables,  especially on private label canned retail vegetables than
the  previous  year;  and 3) an  increase  in natural gas and fuel costs of $6.0
million  (approximately $3.0 million effect on 2001 results).  In 2000, earnings
increased due to the following reasons:  1) a $5.4 million reduction in interest
expense  as a  result  of the  $49.7  million  equity  offering  and  juice  and
applesauce  divestitures  completed in fiscal 1999; 2) better  selling prices on
vegetables,   especially  on  private  label  canned  retail  and  food  service
vegetables  than the previous year; and 3) additional  sales due to the acquired
business  described  above.  These  gains were  partially  offset by a provision
principally to reflect the expected  liquidation  costs of our maraschino cherry
business,  including a plant closure,  of $2.0 million,  established in 2000. In
1999,  earnings increased due to the following reasons:  1) the gain on the sale
of land in Rochester,  Minnesota of $6.2  million;  2) somewhat  better  selling
prices on vegetables  after low prices the previous  year;  and 3) a gain on the
sale of an aircraft of $.7  million.  These  gains were  partially  offset by an
impairment provision of $2.0 million.

A  deferred  tax  valuation  allowance  as of March  31,  2001,  was not  deemed
necessary due to the fact that there was positive  evidence that  outweighed the
negative evidence that it was more likely than not that these tax assets will be
realized.  While the Company has suffered  losses in one of the last five fiscal
years, the Company does not believe that such loss should be considered a trend,
and that other evidence, including the fact that the Company has never had a net
operating  loss expire,  should be considered in evaluating  whether a valuation
allowance is necessary.

In general,  inflation played a relatively  small role in the operating  results
and cash flows of 2001,  2000, and 1999 since the Company  depreciates its fixed
assets under accelerated depreciation methods for tax purposes.


<PAGE>



Recently Issued Accounting Standards

Since June 1998, the Financial Accounting Standards Board (FASB) has issued SFAS
Nos. 133, 137 and 138 related to  "Accounting  for  Derivative  Instruments  and
Hedging  Activities" (SFAS No. 133, as amended or Statements).  These Statements
establish  accounting and reporting  standards  requiring that every  derivative
instrument  be  recorded on the  balance  sheet as either an asset or  liability
measured  at  its  fair  value.  The  Statements  require  that  changes  in the
derivative's  fair value be  recognized  currently in earnings  unless  specific
hedge  accounting  criteria  are met,  in which  case the gains or losses  would
offset the related results of the hedged item.

The Company currently does not have any freestanding derivative instruments. The
Company  is in  the  process  of  performing  a  review  to  identify  potential
derivatives  embedded  in  other  contracts.   The  Company  is  adopting  these
Statements  as of April 1, 2001 and is not  expecting  a material  impact on its
consolidated financial statements.

In May 2000, the Emerging Issues Task Force (EITF),  a subcommittee of the FASB,
issued EITF No. 00-10  "Accounting  for  Shipping and Handling  Fees and Costs."
EITF No. 00-10  addresses the income  statement  classification  of shipping and
handling  fees and costs.  The  Company's  net sales and cost of sales have been
reclassified  to reflect these  expenses in cost of sales,  consistent  with the
classification  of other shipping and handling related costs. The impact of this
change increased net sales by $17.4 million, $16.1 million and $11.9 million for
the years ended March 31, 2001, 2000, and 1999, respectively.  Additionally, the
impact of this change  increased cost of sales by $17.9 million,  $17.3 million,
and  $12.2  million  for the  years  ended  March  31,  2001,  2000,  and  1999,
respectively,  and decreased selling,  general,  and administrative  expenses by
$0.5 million,  $1.2 million and $0.3 million for the years ended March 31, 2001,
2000,  and  1999,  respectively.  There is no impact on  results  of  operations
resulting from this change.

In  2000,  the  EITF  issued  EITF  No.  00-14  "Accounting  for  Certain  Sales
Incentives."  The EITF  subsequently  amended the transition  provisions of this
EITF in  November  2000 to require  application  no later than  fiscal  quarters
beginning after March 15, 2001.  EITF No. 00-14  prescribes  guidance  regarding
timing of recognition and income statement classifications of costs incurred for
certain sales incentive programs. This guidance requires certain coupons, rebate
offers and free products offered concurrently with a single exchange transaction
to be  recognized  at the later of the date at which the  revenue is recorded or
the date at which the sales  incentive is offered and reported as a reduction of
revenue.  The Company's current  accounting and  classification of these amounts
are in compliance with the consensus reached in this EITF.

In January  2001,  the EITF issued EITF No.  00-22,  "Accounting  for Points and
Certain Other Time-Based or Volume-Based  Sales Incentive Offers, and Offers for
Free  Products  or Services  to be  Delivered  in The  Future."  EITF No.  00-22
prescribes  guidance  regarding  timing  of  recognition  and  income  statement
classification of costs incurred in connection with offers of "free" products or
services  that  are  exercisable  by an end  consumer  as a  result  of a single
exchange transaction with the retailer which will not be delivered by the vendor
until a future date.  This  guidance  requires  certain  rebate  offers and free
products that are delivered  subsequent to a single  exchange  transaction to be
reported as a reduction of revenue and recognized based on systematic allocation
of the costs to the underlying revenue  transactions that result in the consumer
earning the rebate or refund.  The guidance in this EITF was  effective  for the
Company for the quarter ended March 31, 2001. The Company's  current  accounting
and  classification of these types of costs are in compliance with the consensus
reached in this EITF.

Quantitative and Qualitative Disclosures about Market Risk

As a result of its operating and financing activities, the Company is exposed to
certain market risks including  changes in commodity pricing and fluctuations in
interest rates.  Commodity pricing exposure includes weather phenomena and their
effect on industry  volumes,  prices,  product  quality,  and costs. The Company
manages  its  exposure to  commodity  price risk  primarily  through its regular
operating activities.  The Company has not used derivative financial instruments
and has not  utilized  financial  instruments  for trading or other  speculative
purposes.


<PAGE>



Interest Rate Risk

As a result of its regular borrowing activities, the Company's operating results
are  exposed to  fluctuations  in  interest  rates,  which it manages  primarily
through its regular financing activities.  The Company uses bank lines of credit
with variable  interest rates to finance seasonal  working capital  requirements
($24.5  million was  outstanding  under these lines as of March 31,  2001).  The
Company maintains  investments in cash equivalents ($1.0 million as of March 31,
2001) and does have  investments  in a modest amount of  marketable  securities.
Long-term debt represents secured and unsecured notes and debentures and certain
notes payable to insurance companies used to finance long-term  investments such
as business  acquisitions.  Long-term  debt bears interest at fixed and variable
rates. The following table provides  information  about the Company's  financial
instruments  that are sensitive to changes in interest rates. The table presents
principal cash flows and sinking fund requirements and related  weighted-average
interest  rates by expected  maturity date.  Weighted-average  interest rates on
variable-rate debt are based on current rates as of March 31, 2001:
<TABLE>
                  Interest Rate Sensitivity of Long-Term Debt,
                   Short-Term Debt and Short-Term Investments
                                 March 31, 2001
                                 (In Thousands)
<CAPTION>

                                                 EXPECTED MATURITY DATE
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            Total /        Estimated
                                                                                                           Weighted          Fair
                                2002          2003         2004        2005         2006      Thereafter    Average          Value
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>           <C>          <C>         <C>           <C>         <C>          <C>            <C>

Fixed-rate L/T debt:
   Principal cash flows      $18,331       $21,665      $21,716     $21,773       $9,703        $74,150    $  167,338       $164,473
   Average interest rate        9.17%         9.05%        8.86%       8.59%        8.36  %        7.81%         8.63%             -
Variable-rate L/T debt:
   Principal cash flows      $    --       $    --      $    --     $    --       $   --        $22,630    $   22,630        $22,630
   Average interest rate        6.30%         6.30%        6.30%       6.30%        6.30  %        6.30%         6.30%             -
Variable-rate S/T debt:
   Principal cash flows                                                                                    $   20,832        $20,832
   Average interest rate                                                                                         8.01%             -
Short-Term investments:
   Average Balance                                                                                         $    4,425         $4,425
   Average interest rate                                                                                         6.12%             -
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>


<TABLE>
Consolidated Statements of Net Earnings

Seneca Foods Corporation and Subsidiaries
(In thousands of dollars, except share amounts)

<CAPTION>
Years ended March 31,                                                              2001             2000             1999
- --------------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>              <C>              <C>

Net sales                                                                     $ 674,300        $ 621,078        $ 588,049
- -------------------------------------------------------------------------------------------------------------------------

Costs and expenses:
   Cost of product sold                                                         630,138          575,184          550,890
   Selling, general, and administrative expense                                  23,367           21,605           18,422
   Other expense (income)                                                           971            1,254           (4,834)
   Interest expense, net of interest income of $629, $1,672, and
     $648, respectively                                                          18,662           16,147           21,594
                                                                               ------------------------------------------
                                                                                673,138          614,190          586,072
- -------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations before income taxes
   and extraordinary item                                                         1,162            6,888            1,977
Income taxes                                                                        349            2,568              557
                                                                              -------------------------------------------
Earnings from continuing operations before
   extraordinary item                                                               813            4,320            1,420
Loss from discontinued operations, less applicable
   income tax benefit of $3,138                                                      --               --           (6,791)
Gain on the sale of discontinued operations, less applicable
   income taxes of $5,431                                                            --               --           11,756
Extraordinary loss on early extinguishment of debt,
   less applicable income tax benefit of $564                                        --               --           (1,222)
                                                                              -------------------------------------------
     Net earnings                                                             $     813        $   4,320        $   5,163
=========================================================================================================================

Earnings from continuing operations per common share                          $     .12        $     .66        $     .23
Loss from discontinued operations per common share                                   --               --            (1.11)
Gain on the sale of discontinued operations per common share                         --               --             1.93
Extraordinary loss on early extinguishment of debt per common share                  --               --             (.20)
                                                                              -------------------------------------------
   Basic net earnings per common share                                        $     .12        $     .66        $     .85
=========================================================================================================================


Earnings from continuing operations per common share                          $     .08        $     .42        $     .17
Loss from discontinued operations per common share                                   --               --             (.80)
Gain on the sale of discontinued operations per common share                         --               --             1.39
Extraordinary loss on early extinguishment of debt per common share                  --               --             (.15)
                                                                              -------------------------------------------
   Diluted earnings per common share                                          $     .08        $     .42        $     .61
==========================================================================================================================

<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>


<PAGE>

<TABLE>

Consolidated Balance Sheets

Seneca Foods Corporation and Subsidiaries
(In thousands)
<CAPTION>

March 31,                                                                                                   2001                2000
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                    <C>                <C>

Assets:
Current Assets:
   Cash and short-term investments                                                                     $   5,391           $  11,348
   Accounts receivable, less allowance for doubtful accounts
     of $632 and $469, respectively                                                                       31,510              31,702
   Inventories:
     Finished products                                                                                   178,415             156,349
     In process                                                                                           13,297               4,610
     Raw materials and supplies                                                                           37,458              42,214
   Deferred income tax asset                                                                               5,602               4,812
   Prepaid expenses                                                                                        1,308                 528
                                                                                                       -----------------------------
       Total Current Assets                                                                              272,981             251,563
- ------------------------------------------------------------------------------------------------------------------------------------
Other Assets                                                                                               3,802               7,831
- ------------------------------------------------------------------------------------------------------------------------------------
Property, Plant, and Equipment:
   Land                                                                                                    7,618               5,700
   Building                                                                                               94,822              94,525
   Equipment                                                                                             256,703             264,454
                                                                                                       -----------------------------
                                                                                                         359,143             364,679
Less accumulated depreciation and amortization                                                           191,693             185,533
                                                                                                       -----------------------------
       Net Property, Plant, and Equipment                                                                167,450             179,146
- ------------------------------------------------------------------------------------------------------------------------------------
         Total Assets                                                                                  $ 444,233            $438,540
====================================================================================================================================

Liabilities and Stockholders' Equity
Current Liabilities:
   Notes payable                                                                                       $  24,500           $       -
   Accounts payable                                                                                       39,726              48,699
   Accrued expenses                                                                                       26,423              25,033
   Current portion of long-term debt and capital lease obligations                                        18,622               8,214
   Income taxes                                                                                              343                 645
- ------------------------------------------------------------------------------------------------------------------------------------

     Total Current Liabilities                                                                           109,614              82,591
Long-Term Debt                                                                                           164,251             182,468
Capital Lease Obligations                                                                                  7,095               7,500
Deferred Gain and Other Liabilities                                                                        6,382               8,599
Deferred Income Taxes                                                                                      7,132               8,383
                                                                                                       -----------------------------
       Total Liabilities                                                                                 294,474             289,541
- ------------------------------------------------------------------------------------------------------------------------------------
Commitments (Note 5)                                                                                           -                  -
Stockholders' Equity:
   Preferred stock                                                                                        42,741              42,940
   Common stock                                                                                            2,825               2,822
                                                                                                       -----------------------------
     Total Capital Stock                                                                                  45,566              45,762
   Additional paid-in capital                                                                             13,555              13,359
   Accumulated other comprehensive income                                                                    961                 991
   Retained earnings                                                                                      89,677              88,887
                                                                                                       -----------------------------
       Total Stockholders' Equity                                                                        149,759             148,999
- ------------------------------------------------------------------------------------------------------------------------------------
         Total Liabilities and Stockholders' Equity                                                    $ 444,233           $ 438,540
====================================================================================================================================
<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Consolidated Statements of Cash Flows

Seneca Foods Corporation and Subsidiaries
(In thousands)
<CAPTION>
Years ended March 31,                                                                    2001             2000              1999
- -------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>              <C>               <C>

Cash flows from operating activities:
   Net earnings                                                                     $     813        $   4,320         $   5,163
   Adjustments to reconcile net earnings to
     net cash provided by (used in) operations:
       Depreciation and amortization                                                   23,733           23,554            27,641
       Deferred income taxes                                                           (2,071)             (87)              (49)
       Gain on the sale of assets                                                      (1,370)            (965)         (24,057)
       Impairment provision and other expenses                                          2,341            2,219             3,354
       Changes in operating assets and liabilities:
         Accounts receivable                                                              192            4,015            12,930
         Inventories                                                                  (25,997)          (6,961)            7,243
         Prepaid expenses                                                                (780)             383               720
         Accounts payable, accrued expenses, and other liabilities                    (11,243)          22,770            (7,817)
         Income taxes                                                                    (302)             336             1,885
                                                                                    --------------------------------------------
       Net cash provided by (used in) operations                                      (14,684)          49,584            27,013
- --------------------------------------------------------------------------------------------------------------------------------


Cash flows from investing activities:
   Additions to property, plant, and equipment                                        (15,395)         (19,875)           (9,494)
   Escrow fund                                                                          4,011           (5,326)                -
   Proceeds from the sale of assets                                                     2,683            1,790            65,270
   Disposals of property, plant, and equipment                                          1,147              159               400
   Acquisitions                                                                             -          (43,481)                -
                                                                                    --------------------------------------------
       Net cash provided by (used in) investing activities                             (7,554)         (66,733)           56,176
- --------------------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
   Net (payments) borrowings on notes payable                                          24,500                -           (62,270)
   Payments of long-term debt and capital lease obligations                            (8,214)          (8,511)          (43,401)
   Dividends paid                                                                         (23)             (23)              (23)
   Other assets                                                                            18               28              (281)
   Proceeds from issuance of long-term debt                                                 -            6,000                 -
   Equity issue                                                                             -                -            49,712
                                                                                    --------------------------------------------
       Net cash provided by (used in) financing activities                             16,281           (2,506)          (56,263)
- --------------------------------------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and short-term investments                             (5,957)         (19,655)           26,926
Cash and short-term investments, beginning of year                                     11,348           31,003             4,077
                                                                                   ---------------------------------------------
Cash and short-term investments, end of year                                        $   5,391        $  11,348         $  31,003
================================================================================================================================

Supplemental disclosures of cash flow information: Cash paid during the year
   for:
     Interest                                                                       $  17,235        $  16,264         $  24,259
     Income taxes                                                                       1,994            2,171               451
<FN>
Supplemental information of noncash investing and financing activities:
In 2000, a $4,978 unsecured subordinated note was issued in conjunction with the
acquisition of assets.
===============================================================================================================================
See notes to consolidated financial statements.
</FN>
</TABLE>

<PAGE>

<TABLE>
Consolidated Statements of Stockholders' Equity

Seneca Foods Corporation and Subsidiaries
(In thousands, except share amounts)
<CAPTION>
                                        Preferred Stock
                        -------------------------------------------------
                                    6%             10%     Participating
                        Cumulative Par  Cumulative Par   Convertible Par                                                Accumulated
                            Value $.25     Value $.025       Value $.025         Class A          Class B  Additional         Other
                       Callable at Par     Convertible      Stated Value    Common Stock    Common Stock      Paid-In Comprehensive
                                Voting          Voting            $11.93  Par Value $.25  Par Value $.25      Capital        Income
- ------------------------------------------------------------------------------------------------------------------------------------

Shares authorized              200,000       1,400,000        4,166,667       20,000,000       10,000,000
=========================================================================================================
Shares issued and outstanding:

    March 31, 1999             200,000         807,240        3,885,869        3,480,719        2,791,017
=========================================================================================================

    March 31, 2000             200,000         807,240        3,593,140        3,797,388        2,767,357
=========================================================================================================

    March 31, 2001             200,000         807,240        3,576,433        3,814,095        2,767,357
=========================================================================================================

- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------

Balance March 31, 1998             $50             $20               $--          $  786        $   1,880      $ 5,913     $ 1,026

   Net earnings                     --              --                --              --              --            --          --
   Cash dividends paid
     on preferred stock             --              --                --              --              --            --          --
   Equity issue                     --              --            49,712              --              --            --          --
   Preferred stock conversion       --              --            (3,349)             71              --         3,278          --
   Common stock conversion          --              --                --              --              (2)            2          --
   Stock issuance                   --              --                --              13              --           747          --
   Net unrealized loss on
     investments                    --              --                --              --              --            --        (149)
- ------------------------------------------------------------------------------------------------------------------------------------

Balance March 31, 1999              50              20            46,363             870            1,878        9,940         877


   Net earnings                     --              --                --              --              --            --          --
   Cash dividends paid
     on preferred stock             --              --                --              --              --            --          --
   Preferred Stock Conversion       --              --            (3,493)             80              --         3,413          --
   Common Stock Conversion          --              --                --              --              (6)            6          --
   Net unrealized gain on
     investments                    --              --                --              --              --            --         114
- ------------------------------------------------------------------------------------------------------------------------------------

Balance March 31, 2000              50             20             42,870             950            1,872       13,359         991


   Net earnings                     --             --                 --              --              --           --           --
   Cash dividends paid
     on preferred stock             --             --                 --              --              --           --           --
   Preferred Stock Conversion       --             --               (199)              3              --          196           --
   Common Stock Conversion          --             --                 --              --              --           --           --
   Net unrealized loss on
     investments                    --             --                 --              --              --           --          (30)
- ------------------------------------------------------------------------------------------------------------------------------------

Balance March 31, 2001             $50             $20        $  42,671             $953          $ 1,872     $13,555      $   961
====================================================================================================================================






                               Retained     Comprehensive
                               Earnings     Income (Loss)
- ---------------------------------------------------------
<S>                            <C>          <C>








- -----------------------------------------------------------

Balance March 31, 1998           $79,450                  -

   Net earnings                    5,163           $  5,163
   Cash dividends paid
     on preferred stock              (23)                --
   Equity issue                       --                 --
   Preferred stock conversion         --                 --
   Common stock conversion            --                 --
   Stock issuance                     --                 --
   Net unrealized loss on
     investments                      --               (149)
- -----------------------------------------------------------

Balance March 31, 1999            84,590           $  5,014
                                                ===========

   Net earnings                    4,320           $  4,320
   Cash dividends paid
     on preferred stock              (23)                --
   Preferred Stock Conversion         --                 --
   Common Stock Conversion            --                 --
   Net unrealized gain on
     investments                      --                114
- -----------------------------------------------------------

Balance March 31, 2000            88,887           $  4,434
                                               ============

   Net earnings                      813           $    813
   Cash dividends paid
     on preferred stock              (23)                --
   Preferred Stock Conversion         --                 --
   Common Stock Conversion            --                 --
   Net unrealized loss on
     investments                      --                (30)
- -----------------------------------------------------------

Balance March 31, 2001         $  89,677            $   783
===========================================================

<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>


<PAGE>


Notes to Consolidated Financial Statements

Seneca Foods Corporation and Subsidiaries

1.  Summary of Significant Accounting Policies

Nature of Operations - The Company conducts its business almost entirely in food
processing,  operating  22 plants and  warehouses  in five  states.  The Company
markets branded and private label processed foods to retailers and institutional
food distributors.

Principles of Consolidation - The consolidated  financial statements include the
accounts for the parent Company and all of its wholly-owned  subsidiaries  after
elimination of intercompany transactions, profits, and balances.

Revenue  Recognition  - Sales and related  cost of product  sold are  recognized
primarily upon shipment of products. When customers, under the terms of specific
orders,  request  that the Company  invoice  goods and hold the goods for future
shipment,  the Company recognizes revenue when legal title to the finished goods
inventory passes to the purchaser. Generally, the Company receives cash from the
purchaser when legal title passes.

Concentration of Credit Risk - Financial  instruments  that potentially  subject
the Company to credit risk  consist of trade  receivables  and  interest-bearing
investments.  Wholesale  and retail  food  distributors  comprise a  significant
portion  of  the  trade  receivables;  collateral  is  not  required.  The  risk
associated  with  the  concentration  is  limited  due to the  large  number  of
wholesalers and retailers and their  geographic  dispersion.  The Company places
substantially all its interest-bearing  investments with financial  institutions
and  monitors  credit  exposure.  Cash and  short-term  investments  in  certain
accounts  exceed  the  federal  insured  limit,  however,  the  Company  has not
experienced any losses in such accounts.

Cash and  Short-Term  Investments  - The  Company  considers  all highly  liquid
instruments  purchased  with a maturity  of three  months or less as  short-term
investments.

Inventories  -  Inventories  are  stated at lower of cost;  first-in,  first-out
(FIFO); or market.

Income Taxes - The provision for income taxes  includes  federal,  foreign,  and
state income taxes  currently  payable and those  deferred  because of temporary
differences  between  the  financial  statement  and tax  bases  of  assets  and
liabilities.


<PAGE>


Notes to Consolidated Financial Statements (continued)

Earnings per Common Share

A  reconciliation  of basic earnings per share from  continuing  operations with
diluted earnings per share from continuing operations follows:

Years ended March 31,                        2001          2000          1999
- -----------------------------------------------------------------------------

                                        (In thousands, except per share amounts)
Basic

Earnings from continuing operations   $       813   $     4,320   $     1,420
Deduct preferred stock dividends paid          23            23            23
                                      ---------------------------------------

Basic earnings                        $       790   $     4,297   $     1,397
=============================================================================


Weighted average common shares outstanding  6,577         6,498         6,082
=============================================================================


Basic earnings per share              $       .12   $       .66   $       .23
=============================================================================

Diluted

Basic earnings                        $       790   $     4,297   $     1,397
Add dividends on convertible
  preferred stock                              20            20            20
                                      ---------------------------------------

Earnings applicable to common stock on a
   diluted basis                      $       810   $     4,317   $     1,417
=============================================================================

Shares used in calculating earnings per
   share above                              6,577         6,498         6,082
Additional shares to be issued under full
   conversion of preferred stock            3,648         3,727         2,396
                                      ---------------------------------------

Total shares for diluted                   10,225        10,225         8,478
=============================================================================

Diluted earnings per share            $       .08   $       .42   $       .17
=============================================================================


Depreciation - Property, plant, and equipment are stated at cost or, in the case
of capital  leases,  the present value of future lease  payments.  For financial
reporting,  the Company provides for depreciation and capital lease amortization
on the  straight-line  method at rates based upon the estimated  useful lives of
the various assets.  Impairment losses are recognized when the carrying value of
an asset  exceeds its fair  value.  The Company  regularly  assesses  all of its
long-lived  assets for  impairment.  An impairment loss of $898,000 and $518,000
was recognized in 2001 and 2000, respectively,  and was included in Other Income
and Expenses  (see Other Income and Expenses,  note 11). An  impairment  loss of
approximately  $3,354,000 was recognized in 1999 of which $2,036,000 is included
in Other  Income and  Expenses  (see Other  Income  and  Expenses,  note 11) and
$1,318,000 is included in discontinued operations.

Use of Estimates in the Preparation of Financial Statements - The preparation of
financial statements in conformity with accounting principles generally accepted
in the United  States of  America  requires  management  to make  estimates  and
assumptions  that affect the reported  amount of assets and  liabilities and the
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements,  as well as the related  revenues and expenses  during the reporting
period. Actual amounts could differ from those estimated.


Recently Issued Accounting Standards - Since June 1998, the Financial Accounting
Standards  Board  (FASB)  has  issued  SFAS Nos.  133,  137 and 138  related  to
"Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133, as
amended or  Statements).  These  Statements  establish  accounting and reporting
standards requiring that every derivative  instrument be recorded on the balance
sheet as either an asset or liability measured at its fair value. The Statements
require that changes in the derivative's  fair value be recognized  currently in
earnings  unless specific hedge  accounting  criteria are met, in which case the
gains or losses would offset the related results of the hedged item.



<PAGE>


Notes to Consolidated Financial Statements (continued)

The Company currently does not have any freestanding derivative instruments. The
Company  is in  the  process  of  performing  a  review  to  identify  potential
derivatives  embedded  in  other  contracts.   The  Company  is  adopting  these
Statements  as of April 1, 2001 and is not  expecting  a material  impact on its
consolidated financial statements.

In May 2000, the Emerging Issues Task Force (EITF),  a subcommittee of the FASB,
issued EITF No. 00-10  "Accounting  for  Shipping and Handling  Fees and Costs."
EITF No. 00-10  addresses the income  statement  classification  of shipping and
handling  fees and costs.  The  Company's  net sales and cost of sales have been
reclassified  to reflect these  expenses in cost of sales,  consistent  with the
classification  of other shipping and handling related costs. The impact of this
change increased net sales by $17.4 million, $16.1 million and $11.9 million for
the years ended March 31, 2001, 2000, and 1999, respectively.  Additionally, the
impact of this change  increased cost of sales by $17.9 million,  $17.3 million,
and  $12.2  million  for the  years  ended  March  31,  2001,  2000,  and  1999,
respectively,  and decreased selling,  general,  and administrative  expenses by
$0.5 million,  $1.2 million and $0.3 million for the years ended March 31, 2001,
2000,  and  1999,  respectively.  There is no impact on  results  of  operations
resulting from this change.

In  2000,  the  EITF  issued  EITF  No.  00-14  "Accounting  for  Certain  Sales
Incentives."  The EITF  subsequently  amended the transition  provisions of this
EITF in  November  2000 to require  application  no later than  fiscal  quarters
beginning after March 15, 2001.  EITF No. 00-14  prescribes  guidance  regarding
timing of recognition and income statement classifications of costs incurred for
certain sales incentive programs. This guidance requires certain coupons, rebate
offers and free products offered concurrently with a single exchange transaction
to be  recognized  at the later of the date at which the  revenue is recorded or
the date at which the sales  incentive is offered and reported as a reduction of
revenue.  The Company's current  accounting and  classification of these amounts
are in compliance with the consensus reached in this EITF.

In January  2001,  the EITF issued EITF No.  00-22,  "Accounting  for Points and
Certain Other Time-Based or Volume-Based  Sales Incentive Offers, and Offers for
Free  Products  or Services  to be  Delivered  in The  Future."  EITF No.  00-22
prescribes  guidance  regarding  timing  of  recognition  and  income  statement
classification of costs incurred in connection with offers of "free" products or
services  that  are  exercisable  by an end  consumer  as a  result  of a single
exchange transaction with the retailer which will not be delivered by the vendor
until a future date.  This  guidance  requires  certain  rebate  offers and free
products that are delivered  subsequent to a single  exchange  transaction to be
reported as a reduction of revenue and recognized based on systematic allocation
of the costs to the underlying revenue  transactions that result in the consumer
earning the rebate or refund.  The guidance in this EITF was  effective  for the
Company for the quarter ended March 31, 2001. The Company's  current  accounting
and  classification of these types of costs are in compliance with the consensus
reached in this EITF.

Reclassifications  - Certain previously  reported amounts have been reclassified
to conform to the current period classification.


<PAGE>


Notes to Consolidated Financial Statements (continued)

2.  Common Stock of Moog Inc.

Other assets  include the  Company's  investment  in the Class B Common Stock of
Moog Inc. totaling $2,264,000 as of March 31, 2001 and 2000, which is classified
as an  available-for-sale  security and is carried at fair value.  There were no
realized gains or losses in 2001, 2000, and 1999, and gross  unrealized  holding
gains were $1,548,000,  $1,548,000,  and $1,379,000, as of March 31, 2001, 2000,
and 1999, respectively.


<PAGE>


Notes to Consolidated Financial Statements (continued)

3.  Lines of Credit

The Company obtains required  short-term  funds through bank  borrowings.  As of
March 31, 2001, the Company had $3,235,988  outstanding for letters of credit, a
committed revolving line of credit totaling  $20,000,000,  and uncommitted lines
of credit  totaling  $81,000,000.  The lines are  renewable  annually at various
dates  and  provide  for  loans  of  varying  maturities.  There  are no  formal
compensating balance arrangements with any of the banks.

As of March 31, 2001 and 2000,  the amounts  borrowed  under the lines of credit
were $24,500,000 and none,  respectively.  The weighted average interest rate on
the amounts borrowed during fiscal 2001 was 8.01%. The Company had no short-term
bank borrowings throughout fiscal 2000.


<PAGE>


Notes to Consolidated Financial Statements (continued)

4.  Long-Term Debt
<TABLE>
<CAPTION>
                                                                                                               2001           2000
- ----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   (In thousands)
<S>                                                                                                     <C>              <C>
Note payable to insurance company, 10.78%, due through 2005                                             $    44,700      $  44,700
Secured nonrecourse subordinated promissory note, 8.00%, due through 2009                                    61,083         64,583
Unsecured subordinated promissory note, 8.00%, due through 2009                                               4,978          4,978
Note payable to insurance company, 10.81%, due through 2009                                                  42,500         46,250
Industrial Revenue Development Bonds, 6.30% and 5.62%, due through 2028                                      22,630         22,630
Industrial Revenue Development Bond, 5.69%, due through 2009                                                  5,342          5,812
Other                                                                                                         1,235          1,339
                                                                                                        --------------------------

                                                                                                            182,468        190,292
Less current portion                                                                                         18,217          7,824
                                                                                                        --------------------------

                                                                                                        $   164,251      $ 182,468
                                                                                                        ==========================
</TABLE>

Long-term debt agreements contain various restrictive  financial covenants,  the
most  restrictive of which requires the Company to maintain  specific  quarterly
levels of interest coverage.  In addition,  these agreements include a provision
that the Company may pay dividends on any class of stock only from  consolidated
net earnings  available for distribution.  There were no earnings  available for
distribution as of March 31, 2001.

The Company has four Industrial  Revenue Bonds ("IRB's")  totaling  $22,630,000,
which are secured by direct pay  letters of credit.  The  interest  rates in the
table above reflect the direct pay letters of credit costs and  amortization  of
other related costs for those IRB's.

Debt repayment requirements for the next five fiscal years are:

                                         (In thousands)
                                   2002              $18,217
                                   2003               21,240
                                   2004               21,276
                                   2005               21,313
                                   2006                9,228

During 1999,  the Company paid off  $15,000,000 of its  outstanding  9.17% notes
payable due 2004 and prepaid two annual  principal  installments  of $8,400,000,
each due February 23 in 2000 and 2001,  of its  outstanding  10.78% note payable
due 2005. The prepayment  penalty paid for the early  extinguishment of the debt
totaled $1,786,000,  before the applicable income tax benefit of $564,000, which
has been accounted for as a net extraordinary loss of $1,222,000.


<PAGE>


Notes to Consolidated Financial Statements (continued)

5.  Leases

The Company leases a portion of its equipment and buildings.  Capitalized leases
consist  primarily  of limited  obligation  special  revenue  bonds,  which bear
interest  rates  from  3.55%  to  4.75%.  Other  leases  include  non-cancelable
operating leases expiring at various dates through 2013.

Leased assets under capital leases consist of the following:

                                                        2001              2000
- ------------------------------------------------------------------------------
                                                           (In thousands)

Land                                                 $    67           $    67
Buildings                                              1,033             1,033
Equipment                                              9,711             9,711
                                                     -------------------------
                                                      10,811            10,811
  Less accumulated amortization                        6,325             5,381
                                                     -------------------------
                                                     $ 4,486           $ 5,430
==============================================================================

The following is a schedule by year of minimum payments due under leases as of
March 31, 2001:

                                                   Operating         Capital
- ----------------------------------------------------------------------------
                                                         (In thousands)
Years ending March 31:
  2002                                              $ 5,631        $    717
  2003                                                4,714             721
  2004                                                3,966             718
  2005                                                3,300             720
  2006                                                2,919             716
  2007-2016                                           7,210           6,460
                                              -----------------------------

  Total minimum payment required                    $27,740        $ 10,052
===========================================================

Less interest                                                         2,552
                                                             --------------
  Present value of minimum lease payments                             7,500
Amount due within one year                                              405
                                                             --------------
  Long-term capital lease obligations                               $ 7,095
===========================================================================

Aggregate continuing rental expense in 2001, 2000, and 1999 was $11,762,000,
$10,612,000, and $9,863,000, respectively.


<PAGE>


Notes to Consolidated Financial Statements (continued)

6.  Income Taxes

The Company files a consolidated income tax return. The provision for income
taxes for continuing operations is as follows:

                                          2001           2000          1999
                                    ---------------------------------------
                                                   (In thousands)
       Current:
         Federal                     $  1,286       $  2,233        $   405
         State                            151            413            100
                                     --------------------------------------
                                        1,437          2,646            505
                                     --------------------------------------
       Deferred:
         Federal                         (973)           (59)            69
         State                           (115)           (19)           (17)
                                     --------------------------------------
                                       (1,088)           (78)            52
                                     --------------------------------------
        Total income taxes           $    349       $  2,568        $   557
                                     ======================================



As of March 31,  2001,  the Company has  Alternative  Minimum Tax Credits in the
amount of  $5,036,000 to offset  future  years'  regular tax expense.  State net
operating loss  carryforwards  of approximately  $9,500,000,  expiring March 31,
2002 through March 31, 2118, are available to offset future state tax expense.

During  fiscal year 2001,  the Internal  Revenue  Service  completed an audit of
fiscal years 1997, 1998 and 1999. Audit adjustments related primarily to changes
in the  timing of  deductions  for income tax  purposes.  There was no  negative
effect on the Company's income statement for the year.

A reconciliation  of the expected U.S.  statutory rate to the effective rate for
continuing operations follows:

                                         2001             2000            1999
 -----------------------------------------------------------------------------

 Computed (expected tax rate)            34.0%            34.0%           34.0%
 Tax-exempt income                       (8.8)            (0.9)          (11.3)
 State income taxes (net of
   federal tax benefit)                   5.7              3.7             8.5
 Other                                   (0.9)             0.5            (3.0)
                                         -------------------------------------

   Effective tax rate                    30.0%            37.3%           28.2%
 =============================================================================



<PAGE>


Notes to Consolidated Financial Statements (continued)

The  following  is a summary  of the  significant  components  of the  Company's
deferred tax assets and liabilities as of March 31, 2001 and 2000:

                                                 2001               2000
 -----------------------------------------------------------------------
                                                      (In thousands)
 Deferred tax liabilities:
   Basis and depreciation difference         $  15,231          $  18,455
   Inventory valuation                               -                724
   Moog investment                                 588                557
                                             ----------------------------
                                                15,819             19,736
                                             ----------------------------


 Deferred tax assets:
   Inventory valuation                           2,202                948
   Future tax credits                            5,036              5,671
   Net operating loss carryforwards                753              1,033
   Employee benefits                             1,816              1,827
   Pension                                       1,763              1,934
   Insurance                                     1,261              1,818
   Deferred gain on sale/leaseback               1,136              1,218
   Impairment                                       82              1,534
   Other                                           240                182
                                               --------------------------
                                                14,289             16,165
                                               --------------------------
      Net deferred tax liability              $  1,530          $   3,571
 =========================================================================


Net current  deferred tax assets of  $5,602,000  and  $4,812,000 as of March 31,
2001 and 2000, respectively,  are recognized in the Consolidated Balance Sheets.
Also recognized are net  non-current  deferred tax liabilities of $7,132,000 and
$8,383,000 as of March 31, 2001 and 2000, respectively.


<PAGE>


Notes to Consolidated Financial Statements (continued)

7.  Stockholders' Equity

Preferred Stock - During  September  1998, the Company  completed an equity sale
that raised  $49,998,000  before  issuance  costs of $286,000.  This equity sale
consisted of a Rights Offering to the Company's common  shareholders and a Stock
Purchase Agreement with certain investors.  A new class of preferred stock ("New
Preferred Stock") was issued, which is convertible, participating, and has a $12
stated  value,  which is now $11.93  due to issue  costs.  The  Rights  Offering
consisted of a distribution  payable to holders of the Company's  Class A Common
Stock at a rate of 1/2 right for each share held to purchase  the New  Preferred
Stock at $12 per  share.  The  shares of New  Preferred  Stock  are  convertible
immediately  on a  share-for-share  basis into  shares of Class A Common  Stock.
Holders of the Company's common stock acquired 1,146,639 shares of new preferred
stock for a total investment of $13,759,000.  Certain investors acquired a total
of 3,019,895 shares of New Preferred Stock for a total investment of $36,239,000
under  the  Stock  Purchase  Agreement.  There  were no  dividends  on this  New
Preferred Stock.

The outstanding 10% cumulative,  convertible, voting preferred stock consists of
407,240 Series A shares,  convertible at the rate of one common share of Class A
and Class B for every  twenty  preferred  shares,  and 400,000  Series B shares,
which carry a one for thirty  conversion  rate. The Series A and B shares have a
$.025 stated value and a $.025 par value.  There are 2,633,333 shares authorized
of Class A $.025 par  value  stock,  which are  unissued  and  undesignated.  In
addition  there are 30,000  shares of no par stock,  which are also unissued and
undesignated.

Common Stock - In September  1998, an amendment to the Company's  Certificate of
Incorporation,  which created the new class of preferred stock described  above,
increased  the  number  of  authorized  shares  of  Class A  Common  Stock  from
10,000,000 to 20,000,000 shares. The Class A Common Stock and the Class B Common
Stock have  substantially  identical  rights with  respect to any  dividends  or
distributions  of cash or property  declared on shares of common  stock and rank
equally as to the right to receive proceeds on liquidation or dissolution of the
Company after payment of the Company's indebtedness and liquidation right to the
holders of preferred shares.  However,  holders of Class B Common Stock retain a
full vote per share  whereas  the  holders of Class A Common  Stock have  voting
rights of 1/20th of one vote per share on all  matters as to which  shareholders
of the Company are entitled to vote.

Unissued  shares of common stock reserved for conversion  privileges were 33,695
of Class A and Class B as of March 31, 2001 and 2000.  Additionally,  there were
3,576,433  and  3,593,140  shares of Class A reserved for  conversion of the New
Preferred Stock as of March 31, 2001 and 2000, respectively.


<PAGE>


Notes to Consolidated Financial Statements (continued)

8.  Retirement Plans

The Company has a  noncontributory  defined  benefit  pension plan  covering all
employees  who meet  certain age entry  requirements  and work a stated  minimum
number of hours per year.  Annual  contributions are made to the Plan sufficient
to satisfy legal funding requirements.

The  following  tables  provide a  reconciliation  of the  changes in the plan's
benefit  obligation and fair value of plan assets over the two-year period ended
March  31,  2001 and a  statement  of the  funded  status as of March 31 of both
years:

                                                  2001                2000
                                            ------------------------------
Change in Benefit Obligation                          (In thousands)

Benefit obligation at beginning of year       $ 26,655            $ 26,787
Service cost                                     2,017               1,781
Interest cost                                    2,080               1,843
Actuarial gain (loss)                            2,045              (2,631)
Benefit payments and expenses                   (1,647)             (1,125)
- --------------------------------------------------------------------------
Benefit obligation at end of year             $ 31,150           $  26,655
==========================================================================


Change in Plan Assets

Fair value of plan assets at
  beginning of year                            $ 23,373            $ 21,800
Actual return on plan assets                      3,832               2,698
Employer contributions                            3,595                   -
Benefit payments and expenses                    (1,647)             (1,125)
- ---------------------------------------------------------------------------
Fair value of plan assets at end of year       $ 29,153           $  23,373
===========================================================================


Funded Status

Funded status at end of year                   $ (1,997)           $ (3,281)
Unrecognized transition asset                    (2,990)             (3,266)
Unrecognized prior service cost                     125                 219
Unrecognized gain                                  (255)               (757)
- ---------------------------------------------------------------------------

Accrued benefit cost                           $ (5,117)          $  (7,085)
===========================================================================


The Plan holds the Company's common stock with a fair market value of
$2,033,000.



<PAGE>


Notes to Consolidated Financial Statements (continued)

8.       Retirement Plan (continued)

The following table provides the components of net periodic benefit cost for the
plan for fiscal years 2001, 2000, and 1999:
<TABLE>
<CAPTION>
                                                           2001                2000                1999
- -------------------------------------------------------------------------------------------------------
                                                                        (In thousands)
<S>                                                    <C>                <C>                  <C>

Service cost                                           $  2,017            $  1,781            $  2,030
Interest cost                                             2,080               1,843               1,701
Expected return on plan assets                           (2,288)             (2,013)             (2,499)
Amortization of transition (assets) obligation             (276)               (276)               (276)
Amortization of prior service cost                           94                  94                  94
Amortization of net gain                                      -                   -                (149)
- -------------------------------------------------------------------------------------------------------

Net periodic benefit cost                              $  1,627            $  1,429            $    901
=======================================================================================================
</TABLE>


The prior service costs are amortized on a straight-line  basis over the average
remaining service period of active  participants.  Gains and losses in excess of
10% of the greater of the benefit  obligation  and the  market-related  value of
assets  are  amortized  over the  average  remaining  service  period  of active
participants.

The assumptions  used to measure the Company's  benefit  obligation are shown in
the following table:

                                                      2001                2000
- ------------------------------------------------------------------------------


   Discount rate                                       7.50%              7.80%
   Expected return on plan assets                      9.50%              9.50%
   Rate of compensation increase                       5.00%              5.00%

The Company has an Employees'  Savings Plan (401(k))  covering all employees who
meet certain age entry  requirements  and work a stated  minimum number of hours
per  year.  Participants  may make  contributions  up to the  legal  limit.  The
Company's matching contributions are discretionary.  Costs charged to operations
for the Company's matching  contributions  amounted to $875,000,  $761,000,  and
$808,000 in 2001, 2000, and 1999, respectively.

9.  Fair Value of Financial Instruments

The carrying  amounts and the estimated  fair values of the Company's  financial
instruments are summarized as follows:
<TABLE>
<CAPTION>
                                                                                             2001                     2000
                                                                                     -----------------------------------------------
                                                                                     Carrying    Estimated     Carrying    Estimated
                                                                                       Amount   Fair Value       Amount   Fair Value
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       (In thousands)
<S>                                                                                  <C>          <C>         <C>           <C>

Long-term debt, including current portion                                            $182,468     $179,603     $190,292     $187,140
Notes payable                                                                          24,500       24,500            -            -
Class B Common Stock of Moog Inc.                                                       2,264        2,264        2,264        2,264

The estimated fair values were determined as follows:

     Long-term debt - The quoted market prices for similar debt or current rates
     offered to the Company for debt with the same maturities.

     Notes payable - The carrying amount approximates fair value due to the
     short-term maturity of the notes.

     Class B Common Stock of Moog Inc. - Based on quoted market prices.

</TABLE>

<PAGE>


Notes to Consolidated Financial Statements (continued)

10. Acquisition

In 2000, the Company acquired certain assets of the Midwest private label canned
vegetable  business  from Agrilink  Foods,  Inc., a  wholly-owned  subsidiary of
Pro-Fac  Cooperative,  for  approximately  $48 million.  The Company purchased a
plant  and  related  equipment  for  $5  million  in  Arlington,  Minnesota  and
inventories of the acquired  business for $43 million.  The annual sales of this
business are approximately $73 million.  The purchase price was partially funded
by a subordinated note for $5 million while the balance was paid in cash.

The fiscal 2000 and 1999 results of operations on a proforma basis, assuming the
Agrilink acquisition occurred at the beginning of the periods, are as follows:


                                              2000                      1999
- ----------------------------------------------------------------------------
                                                         (Unaudited)
                                       (In thousands, except per share amounts)

 Net sales                               $ 664,698                 $ 665,347
 ===========================================================================
 Net earnings from continuing operations
   before extraordinary item             $   4,118                 $   1,107
 ===========================================================================
 Basic net earnings from continuing
   operations before extraordinary
   item per share                        $     .63                 $     .18
 ===========================================================================


This acquisition was accounted for under the purchase  method,  and accordingly,
the  operating  results  of the  acquired  business  have been  included  in the
consolidated operating results since the acquisition date.


<PAGE>


Notes to Consolidated Financial Statements (continued)

11.  Other Income and Expense

Other expense in 2001 consisted of the  following:  1) a gain on the sale of the
Othello,  Washington  facility of $1,151,000;  2) a loss of $1,443,000  which is
related  primarily  to  exiting a line of  business;  3) an  impairment  loss of
$898,000;  and 4) a gain  on the  sale  of the  Buckley,  Michigan  facility  of
$219,000.

Other expense in 2000 consisted of the following:  1) a loss of $2,219,000 which
is related primarily to exiting a line of business; and 2) a gain on the sale of
the Chicopee, Massachusetts warehouse of $965,000.

Other income in 1999 consisted of the  following:  1) a gain on the sale of land
in Rochester,  Minnesota of $6,220,000;  2) a gain on the sale of an aircraft of
$650,000; and 3) an impairment loss of $2,036,000.

12.  Sales Information

The Company sold $241,492,000,  $209,872,000 and $246,760,000, representing 36%,
34% and 42% of net sales, to one customer in 2001, 2000 and 1999, respectively.

13.      Segment Information

The Company  manages its business on the basis of one  reportable  segment - the
processing  and sale of  vegetables.  The Company  markets  its  product  almost
entirely  in the United  States.  The Company  has an  Alliance  Agreement  with
Pillsbury  whereby  the  Company  processes  canned  and frozen  vegetables  for
Pillsbury  under  the  Green  Giant  brand  name.   Pillsbury  continues  to  be
responsible for all of the sales, marketing,  and customer service functions for
the Green  Giant  products.  In 2001,  2000,  and 1999,  the sale of Green Giant
vegetables account for 43%, 42%, and 49% of net sales. The following information
is presented in accordance with SFAS No. 131,  "Disclosure  about Segments of an
Enterprise and Related Information,":

Classes of similar products/services:    2001           2000            1999
- ----------------------------------------------------------------------------

                                                   (In thousands)
Net Sales:
   Green Giant vegetables           $ 290,346       $ 263,279       $ 289,946
   Canned vegetables                  326,224         291,436         250,266
   Frozen vegetables                   22,052          27,889          20,446
   Fruit and chip products             20,092          21,075          18,117
   Flight operations                    5,905           5,105           4,225
   Other                                9,681          12,294           5,049
- -----------------------------------------------------------------------------
                                    $ 674,300       $ 621,078       $ 588,049
=============================================================================


14. Discontinued Operations

In December 1998,  the Company sold a significant  portion of its Juice Division
to Northland Cranberries, Inc., together with an exclusive license to market and
sell Seneca juice  products,  for  $28,200,000  in cash plus the  assumption  of
certain liabilities. This transaction resulted in a pre-tax gain on the disposal
of $6,760,000,  which was recognized  during the Company's  fourth quarter ended
March 31, 1999.  This sale included plants in Dundee,  New York;  Mountain Home,
North Carolina;  Jackson,  Wisconsin; a warehouse in Eau Claire, Michigan; and a
receiving station in Portland, New York.

In  January  1999,  the  Company  completed  the sale to Tree Top,  Inc.  of its
processing  facility  in  Prosser,  Washington  together  with  its  non-branded
specialty fruit concentrate business and an exclusive license to market and sell
the Company's branded  applesauce.  Tree Top paid  approximately  $29,000,000 in
cash.  This  transaction   resulted  in  a  pre-tax  gain  on  the  disposal  of
$10,427,000,  which was also  recognized in the Company's  fourth  quarter ended
March 31, 1999.

As a result of these  sales,  the  disposition  of the Juice  Business  has been
accounted for as a discontinued operation. Net sales for the Juice Business were
$121,290,000 in 1999.  Interest  expense  allocated to  discontinued  operations
includes an  allocation  of  corporate  interest  expense  and amounts  directly
related to the  discontinued  business.  The  allocation  of corporate  interest
expense  was based,  in part,  on a ratio of the net assets of the  discontinued
operations to the sum of  consolidated  net assets and  consolidated  debt.  The
amount allocated in 1999 totaled $1,567,000.


<PAGE>


Independent Auditors' Report

To the Board of Directors and Stockholders of
Seneca Foods Corporation
Pittsford, New York

We have audited the  accompanying  consolidated  balance  sheets of Seneca Foods
Corporation  and  subsidiaries  as of March 31,  2001 and 2000,  and the related
consolidated  statements of net earnings,  stockholders'  equity, and cash flows
for each of the three years in the period ended March 31, 2001.  These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the  financial  position of Seneca  Foods  Corporation  and
subsidiaries as of March 31, 2001 and 2000, and the results of their  operations
and their cash flows for each of the three  years in the period  ended March 31,
2001 in conformity with accounting  principles  generally accepted in the United
States of America.



/s/Deloitte & Touche LLP

DELOITTE & TOUCHE LLP
Rochester, New York
May 25, 2001



<PAGE>


Notice of Annual Meeting

The 2001 Annual Meeting of Shareholders will be held on Friday,  August 3, 2001,
beginning at 1:00 P.M. at the  Company's  facilities  at 3736 South Main Street,
Marion, New York. A formal notice of the meeting together with a proxy statement
and proxy form will be mailed to shareholders of record as of June 15, 2001.

Additional Information

A copy of the  Company's  Annual  Report on Form 10-K for the fiscal  year ended
March 31, 2001, as filed with the  Securities and Exchange  Commission,  will be
provided by the Company to any shareholder who so requests in writing.  Requests
should  be  sent  to  Philip  G.   Paras,   Seneca   Foods   Corporation,   1162
Pittsford-Victor Road, Pittsford, New York 14534, or contact us via our web site
at http://www.senecafoods.com, or e-mail us at senecafoods@senecafoods.com.

Forward-Looking Statements

Except for the historical information contained herein, the matters discussed in
this  annual  report are  forward-looking  statements  as defined in the Private
Securities  Litigation  Reform Act (PSLRA) of 1995.  The Company  wishes to take
advantage  of the  "safe  harbor"  provisions  of the PSLRA by  cautioning  that
numerous important factors which involve risks and uncertainties,  including but
not limited to economic,  competitive,  governmental and  technological  factors
affecting the Company's operations,  markets, products, services and prices, and
other  factors  discussed  in the  Company's  filings  with the  Securities  and
Exchange  Commission,  in the future,  could affect the Company's actual results
and could cause its actual consolidated  results to differ materially from those
expressed  in any  forward-looking  statement  made by,  or on  behalf  of,  the
Company.


<PAGE>


Shareholder Information and Quarterly Results

The Company's  common stock is traded on The NASDAQ  National Stock Market.  The
3.8 million of Class A  outstanding  shares and 2.8 million  Class B outstanding
shares are owned by 351 and 343 shareholders of record,  respectively.  The high
and low prices of the Company's common stock during each quarter of the past two
years are shown below:

      Class A:               2001                         2000
                      ----------------------------------------------
      Quarter          High          Low            High         Low
      --------------------------------------------------------------

      First           $12.75       $11.00         $15.50       $10.25
      Second           14.00        11.25          13.75        12.50
      Third            15.25        12.75          12.75        11.50
      Fourth           14.13        12.38          11.94        10.69

      Class B:                2001                         2000
                      -----------------------------------------------
      Quarter          High          Low            High          Low
      ---------------------------------------------------------------

      First           $12.25       $10.75         $14.75       $10.00
      Second           14.88        11.50          13.88        10.50
      Third            14.75        12.75          12.38        11.25
      Fourth           14.25        12.75          11.94        10.75


The  Company  may pay  dividends  on common  stock  only from  consolidated  net
earnings  available  for  distribution,  which  were none as of March 31,  2001.
Payment of dividends to common  stockholders  is made at the  discretion  of the
Company's  Board of Directors  and depends,  among other  factors,  on earnings,
capital  requirements,  operating  and financial  condition of the Company.  The
Company has not declared or paid a common dividend in many years.

The  following is a summary of the  unaudited  interim  results of operations by
quarter:
<TABLE>
<CAPTION>

                                                                         First          Second            Third          Fourth
- -------------------------------------------------------------------------------------------------------------------------------
                                                                                      (In thousands, except per share data)
<S>                                                                  <C>             <C>              <C>             <C>

Year ended March 31, 2001:
Net sales                                                            $ 131,159       $ 187,774        $ 248,109       $ 107,258
Gross margin                                                            11,468          13,630           10,821           8,243
Net earnings (loss)                                                      1,290           2,053           (1,116)         (1.414)
Basic earnings (loss) per common share                                     .20             .31             (.17)           (.22)
Diluted earnings (loss) per common share                                   .13             .20             (.17)           (.22)

Year ended March 31, 2000:
Net sales                                                            $  91,594       $ 185,812        $ 246,333       $  97,339
Gross margin                                                             9,482           9,368           13,326          13,718
Net earnings                                                                35             325            2,212           1,748
Basic earnings per common share                                            .00             .05              .34             .27
Diluted earnings per common share                                          .00             .03              .22             .17

<FN>
Earnings for the fourth quarter have historically reflected adjustments of
previously estimated raw material costs and production levels. Due to the
dependence on fruit and vegetable yields of the Company's food processing
segment, interim costing must be estimated. The net sales and gross margin
amounts have been restated as a result of classifying freight expenses as an
expense versus a reduction of net sales.
</FN>
</TABLE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>3
<FILENAME>e2101.txt
<DESCRIPTION>SUBSIDIARIES 2001
<TEXT>


                                   Exhibit 21

                              LIST OF SUBSIDIARIES

The following is a listing of subsidiaries 100% owned by Seneca Foods
Corporation, directly or indirectly:

    Name                                                             State

    Marion Foods, Inc.                                              New York
    Seneca Foods International, Ltd.                                New York

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>4
<FILENAME>e2301.txt
<DESCRIPTION>CONSENT 2001
<TEXT>


                                   Exhibit 23

                          INDEPENDENT AUDITORS' CONSENT

We consent to the  incorporation by reference in this  Post-Effective  Amendment
No. 1 of  Registration  Statement No.  333-12365 of Seneca Foods  Corporation on
Form S-8 of our reports  dated May 25, 2001,  appearing in and  incorporated  by
reference in the Annual Report on Form 10-K of Seneca Foods  Corporation for the
year ended March 31, 2001.

DELOITTE & TOUCHE LLP

Rochester, New York
June 25, 2001

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
