Forum Report: Progress with Exploration of Strategic Alternatives

Following is a summary of holiday season progress relating to the development of strategic alternatives for Farmer Bros. shareholders:

Prospective strategic relationships: Although communications are expected to be limited until after the holidays, we are in the process of preparing suggestions of conditions for exclusive explorations with one of the parties selected by the Chapman Group, the food industry investment banking firm engaged to advise shareholder interests. This would relate only to coffee operations of Farmer Bros., as indicated in my November 18, 2005 Forum Report, and we expect to consider separate strategies for optimizing shareholder value of the company's real estate and surplus funds.

Information requirements: The shareholder Delegate, Peter Brennan, received a letter dated December 13, 2005 from the company's management in last week's mail, responding to his demand for records submitted on December 9, 2005. This was the full text portion of the management letter, a scanned copy of which will be posted on the Forum web site [see December 13-20 letters]:

Dear Mr. Brennon [sic]:

We are in receipt of subject demand, but due to the holidays we will not be ready to respond until the new year. In the meantime, I have been advised by counsel that your demand does not comply with the requirement of the Delaware statute that the demand be made under oath. Please resubmit.

Sincerely,

FARMER BROS. CO.

John E. Simmons

Treasurer

In a letter copied below, the shareholder Delegate has resubmitted the demand as requested with a notarized signature to satisfy the cited Delaware statutory provision, noting (a) that the same statute requires management's production of the demanded records within five days and (b) that the equally applicable California law did not require a notarized signature of the original December 9 demand. There has been no further response from the company.

Investment Company status: In relation to the precedent-setting court decision supporting SEC regulation of National Presto as an "investment company" under the Investment Company Act of 1940, National Presto reported in an SEC filing this afternoon that the federal court had denied a company motion to stay the order requiring National Presto's immediate registration with the SEC as an investment company, and that management had therefore filed the required papers a few hours after the court hearing. The SEC's brief submitted to the court in opposition to the company motion had argued that public policy should not allow a company to avoid registration by simply shifting its funds out of securities after having operated in violation of regulations for ten years. (Copies of court filings can be provided upon request.)

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I wish all of you a happy holiday season, and a new year in which the enhanced value of Farmer Bros. will at last contribute to your prosperity.