SecProbe.io

CORRESP
1
filename1.htm

April 2,
2008

Ms. Jill
Davis

Branch
Chief

Division
of Corporate Finance, Mail Stop 7010

United
States Securities and Exchange Commission

100
F Street, N.E.

Washington,
D.C.  20549-7010

  Re:

  Farmer
  Bros. Co.

  Form 10-K
  for Fiscal Year Ended June 30, 2007

  File
  No. 000-01375

Dear
Ms. Davis,

To
supplement our response letter dated March 12, 2008, we are providing this
additional information to aid in your review.
Please note that the numbers referenced below correspond to the comment
numbers set forth in your letter of January 31, 2008.

Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities, page 11

1.            Please
expand your disclosure to include the frequency and amount of dividends
declared for the two most recent fiscal years and the subsequent interim
period. Additionally, consider indicating your intention to pay dividends in
the future, or if no such intention exists, consider stating that fact. Refer
to Item 201(c) of Regulation S-K.

a.     Response:  We will expand our future disclosure to
include the frequency and amount of any cash dividends declared on our common
stock for the two most recent fiscal years and any subsequent interim period
for which financial statements are required to be presented by Article 3
of Regulation S-X.    Assuming there is
no subsequent interim period for which financial statements are required to be
presented, an example might be as follows:

1

The following table sets forth, for the
periods indicated, the dividends declared and the high and low sales prices of
the shares of common stock of the Company as quoted on the NASDAQ National
Market.

  Fiscal year ended June 30, 2007

  Fiscal year ended June 30, 2006

  High

  Low

  Dividend

  High

  Low

  Dividend

  1st
  Quarter

  $

  21.13

  $

  20.70

  $

  0.11

  $

  24.98

  $

  19.50

  $

  0.105

  2nd
  Quarter

  $

  21.48

  $

  20.97

  $

  0.11

  $

  22.87

  $

  19.11

  $

  0.105

  3rd
  Quarter

  $

  20.61

  $

  20.23

  $

  0.11

  $

  22.61

  $

  19.31

  $

  0.105

  4th
  Quarter

  $

  22.73

  $

  22.12

  $

  0.11

  $

  23.18

  $

  19.72

  $

  0.105

Management’s Discussion and Analysis of Financial Condition and Results
of  Operations Critical Accounting Policies  Self-Insurance
Retention, page 14

2.             We note your
disclosure of accruals for estimated losses from workers’ compensation self
insurance and other self-insured deductible amounts. Please expand your
disclosure to include the methods used to determine accruals for other
self-insured deductibles (e.g. actuarially-adjusted loss history,
event-specific loss estimates, or other methods). Also, please expand your
discussion and analysis, as it relates to both workers’ compensation and
self-insured deductibles, to include the significant assumptions used in
estimating the accrual, and the potential financial statement effect of
variability of the estimates. Please refer to Section V of release numbers
33-8350 and 34-48960, “Commission Guidance Regarding Management’s Discussion
and Analysis of Financial Condition and Results of Operations” (Release
34-48960) located on our website at:

http ://www. sec.gov/rules/interp/33-8350.htm

Response: We will provide additional
disclosure in future filings.  An example
might be as follows.

 Self-Insurance

We are self-insured for California workers’
compensation insurance subject to specific retention levels and use historical
analysis to determine and record the estimates of expected future expenses
resulting from workers’ compensation claims. Our self-insured California
workers’ compensation liability is estimated using historical analysis of
payment patterns projecting future liability from date of first payment.  As such, a majority of the Company’s recorded
expense for California workers’ compensation is management’s best estimate. The
annual loss and allocated loss adjustment expense (ALAE) is net of any
reimbursement received from the Company’s insurers for claims in excess of the
self-insurance retention.

Management believes that the amount accrued is
adequate to cover all known claims at June 30, 2007.  If the actual costs of such claims and
related expenses exceed the amount estimated, additional reserves may be
required which could have a material negative effect on operating results. If

2

our estimate were off by as much as 15%, the
reserve could be under or overstated by approximately $656,000 as of June 30,
2007.

Estimated Company liability resulting from our
general liability policies, within our deductible limits, is accounted for by
specific identification. Large losses have historically been infrequent, and
the lag between incurred but not reported claims his historically been short.  Once a potential loss has been identified,
the case is monitored with our risk manager to try and determine a likely
outcome.  Lawsuits arising from injury
that are expected to reach our deductible are not reserved until we have
consulted with legal counsel, become aware of the likely amount of loss and
determined  when payment is expected.

The estimated liability related to our self-insured
group medical insurance is recorded  on
an incurred but not reported basis, within deductible limits,  based on actual claims and the average lag
time between the date insurance claims are filed and the date those claims are
paid.

Critical
Accounting Policies - Retirement Plans, page 14

3.             We note your
disclosure of significant assumptions in relation to your retirement plan
valuations, including the discount rate and the estimated return on plan
assets. Due to the nature of these estimates, please expand your Management’s
Discussion and Analysis to quantify, within a reasonable range of outcomes for
these estimates, the impact that could result from variability in the
estimates. Please refer to Release 34-48960.

Response: We will provide additional
disclosure in future filings. An example might be as follows.

The following chart quantifies the effect on the projected
benefit obligation and the net periodic benefit cost of a change in the
discount rate assumption, and the impact on the net periodic benefit cost of a
change in the assumed long term rate of return.

  (in thousands)

  Discount Rate

  5.50%

  Actual 6.0%

  6.50%

  2008
  net periodic benefit cost

  $

  (3,557

  )

  $

  (512

  )

  $

  (656

  )

  Projected
  benefit obligation

  $

  89,213

  $

  83,576

  $

  78,491

  Long Term Rate of Return

  7.75%

  Actual 8.25%

  8.75%

  2008
  net periodic benefit cost

  $

  (42

  )

  $

  (512

  )

  $

  (981

  )

3

Company
Pension Plans, page 31

16.            Please
expand your disclosure to include a reconciliation of the beginning and ending
balances of the projected benefit obligation, identifying each appropriate
component of the change, for each year a balance sheet is presented. Refer to
paragraph 5.a of FAS 132R.

Response: We will provide the additional
disclosure in future filings.  Please see
the attached Pension Plan Tables for a sample.

17.            Please
expand your disclosure to include a reconciliation of the beginning and ending
balances of the fair value of the plan assets, identifying each appropriate
component of the change, for each year a balance sheet is presented. Refer to
paragraph 5.b of FAS 132R.

Response: We will provide the additional
disclosure in future filings.  Please see
the attached Pension Plan Tables for a sample.

18.            Please
expand your disclosure to include the location of the amounts recognized in the
balance sheet related to the funded status of the plan, including the current
arid non-current portions, at each balance sheet date presented. Refer to
paragraph 5.c of FAS 132R and paragraph E.l.c of FAS 158.

Response: We will provide the additional
disclosure in future filings.  Please see
the attached Pension Plan Tables for a sample.

Post
Retirement Benefits, page 33

19.            Please
expand your disclosure to include your assumptions regarding discount rates and
health care cost trend rates used in deriving your APBO. Refer to paragraphs
5.j and 5.1 of FAS 132R.

Response: We will provide this additional
disclosure in future filings.  Please see
the attached Pension Plan Tables for a sample.

If
you have any further questions please contact me directly at 310-787-5241 or
through my assistant Amy Clark at 310-787-5242.

  Sincerely,

  FARMER
  BROS. CO.

  /s/ John E. Simmons

  John
  E. Simmons

  Treasurer
  and Chief Financial Officer

  Att:

  Pension
  Plan Tables

  Cc:

  James Giugliano

  John Anglin

  Patrick
  Niemann

4

Pension Plan Tables

Comments
16, 17 and 18:

Obligations and Funded Status

  Farmer Bros. Plan

  Brewmatic Plan

  Years ended June 30,

  Years ended June 30,

  2007

  2006

  2007

  2006

  (In thousands)

  (In thousands)

  Change
  in projected benefit obligation

  Benefit
  obligation at the beginning of the year

  $

  77,896

  $

  82,955

  $

  3,456

  $

  3,888

  Service
  cost

  2,053

  2,756

  41

  58

  Interest
  cost

  4,759

  4,310

  209

  200

  Plan
  participant contributions

  189

  235

  0

  (459

  )

  Actuarial
  (gain)/loss

  2,095

  (9,194

  )

  49

  (230

  )

  Benefits
  paid

  (3,416

  )

  (3,167

  )

  (229

  )

  0

  Projected
  benefit obligation at the end of the year

  $

  83,576

  $

  77,895

  $

  3,526

  $

  3,457

  Change
  in plan assets

  Fair
  value in plan assets at the beginning of the year

  $

  84,960

  $

  80,874

  $

  3,697

  $

  3,584

  Actual
  return on plan assets

  13,823

  7,018

  583

  319

  Employer
  contributions

  0

  0

  26

  24

  Plan
  participant contributions

  189

  235

  0

  0

  Benefits
  paid

  (3,415

  )

  (3,167

  )

  (229

  )

  (230

  )

  Fair
  value in plan assets at the end of the year

  $

  95,557

  $

  84,960

  $

  4,077

  $

  3,697

  Funded
  status at end of year (underfunded)/overfunded

  $

  11,981

  $

  7,064

  $

  551

  $

  241

  Amounts
  recognized in statement of financial position

  Noncurrent
  assets

  $

  11,981

  N/A

  *

  $

  551

  N/A

  *

  Current
  liabilities

  0

  N/A

  *

  0

  N/A

  *

  Noncurrent
  liabilities

  0

  N/A

  *

  0

  N/A

  *

  Total

  $

  11,981

  N/A

  *

  $

  551

  N/A

  *

* These items are new
this year due to the application of SFAS 158.
Retrospective application is not required.

Comment 19:

  2007

  2006

  2005

  Discount
  rate

  6.44

  %

  6.25

  %

  5.30

  %

  Initial
  medical rate trend

  9.00

  %

  9.00

  %

  10.00

  %

  Ultimate
  medical trend rate

  5.50

  %

  5.50

  %

  5.50

  %

  Number
  of years from initial to ultimate trend rate

  6

  6

  6

Attachment