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Farmer Bros Co
LETTERHEAD

June 30, 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

Filed September 13, 2007

Response Letter Dated March 12,
2008

Response Letter Dated April 2,
2008

Form 10-Q for the
Quarterly Period Ended March 31, 2008

Filed May 9, 2008

Response Letter Dated May 9,
2008

File No. 000-01375

Dear Ms. Davis,

The following comments
are responsive to your latest letter dated May 14, 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 May 14, 2008.

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

Fiscal Years Ended June 30
2007 and 2006 — Comparative Information, page 16

1.             We have reviewed your response to prior
comment number two. We note that you cite your capitalization policy in your
response as a basis for your conclusion. We are not in a position to agree that
a dollar-value capitalization policy threshold is contemplated in GAAP. Please
revise your analysis to address the extent to which brewing equipment expense,
which you indicate consists of numerous individually-immaterial assets and
component parts, are collectively material for each period reported.  We also note in your response that you
maintain ownership of the equipment and maintain the ability to control your
customer’s use of the equipment even after it has been placed in service at the
customer’s location. This appears to be an indication that the equipment has
characteristics consistent with those of an asset, and not a current-period
expense. By reference to appropriate GAAP or other accounting literature,
please tell us how you have concluded that your coffee brewing equipment is not
an asset consistent with paragraphs 25 thru 33 of FASB Concept

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Statement No. 6 that
should be inventoried prior to its use-in-service, and depreciable subsequent
to its placement into service.

Our
costs relating to the purchase of coffee brewing equipment for customers
totaled $7,343,000, $5,353,000, and $4,197,000 during the fiscal years ended June 30,
2007, 2006, and 2005, respectively, and represented approximately 7%, 5% and
5%, respectively, of our total selling expenses for those periods.  These
purchases are substantially comprised of coffee brewers and related equipment
costing less than $1,000 each. These costs are incurred to respond to existing
or new customer needs and do not relate to revenue levels.  For parts to
repair or maintain coffee brewers, we incurred costs of $7,063,000, $6,023,000,
and $4,909,000 during the fiscal years ended June 30, 2007, 2006, and
2005, respectively, which represented approximately 7%, 6% and 5%,
respectively, of our total selling expenses for those periods.  While this
expense is substantially comprised of individual parts costing less than $50
each, we have more than 47,000 active customers in our route sales division
alone, and the average customer may have two to three pieces of equipment
(coffee brewers, coffee grinders, cocoa machines, cappuccino machines, etc.) at
a given time. (Please note that the annual total of each category exceeds the
amounts included in my letter dated May 9.  We inadvertently
neglected to include certain general ledger accounts in the totals reflected in
the May 9 letter.) We believe the level of these expenses to be immaterial
to our operations as a whole.

Paragraph
25 of FASB Concept Statement No. 6 defines assets as “… probable future
economic benefits obtained or controlled by a particular entity as a result of
past transactions or events.”  Our business strategy is to provide our
customers with coffee brewing equipment and related service as incentives to
buy our coffee products. We also benefit by having equipment with our brand and
logo in our customers’ locations, which, combined with our service and quality
products, helps create customer goodwill and loyalty.   While we hope that the goodwill we believe
we obtain through the provision and servicing of coffee brewing equipment to
our customers will generate future economic benefits, this is not assured.  We do not tie equipment to customer purchase
requirements and therefore do not control any future benefit. Customers may
terminate at any time.  Nor are we able to
determine whether subsequent purchases relate to our providing equipment and
equipment service or to other factors such as price, product quality, or the
convenience of direct store delivery.  We
do not know whether we in fact obtain future economic benefits from furnishing
equipment and equipment service, and we certainly do not “control” any benefits
obtained.

We refer
to paragraph 168 of Appendix B to FASB Concept Statement No. 6 which
states:  “An item does not qualify as an asset or liability of an entity
if it lacks one or more essential characteristics.”  In this case, we are uncertain whether we
obtain any future economic benefits from providing and servicing coffee brewing
equipment.  Additionally, paragraph 175
of Appendix B to FASB Concept Statement No. 6 provides that “[t]he kinds
of items that may be recognized as expenses or losses rather than as assets
because of uncertainty are some in which management’s intent in taking certain
steps or initiating certain transactions is clearly to acquire or enhance
future economic benefits available to the entity….The uncertainty is not about
the intent to increase future economic benefits but about whether and, if so,
to what extent they succeeded in doing so.”

Additionally,
paragraph 28 of FASB Concept Statement No. 6 states that “future economic
benefit eventually results in net cash inflows to the enterprise As stated
above, the customer’s decision to purchase our products is outside of our
control, is thus subject to a high degree of uncertainty as to what amount of
revenue, if any, will be realized from a particular customer, and we are unable
to determine whether purchases are attributable to our furnishing and servicing
equipment or to other factors.  Therefore, there can be no assurance that
the Company will receive any
future net cash inflow associated with the provision and servicing of coffee
brewing equipment.

We also
refer to paragraph 23 of FASB Concept Statement No. 6 which states: “To be
included in a particular set of financial statements, an item must not only
qualify under the definition of an element but also must meet criteria for
recognition and have a relevant attribute (or surrogate for it) that is capable
of reasonably reliable measurement or estimate.”   As stated in
paragraph 48 of FASB Concept Statement No. 6, “recognition or measurement
considerations stemming from uncertainty may result in not recognizing as
assets or liabilities some items that qualify as such under the
definition…until their existence becomes more probable or their measures become
more reliable.”

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We also
refer to paragraph 23 of FASB Concept Statement No. 6 which states: “To be
included in a particular set of financial statements, an item must not only
qualify under the definition of an element but also must meet criteria for
recognition and have a relevant attribute (or surrogate for it) that is capable
of reasonably reliable measurement or estimate.”   As stated in
paragraph 48 of FASB Concept Statement No. 6, “recognition or measurement
considerations stemming from uncertainty may result in not recognizing as
assets or liabilities some items that qualify as such under the
definition…until their existence becomes more probable or their measures become
more reliable.”

Given
our business strategy and practice relating to these products and services, we
believe that such costs more closely reflect the characteristics of expenses,
as summarized in paragraph 81 of FASB Concept Statement No. 6, which
states, “Expenses represent actual or expected cash outflows (or the
equivalent) that have occurred or will eventuate as a result of the entity’s
ongoing major or central operations.”

We also
believe that paragraph 148 of FASB Concept Statement No. 6 is relevant,
stating that “Some costs that cannot be directly related to particular revenues
are incurred to obtain benefits that are exhausted in the period in which the
costs are incurred. For example, salesmen’s monthly salaries and electricity
used to light an office building usually fit that description and are usually
recognized as expenses in the period in which they are incurred. Other costs
are also recognized as expenses in the period in which they are incurred
because the period to which they otherwise relate is indeterminable or not
worth the effort to determine.” In  our
case, given that our customers are under no obligation to purchase from us and,
in fact, can stop purchasing from us at any time, and the fact that we do not
know whether a particular purchase relates to equipment or other factors, the
period to which the coffee brewing expenses relate is indeterminable and,
therefore, under paragraph 148 of FASB Concept Statement No. 6 should be
expensed in the period in which they are incurred.

Because
of these factors, we believe that expense recognition for the costs of these
products and services in the period incurred is an acceptable method of
accounting.  We further believe that this
is the result required under EITF 01-9 discussed below.

2.             We note in your response to our prior
comment number two that you conclude that your coffee brewing equipment
expenses are classified as an element of selling expenses and your facts and
these transactions are outside of the scope of EITF 01-9. We are unable to
agree with your conclusion as it appears that your response has not addressed
why EITF 01-9 would not be applicable. It does not appear that your reference
to paragraph 7 limits the applicability of EITF 01-9 to your situation in that
it relates to free or discounted products or services redeemable by the
customer at a future date. In practice, your provision of brewing equipment to
your customers is not at a future date, but in the current and ongoing
accounting periods in question. Therefore, this limitation in the scope of EITF
01-9 does not appear to apply.  It is our
understanding that EITF 01-9 applies to consideration given by a vendor to a
customer, with consideration defined in Exhibit 01-9E to include free
products or services given to the customer by the vendor. Please tell us why
you believe that your provision of brewing equipment and the related servicing
of this equipment does not constitute consideration within the scope of EITF
01-9. Additionally please address paragraph 10 of EITF 01-09 in your response.

On
further consideration, we agree that paragraph 10 and not paragraph 7 of
ETIF-01-9 applies in our case. Under paragraph 10 the cost of the consideration
is to be treated as an expense when recognized. Relative to the classification
of these expenses, we regard these costs as selling expenses, not direct costs
of producing our coffee products. Our provision of coffee brewing equipment is
part of our overall sales process.  Our strategy is to provide our
customers with coffee brewing equipment as an incentive to buy our coffee
products, and we also benefit by having equipment with our brand and logo in
our customers’ locations, which, combined with our service and quality
products, helps create customer goodwill and loyalty by enhancing the overall
purchasing process.  Such equipment is
not integral to a customer’s use of our coffee products, as customers

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can use
other equipment to make coffee. Accordingly, we believe that our classification
is reasonable and appropriate.

Consolidated
Statements of Stockholders’ Equity. page 2

3.             As previously requested in our prior
comment number four, please provide us with a sample of your proposed
disclosure which you plan to include in your next annual filing. Your proposed
explanatory disclosure should explain the nature and effect of the change in
your presentation of the adoption of FAS 158, including disclosure of how this
amount was previously presented and the resulting impact on comprehensive
income. Additionally, please confirm to us that your proposed disclosure will
be included both within your financial statements and prominently displayed
within the forepart of your next Form 10-K (i.e. preceding Item 1).

The following is
a sample of our proposed disclosure that we plan to include in our next annual
filing. We confirm that disclosure similar to this will be included both within
our financial
statements and prominently
displayed within the forepart of our next Form 10-K.

“During the fiscal year ended June 30,
2007, the Company adopted the recognition provisions of SFAS No. 158 and
applied them to the funded status of its defined benefit plans resulting in a
decrease in stockholders’ equity of $8.8 million as of June 30, 2007.
In the Company’s consolidated statement of stockholders’ equity contained in
its Form 10-K for the fiscal year ended June 30, 2007, this decrease
was presented as a decrease of $8.8 million to other comprehensive income.  In accordance with SFAS No. 158, this
adjustment should have been recorded against accumulated other comprehensive
income.  As a result, the Company has
adjusted the accumulated other comprehensive income and other comprehensive
income balances presented in the accompanying consolidated statements of
stockholders’ equity for the fiscal year ended June 30, 2007 in accordance
with SFAS No. 158.”

Acquisition of
Coffee Bean International, Inc., page 24

4.             We note in your response to our prior
comment number five that you assert the pro forma information prescribed by FAS
141 is immaterial for financial statement disclosure citing, among other
factors, which CBI accounted for less than 10% of your net sales and profits
for the fiscal year 2007. Please clarify whether or not your analysis
considered financial information for the entire 2007 fiscal year (as if the
transaction had consummated at the beginning of the year) or the period
subsequent to the acquisition date. We note in your disclosure in your 10-Q for
the quarterly period ended March 31, 2008 that CBI contributed to 74% of
the 26% increase (or 19% of the increase) in net sales for the first nine
months of fiscal 2008 as compared to the same period in 2007. Given this
disclosure, and despite the qualitative factors noted in your response, it
continues to be unclear as to why you believe FAS 141 pro forma disclosures are
not relevant in enabling an investor’s understanding of how this acquisition
would have impacted your historical results of operations. Please consider
adding this disclosure to your financial statements in your next annual report
on Form 10-K, or tell us why you believe such information should not be
included. In responding to this comment, please provide us with a sample of
your disclosure in satisfaction of the pro forma requirements of FAS 141.

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As previously communicated, in
determining that the acquisition of CBI was not material to our YE 6/30/07
results, we applied the significance tests of rule 3-05 of Regulation S-X
as a starting point.  The analysis of the
significance of this acquisition considered financial information for the
entire 2007 fiscal year.  The asset and
investment test calculation yielded a result of less than 10%.  The income test calculation was less than
15%.  Other qualitative considerations
were cited in our May 9, 2008 response.
In light of all the circumstances known to management at that time,
management determined that pro-forma financial information on CBI would not
have been material to investors.  As you
have noted above, during fiscal 2008 the major change in sa