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corresp

November 28, 2005

Securities and Exchange Commission

Washington, D.C. 20549-7010

Subject: Response to Correspondence Dated November 14, 2005

Meadow Valley Corporation

Form 10-K for the fiscal year ended December 31, 2004

Filed March 31, 2005

File No. 0-25428

Dear Ms. Do:

     In response to your letter to us dated November 14, 2005, we have responded to the Staff’s
comments using the same paragraph numbers contained in the Staff’s letter to us dated November 14,
2005.

Form 10-K for the year ended December 31, 2004

12. Income Taxes, page 37

     1. Listed below are our federal and state operating loss carryforwards remaining after being
applied to the current period’s taxable income or loss as requested and will be disclosed in future
filings.

     Net
operating loss carryforward expiration schedule as of December 31,
2004:

    Federal

    State

    Tax Year

    Operating Loss

    Tax Year

    Operating Loss

    Expiring

    Carryforward

    Expiring

    Carryforward

    2019

    $
    3,374,750

    2009

    $
    410,000

    2018

    —

    2008

    1,016,000

    2017

    26,100

    2007

    9,000

    2016

    2,735,700

    2006

    1,185,000

    2005

    930,000

    Total

    $
    6,136,550

    $
    3,550,000

     2. Our contemplation of the deferred tax liability to offset our deferred tax assets to be
recovered was based on the anticipated and estimated future taxable earnings. These were based on
our best estimates available at that time, March 2005. We reserved approximately 50% of the net
operating loss benefit as of December 31, 2004. This reserve was done in contemplation of our
financial position at that time and our reasonable estimate of future taxable income. Subsequent
to the year ended December 31, 2004 we have attained significant taxable income and believe that
our estimates for the year ended December 31, 2004 were reasonably and accurately presented as of
December 31, 2004.

     The Construction Services segment had experienced losses for the previous consecutive five
years. While results of operations from the construction services segment were anticipated to
improve

    P.O. Box 60726 Phoenix, Arizona 85082-0726

    Telephone: 602-437-5400 Fax: 602-437-1681

Securities and Exchange Commission

November 28, 2005

Page 2

significantly in fiscal year 2005, we believed it was reasonable and prudent to reserve against the
operating loss carryforward tax asset, especially since as of March 31, 2005, the construction
services segment had a loss from operations. There was a net income in the construction services
segment as of March 31, 2005, which was due to having received interest income and reimbursement of
prior legal fees on a judgment award. Based upon our analysis and the best available information
at that time, March 2005, we reserved approximately 50% of the deferred tax asset associated with
the operating loss carryforward.

     In response to your citation of paragraph 21a of SFAS 109, which deals, “... with future
reversals of existing taxable temporary differences...,” we note that our reserve was based upon our
concern of prior net operating losses in our construction services segment and the ultimate
realization of the benefit therein. We contemplated both our deferred tax asset and liability in
our final estimation of the amounts presented on our audited financial statements as of December
31, 2004. While the deferred tax liability was recorded primarily in relation to the book versus
tax depreciation difference there was no assurance, as of the date of our 10-K filing, that the
reversal would generate sufficient taxable income to offset the operating loss carryforwards and
the other deferred tax assets (inventory reserve, allowance for bad debt, vacation accruals, etc.)
recorded.

     3. To address your concerns regarding the valuation allowance requires us to go back to the
previous years to explain the cause for a lower than expected effective tax rate. Below is a table
with the before tax book income from our form 10-Ks for the years December 31, 2000, 2001, 2002,
2003 and 2004, and the reported income tax expense or benefit. The effective federal and state
statutory tax rate for each of the years and a variance from the statutory rate during each of
those years is also shown.

    Total for

    2000

    2001

    2002

    2003

    2004

    five years

    Pretax Book Income (Loss)

    (1,859,447
    )

    (3,192,562
    )

    936,770

    162,381

    890,443

    (3,062,415
    )

    Reported Tax Benefit (Expense)

    284,861

    668,631

    (198,629
    )

    (41,643
    )

    (290,804
    )

    422,416

    Effective Tax Rate

    15,32
    %

    20.94
    %

    21.20
    %

    25.65
    %

    32.66
    %

    13.79
    %

    Anticipated Statutory Rate(1)

    37.50
    %

    37.50
    %

    37.50
    %

    37.50
    %

    36.00
    %

    697,293

    1,197,211

    (351,289
    )

    (60.893
    )

    (320,559
    )

    1,161,762

    Variance

    (412,432
    )

    (528,580
    )

    152,660

    19,250

    29,755

    (739,346
    )

(1) — Statutory Federal Rate of 34% and average effective state rates of 3.5% during the years 2000 through 2003 and 2.0% during 2004.

     As a result of the previous years effective tax rate being somewhat below the federal
statutory rate we chose to true-up our deferred tax assets and liabilities during 2004, which
resulted in no additional tax expense even though we increased our valuation allowance. If you
disregard our balance sheet, then you are correct that a valuation allowance increase would
increase our income tax expense during 2004. But since the deferred tax assets and liabilities are
correct on the balance sheet as of December 31, 2004, increasing our tax expense on our Statement
of Operations for the year ended December 31, 2004, would have made our balance sheet inaccurate.

     We believe that once we have fully utilized the operating loss carryforward, which we now
anticipate utilizing during the year ending December 31, 2005, our effective tax rate will be in
accordance with the federal statutory rate and the average effective state rates.

     4. The operating loss carryforward was reported net of the valuation allowance and therefore
no valuation allowance was reported in the 2002 10-K. If we would have reported the operating loss
carryforward and valuation allowance gross we would have reported an allowance of $132,122, but
since we reported the operating loss carryforward and valuation allowance net we reported a zero
balance. We

Securities and Exchange Commission

November 28, 2005

Page 3

agree that we should have reported the valuation allowance and the operating loss carryforward
at the gross amounts as of December 31, 2002 and in all subsequent filings. We have modified our
disclosure for income taxes in our form 10-Q for the period ended September 30, 2005 to reflect the
valuation allowance and the deferred tax asset arising from the net operating losses. We will
continue to do so in future filings until the net operating loss carryforward is fully utilized
which we anticipate to occur by December 31, 2005.

     We trust that the responses provided herein satisfactorily address your comments. We
acknowledge that the company is: a) responsible for the adequacy and accuracy of the disclosures in
our filings; b) that our responses to the Staff comments or changes in our disclosures do not
foreclose the Commission from taking any action with respect to the filing, and; c) that the
company may not assert Staff comments as a defense in any proceeding initiated by the Commission or
any person under the federal securities laws of the United States.

Sincerely,

MEADOW VALLEY CORPORATION

Clint L. Tryon

Principal Accounting Officer