8-K

   1
                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K
                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

        DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JANUARY 17, 2001

                               PENFORD CORPORATION
          ------------------------------------------------------------
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

                                   WASHINGTON
          ------------------------------------------------------------
                 (STATE OR OTHER JURISDICTION OF INCORPORATION)

                  0-11488                        91-1221360
          ------------------------           --------------------
          (COMMISSION FILE NUMBER)     (IRS EMPLOYER IDENTIFICATION NO.)

            777-108TH AVENUE N.E., SUITE 2390
                 BELLEVUE, WASHINGTON                   98004-5193
          ----------------------------------------    ----------------
          (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)      (ZIP CODE)


        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (425) 462-6000
                                                           ---------------


          ------------------------------------------------------------
          (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)


   2
ITEM 5.  OTHER EVENTS

         On January 17, 2001, Penford Corporation ("Penford") issued a press
         release announcing that it intends to form a joint venture with Cargill
         combining their industrial starch businesses in North America. The
         Companies plan to create a limited liability corporation with Penford
         as managing partner. Terms of the deal were not disclosed and final
         agreement is subject to various approvals.

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS

         (C)   Exhibits

          99.1 Press release dated January 17, 2001.


   3
SIGNATURES:

       Pursuant to the requirements of the Securities Exchange Act of 1934, the
       registrant has duly caused this report to be signed on its behalf by the
       undersigned hereunto duly authorized.

                                PENFORD CORPORATION

       January 18, 2001         By /s/ Jeffrey T. Cook
       ----------------         ----------------------
            Date                Jeffrey T. Cook
                                President and
                                Chief Executive Officer

EX-99.1

   1
CONTACTS:      Jeffrey T. Cook                     For media inquiries:
               President and CEO                   Stephen Davis
               Penford Corporation                 MWW/Savitt
               425-462-6000                        206-505-8380
               jcook@penx.com                      sdavis@mww.com


                                                   FOR IMMEDIATE RELEASE


       PENFORD CORPORATION AND CARGILL TO FORM $200 MILLION JOINT VENTURE
                     COMBINING INDUSTRIAL STARCH BUSINESSES

BELLEVUE, WASH., AND MINNEAPOLIS, JAN. 17, 2001 - Penford Corporation (Nasdaq:
PENX) and Cargill today announced their intent to form a joint venture combining
their industrial starch businesses in North America. The companies will create
an enhanced specialty-starch ingredient manufacturing and distribution business,
with estimated annual sales of about $200 million focusing primarily on the
paper and textile industries. The joint venture is anticipated to generate
significant cost-efficiencies.

The joint venture will combine Cargill's operations know-how, broad resource
base, and reputation for quality and integrity with Penford's capabilities in
research and development, natural science technology, and customer service. The
joint venture also combines two highly-talented workforces known throughout the
industry for technical knowledge, depth of experience and problem-solving
skills. Terms were not disclosed and any final agreement is subject to various
approvals.

The companies anticipate creating a limited liability corporation (LLC) with
Penford as managing partner. The joint venture is expected to create multiple
plant efficiencies by utilizing both companies' Cedar Rapids industrial starch
facilities, as well as a Cargill facility in Memphis. An additional Cargill site
in Dayton, Ohio, will discontinue industrial starch operations.

                                     -more-

   2
PENFORD CORPORATION AND CARGILL TO FORM $200 MILLION JOINT VENTURE COMBINING
INDUSTRIAL STARCH BUSINESSES, PAGE 2

"Joining forces with Cargill is in line with Penford's vision and commitment to
be a leading research-driven, natural science company that develops and delivers
value-added ingredient systems to our customers, in this case, our industrial
customers in North America," said Jeffrey Cook, CEO of Penford. "Our
relationship with Cargill solidly positions us to deliver customized solutions
to our industrial customers like never before, while combining the strength and
experience of both companies' employees."

"The joint venture allows both companies to combine their intellectual assets to
develop new products," said Cargill Corporate Vice President Mike Urbanic. "It
creates a strong financial entity, while providing leading-edge processing
capabilities for the benefit of customers, giving them an exciting competitive
advantage."

Specialty industrial starches are primarily derived from corn and used in such
products as paper and cardboard. Penford's natural-based polymer systems lower
costs across virtually every phase and grade of papermaking while making the
paper stronger, smoother and enhancing its surface properties to better hold
ink. In addition, Penford's specialty starches retain more fiber in the paper,
allowing for reduced sewage treatment, making the manufacturing process cleaner.

Penford and its predecessor companies have been producing starch for the
industrial market since the early 1940s, while Cargill has been in the business
since acquiring their Cedar Rapids corn milling facility in 1967.

"By combining our operations, we can establish long-term reliability, increased
global supply and a broader product mix to customers of both companies," said
Gregory Keeley, president of Penford 's Industrial Ingredients business.
"Furthermore, the additional plant locations will mean more reliable supplies
and reduced transportation costs for our customers to help them operate more
successfully."

                                     -more-
   3
PENFORD CORPORATION AND CARGILL TO FORM $200 MILLION JOINT VENTURE COMBINING
INDUSTRIAL STARCH BUSINESSES, PAGE 3

"Cargill brings core competencies to this JV in such key areas as plant
management, information technology and risk management," said Creager Simpson,
president of Cargill's North America Industrial Starch business unit. "Combined
with Penford 's strengths in product development and customer service, this
venture has the potential to become the premier industrial starch producer in
North America." Though the joint venture is expected to achieve some
administrative and management efficiencies, specific staffing levels are still
being formulated.

ABOUT PENFORD

Seattle-based Penford (www.penx.com) develops, manufactures and markets
specialty natural-based ingredient systems for various applications, including
papermaking, textiles and food products.

ABOUT CARGILL

Minneapolis-based Cargill (www.cargill.com) is an international marketer,
processor and distributor of agricultural, food, financial and industrial
products and services with 85,000 employees in 60 countries. The company
provides distinctive customer solutions in supply chain management, food
applications and health and nutrition

This report contains forward-looking statements concerning the performance and
results of Penford. There are a variety of factors which could cause actual
events or results to differ materially from those projected in the
forward-looking statements, including, without limitation, the possibility that
the joint venture will not be finalized because of the inability of the parties
to reach final agreement, regulatory or other concerns, the failure of the joint
venture to achieve anticipated synergies and cost savings, competition, the
possibility of interruption of business activities due to equipment problems,
accidents, strikes, weather or other factors; product development risk; changes
in corn and other raw material prices; changes in general economic conditions or
developments with respect to specific industries or customers affecting demand
for the joint venture's products including unfavorable shifts in product mix;
unanticipated costs, expenses or third party claims; the risk that results may
be affected by construction delays, cost overruns, technical difficulties,
nonperformance by contractors or changes in capital improvement project
requirements or specifications; interest rate and energy cost volatility;
foreign currency exchange rate fluctuations; or other unforeseen developments in
the industries in which the joint venture operates. Accordingly, there can be no
assurance that future activities or results will be as anticipated.

                                      # # #